Source: All the key figures on agri-food reliance on UK market
There are two Irish economies: the hi-tech international economy, and the indigenous economy with an enormous reliance on agri-food. The Hidden Ireland is still doing pretty much what we have been doing since the Repeal of the Corn Laws: rearing pigs and cattle to feed England’s industrial cities. There is no other market in the world like the UK, which produces only 61% of the food it consumes. We sell them food to help close the gap, including six out of every ten bullocks we fatten on the plains of Royal Meath. They depend on us, but our dependence on them is even greater, and it is under threat. The latest policy paper from the Irish Farmers’ Association maps our dependence. Anyone who needs to appreciate the extent of the threat should read it on conjunction with Working Paper 550 from ESRI (published November 2016). Here are some of the IFA’s key findings:
With 65% self-sufficiency, the UK is a net importer of beef. Ireland is the main import supplier, accounting for almost 70% of UK beef imports. The UK is the market for 50% of Irish beef exports, with a further 45% going to the EU market. The UK is a high value market for beef, with prices consistently above the EU average. Overall, a reduction in access to and the value of the UK market would have a very negative impact on the Irish beef sector, and potentially on the overall EU beef market. As a mature market, the capacity of the EU beef market to absorb increased imports is low. Irish beef exports of 270,000 tonnes to the UK represent almost 10% of the intra-EU beef trade. The displacement of these exports would therefore have a destabilising effect on the overall EU market.
In 2016, 34% of Ireland’s dairy exports went to the UK, representing 53% of cheese exports, 29% of butter and 12% of SMP (Skim Milk Powder). Exports of cheddar cheese were 78,000 tonnes, representing 82% of all cheddar imported by the UK in 2016. Ireland is the only significant exporter of cheddar to the UK market and the UK market is the only market of significance for Irish cheddar. For Milk and Cream, the UK is a significant net exporter. In 2016, Ireland imported over 800m litres of milk from Northern Ireland for processing. Of this amount, approximately 120m litres were sold as fresh milk, accounting for 25% of the Ireland’s fresh milk market. Retention of tariff-free access to the UK market is critically important, particularly for Irish cheddar exports. Overall, the loss of or disimproved access to the UK market could have a destabilising impact on the overall value of the Irish dairy sector.
Ireland exported 13,000 tonnes of sheep meat to the UK in 2016. In the UK market, almost 90% of UK lamb imports come from outside the EU (New Zealand and Australia), while UK exports go predominantly to four EU Member States, with France accounting for 50% of these. The key issue for the sheep sector will be the decisions taken on the division of the large EU TRQ for New Zealand lamb– any displacement of NZ lamb imports, which currently go to the UK market, could have a negative impact on the overall value of the EU lamb market.
Pigmeat and Poultry
There is significant bilateral trade between Ireland and the UK in pigmeat and poultry products, which has been built up over many years. The disruption to existing trade flows, through tariff barriers, or other increases in costs, would reduce the overall value of these markets. In addition, the continuation of cross-border trade of pigs for processing is a critical issue, reflecting the overall processing capacity of the sector on the island of Ireland.
In the tillage sector, Ireland is a net importer of grains. The geographical closeness to Northern Ireland results in some grain farmers exporting their product to Northern Ireland, rather than selling to more distant parts of Ireland. • The imposition of tariffs on UK imports would potentially result in a re-sourcing of imports from the EU, with increased transport costs. On the inputs cost side, the exit of the UK from the EU presents a significant threat of increased costs and reduced availability for plant protection products and animal health remedies.
The UK represents 90% of the value of Irish exports, or over €80m. Barriers to trade, through tariffs, or other additional costs would undermine significantly this sector.