‘No deal’ a threat to agri exports

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A ‘no deal’ Brexit could have a devastating impact on Northern Ireland’s beef industry, according to Northern Ireland Meat Exporters’ Association (NIMEA) executive director Conall Donnelly.

He added: “A ‘no deal’ would have implications for both beef exports and imports, if we are faced with a scenario on March 30 this year which could see our beef exports to the EU and third countries prevented. Meanwhile, the potential for unfettered competition from third country markets would be devastating for the livestock sector here. The last time we had a similar scenario was BSE.”

Sources within the agri-food sector have told Farming Life that trade with EU and third country markets is currently being undermined due to uncertainty on health certification along with the added issue of potential tariffs.

Mr Donnelly again: “Beef exporters have been gradually building up a customer base in the EU and third countries over the past 15 years. Exports to these markets now account for over 20% of Northern Ireland’s total beef output. It is vitally important that they are retained and built upon for the future.”

Meanwhile, the Livestock and Meat Commission for Northern Ireland (LMC) has emphasised the importance of a Brexit withdrawal deal being reached with the EU.

The organisation’s economist, Seamus McMenamin said that a ‘no deal’ Brexit and the UK reverting to World Trade Organisation (WTO)trading conditions could be devastating to the Northern Ireland red meat industry.

He added: “LMC commissioned a report by the Andersons Centre in 2017 which examined the impact of two different WTO trading scenarios and the affect these could have on the Northern Ireland beef and sheep meat industry. The findings of the report display the vulnerabilities of the red meat sector in Northern Ireland to any changes to the current trading conditions. Farmers in Northern Ireland need access to important markets within the EU as well as wider global markets to ensure the future sustainability and viability of our industry.

“The Northern Ireland red meat industry would be particularly exposed under a WTO trade liberalisation model, whereby the UK unilaterally abolishes tariff barriers, also known as an ‘Open-Door’ trade policy. Outputs from the Northern Ireland red meat sector would fall by over 20 per cent and exports to the EU would decline by over 90 per cent. There would then be a significant increase in red meat imports to the UK from the rest of the world under this trading model.”

Mr McMenamin further explained: “The economic impact of an ‘Open-Door’ trade policy would seriously threaten the viability of beef and sheep farming across Northern Ireland with grave consequences for the wider rural economy. With this arrangement, the beef and sheep industry stand to lose an estimated £230m per annum which would be disastrous.

“The potential implications for the Northern Ireland sheep sector are particularly stark under any no-deal trading situation. Access to EU markets is critical given that half of lambs produced in Northern Ireland are exported to the Republic of Ireland for direct slaughter. In addition to this, approximately half of the lamb that we process in Northern Ireland meat plants is destined for the EU.

“The uncertainty surrounding the Brexit process is the most challenging aspect for all businesses involved in red meat production. Clarity is urgently required on the future UK/EU relationship which will allow businesses to make informed decisions about their future investment and development plans.”

Many of the local farming and food stakeholder groups met with the Prime Minister Theresa May during her visit to Northern Ireland earlier this week. These included the Northern Ireland Food and Drink Association (NIFDA).

Commenting, the organisation’s chief executive Michael Bell said: “The meeting with the Prime Minister was a useful exchange of views between key business and agri-food representatives, who are all passionate about getting the best deal for Northern Ireland businesses, and for our society as a whole.

“Given our land border with the EU and our reliance on export markets, it is clear that we face unique challenges posed by Brexit. It is important to stress that whilst Great Britain imports 50% of its food, Northern Ireland exports 80%, so we are particularly sensitive to any potential barriers to export. We welcome the Prime Minister’s commitment to ensure that there is no hard border, however the industry also needs reassurances about our ability to continue frictionless trade with other key markets post-Brexit.

“As a representative body for the leading agri-food businesses in Northern Ireland, we have voiced our support for the backstop as it offers vital assurances to our members. We recognise that some amendments may be required to the current backstop proposal, and we are happy to engage with politicians as they continue to seek a solution.

“A no-deal outcome would be devastating to our local food and drink industry, which simply could not absorb WTO tariffs. We strongly urge the UK government, and our local politicians, to work together to avoid a no-deal at all costs.”

The leadership of the Ulster Farmers’ Union (UFU) also met the Prime Minister: Mrs May was told that a ‘no deal’ would have catastrophic consequences for the farming industry in Northern Ireland and urged her to do everything in her power to secure a Brexit deal.

UFU chief executive, Wesley Aston said: “We welcome the opportunity to have met the Prime Minister again this week. We stressed to her it is crucial that a deal is secured and soon. The current uncertainty is bad for business and our customers are seeking more clarity on what is to happen after the 29th March.”

Northern Ireland’s agri-food industry is worth approximately £4.5 billion to the Northern Ireland economy and employs around 100,000 people.

Mr Aston continued: “The importance of agri-food and farming to Northern Ireland cannot be underestimated. It was encouraging that the Prime Minister recognised both this and our dependence on external trade. We have a world-class reputation and produce food to some of the highest animal welfare and environmental standards in the world. A ‘no deal’ Brexit puts the future of the entire industry in jeopardy.”

According to the UFU, a ‘no deal’ scenario would introduce steep EU tariffs on agriculture goods from the UK, effectively pricing the agri-food industry out of the market. Additionally, in the effort to deliver on the UK government’s commitment to keep food prices stable for consumers, the government is likely oot to offer lower import tariffs. Which, under WTO rules, would have to be available to trading partners across the globe.

“We are already seeing evidence the Government is seriously considering lowering import tariffs in the event of a no deal. This would be disastrous for farmers, as the market would be flooded with cheaper, and possibly lower standard food imports. Farm gate prices would be undercut and local farmers would be unable to compete,” said the UFU chief executive.