Serious logistical disruption to exports cannot be avoided in January even if a Brexit trade deal is concluded, an Irish parliamentary committee has heard.
The Irish Cattle and Sheep Farmers’ Association (ICSA) president said farmers need to brace themselves for a “massive crisis” if negotiations between the UK and the EU fail.
Edmond Phelan said: “We have come to the edge of the precipice in the Brexit trade negotiations and right now we can only hope that common sense prevails.
“Even then, it has been left very late to avoid major disruption in January and the possibility of no deal is still very real.
“In any event, we may have the impact of no deal in the early weeks of January even if a deal is agreed in principle in the coming days.
“We find ourselves now looking at cobbling together a more limited free trade agreement or ‘skinny deal’. However, the risk of no deal at all remains very much a live risk today.”
Mr Phelan was addressing the Joint Committee on Agriculture and Marine on Tuesday, which met to discuss Brexit and its impact on the agri-food industry.
The ICSA said that in the event of no deal, the cost of import tariffs on the Irish food sector export to the UK have been estimated at up to 1.35 billion euro per annum. The beef sector alone could incur up to 725 million euro in extra tariff costs.
“Perhaps even worse than the actual rate of tariffs would be the crisis of trying to find alternative markets for our beef,” Mr Phelan said.
“In 2019, 260,000 tons of beef went to the UK which is about 47% of all our beef exports of 560,000 tons.
“We have succeeded in growing export volumes since the Brexit vote to other markets. But these numbers are nowhere near sufficient to deal with even half the UK market levels.
“So in the event that Brexit negotiations fail, we have a massive crisis in the short term.
“Even if negotiators put a deal together there is now no way of avoiding serious logistics disruption both in terms of UK exports and in terms of using the UK landbridge. This adds cost.”
He said Ireland needs to ensure direct ferry access to continental Europe, warning: “Although there have been some announcements of extra ferry capacity between Ireland and the continent in recent weeks, there is not anywhere near enough to replace the landbridge.”
Representatives from the Irish Creamery Milk Suppliers’ Association (ICMSA) told the committee it was important for policymakers to recognise that the biggest losers from Brexit, whether a deal is concluded or not, would be the primary producer.
ICMSA general secretary John Enright said a no-deal outcome could devastate the Irish economy, particularly the agri-food industry, given Ireland’s dependence on the UK market.
“The immediate impact of a no deal has the potential to be very severe, including the imposition of tariffs, currency volatility, increased administration and shipping delays and higher levels of uncertainty,” he said.
“Put simply, Brexit has the potential to do enormous damage to our agri-food sector, damage that will be felt in every townland in Ireland.”
Mr Enright said even if a deal is concluded there would still be negative implications for the agri-food sector and these should not be ignored.