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Economists need to calculate the cost to industry of having free trade and zero support payments after Brexit, and compare it to a model that increases self-sufficiency in UK food production, NI Food and Drink Association (NIFDA) chair Declan Billington said at the NIIAS conference ‘‘Brexit– making it work for NI agri food” in Templepatrick last week.
The free trade agriculture model was advocated by former Defra and former NI secretary Owen Paterson during a visit to Belfast earlier this month.
Global imports
Paterson said that access to global food imports would save UK consumers £8bn in food prices annually. Taxpayers would also benefit with having no food production subsidies to fund.
“He hasn’t done his numbers. Someone has to calculate the effect of that and see that it is a disaster,” Billington told members at the Northern Ireland Institute of Agricultural Science (NIIAS) annual conference.
Billington estimated that the cost to UK farmers could be over £10bn when the effect of the £8bn reduction in food prices and the £3bn loss in current farm support is passed on to farmers. “What would be the cost to the UK government to deal with picking up the pieces of our agri food industry?” he asked.
Domestic market
NIFDA favours a post-Brexit model that increases UK food production to primarily supply the domestic market and displace imports.
According to Billington, import tariffs for other countries wanting to supply the UK market would be needed to offset higher production costs in the UK due to the exacting standards and regulations imposed on UK farmers.
He also reminded NIIAS members that trade access to global markets is still crucial to sell products not readily consumed in the UK market, particularly in the red meat sector.
Customs union
With the UK government keen to pursue trade deals with non-EU countries post-Brexit, he maintained that staying in the single narket and customs union after Brexit was never an option. “You cannot have goods from the rest of the world washed through the UK into the EU market,” he said.
On the Irish border after Brexit, Billington said: “If you have no trade deal with the EU, you can do nothing about the border.
‘‘No matter what the politicians say, it will be a hard border.”
Using the example of milk, he said that a 15p/l WTO default tariff would apply to the 25% of the NI milk pool that moves south. He said that this would make crossborder trade uneconomical unless a quota system allowing set amounts of certain products tariff-free movement was introduced.
Billington also questioned if LacPatrick’s new drier in Artigarvan would solve the issue of a hard Brexit for the dairy sector in the absence of trade deals.
The new facility will significantly increase local processing capacity, but the UK is already 200% self-sufficient in milk powder.
During a question-and-answer session at last week’s NIIAS conference, New Zealand native David Porter warned that a swift removal of direct support payments after Brexit would have severe consequences for farming and the rural society in NI.
He spoke from his own experience of how the removal of farm subsidies in New Zealand in 1984 affected his family’s arable and sheep farm in Timaru in the South Island.
He said that average incomes dropped by a third after the six-month transition to subsidy-free farming. A loan that David’s brother had taken out for land purchased the previous year had to go to interest-only payments.
“We nearly lost the lot. Just when he should have been finishing paying it off about 25 years later, he was actually only then in a position to start to make the payments,” he told NIIAS members.
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“Not only for farming but for the support industries and processing industries, everything was really tough. Small towns and villages were completely devastated,” he said.
He added that a similar scenario for NI farming, as proposed by some Brexiteers, would be worse as debt levels on NI farms are much higher than they were in New Zealand in the 1980s.
“There is not a lot of money being made in agriculture [in NI] anyway and if you take away subsidies that is just going to exacerbate the situation. Some call it hard medicine, I call it brutal,” David said.
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