Brazil, Russia, India, China and South Africa, collectively known as the BRICS group of countries are holding their 15th summit in South Africa this week with expansion on the agenda.
The common bond between this diverse group of nations is that they are recognised as the emerging economic powerhouses in the global economy outside the major developed economies of which North America, Western Europe, Japan, South Korea and Australia are the most prominent.
Of course, countries like China, Brazil and Russia straddle both groups and are economic powerhouses in their own right, though in the case of Russia, before the invasion of Ukraine.
The BRICS group is a fairly loose alliance whose members have economic advancement as their objective.
However, in the case of China and Russia there is a strong geo-political dimension and an ambition to develop an economic bloc under China/Russian leadership that rivals the US and their allies dominated G7 and G20 group of nations.
The Russian invasion of Ukraine and US/UK/EU led pushback against the invasion through economic and military support gives the possible expansion of the BRICS group new meaning.
The EU and UK are active in the development of trade deals with countries and regions outside the EU, with the South American Mercosur group deal the most ambitious followed by Japan, Australia, New Zealand, Canada and South Korea as recent examples.
Attempts at an EU-US deal have failed for now, but the EU and UK are anxious to pursue trade relations. Progress on attempts with India and China has been at best slow.
Trade is particularly active between the BRICS members.
This was well demonstrated in the aftermath of the Russian invasion when Russian gas supplies to the EU were dramatically reduced. Overnight Irish and EU farmers struggled to access fertiliser supplies, and those that were available were at hugely inflated prices.
On the other hand, Brazil, which imports 85% of its total fertiliser requirement, secured a deal with Russia that meets a quarter of Brazil’s total fertiliser imports
It has also been demonstrated more recently with a grain power play following Russia not renewing the deal that allows Ukrainian grain exports out through the Black Sea.
At a Russian-African nations summit last month, Russia offered to replace any disruption of grain supplies to African countries caused by the blockade.
China has also been active in Africa through the construction of infrastructure projects as part of their plan to compete with the US and European countries who historically colonised much of the African continent.
Ambitions and relevance to Irish farmers
While this is all important at a geopolitical level and more general trade, the link with agriculture and impact on Irish farmers is less obvious.
If there is further expansion of the group, Argentina, the world’s third largest beef exporter and Saudi Arabia, the leading exporter of oil and energy, are likely to join. Iran, another major oil exporter, and Belarus, a major potash producer are also candidates to join.
They have even considered a collective trade currency to rival the dollar for international trade, but this seems to be recognised as an ambition too far.
It is fair to say that many of these countries aren’t aligned with the EU when it comes to climate policy, notwithstanding China’s progress in developing energy production without fossil fuels, and they are in the process of becoming the leader in manufacture and sale of electric vehicles.
While the Irish agrifood industry has a strong trading relationship with China, the value of this trade has weakened this year due to the combination of increased Chinese production and extremely competitively priced alternative suppliers.
For example, China was a high value market for Irish beef exports up to the suspension in May 2021, yet when that business recommenced in January this year, traders found that the value per tonne of beef exports had plummeted, with increased production from Brazil and Australia dominating the market for imported beef.
Irish dairy exports to mainland China have plummeted to a five year low in the first half of 2023 at just 30,306 tonnes compared with 52,142 tonnes in the first half of 2019.
Of course Irish farmers benefited greatly by joining the alliance of European countries fifty years ago that has since expanded to 28 members, now 27 with the UK departure.
The development of a BRICS alliance will create opportunities for farmers in these nations and make them even more competitive to trade in global markets.