The European Commission’s €50m Brexit aid package for Irish beef farmers has been widely welcomed, as has the Government’s confirmation that it will bring the overall package to €100m. It is an important recognition by European Commissioner for Agriculture Phil Hogan and Minister for Agriculture Michael Creed that Brexit has already affected the income of beef farmers.

Hogan and Creed, along with the IFA, which made a submission detailing the impact of Brexit, deserve credit for delivery of such a critical support.

The precedent of Brexit-related supports has now been established. However, there is little room for celebration. As Department officials work to design a scheme that will allow the transfer of money on to farms, the likelihood of additional Brexit supports being required has intensified amid increased political turmoil in the UK.

It is now almost certain that over the course of the summer months the political agenda in the UK is going to be dominated by a leadership contest within the Conservative Party. It will undoubtedly further entrench MPs on both sides of the Brexit debate.

All animals from processor-owned or controlled feedlots should be excluded from the compensation scheme

While Theresa May planned a last-ditch attempt to get support for her withdrawal agreement in June, many are now predicting her imminent departure. As the UK government disintegrates, polls are suggesting that support for Nigel Farage’s Brexit Party – which is arguing for the UK to leave the EU without a deal – is surging ahead of the European elections, with some predicting the party could receive 34% of the vote.

Closer to home, An Tánaiste Simon Coveney has warned that the risk of a no-deal Brexit has never been greater. In the context of the recent announcement, it is worth highlighting that in a crash-out scenario, a €100m fund would be a drop in the ocean relative to the impact on farm incomes.

Attention is now turning to how Minster Creed will distribute the €100m fund. It is regrettable that beef processors with large-scale feedlots have not ruled themselves out of the compensation scheme. All animals from processor-owned or controlled feedlots should be excluded.

There will be the political temptation to use a scatter-gun approach to distributing funds. This should be resisted. The fund is calculated on the severe financial impact of Brexit on the income of farmers who slaughtered cattle or sold cattle for direct slaughter over the past number of months. Any attempts to exempt certain classes of stock from the compensation package would need careful consideration.

Genuine beef finishers who meet set residency requirements should not be excluded regardless of the type of animal they may have slaughtered.

The €100m fund should not be seen as a solution to the income challenge on suckler farmers. This sector requires a structured support mechanism – not an ad-hoc payment. There remains an onus on both the commissioner and the minister to put such a mechanism in place.

Unfortunately, Brexit is not the only threat on the horizon for farmers. It now appears that a Mercosur trade deal is back on the agenda. Traditionally, the Irish beef industry has been dependent on the support of its French counterparts in keeping the French government on board in opposing a deal. However, recent indications are that France is now more amenable to a deal and, if that is a case, it looks unstoppable.

Commissioner Hogan was strong last week in his dismissal of prospects for a deal – and again this week when he spoke to Odile Evans (listen at ifj.ie/podcast).

However, it is no secret that European Commissioner for Trade Cecelia Malmström, along with many EU member states, is anxious to conclude a deal which has particular advantages for the auto and pharmaceutical industries, as well as financial services – which is no doubt appealing to the French.

For the Commission to strike a Mercosur deal offering a beef quota to South America of 70,000t to 100,000t as the EU and Irish beef sectors struggle to deal with Brexit would be indefensible.

Farmers will be hoping that the announcement of the €100m fund is not an attempt to prepare them for bad news to come.

Agribusiness: keeping Ireland competitive in a global market

This week’s paper carries our special Irish Farmers Journal/KPMG Agribusiness report. Agri-food is facing increased competition, not just from traditional competitors but also those seeking to target consumers with alternatives to dairy and meat proteins.

One of the key areas identified in achieving a competitive advantage is cooperation, particularly in the area of building brand awareness and logistics. Developing efficient routes to market becomes a much bigger challenge when trying to service customers in Asia rather than those on our doorstep in the UK.

Similarly, communicating to an Asian consumer the credentials of Ireland as a premium food producer is more complex and costly than selling the message in the UK.

One area that often escapes attention is the need for a balanced regulatory landscape. We only have to look to our tillage sector where our competitive yield advantage is eroded by an unbalanced regulatory landscape – one that sees farmers being forced to compete in a global market without the performance-enhancing and cost-reducing technologies available to global competitors.

We hope that, as Amy Forde reports, the move to have gene editing excluded from GMO legislation is the first step to addressing this. The same anticompetitive regulatory landscape would develop for beef farmers in any Mercosur deal.

Tillage Industry Ireland: a new umbrella group for tillage

The establishment of Tillage Industry Ireland is a welcome development. While focused on the ailing tillage sector, it promises to help build a more sustainable future for Irish food products. It is unique in that it sees many strands of the industry – growers, input providers, grain purchasers and others – come together for the good of the sector as a whole.

The importance of the tillage sector as a supplier of inputs to the feed, and food and drinks industries has largely been ignored. With the level of scrutiny on the origin of ingredients used, the marketing messages used to promote Irish food and drinks are increasingly vulnerable.

We wish them the best in their journey to integrate more fully with other farming sectors and in their quest to help in the many difficulties that modern farming is encountering, namely climate change, water and air quality, biodiversity, soil health and other environmental issues.

Nitrate derogation: what constitutes an intensive farm?

One of the more puzzling categorisations in the Department’s nitrate derogation review is the labelling of farms stocked in the 130-170kg organic nitrogen bracket as “intensive”. This suggests farms stocked between 1.5 and 2 cows/ha are intensive and pulls another 17,000 farms into additional regulations and controls.

Unnecessary controls and red tape are not helpful.

Irish water quality is good relative to other EU member states. The general public and farmers need it to stay that way.

The last day for farmers to have their say on the nitrate derogation is Friday 24 May.

Global trade: all eyes on China as food imports soar

Elsewhere this week, Aidan Brennan reports on a phenomenal statistic: in January of this year, China imported more milk powder than the combined imports into the country in 2009 and 2010.

Darren Carty reports a similar trend in sheepmeat, with imports in 2018 jumping 30% on the previous year. Sheepmeat imports from New Zealand over the last decade have soared from less than 50,000/t per annum to over 200,000/t.

Added to this we now have a scenario where the meat protein market in China has been thrown into chaos in the wake of African swine fever. Peter Duggan details the impact on the pigment market here.