With just two weeks to go before the UK is set to leave the European Union, the complexity of what effectively equates to trying to take an egg back out of an omelette is finally dawning – to such an extent that in some quarters there is a growing realisation that perhaps achieving such a feat is not even possible.
As we go to press, the UK parliament is preparing for a vote to take the no-deal scenario off the table. While it is widely anticipated that the vote will receive majority support, the outcome will have limited impact on future developments.
As Colm McCarthy outlines, irrespective of the outcome of the vote, the reality is that the only two mechanisms available to parliament in preventing a no-deal Brexit are that they either accept Theresa May’s deal or that they take the unilateral decision to revoke Article 50.
While the option of extending Article 50 is still very much in play, achieving this requires the unanimous support of member states and therefore it is not directly within the control of parliament. Any vote by parliament to seek an extension to Article 50 on Thursday would not remove the risk of a potential crash-out Brexit.
Sources within the European Commission and Westminster indicate that there is weak appetite for a short-term extension to Article 50 within the EU, merely viewed as a further attempt to kick the can down the road. Extending Article 50 for a longer, two-year period, to allow for a complete renegotiation, would appear to have much more support across member states. Ironically, such an outcome would see the UK having to run candidates in the upcoming EU elections.
A two-year extension is also likely to see either a general election or a second referendum taking place – the latter being the preferred outcome in the EU given that a general election may do little to alter the UK’s political landscape. At least a second referendum – even if support remains for Brexit – would present a solid way forward.
A two-year extension is also likely to see either a general election or a second referendum taking place
While events of the past week have added to the uncertainty around Brexit, the announcement by the UK government detailing the tariff landscape in a no-deal scenario does bring some clarity, however unpalatable it may be. Phelim O’Neill and Lorcan Allen go into detail on what the new tariff regime would mean for Irish farmers.
In its simplest form, it presents a scenario where Irish farmers may have to pay more to get into a market that would be worth less – tariffs would drive up the cost of business by the equivalent of €1.60/kg on beef and from 20-40c/kg in the case of cheese and butter, while the introduction of a tariff-free quota would see the value of the market diminished with increased competition from cheaper South American product. Ultimately, Irish beef would find itself sandwiched between British and Brazilian product.
Six weeks ago, the Irish Farmers Journal ran a headline warning that in the event of a no-deal Brexit, Irish beef prices could fall to a low of €2.50/kg. We received criticism from some quarters that would have preferred this information not to have been presented to farmers – clearly hoping that it would be a scenario that would not materialise. Such an outcome is now very much on the cards and the time for hoping for the best is over.
Ultimately, the European Commission will know the outcome of Brexit on Thursday night – if the UK parliament votes for an extension to Article 50, the ball is in their court. The focus should be on securing a minimum 18- to 24-month extension period. Rejecting the request for an extension effectively delivers a hard Brexit, which Minister for Agriculture Michael Creed has calculated will cost Irish farmers €1.7bn per annum.
A decision by member states to reject any calls for an extension should therefore be followed up with an immediate plan for how the EU will move to deliver on its promise to protect farm incomes.
European Commissioner for Agriculture Phil Hogan’s keynote address at our Navigating Global Trade conference in the RDS on Friday will certainly be watched closely and we look forward to putting these questions to him in our follow-up interview.
Click here for expert analysis as Brexit develops.
Focus: modern-day farming issues and making the most of pigs and poultry
\ Philip Doyle
This week in Focus we look at some of the challenges in modern-day farming. We also carry reports on developments in the pig and poultry sectors.
The growth in broiler and duck production in the Cavan/Monaghan region is staggering. It asks questions of other farmers and policy-makers.
Environmentally, how sustainable is the intensification of high-input sectors in a small region? Where is the joined-up thinking, particularly in relation to nutrient management?
Are there synergies across sectors that can be exploited? Could the poultry sector offer the opportunity for suckler farmers to drive income through a secondary enterprise?
Is there the opportunity for tillage farmers to establish a farming model that generates key soil nutrients on location – a trend we have seen in Brazil, where large-scale arable units have established pig, poultry units and even fish farms to convert grains to higher value proteins.
The growth in the development of anaerobic digesters (AD) in Northern Ireland has been phenomenal. AD plants can utilise forage grown in surrounding areas and when mixed with other energy sources, they can provide an alternative source of energy generation. The challenge for the livestock sector is the competition for land or feed in the region of the digester. It almost stimulates intensification of the livestock enterprises. At the same time, low-margin livestock enterprises with land that can’t be harvested can’t get a reward or bonus from the development and it can result in higher feed costs.
