Cabinet told no-deal Brexit will ‘wipe out’ beef industry
Farmers facing massive 40pc drop in income as sector is hugely reliant on British exports
CABINET ministers were warned the beef, dairy and pig meat industry could be “wiped out” if Britain crashes out of the European Union, the Sunday Independent can reveal.
Ministers were also told a no-deal Brexit would also “seriously jeopardise the viability of large sections” of the country’s fishing industry.
The stark warnings were part of a confidential briefing presented to the Cabinet by Agriculture Minister Michael Creed. The minister said the agri-food sector is “uniquely exposed” to Brexit.
However, Mr Creed told colleagues the beef industry will be the most dramatically impacted by a cliff-edge Brexit with farmers facing a 40pc drop in their income.
The massive cut in income will be caused by beef prices plummeting 20pc, according to figures compiled for the Government by State agriculture agency, Teagasc. The Brexit fallout would make beef farming “completely unviable” and ultimately impact on employment in rural Ireland where more than 174,000 people work in farming.
The minister said the entire agri-food industry could face tariffs totalling €1.7bn which could “potentially wipe out Irish exports of beef, dairy and pig meat to the UK market”.
He said alternative markets would be found over time for the dairy and pig meat industry but the beef sector would be severely impacted as it is hugely reliant on UK exports.
The minister is acutely concerned about the tariffs which will be applied by the UK if the country leaves the EU without a trade deal.
The EU’s tariffs on agri- food from outside the union are far higher than those applied to other products.
The Government fears the UK will apply similar tariffs to those used by the EU if World Trade Organisation rules are introduced when Britain leaves in March.
Mr Creed also set out concerns facing food exporters who transfer goods through the UK to mainland Europe.
He said additional custom checks and queues at ports could have a detrimental impact on produce, especially goods with a short shelf-life.
The minister said the fishing industry is also worryingly exposed if Britain crashes out of the EU, as almost a third of fish are caught in UK waters.
A no-deal Brexit would mean Irish fishermen would no longer have access to a 200mile zone in British waters.
Details of Mr Creed’s briefing were not released after the Cabinet meeting but he did say the farming industry was facing an “existential challenge”.
Speaking before an Irish Farmers’ Association (IFA) event, Mr Creed insisted the Government was “well prepared” for a no-deal Brexit but said they “don’t have a clear line of sight” on what the impact will be on the agrifood sector. After the Cabinet meeting, the Department of Finance announced that a no-deal Brexit could result in economic growth slowing and 55,000 job loses.
It also said Mr Creed will meet with EU Commissioner Phil Hogan to discuss the potential impact of a disorderly Brexit on the Irish agri-food and fisheries sectors.
“The discussion also covered the need to deploy market response measures, including exceptional aid, under the CAP to provide necessary supports to Ireland’s agri-food sectors, given our specific exposure to the UK market,” it said.
“Minister Creed and Commissioner Hogan agreed to remain in close contact as the situation develops and we have more clarity about the nature of the UK’s departure,” the statement added.
Meanwhile, Tanaiste Simon Coveney has said Brexit is a “lose, lose, lose situation”.
“The European Union stands to lose a valued member state which designed some of its very best features,” Mr Coveney says in today’s Sunday Independent.
“Ireland stands to lose our closest neighbour from the group. Britain stands to lose the most. Many in the UK will fundamentally disagree with me on that last point, but there is not much by way of credible economic data or studies that say Britain will be better off after Brexit. Although we deeply regret the outcome of the UK’s referendum on EU membership, we must respect it,” he added.
The Tanaiste will this week travel to Washington to discuss Brexit with key figures in US politics. Taoiseach Leo Varadkar will hold talks in Brussels with EU leaders.