Brexit and Agriculture in Northern Ireland
Sowing seeds of doubt in the future of farming.
The EU is the world's largest agricultural trader. The United Kingdom is a net-importer of agri-food products and imports almost twice as much from EU member states than it exports to them. In terms of employment and GDP Northern Ireland is more dependent on the agricultural sector (including the agri-food business) than any other area of the United Kingdom. There can be little doubt that the future for Northern Irish farming looks ominous.
Agriculture in the Northern Ireland faces an uncertain future after Brexit. According to a study by the Centre on Constitutional Change, a network of scholars across the UK, farms in Northern Ireland will be particularly badly hit when Common Agricultural Policy (CAP) direct payments are phased out after the end of the current Parliament in 2022. The North also has it's historical baggage to contend with. The idea of a change in the status of the border causes many there great anxiety.
What is CAP?
CAP or the Common Agricultural policy, was introduced in 1962 to support farmers, who struggle to maintain consistent revenues against a backdrop of volatile food prices and low margins.
The EU's Basic Payment Scheme currently provides subsidies to farmers in Northern Ireland that represents 87 percent of farmers' incomes. It's a staggering figure, largely due to the fact that 70 percent of the North's land is classified as being in 'areas of natural constraint' such as hill farms and bog land compared with only 17 per cent of farm land in England. Dr Alan Greer, associate professor in politics and public policy at UWE Bristol, outlined just how dependent UK farmers are upon CAP payments in evidence given to a House of Lords select committee last year. "Those farms which are struggling at the moment — even with direct payments coming from the EU — will not make it afterwards.
While farm incomes in Northern Ireland's 10,300 farms almost doubled in 2017, from £253 million to £473 million, when EU subsidies are deducted the increase is a paltry £27 million year on year. The rise has come about due to a recovery in milk prices, with the volatile dairy sector, the largest contributor to the North's total value of gross output of £662m, up 46 per cent on a year earlier.
A more favourable sterling/euro exchange rate also plays an important role in the figures, which at first glance, should give rise to optimism but which many see as an improvement from a very low base.
CAP Single Farm Payments to farmers in Northern Ireland are worth in excess of £2.3 billion from 2014-2020. To put that figure into perspective, every £10 sterling that Northern Irish farmers earn, the Common Agricultural Policy accounts for £8.70 of that total.
When Britain leaves the EU, Defra says it will replace the basic payment scheme with a new policy which rewards farms for environmental schemes, but experts such as Dr Vivane Gravey of Queen's University Belfast, believe the impact on Northern Ireland will be far greater than that felt in other areas of the United Kingdom.
The food supply chain
When we think about the importing and exporting of goods it's difficult to understand just how complex the food supply chain can be. Whether its millions of litres of milk, mushrooms, or frozen pizza. Animals, food and food ingredients frequently pass back and forth between different countries on numerous occasions on the journey from primary production to retail sale. This is particularly the case in Ireland where, for example, milk might cross from the Republic of Ireland to Northern Ireland and back numerous times between cow and supermarket shelf.
The House of Lords' European Union Select Committee said it seems "unavoidable" that Brexit will result in some additional border checks, and nowhere is that going to cause friction than on the 310 mile border.
In a report on the impact of Brexit on food prices, the committee said: "Significant delays will disrupt the just-in-time supply chains that food manufacturers and retailers depend on and could affect the availability of food." As a former butcher, Eamon Scanlon TD (member of parliament) for Sligo Leitrim understands the complexities that a hard Brexit could bring and is also worried about meat from other parts of the world eventually ending up in the Republic.
"If there's Brazilian and Argentinian beef coming in the UK sometime in the future it will come into the North as well. There’ll be nothing to stop it and it will be half the price it would cost to produce beef here".
According to Ulster University's Economic Policy Centre, companies operating in the agri-food sector are among the most vulnerable when it comes to a Brexit deal, because the "level of North-South trade and the integrated nature of the supply chains on the island" of Ireland.
The EU is the world's largest agri-food markets, with exports exceeding €137.9 billion in 2017. Farmers in Northern Ireland have the opportunity to capitalise on over 53 trade agreements which allow for agri-produce to be exported and imported without any red tape.
No more CAP in hand
The road from Derry city to Robert Moore’s farm hugs the west bank of the Foyle as it flows inland towards Donegal. In the townland of Ballougry, Moore’s family have been farming this land for more than 200 years with his farmhouse only a quarter of a mile from the Boarder, Brexit is an issue he feels strongly about.
Moore voted Leave in the Brexit Referendum, and as a recent appearance on BBC’s Newsnight will attest, he remains convinced that leaving the European Union is the best decision for farmers.
Moore believes CAP is unhealthy for farming as it does not "integrate the supply chain" and is not tied to market incentives — instead, the EU pays farmers an annual lump sum payment every year for each hectare they farm. He supports the proposed post-Brexit farming policy which Michael Gove, Secretary of State for Environment, Food and Rural Affairs, says will reward farmers for "public goods" such as planting meadows and access to the countryside. Moore believes the UK can put a more adequate plan for farmers on the table.
