The countdown to the UK’s departure from the EU continues, but the uncertainty for farmers and industry remains.

British prime minister Theresa May spent two days in Belfast this week renewing her commitment to no hard border on the island of Ireland but with no explanation of how this could be achieved if the UK moves to being a third country outside the EU on 29 March.

Meanwhile, An Taoiseach Lea Varadkar went to Brussels to talk about exceptional aid that would be needed for Ireland in the event of a no-deal departure for the UK.

The suite of tools available to the EU that sound reassuring when delivered from a podium are much less so when they are subjected to deeper scrutiny on how they might work in the real world of a collapsing market

Farmers will be hoping that at this point it is a case of finalising a contingency plan for the disaster that would follow no deal rather than beginning the process.

There has been much comment over recent weeks as the Brexit date approaches on the tools available to the Government and the EU to support farmers in the event of a no-deal outcome and the inevitable market disruption.

However, the suite of tools available to the EU that sound reassuring when delivered from a podium are much less so when they are subjected to deeper scrutiny on how they might work in the real world of a collapsing market.

Under aid to private storage, the EU pays factories to hold product off the market in storage for a period of time, usually in six-month blocks

The conventional tools that have been used both in the pigmeat and dairy industries over the past couple of years were aid to private storage and intervention purchasing.

Under aid to private storage, the EU pays factories to hold product off the market in storage for a period of time, usually in six-month blocks.

This is intended to have a stabilising effect on the market as surplus product is held back.

Intervention purchasing goes one step further in that the EU actually buys and stocks surplus product which is then released back on to the market in a controlled manner over a period of time.

For example, the last of the dairy powder that was bought by the EU in 2016 at the time of the milk price collapse has only just been released back on to the market.

Problems

Both these remedies work only when there is a short-term problem with the market that can be resolved within a defined and relatively short time period.

However, the consequences of Brexit won’t be resolved in either a six-month or 12-month period, especially for the beef industry.

These measures may be of some benefit to the hugely exposed pigmeat sector as it scrabbles to find alternative markets across the world or indeed the dairy industry.

This is because both these categories while hugely exposed to the UK markets, produce a product that is competitive at global market prices and therefore, in theory at least, should in time be able to develop alternative markets to the UK.

Even if the UK were to adopt a zero-tariff or low-tariff position as a third country trading under WTO rules, then Irish dairy and pigmeat would be competitive in that market alongside any potential global supplier.

Doesn’t work for beef

Intervention or aid to private storage doesn’t provide a Brexit remedy for beef.

For a start, Ireland exports 300,000t of beef to the UK annually spread evenly across the year, so that is 6,000t every week.

A short-term measure would do nothing more than borrow a breathing space

Removing part of that for a period would be pointless as it cannot be stored forever and outside of the UK there is nowhere Irish beef can go at a similar market return.

Therefore, a short-term measure would do nothing more than borrow a breathing space that would have to be paid back whenever any product in store was released back on to the market.

Additionally, intervention purchasing isn’t a practical option either as the R3 steer price would have to collapse to €1.90/kg under current EU regulations for it to take effect.

At that price Irish beef would sell anywhere in the world but farmers would simply be out of business.

Exceptional aid

That leaves the exceptional aid option that the Taoiseach has headed to Brussels to discuss this week.

Minister Creed emphasised to the Irish Farmers Journal in the margins of the IFA AGM last week that it was his priority to keep Irish beef on UK shelves come what may.

This is likely to be a very expensive scheme and there has to be questions about its long-term sustainability

He envisaged a direct payment to farmers in the form of exceptional aid to offset what is likely to be a substantial change in market prices as the way to achieve this.

This is likely to be a very expensive scheme and there has to be questions about its long-term sustainability.

The bottom line is that Brexit will be a disaster for agriculture in Ireland and the UK so the only real solution is to find a deal that maintains the status quo as far as possible