Dáil Éireann Debate, Wednesday - 13 January 2021
1129. Deputy Matt Carthy asked the Minister for Agriculture, Food and the Marine if his Department will conduct an assessment of the Brexit-related impact on farm incomes; his plans to financially support those farmers who have been negatively impacted; and if he will make a statement on the matter. [1086/21]
View answerIn line with other parts of the economy, much of the analysis and economic modelling to date on Brexit for the Irish agrifood sector has concentrated on the outcome of a no deal scenario. Recent research by Teagasc estimated that in a no-deal scenario, the average family farm income in 2021 would have decreased by 18%, with average income on beef farms dropping by 40%.
In concluding a Free Trade Agreement with the UK, this worst case scenario has been avoided. However, it has always been clear that there is no good Brexit for the agrifood sector. While the avoidance of tariffs is hugely significant, the trading relationship has changed and non-tariff barriers will inevitably create costs to trade. These mainly relate to the costs of customs procedures, compliance with SPS requirements, costs of transit and certification requirements. The precise magnitude of these costs is unclear but academic research indicates that they could be in the region of 8-13% of the value of exports. These costs are likely to be higher in the short term but would be expected to ameliorate over the medium to longer term as firms learn and adapt to the new requirements.
The impact on farm incomes will depend on how non-tariff barriers translate into additional costs of doing business with the UK, over the next year in particular, and how those costs are absorbed along the value chain. It is not possible to accurately predict the effects on annual farm incomes. However, my Department is closely monitoring the situation in relation to farm incomes.
I, along with the rest of Government, stands ready to provide the necessary supports for impacted sectors, including through funding from the EU's Brexit Adjustment Reserve.
