ANDY JALIL –
The Irish agri-food sector faces a severe jolt to its very being if a no-deal Brexit happens next March and there is very little it can do to help itself. Ireland’s much-talked-about temperate climate means it has ideal conditions for farming, notably beef and dairying, and it built up a huge export industry for its surplus produce.
Some 90 per cent of Irish beef is exported, while its dairy exports are worth in the region of 4bn euros. Any possible disruption to its exports will be felt right across the sector, but especially by farmers on the ground.
Recent stark warnings from Meat Industry Ireland, which represents the meat processors, are not scaremongering, but fact.
If a no-deal Brexit happens, the agri-food sector will be facing a massive problem — what to do with the excess produce. While the Department of Agriculture and Bord Ria have been working in recent times on finding and opening new markets for Irish exports, the reality of the situation is that the UK is Ireland’s closest and best market.
Ireland is so reliant on the UK for beef exports that industry experts say possible disruption will see meat factories close and the price of beef collapse.
The UK takes 50 per cent of Ireland’s beef exports — worth more than one billion euros — and the imposition of extra tariffs onto these products, along with possible border checks, would fundamentally price Ireland out of the market.
Other sectors are even more complicated. Hundreds of thousands of litres of milk from cows in the Republic of Ireland goes to Northern Ireland to be processed every day, before makings its way back down to southern Ireland onto supermarket shelves. Some 500,000 pigs are sent to Northern Ireland every year for processing.
The logistics of any physical border checks would be nothing short of a nightmare for the industry as a whole. From processors right down to farmers, the free movement of animals, milk and processed foodstuff is critical to the industry. If there are more than 300 refrigerated trucks of meat leaving Ireland every week to continental EU markets, 89pc via the UK, the task is mammoth.
Norway and Sweden seem to have their border issues sorted, using available technology to minimise time delays. But paper work problems can result in hours of delays.
Estimates say that a two-minute delay in Dover would cause 27km queues and it would be horrendous on the M1 motorway as over 5,000 lorries cross this invisible Border each day.
As time ticks by and a no-deal Brexit looks more likely an outcome, talk of checks on live animals and agricultural products at borders has the potential to bring Ireland’s export-reliant industry practically to a halt.
Putting the brakes on the country’s largest indigenous sector, which has ambitions to be worth 13bn euros, could see the sector crashing down and will affect far more than just farmers. A no-deal Brexit would be a hammer blow to a sector that’s keeping the lights on in many parts of rural Ireland.
Meanwhile, while its thoughts are on the eventual outcome of Brexit, Ireland has slipped in global business rankings. It has fallen from eighth to eleventh in the annual Forbes ‘Best Countries for Business’ list.
Among the smaller countries placed ahead of Ireland are Singapore, the Netherlands, New Zealand and Denmark. The rankings were compiled by looking at areas like property rights, tax, infrastructure, and market size.
Seven years ago, former PM Enda Kenny, on the election trail, promised to make Ireland “the best small country in the world in which to do business” by 2016.
However, while the economy has improved dramatically since then, it is only ranking as the third-best small country in Europe for business. According to Forbes, the greatest risks facing the Irish economy are Brexit, possible changes to international taxation policies which could affect the country’s revenues, as well as trade pressures from outside forces.
As a small open economy, Ireland is especially exposed to changes in the global trading system. The listing comes as the National Competitiveness Council (NCC) last week warned that rapid house price inflation and traffic congestion are the warning signs of a loss of competitiveness in Ireland.
The country is facing a “significant” loss of competitiveness as the economy heats up and prices and living costs continue to rise, it said.
(The author is our foreign correspondent based in the UK. He can be reached at email@example.com)