Addressing the Oireachtas Committee on Agriculture on Tuesday afternoon on the impact of Brexit, IFA President Joe Healy called for the support of the Committee on the proposals IFA has put forward at national and EU level for farmers and the agri-food sector.
On our access to the UK, Joe Healy said it’s important it remains as free as possible, with the minimisation of any barriers to trade. The potential economic damage for the agri-food sector that would arise from a hard Brexit, is too serious to ignore.
Joe Healy said, “Our first position is that the UK would remain a full member of the EU’s Single Market, including free trade on agricultural products. This is also the position represented by our farming colleagues in the NFU in the UK, with whom we remain in regular contact since the vote and work closely with in Brussels through COPA”.
He said if this proves unworkable, IFA is clear that the agreement of a comprehensive Free Trade Agreement between the EU and the UK, with favourable access for agricultural products and mutual recognition of standards, must be a priority at EU level.
At EU level, IFA has looked for direct support through CAP Market Support measures to be provided to affected producers. The decline of sterling, arising from the UK vote, is a market disturbance which has occurred swiftly and unexpectedly, and has resulted in significant price falls.
“We believe that the EU Commission must look seriously at providing exceptional support for sectors for whom an external political event has had an immediate and negative economic impact. We are again calling on the Government to pursue this at EU level. We are also asking for the support of this Committee on these issues.”
Joe Healy said IFA is clear that there must be no changes to farm payments before the current CAP reform concludes in 2020, even if this requires additional contributions from the remaining Member States. A new EU and CAP budget must be negotiated after 2020.
“Ireland must be very clear and lead the way about the need for a strong CAP budget. This is critical for farm incomes, farm output and wider economic activity in the rural economy.”
For our beef sector, over 50% of exports go to the UK market, and so the weakness of sterling does provide a major challenge. However, IFA is clear, however, that exchange rate volatility is not the only determinant of price returns.
Joe Healy said demand for beef in the UK remains very strong. We are in the high demand Christmas procurement period for the last month or more, trade and market returns have picked up and cattle prices should have risen a lot more. It is clear the lack of competition in the beef sector is a major factor.
IFA has also made it clear that factories must demand higher prices from their British retailer customers to reflect the devaluation and pass these increases directly back to farmers. This is what should happen in a normal functioning market. But as producers, we well know the imbalance of power in the farmer, processor, retail relationship in the food chain and the need for regulation in this area.
Concluding, Joe Healy said strong leadership and the ability to compromise will be needed, at both EU and UK level. “The strength of the relationship between Ireland, Northern Ireland and the UK, at government and civil society level must be leveraged to minimise the economic and social disruption in the short term and to achieve the most positive and sustainable outcome to the negotiations.”