Deasy: “Massive diplomatic effort” needed on Brexit agri-food front

Impact across 6,000 Waterford jobs and €440m in local exports



Fine Gael TD John Deasy says there needs to be “a massive diplomatic effort” to try to mitigate the effects of Brexit on the farming and agri-food sectors, which employ more than 6,000 people in Waterford alone.
While there’s been an inevitable spotlight on the city around from the Ireland 2040 planning strategy, the threat posed to the County Waterford economy as a whole by Britain’s withdrawal from the Single Market and EU Customs Union has been thrown into stark light.
The government-commissioned Copenhagen Economics study estimated last week that the UK’s departure from the EU will cause output values in key parts of the agri-food sector to fall by 10 to 20% between now and 2030.

This could mean 17,000 fewer jobs in a benign Brexit situation, or over 30,000 lost in a worst-case scenario.
“If even a fraction of the Copenhagen forecast turns out to be true, the repercussions for a county like Waterford would be extremely serious,” Deasy says.
“Waterford, both rural and urban, is heavily reliant on farming and food industry revenues. Production from more than 2,750 farms here gives rise to €300m in agricultural output, with an export value of €440m.”Deasy makes the point that the €80m generated in farm income locally each year, plus €45m in direct payments, is by and large fed back into the Waterford economy.“Nationally we’re very badly exposed in that 40% of Irish food exports — worth around €5 billion a year — are to the UK. Of these, 80% of food and drink manufacturing occurs outside of Dublin,” he says.

Food and drink export gains of 40% this decade would be wiped out by taxes on exported produce. Ireland is particularly vulnerable in that half of our beef production is exported, and half of that goes to the UK.Waterford is prime beef country, with almost half the 2,760 farms in the county coming under the ‘specialist beef production’ category, according to Teagasc. The county has about 1,200 specialist beef producers.With other subsectors such as processed foods and dairy also hugely exposed, the threat to rural jobs spelled out in the Copenhagen report “needs to be faced up to,” Deasy added, noting that the IFA has described the potential fall-out as catastrophic.
“Its figures indicate there are some 3,785 people are employed at farm level in Waterford. Add in the 2,500 others employed in related industries — everything from processors to input suppliers, contractors, auctioneers, hauliers, fitters, and engineering firms; not to mention accountants, solicitors, vets, and advisors — and it’s clear that hundreds of those jobs will be jeopardised if UK trade barriers are introduced.”

Deasy said the immediate aftermath the referendum result “showed that the consequences of a hard Brexit will kick in quickly. Given what we’re facing into, between tariffs on trade, likely border checks, the threat from cheaper non-EU imports, higher supply-chain costs, and lower sterling, there’s scope for serious collateral damage.
“Which is why — given that the prospect of free trade across the border and the Irish Sea looks increasingly slim — the government needs to ensure there’s maximum regulatory alignment provided for in the negotiations.”Deasy acknowledged initiatives including the doubling of Brexit-related staff for state agencies, as well as five new missions with a trade focus for the Department of Foreign Affairs and Trade. Also, a €300m Brexit Loan Scheme is being rolled out from March with at least 40% of low-interest loans aimed at the agri-food sector.“However,” he says, “there seems to an acceptance that certain sectors will contract and that most jobs will be lost across the agri-food area” — the predicted figure of -12,400 being double the next biggest casualty, namely manufacturing and construction.
“As I said a year ago, initial Teagasc forecasts of post-Brexit losses of €200m—€900m would seem very much understated,” Deasy added. Indeed, the Copenhagen analysis suggests that because of trade barriers Irish exports to the UK could shrink by 50% up to 2030.

Food is to the fore in this risk category, with exports of processed foodstuffs such as meats, bread, biscuits, cereal-based products etc staring at anything between a 50% and 87% hit over this period.“These projections are chilling,” Deasy says. “There’s a danger that we’ve been blindsided somewhat as to the effects on rural Ireland by the focus on border politics. Also, investment strategies centred around retail developments and spending power in city centres don’t fully appreciate the impact Brexit could have on disposable income throughout local economies like Waterford, which are so dependent on agriculture.”

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