Ireland braces for loss of markets, subsidies

The beef sector accounts for 40 percent of Ireland’s gross agriculture output, with exports worth about $C5billion. | Getty photo

CAMROSE, Alta. — As the United Kingdom prepares to leave the European Union, Ireland watches the process with trepidation.

Ireland is an exporting nation where half of its business is conducted with the U.K. As Brexit negotiations begin, Ireland will be one of 27 nations negotiating and it will not receive favoured status, said a senator from the Irish government.

“This is an unprecedented event and now no one is quite sure how it will play out,” said Paul Daly, who is an opposition agriculture spokesperson.

“We need to broaden our horizons because we are in a very precarious position,” he said in an interview while visiting the Canadian Bull Congress held in Camrose Jan. 27-28.

The European strategy is to make the process difficult, partly to discourage other members from following suit if Britain gets too good a deal.

While agriculture could struggle, other industries may take advantage of the new order because Ireland could be the last English speaking EU member and multi-national companies are interested in establishing offices there be-cause of that.

“That will open up Dublin for financial services,” Daly said.

Agriculture has not received much consideration.

“Agriculture is our largest indigenous industry. Our government has serious concern for our agriculture industry. What I am learning now is that agriculture is the poor relation in the U.K., so the English farmer is going to come pretty poorly out of this,” he said.

British farmers are worried about the future reduction in farm subsidy payments. Irish farmers are concerned because the U.K. puts more into the EU subsidy fund than it takes out and once they are gone there will be a considerable gap in that budget.

The first major casualty of the Brexit vote was the Irish mushroom industry.

About 80 percent of fresh mushroom production went to the U.K. Farmers had yearly contracts with fixed prices in pound sterling. When the vote happened, the pound dropped 20 percent relative to the U.S. dollar and the Irish farmer received less because they were paid in euros.

Some farms and jobs were lost because of the income drop.

An open border now exists be-tween Ireland and Northern Ireland and processors operate on both sides of the border.

No one knows how food export requirements might change if the U.K., and therefore Northern Ireland, pulls out of the EU and Ireland itself remains within the EU.

The Irish agriculture industry needs a diversified export market portfolio.

“We need to explore foreign markets and we need to have our finger on the pulse of negotiations. They may not work out negatively,” he said. “It is up to our government to be very forthright for us.”

The beef sector is the largest in the Irish farm economy and accounts for 40 percent of Ireland’s gross agriculture output. Last year, beef production was 520,000 tonnes and 470,000 was exported. Those exports were worth about C$5 billion.

Ireland has clearance to ship beef to Canada and the United States, although at this point the amount is low. Most of that beef goes into specialty markets, said Daly.

By the end of November, Ireland had shipped 1,659 tonnes to the U.S.

Ireland slaughters 1.8 to 1.9 million head annually, said Gerry Smyth, who has been buying Canadian cattle, embryos and semen since the mid 1990s.

Besides a large beef sector, there has been a surge in dairy production.

The European dairy quota has been lifted and Irish farmers expanded their cow herds. Milk prices dropped but farmers took the approach that milk prices will recover.

“There is no real alternative. Beef has topped, corn and grain has topped, so dairy is the best alternative,” said Smyth.

Live cattle exports are also important.

“The live export is the biggest part of our industry,” Daly said.

“If we can’t export a large percentage of our stock, then we are overpopulated and the processors have a field day because there are too many cattle,” he said.

Most recently live exports of cattle younger than 12 months have gone to Turkey and negotiations are underway to ship cattle to Egypt.

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