EU farm payments could see a 10% drop in rates post-Brexit.
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  • 2 years ago

EU farm payments could see a 10% drop in rates post-Brexit.

Irish sheep farmers have today been warned, by one of Teagasc’s leading economists, that Brexit could see yet more implications affecting the sheep industry.

Farmers who have recently seen an upturn in lamb exports to the UK are likely to be wiped out post-Brexit. It is claimed that if sheep meat exported from the UK to the EU are hit by penalties and tariffs that this could see lamb sales rise in the country. The claim was made by Dr Kevin Hanrahan at the recent Grassland Association sheep conference.

These potential gains, it is warned, could be wiped out by other costs, a dip in beef prices and a decrease in EU payments. Dr Hanrahan, head of Teagasc’s rural economics unit, said at the conference that he estimates that direct payments from the EU might decrease by as much as 10% or €130m. He theorizes that this could well happen as the UK, in recent years, has been the second largest net contributor to the EU budget.

He also added that these payments are a key part of dry stock farmer’s income and that "Almost certainly post-Brexit, the basic payment will get smaller in Ireland”. He also stressed that the key negotiators pledged to battle hard for the payments.

At the conference, it was heard that previous relations between the UK, Australia and New Zealand had led to agreements being made to allow sheep meat to be imported into the EU tariff free. This was explained by Declan Fennell, Sheep market analyst Bord Bia, who said a large number of these lambs enter the UK while the rest enters the EU. He also questioned the future of this agreement, "In a post-Brexit era, where does the New Zealand quota end up?" he asked.

He also questioned whether "In a situation post-Brexit, will they have issues in terms of exporting product into the EU. I suppose that gives us a competitive edge and positions us as the number one exporter in the EU market,".

He also warned Irish farmers that although they provide a better tasting meat that "We will never out-manoeuvre New Zealand in terms of scale or being more price competitive,".

With issues surrounding a proposed hard border being raised again Mr Fennell said, “There is going to be a logistical and production issue there”. As we know Ireland imports around 350,000 to 400,000 sheep from Northern Ireland every year, and any potential tariffs would further damage the industry.

Joe Ryan, of the Meat Industry Ireland, also had a warning for Irish sheep farmers. Although he stated that they believe that Irelands country sheep breeding stock potentially be expanded and add an extra €150m to the sector with the new promotion of Irish meats in China. He also warned that if tariffs are imposed on lamb travelling through the UK, post-Brexit, and into Europe that this would create major issues and damage to the sector.

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