Brexit Could lead to Irish Agri-Food Business falling by $900m a Year in Value, Experts Warn

14 Apr 2016 --- The UK exit from the European Union could have significant impact on Irish agri-food exports leading to Irish dairy and beef products facing import tariffs and potentially the Irish agri-food business falling in value by up to €880m ($990m) a year, according to a report from the Irish Agriculture and Food Development Authority.

The report from Teagasc is the latest intervention in the Brexit debate, which has seen a number of businesses, trade bodies and regulators wade into the hotly-contested debate.

Overall, Irish agri-food exports were valued at close to €11 billion ($12.3 billion) in 2014 and the UK is the number one export market, worth €4.5 billion ($5.1billion) in 2014.

According to economists at Teagasc, if a vote in favour of Brexit occurs, then there will be a period of trade policy uncertainty, as the UK will try and thrash out new trading deals with EU members states including Ireland.

Experts believe that the UK would leave the EU around 2020, should this happen.

The report says that in the event of Brexit, UK agricultural policy is not likely to radically chance immediately. But over the medium term, UK agriculture is likely to receive lower budgets and that funds will be more targeted to environmental objectives relating to agriculture.

The author of the report, doctor Kevin Hanrahan, notes that Irish agri-food trade with the UK in light of Brexit would not stop, owing to the UK’s low level of agri-food self-sufficiency.

Hanrahan argues that it would be in the interests of the Irish agri-food sectors that trade with the UK would continue in an unimpeded fashion, ideally through a customs union.

However, unless a trade agreement can be reached, then a re-introduction of trade barriers would occur between the UK and Ireland.

In the worst case scenario, Irish exports of dairy, beef and other agri-food items could face import tariffs that would make it less likely they would be imported into the UK market, the report warns.

The reports also warns that following Brexit, markets prices could become depressed if the UK decided to scrap all its import tariffs.

For example, this would mean that beef experts from South America and lamb and dairy exports from New Zealand wold enter the market at much lower prices.

But the report stressed that this is an unlikely outcome.

Teagasc economist Trevor Donnellan says that Brexit could mean a reduction in the value of Irish agri-food exports of anything from €150 million (1.5%) to €800 million (7.2%) per annum.

The report concludes that if the UK votes to leave the EU, it will only be possible to make a detailed assessment of the consequences, when the terms of Brexit become clearer.