The Government's plan to nearly double the value of Ireland's food output over the next decade may no longer be feasible because of Brexit, an Oireachtas committee report has warned.
The Food Wise 2025 plan, which is based on projected expansions in dairy, beef and seafood, as well as a doubling of consumer food and drinks exports, targets an 85 per cent jump in the value of exports to €19 billion by 2025.
However, a report by the Oireachtas Committee on Agriculture suggests the targets may be unrealistic in light of the threat posed to Irish agriculture from Britain’s decision to leave the EU.
“Brexit may require fundamental changes in the structure and future of Irish agriculture. As such targets set in Food Wise 2025 may no longer reflect what is possible or even what is best for the Irish agri-food and fisheries sectors,” the report said.
Ireland's €11 billion food sector has long been highlighted as the most vulnerable to Brexit, with more than half of the State's food output going to the UK. A hard Brexit scenario, with Britain reverting to World Trade Organisation (WTO) rules, could result in hefty tariffs on Irish exports to the UK.
The Oireachtas report also raised the prospect of a post-Brexit Britain sourcing cheaper food on world markets, a move which would damage the livelihoods of producers here.
Cost pressures
“Irish agriculture will inevitably face increasing cost pressures in the coming years. If the UK can source produce on the world market at considerably lower prices than within the EU, and
Ireland
specifically, Irish producers will face considerable downward price pressures.
“At a critical point Irish producers will not be able to sustain price reductions; in the absence of alternative market outlets for produce this would entail a substantial constriction of the market,” the report warned.
This could have a knock-on impact on employment in the sector, which currently supports about 170,000 jobs. The committee said the best strategy was to pursue greater market diversification.
Minister for Agriculture Michael Creed is leading a trade mission to Saudi Arabia and other Arab states this week in bid to identify new markets for Irish produce.
Protectionist stance
The report also highlighted the risk to trade from events elsewhere in the world, including a more protectionist stance by the US, which might reduce the prospect of an EU-US transatlantic trade deal.
A proposed Transatlantic Trade and Investment Partnership is not, however, expected to be favourable to agriculture in Ireland.
The report recommends that the upcoming Brexit negotiations secure the closest possible trading relationship between the UK and EU, and the provision of a strong CAP budget following the UK departure.
Responding to the report, the president of the Irish Farmers' Association (IFA) Joe Healy said: "The retention of free trade in agriculture and food products between the EU and UK, and maintaining the value of the market, must be the Irish priorities."
