Brexit plan essential to protect €5bn food exports

The decision of the UK to leave the European Union will have serious implications for all sectors of the Irish economy including the agri-food sector.

The minister for agriculture, food and marine along with his relevant cabinet colleagues needs to put a clear plan in place to address the many issues that are likely to arise when the Brexit is finally negotiated with the EU.

That imperative now becomes the context into which all our planning and projects must fit. Having met the Department of Agriculture, Food and Marine last week and having had minister Michael Creed to a national council meeting held in Dublin as recently as last Thursday (for which, much appreciation) ICMSA is satisfied that the department has identified all the issues from farm to processor to trading level that are likely to arise from a Brexit.

But there’s no room for any degree of complacency from here forwards, not in the context of €5bn in food exports to the UK — €1.1bn is beef and €1bn is dairy produce. We need clear and agreed plans.

It is important to emphasise that it will be at least two years before any of these issues become a reality, including any possible implications for farmer payments.

But we need to be planning at this stage to ensure a smooth transition and, to this end, ICMSA believes that the agriculture minister should establish a co-ordinating group of department officials and industry stakeholders so that clear plans and strategies are identified and agreed at an early stage.

In the short term, the implications are likely to focus on exchange-rate movements and the Government and the EU must understand farmers cannot be expected to pay for negative currency movements arising from the Brexit vote.

A farm council meeting will take place today and plans need to put in place to protect farmers.

In the past, food processors have simply passed back the impact of negative exchange rate movements and our farm council must take measures to protect farmers rather than food processors, who have insulated themselves in the past.

Farmers are already in a prolonged income crisis and cannot be expected to take additional punishment.

Brexit will have practical implications at farm level, particularly for farmers in border regions, for processors in terms of trade to the UK and also transit of products to continental Europe.

It becomes a national priority to ensure that as Brexit negotiations begin and develop that access to the UK market is retained on the basis of current conditions and that Ireland’s dependence on the UK market is recognised and addressed.

Irish farmers have a long history of trading with the UK and I have no doubt that this will continue provided the UK and EU regulators maintain the proper trading environment for it to continue.

I turn to last week’s meeting of the Dairy Forum and say, with regret, that the Dairy Forum is failing dairy farmers and the fact is that not a single policy initiative was agreed at the meeting that will lead to an increase in milk price.

Official Irish policy on the milk price collapse is one of waiting to see if something turns up and hoping for the best. The processors seem to be focussed on achieving their volume targets and if that meant low milk prices for farmers, then so be it.

Certain parties to the Diary Forum are speaking out of both sides of their mouths on the need to support farmers while, at the same time, refusing to support measures to boost milk prices.

We need an EU-wide voluntary supply reduction programme that will pay farmers a set amount per litre of milk reduced on 2016 production compared to their 2015 figures.

This scheme would be absolutely voluntary and those who wish to maintain or increase current supply will be free to do so.

If milk prices are to recover then the supply/demand balance needs to be improved quickly and ICMSA firmly believes that farmers across the EU would reduce supplies — if incentivised to do so — which would, in turn, lead to improved milk prices.

I’d caution Mr Creed against getting the interests of “the dairy sector” mixed up with those of “dairy farmers”; the links further up the supply chain are doing very well out of the price crisis while the farmers, — on whom the whole industry ultimately rested — have now gone a year earning no income from their herds.

If ever there was a time for the EU to show what it can do when a clear problem has arisen that affects a whole EU-wide sector, then it is in this area of collapsed farmer milk prices.

Why not show how the EU can work decisively when the real problem is identified?

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