On the pig and poultry side, the challenge is to manage costs and a borrowing risk where no obvious local or regional competitive advantage exists. Pig and poultry farmers import most of the feedstuffs, including labour. Feed cost was 75% of the average pig price in 2018. As a result, we see profitability tumble to a 20-year low. Farmers need to be aware of business risks and can’t be used as pawns in the development of large-scale businesses.
Origin: what does the term ‘Irish’ mean?
We received plenty of response to Andy Doyle’s piece on the state of the tillage industry in last week’s edition.
The article posed questions as to what we consider “Irish” to mean for our exports. We cannot ignore the significance of the increasing proportion of imported ingredients in our exported produce.
While the growing demand for feed, which was unprecedented in the drought period in 2018, cannot be met by native production, it is of concern that we have such a dependence on imported feeds when we market our produce on a green grass-fed canvas for all to see.
Does the marketing message reflect what we are doing?
The tillage sector has long been critical of Origin Green given that it purports to signify Irish origin with healthy traceable green grass and environmentally sensitive inputs with low carbon footprint.
Yet it appears to pay no attention to the total package of inputs that make up the animals or products marketed under the logo. This must change. Discerning customers know the questions to ask and we cannot afford to leave our industry vulnerable to attacks by vested interests or lobby groups.
Our industry has a lot of very good co-ops and businesses doing a very good job. But food is now taking on a wider meaning where consumers demand a genuine inventory of ingredients and processes.
Dairylink Ireland: programme returns with innovation key
The Irish Farmers Journal has never been afraid to push boundaries. It’s great to see NI dairy farmers in Ballymena, Limavaddy and Omagh represented in phase two of our Dairylink programme. The objective is to share new and profit-improving technologies. None of this work would be possible without long-standing partners Lakeland, MSD, CAFRE, AFBI and Teagasc. It is to their credit we can devote the resources necessary.
Meanwhile, farmers down south are rightly disappointed to see two of the major processors – Glanbia and Kerry – cut milk prices. Lakeland also cut prices in NI. While global signals suggest an upturn in prices, the processors blame Brexit uncertainty and lower oil prices. Our information suggests market returns should be delivering a more competitive price.
With just two weeks to go before the UK is set to leave the European Union, the complexity of what effectively equates to trying to take an egg back out of an omelette is finally dawning – to such an extent that in some quarters there is a growing realisation that perhaps achieving such a feat is not even possible.
As we go to press, the UK parliament is preparing for a vote to take the no-deal scenario off the table. While it is widely anticipated that the vote will receive majority support, the outcome will have limited impact on future developments.
As Colm McCarthy outlines, irrespective of the outcome of the vote, the reality is that the only two mechanisms available to parliament in preventing a no-deal Brexit are that they either accept Theresa May’s deal or that they take the unilateral decision to revoke Article 50.
While the option of extending Article 50 is still very much in play, achieving this requires the unanimous support of member states and therefore it is not directly within the control of parliament. Any vote by parliament to seek an extension to Article 50 on Thursday would not remove the risk of a potential crash-out Brexit.
Sources within the European Commission and Westminster indicate that there is weak appetite for a short-term extension to Article 50 within the EU, merely viewed as a further attempt to kick the can down the road. Extending Article 50 for a longer, two-year period, to allow for a complete renegotiation, would appear to have much more support across member states. Ironically, such an outcome would see the UK having to run candidates in the upcoming EU elections.
A two-year extension is also likely to see either a general election or a second referendum taking place – the latter being the preferred outcome in the EU given that a general election may do little to alter the UK’s political landscape. At least a second referendum – even if support remains for Brexit – would present a solid way forward.
A two-year extension is also likely to see either a general election or a second referendum taking place
While events of the past week have added to the uncertainty around Brexit, the announcement by the UK government detailing the tariff landscape in a no-deal scenario does bring some clarity, however unpalatable it may be. Phelim O’Neill and Lorcan Allen go into detail on what the new tariff regime would mean for Irish farmers.
In its simplest form, it presents a scenario where Irish farmers may have to pay more to get into a market that would be worth less – tariffs would drive up the cost of business by the equivalent of €1.60/kg on beef and from 20-40c/kg in the case of cheese and butter, while the introduction of a tariff-free quota would see the value of the market diminished with increased competition from cheaper South American product. Ultimately, Irish beef would find itself sandwiched between British and Brazilian product.
