Cross-border milk sales could be exposed to the full EU tariff of €21.8/100kg if the UK crashes out of the European Union (EU) without a withdrawal deal on March 29th, according to Dairy UK’s director for Northern Ireland, Dr Mike Johnston.
“This is a very complicated matter,” he stressed.
“However, if the UK leaves the EU without a deal, and the EU leaves its tariffs unchanged, then milk produced in Northern Ireland, which is subsequently processed in the Republic, would be subject to a tariff.
“Under these circumstances imports coming into the UK would be subject to whatever tariff levels the Government finally decides on. However, tariffs would be paid on all exports from the UK to the EU and this would include cross border milk sales.
“Our current estimates put the tariff figure involved at around 19p per litre.”
Dr Johnston went on to point out that it would be up to individual processors to decide how to react in these circumstances.
He continued: “I understand that a UK cabinet sub-committee met last week to decide on what specific trading policies would be followed in the event of a No Deal Brexit. We are expecting confirmation of which policies would be actually put in place over the coming days.”
The Dairy UK representative also pointed out that processors in the Republic of Ireland and Northern Ireland would be eligible to claim Inward Processing Relief on cross border movements for processing, but the details of how this would operate are still unclear.
“This could help to mitigate the impact of the tariffs imposed. However, this is a very complicated process. Current milk certification procedures may also be impacted by a No Deal Brexit. Currently, there is full co-operation between the Department of Agriculture, Environment and Rural Affairs here in Northern Ireland and the Republic’s Department of Agriculture, Food and the Marine on this matter.
“However, if these working procedures broke down post-Brexit it could prevent processors in the Republic of Ireland from manufacturing milk sourced north of the border into products destined for Third World markets.”
Commenting on these matters UFU president, Ivor Ferguson said: “Leaving the EU without a deal would be catastrophic for Northern Ireland’s farming families and their businesses. No deal means high tariffs on our exports creating an effective trade embargo and the possibility of lower standard imports flooding the UK market. These practical issues will have an immediate and profound impact on farmers, causing major disruptions to the supply chain, crippling the industry and rendering our farmers uncompetitive. We are continuing to work closely with DAERA on ‘no deal’ contingency planning. However, in addition to this practical and logistical planning, to prevent the total collapse of our farming industry, farmers will need separate and additional funding for off-setting crisis measures.”
In response, a DAERA spokesperson said: “Based on current EU rules, it could be anticipated that the EU would regard the UK as a third country from 30 March 2019 in the event of a no deal Brexit and apply their relevant rules accordingly.”