Irish farmers cannot continue to carry the cost of exchange rate fluctuations resulting from Brexit uncertainty, according to the Irish Cattle and Sheep Farmers’ Association’s General Secretary Eddie Punch.
Speaking at the All-Island civic dialogue on Brexit which took place yesterday, Punch said that while in the short term, falling beef prices due to Sterling weakness may have been inevitable, in the medium term they are unsustainable.
ICSA rejects the importation of the cost of Brexit which is what food processors are doing when they pass back the impact of weaker Sterling to the primary producer, he said.
“The food industry needs to get tough with UK supermarkets. We have already seen multinationals such as Unilever take this approach.
The reality is that Sterling has got weaker, not that the euro has got stronger.
“What we see at present, however, is that this reality is being evaded because Irish food exporters are happy to pass back most of the exchange rate movement in the form of lower prices to the primary producer.
“This is not sustainable and will lead to farmers having to cut back on production because prices are now well below the costs of production,” he said.
Speaking ahead of the civic dialogue, a tough Brexit could leave Irish food and agri-exports to the UK subject to tariffs, the President of the Irish Creameries and Milk Suppliers Association John Comer said.
Any additional charges would represent an unmitigated disaster for Ireland’s €10 billion farming and food sector, with approximately €5 billion worth of Irish food exports going to UK markets, Comer said.
“The Irish Government has a responsibility to ensure that the bilateral trading relationship between Ireland and the UK is protected in future negotiations.”
Calls for Government to provide support package for meat sector
Meat Industry Ireland Chairman Philip Carroll was also participating in the All-Island civic dialogue on Brexit.
He believes that increasing production costs are lessening Ireland’s international competitiveness performance, which is something the Government needs to tackle decisively.
These higher costs in the productive sector have not been helped by the 30% devaluation of Sterling against the euro in the past year, he said.
The Government needs to put a support package in place to aid the sector through the current level of uncertainty caused by Brexit, Carroll said.
This package could ensure that companies are supported in their efforts to retain market share in the UK and diversify into other markets, he said.
Carrol also advised that this package must include assistance at EU level, including support to sectors most exposed to the Brexit related sterling collapse.