Updated: 17/07/17 : 11:51:02
The departure of the UK from the EU will provide major challenges for Irish farming and the agri-food sector. Claire Walsh, Brexit Specialist at IFAC Accountants and Sligo branch manager believes the Irish farming and agri-food sector is vulnerable to Brexit for the following reasons.
Why Irish farming and the food sector is so exposed?
The UK remains the main destination for Irish food exports, with:
37% of all food and drinks exports, at a value of €4.1bn, going to the UK market in 2016
50% beef - 270,000t, worth €1.2bn
90% mushrooms worth €80m
56% pig-meat worth €345m
53% of cheese, 29% of butter, which along with other dairy products are worth €825m
“The potential re-introduction of tariffs on exports to the UK wouldbe crippling for Irish farmers” said Claire.Claire continued “Ireland is the only country in the EU sharing a land border with the UK. Exports of agricultural products from Ireland to Northern Ireland specifically, were worth €750m in 2015”.
At present the UK contributes a net €4bn per annum to the EU CAP budget.A reduction in the CAP budget post 2020 arising from the UK exit would have serious implications for farm incomes. A recentfarm income survey confirmed Irish farming’s reliance on CAP, with 65% of all farm income coming from the CAP budget.
According to Claire Brexit has a number of serious implications for Irish farming, all of which must be tackled head on.What does this really mean?
1. Ireland is highly dependent on the UK market for agri-food exports. It is vital that new markets
2. The introduction of tariffs will be hugely detrimental to producers here and the negotiation of
free trade agreements will be vital.
3. A hard border with Northern Ireland will severely impact trade and the cost of doing business.
The impact on trade and movement of goods must be minimized.
4. A reduction in the CAP budget will undoubtedly have a hugely negative impact on farm incomes
in Ireland. We must lobby hard for a “no drop in CAP” budget solution post Brexit.
5. Brexit will affect all industries. Businesses must ensure their operations are running as
efficiently as possible.
“Here in the North West, IFAC clients are mainly in the beef, suckling and sheep sectors, considering that these sectors are most exposed to the effects of Brexit,and our close proximity to Northern Ireland, farmers here are very vulnerable. My advice to clients preparing for Brexit is to focus on cost efficiency, carefully assess any capital investment projects, and apply a discount factor of 3-5% on future BPS payments” recommended Claire.
A member of Chartered Accountants Ireland and an AITI Chartered Tax Advisor, Claire Walsh is the Brexit specialist with IFAC Accountants. Claire also manages IFAC’s Sligo branch.
To discuss in confidence please contact Claire on 071-9167848 or email firstname.lastname@example.org
or visit www.ifac.ie
With over 30 locations across the country, IFAC Accountants has
grown into one of the country's largest accountancy firms and is the only firm
specialising in the agri-business sector.