Six weeks ago, the Irish Farmers Journal ran a headline warning that in the event of a no-deal Brexit, Irish beef prices could fall to a low of €2.50/kg. We received criticism from some quarters that would have preferred this information not to have been presented to farmers – clearly hoping that it would be a scenario that would not materialise. Such an outcome is now very much on the cards and the time for hoping for the best is over.
Ultimately, the European Commission will know the outcome of Brexit on Thursday night – if the UK parliament votes for an extension to Article 50, the ball is in their court. The focus should be on securing a minimum 18- to 24-month extension period. Rejecting the request for an extension effectively delivers a hard Brexit, which Minister for Agriculture Michael Creed has calculated will cost Irish farmers €1.7bn per annum.
A decision by member states to reject any calls for an extension should therefore be followed up with an immediate plan for how the EU will move to deliver on its promise to protect farm incomes.
European Commissioner for Agriculture Phil Hogan’s keynote address at our Navigating Global Trade conference in the RDS on Friday will certainly be watched closely and we look forward to putting these questions to him in our follow-up interview.
Click here for expert analysis as Brexit develops.
Focus: modern-day farming issues and making the most of pigs and poultry
\ Philip Doyle
This week in Focus we look at some of the challenges in modern-day farming. We also carry reports on developments in the pig and poultry sectors.
The growth in broiler and duck production in the Cavan/Monaghan region is staggering. It asks questions of other farmers and policy-makers.
Environmentally, how sustainable is the intensification of high-input sectors in a small region? Where is the joined-up thinking, particularly in relation to nutrient management?
Are there synergies across sectors that can be exploited? Could the poultry sector offer the opportunity for suckler farmers to drive income through a secondary enterprise?
Is there the opportunity for tillage farmers to establish a farming model that generates key soil nutrients on location – a trend we have seen in Brazil, where large-scale arable units have established pig, poultry units and even fish farms to convert grains to higher value proteins.
The growth in the development of anaerobic digesters (AD) in Northern Ireland has been phenomenal. AD plants can utilise forage grown in surrounding areas and when mixed with other energy sources, they can provide an alternative source of energy generation. The challenge for the livestock sector is the competition for land or feed in the region of the digester. It almost stimulates intensification of the livestock enterprises. At the same time, low-margin livestock enterprises with land that can’t be harvested can’t get a reward or bonus from the development and it can result in higher feed costs.
On the pig and poultry side, the challenge is to manage costs and a borrowing risk where no obvious local or regional competitive advantage exists. Pig and poultry farmers import most of the feedstuffs, including labour. Feed cost was 75% of the average pig price in 2018. As a result, we see profitability tumble to a 20-year low. Farmers need to be aware of business risks and can’t be used as pawns in the development of large-scale businesses.
Origin: what does the term ‘Irish’ mean?
We received plenty of response to Andy Doyle’s piece on the state of the tillage industry in last week’s edition.
The article posed questions as to what we consider “Irish” to mean for our exports. We cannot ignore the significance of the increasing proportion of imported ingredients in our exported produce.
While the growing demand for feed, which was unprecedented in the drought period in 2018, cannot be met by native production, it is of concern that we have such a dependence on imported feeds when we market our produce on a green grass-fed canvas for all to see.
Does the marketing message reflect what we are doing?
The tillage sector has long been critical of Origin Green given that it purports to signify Irish origin with healthy traceable green grass and environmentally sensitive inputs with low carbon footprint.
Yet it appears to pay no attention to the total package of inputs that make up the animals or products marketed under the logo. This must change. Discerning customers know the questions to ask and we cannot afford to leave our industry vulnerable to attacks by vested interests or lobby groups.
Our industry has a lot of very good co-ops and businesses doing a very good job. But food is now taking on a wider meaning where consumers demand a genuine inventory of ingredients and processes.
Dairylink Ireland: programme returns with innovation key
The Irish Farmers Journal has never been afraid to push boundaries. It’s great to see NI dairy farmers in Ballymena, Limavaddy and Omagh represented in phase two of our Dairylink programme. The objective is to share new and profit-improving technologies. None of this work would be possible without long-standing partners Lakeland, MSD, CAFRE, AFBI and Teagasc. It is to their credit we can devote the resources necessary.
Meanwhile, farmers down south are rightly disappointed to see two of the major processors – Glanbia and Kerry – cut milk prices. Lakeland also cut prices in NI. While global signals suggest an upturn in prices, the processors blame Brexit uncertainty and lower oil prices. Our information suggests market returns should be delivering a more competitive price.
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