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BREXIT DEAL WILL HAVE A SIGNIFICANT IMPACT ON AGRI-FOOD SECTORS - NIGTA
According to the Northern Ireland Grain Trade Association (NIGTA), the Brexit withdrawal agreement, to which the government is now committed, will have a significant impact on businesses in Northern Ireland and, unlike the earlier attempts by Theresa May, it will mean a changed relationship between Northern Ireland and the rest of the United Kingdom.
NIGTA’s Robin Irvine points out that the border in the Irish Sea will create an additional administrative burden for materials or product entering Northern Ireland from the UK mainland. The potential for further complication in terms of different duties applied to this trade will depend on whether the UK can negotiate a deal with the EU over the next 12 months or so.
But NIGTA members are also highlighting the advantage of the agreement over a no-deal outcome. This centres on the fact that Northern Ireland will remain in regulatory alignment with the European Union, with access to the single market for the foreseeable future, while the rest of the UK will seek to pursue new trade deals and will be free to develop their own regulatory rulebook.
While local farmers and businesses will continue to conform to European standards for at least four years (with a further two-year withdrawal period, should our assembly decide to end the arrangement), there is, however, no indication that they will continue to enjoy the EU system of farm support.
The £240 million of single farm payment, which is essential to the viability of local farming, may be lost in favour of an unspecified and unquantified package of incentives for environmental protection. A major NIGTA concern in all of this centres on the question: How can Northern Ireland businesses engage with the EU when the rest of the UK has withdrawn? The UK government has already removed their civil servants from Brussels, and UK agencies will no longer be eligible for membership of many European committees and forums across a wide range of activity.
“We will be subject to EU regulation; but with no voice at the table when these regulations are being discussed and negotiated,” commented Robin Irvine. “Any divergence between UK and EU regulation has the potential to create distortion in the market, and we need to be able to exert some influence to ensure a level playing field. “It will be important for local representatives to have access to the various EU rule-making bodies and the communication with Brussels will be essential. New bodies and structures taking a pragmatic approach at an all-island level will also be required to make things work when we can no longer look to London for direction.”
Irvine continued by saying that a significant concern for the agri- food sector is the potential for this new government, with its substantial majority, not depending on support from the rural areas or the minor parties to enter into trade deals that would allow the UK to significantly increase the import quota of cheaper food while still requiring the high welfare and regulatory standards for home-produced product. “This cheap food will be enthusiastically welcomed by the electorate but could be devastating for a region like Northern Ireland, where we depend on exporting the vast majority of what we produce. Northern Ireland has a population of fewer than two million people, but we produce meat, milk and eggs for almost 10 million consumers. “The natural market for this product is mainland UK. But if this market is devalued by open access to imports and competition from low-cost regions such as South America, Northern Ireland producers will be glad that they still have access to Europe’s 450 million consumers and the challenge will be to refocus the business model beyond the UK shores.”
CROP RETURNS INCREASES FOR MANY IRISH TILLAGE FARMERS IN 2018
According to figures recently released by Teagasc, the average return for Irish tillage farms in 2018 was €286 per hectare, or 83% higher, compared to 2017. For 2019, preliminary figures suggest a lower financial return (on average, approximately 17% lower), despite higher yields during the period. This reflects the major effect that reduced grain and straw price can have on the returns for farmers. “The 2018 average financial returns disguise the top performing and the bottom performing farms,” said Michal Hennessy, Head of Teagasc’s Crops KT department, who analysed the figures. “Farmers who were more dependent on spring crops, especially in the southeast, were worst affected by the drought and consequently had lower financial returns compared to farms with a good mix of winter and spring cereals.” Teagasc 2018 e-Profit Monitor results were highly influenced by a very unusual weather year with late spring sowing and a severe drought in the middle of the growing season. Grassland farmers were also severely affected by shortages of winter feedstuffs due to the cold and wet spring. Poor grass growth during May and June resulted in lower than average silage harvests. As a consequence, prices for grain and straw increased on the back of very high local demand and an increased world market price.
The overall trend in 2018 is a marked increase in income compared to 2017. The ePM average tillage Net Margin of farmers analysed is €629/hectare, which compares to €343/hectare in 2017. Farms categorised as predominately spring cereals gave the lowest returns
PAGE 24 JANUARY F//FEBRUARY 2020 AGE
2020 FEED COMPOUNDER
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