Relevant Matter
Public policy or programme
Public Policy Area
Finance
Period
1 May, 2022 to 31 Aug, 2022
Specific Details
Brexit Adjustment Reserve (BAR)
Intended results
To maximise the allocation from BAR to farmers.
• The Irish agriculture sector has been the foundation stone on which economic activity and employment (both upstream & downstream) has been built in towns, villages and surrounds throughout rural Ireland. The sector, and specifically its primary producers, are a critical part of the food supply chain, ensuring food security for Irish consumers, however now more than ever is facing into an increasingly uncertain future.
• The United Kingdom (UK) has, and will remain, a key strategic market for Irish Food & Drink exports, however Irish farmers have been forced to endure the adverse consequences of that unexpected Brexit vote in June 2016, operating often within the realm of negative market sentiment; currency fluctuation; protracted EU/UK negotiations; uncertainty and indeed a series of Hard Brexit cliff-edges, which unfortunately even today, remains a possible reality.
• Cost of production (particularly inputs sourced/diverted through the UK) has gone up post Brexit; while added uncertainty and challenge has impacted on-farm investment and succession, particularly among the traditionally low margin enterprises. The cost/inability to secure seed potatoes has been a particular challenge.
• The most immediate and direct consequence of the Brexit referendum was however a weakened sterling – wiping approximately €570m off the value of Irish Food & Drink exports in 2016, and an estimated €1.55bn since. Mushroom exporters, trading in sterling suffered an 18% cut to margins within weeks. Many ceased growing for a period; 40% exited completely. The industry impact of a weakened sterling alone relative to pre-Brexit levels for the Mushroom sector is estimated at c.€47m.
• Agri output prices took a hit too, with atypical seasonal market demand trends and stockpiling of product, aligned with cliff-edge EU/UK negotiations, continued Stg devaluation/fluctuations and the threat of a Hard Brexit, compounding matters, depressing output prices and consequently revenue returns received by Irish farmers. E.g., spanning Sept '18 – March '19, estimated lost trade for the beef sector was c.€101m, with further revenue loss evident end 2019 (c.€8.3m) and early 2021 (c€12.5m).
• Increased Agri-Food exports have been directed outside Great Britain (GB) since the Brexit vote, with a significant drop-off in the level & value of GB trade evident. Pigmeat exports to GB for example dropped almost 60% in value and volume terms in 2021 vs. 2020, with the GB market contributing only c.10% of total pigmeat exports (value & volume).
• It is undeniable that Brexit has had a significant adverse impact on the Irish Agriculture Sector, spanning all sectors, with additional, even heightened risk of further disadvantage potentially still to come in the form of market displacement; regulatory divergence and even the implementation of crippling tariffs should a Hard Brexit arise.
• A series of targeted, wide-ranging, and innovative financial & support measures are required to promote increased resilience and the sustainability of Irish family farm operations into the future. Such supports, amongst others, span
o Direct, targeted financial aid, in the form of De Minimis aid, to compensate for lost income incurred as a result of the weakening of sterling; atypical seasonal demand and/or other direct Brexit related reasons;
o Subventions on added cost of production;
o Measures, including direct-aid to support improved performance, efficiency and/or sustainability of the agricultural holding and therein support improved income resilience;
o Measures to reduce reliance on inputs by directly supporting farmers to implement measures that improve soil health and animal health leading to higher production efficiencies;
o Measures to promote On-Farm Diversification;
o Measures to support Intergenerational Renewal / Collaboration type supports/models;
o Measures to attract, sustain & diversify skills/expertise in the Irish Agri sector;
o Development of specific volatility and risk management measures.
• Farmers are continually been asked to focus and improve efficiencies to help sustain our businesses against Brexit and other negative external factors of influence, and while an essential practice, it in itself will not be enough. We need practical solutions and adequate supports too. The degree and depth of the support measures, including more broadly the allocation/distribution of BAR funding nationally received, must be proportionate to the fundamental risk involved.
• It is important to note that documented financial implications throughout this submission cannot in any way be construed as a full or comprehensive assessment of the overall adverse financial impact of Brexit on Irish farms/farm sectors. They are to be used purely for indicative purposes only, and included solely to highlight the significant economic consequences incurred post-Brexit, spanning multiple perspectives.
• The true impact of Brexit is yet to be realised. IFA welcome the opportunity to contribute this submission, and would very much welcome the opportunity to engage and discuss further in the weeks and months ahead to develop and deliver a series of measures to support increased sustainability and on-farm resilience as negotiation & events begin to unfold.
To seek a meeting with Michael McGrath - Minister, Department of Public Expenditure and Reform.
Name of person primarily responsible for lobbying on this activity
Tim Cullinan IFA President, Damian McDonald IFA Director General, Tadhg Buckley IFA Director of Policy/Chief Economist, Rose Mary McDonagh IFA Farm Business Chair. Shane Whelan IFA Senior Policy Executive
Did any Designated Public Official(DPO) or former Designated Public Official(DPO) carry out lobbying activities on your behalf in relation to this return? You must include yourself, and answer Yes, if you are a current DPO or a DPO at any time in the past. (What is a Designated Public Official?)
No
Did you manage or direct a grassroots campaign?
No
Was this lobbying done on behalf of a client?
No
Lobbying activity
The following activities occurred for this specific Subject Matter Area.
Email (2-5)
IFA Submission sent to Ministers.
Informal communication (2-5)
Designated public officials lobbied
The following DPOs were lobbied during this return period on this specific Subject Matter Area. These DPOs were involved in at least one of the Lobbying Activities listed above, but not necessarily all of them.
As returns are specific to a Subject Matter Area the above Lobbying Activities may be associated with multiple returns.
Patrick Donohoe
Special Adviser (Department of Agriculture, Food and the Marine)
Paul Savage
Assistant Secretary (Department of Agriculture, Food and the Marine)
Michael McGrath
Minister (Department of Public Expenditure and Reform)
Charlie McConalogue
Minister (Department of Agriculture, Food and the Marine)
Kevin Barrett
Special Adviser (Department of Public Expenditure and Reform)
Simon Harris
Minister (Department of Further and Higher Education, Innovation and Science)
Grant Sweetnam
Special Adviser (Department of Public Expenditure and Reform)
Brendan Gleeson
Secretary General (Department of Agriculture, Food and the Marine)