"I am hoping that we will develop an agricultural policy that is fit for purpose, that will deliver environmental farming and benefits for the environment as a whole, which the EU policy is only doing to a minor extent."
"The problem with subsidies is it that they don't drive you to become a better farmer, they make you look inwards" says Moore.
“ I want to farm for the price of the beef and the potatoes and the cereals that I produce, I get no satisfaction from getting a subsidy."
Living so close to the border, Moore tells me he's never been concerned about a hard border, calling the idea "frankly inconceivable". With the 'backstop' solution now looking more and more likely, Moore sees it as progress that the British government has accepted the inevitable and is staying in "some sort of trade arrangement with the EU, a custom's union by another name:
"We're going to have to have regulatory alignment by remaining in the single market agricultural goods and there's obviously no way there can be a divergence in animal welfare regulations".
Is he optimistic?
"I'm hopeful because I don't think we can do much worse than CAP. To have a common agricultural policy that is strictly enforced throughout the whole of Europe. What suit's the north of Scotland and the South of Spain are very different things so it's crazy to apply a single policy across the whole of the continent".
While many farmers like Moore, bemoan the unwieldy nature of CAP European Agriculture Commissioner Phil Hogan has in the past acknowledged the policy instrument's shortcomings, committing to cut red tape and make it "simpler and fairer". The burden of red tape is an issue that’s raised time and again by farmers on both sides of the Brexit debate but is more paperwork better than having less money in your pocket?
David McCoubrey is the director of Erth Engineering, a company he setup 20 years ago, that produces a range of farm machinery for both domestic and international markets. Selling to countries like New Zeland, Canada, and the EU market including the Republic of Ireland, while importing his raw materials from Germany, France and Italy. McCoubrey is better placed than many to understand the real impact on trade Brexit will have for business in Northern Ireland.
On the matter of subsidies McCoubrey is at a loss to understand how small farms in Northern Ireland can continue without the existing levels of subsidies. "How can you survive, when your margin is already razor thin, when your 'neighbours' [farmers in the South] are subsidised and you’re not? Suddenly you’re at a massive disadvantage - You just can’t".
Like Robert Moore, McCoubrey also believes the agri-food industry needs less bureaucracy but he believes Brexit will result in more red tape. “I’m sorry but we’re going to have the bureaucracy we have now and more. These people have tinted glasses because even with full access to the market there’s going to be a paper trail whereas now there is none”.
On possible new trading opportunities in the global market McCoubrey is sceptical. “This big myth of where we’re going to do the deals, it’s like what the guy said, would you give away a steak dinner for a bag of crisps. If there’s a brexiteer out there to come and tell me where these opportunities are I’d love to find them because I can’t find them”. McCoubrey sees labour as another fly in the Brexit ointment. “After Brexit, why would anyone want to come here? To be thought of as a second-class citizen. So, I might not have the people to run my business. "
The EU is the world's largest agri-food markets, with exports exceeding €137.9 billion in 2017. Farmers in Northern Ireland have the opportunity to capitalise on over 53 trade agreements which allow for agri-produce to be exported and imported without any red tape. "I think we're being hoodwinked to be honest", McCoubrey tells me as he washes oil from his hands, "and people are starting to look down South, where there's a country that's comfortable in itself and they're thinking about moving. This Brexit is going to change this whole situation".
For McCoubrey and many others I talked to in the North, the collapse of the power-sharing agreement and the increasing polarisation of Northern politics has added to the dangers inherent in Brexit, political opportunism and intransigence filling the vacuum while political expediency and practicality are what the region requires.
“My issue with the DUP and Sinn Féin is that there is no compromise. When you’re a child you believe you can have everything you want, and you don’t have to compromise and every deal we do, every interaction with people there’s compromise of sorts. In this little business we have Protestants and Catholics, great banter, we get on and Brexit is a step away from that”.
In the North, the views from those at the extremities of the political divide – what McCoubrey colourfully calls ‘the vampires’ – seem to get the most press. Someone who agrees with McCoubrey’s assessment of Brexit is Ian Marshall. A former president of the Ulster Farmers’ Union (UFU), Marshall, who works in Queens University Belfast in the Institute for Global Food Security, was the first unionist candidate to be elected to the Irish Senate in April. As a unionist that opposes Brexit, I put it to him that his position is unique, but Marshall was quick to challenge this.
“Something we need to be cognisant of in the North is the silent majority. I was told by a very old guy that said ‘there’s only two things you know about them: A, they’re silent and B, they’re the majority. What we’ve got is the fear of speaking out against the polarisation of opinion. I was born into a Protestant Unionist household in South Armagh in the middle of the troubles, and I see moderate unionists voting DUP and moderate Republicans voting for Sinn Féin due to the fear they have of the other’s hardliner elements in each party”.
Marshall feels his two years as UFU president helped him more greatly understand the European project and understand that while many farmers in the North struggle to feel European, “when you speak to fellow farmers across Europe and fellow business people, we’re the same, actually frighteningly so”.