Claire Walsh, Brexit Specialist at IFAC Accountants has warned of the threat posed by Brexit
Claire Walsh, Brexit Specialist at IFAC Accountants has said Irish farming is particularly vulnerable to a hard Brexit, labelling it the greatest threat to the sector in the history of the State.
Our export focus on the UK market has been very successful, our nearest neighbor consumes 50% of our beef exports and 25% of our dairy exports.
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 believes the Irish farming and 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% pigmeat 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 would be crippling for Irish farmers,” Claire said.
“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,” she continued.
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 recent farm income 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 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 are explored.
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 and businesses should be encouraged to ensure their business is running as effectively as possible
“Irish farmers in the beef, suckling and sheep sectors are most exposed to the effects of Brexit. My advice for 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,” Claire continued.
A member of Chartered Accountants Ireland and an AITI Chartered Tax Advisor, Claire is the Brexit specialist with IFAC Accountants.
To discuss in confidence contact Claire on 071-9167848 or email email@example.com or visit www.ifac.ie.
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