No-deal Brexit will be death-knell for 3,000 dairy farms in Northern Ireland, says industry chief
The livelihoods of 3,000 farming families are on the line as Northern Ireland's dairy industry faces a major crisis with the threat of a no-deal Brexit, it has been warned.
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The Dairy Council NI (DCNI) has said there are not enough facilities in the UK to process the amount of milk produced here, with 35% of it currently being processed in the Republic.
The current trade tariffs for exporting both raw milk and the finished product would be in excess of £300m, which would directly impact on the price paid to farmers for their milk, according to the DCNI chief executive Dr Mike Johnston.
In a dire warning over the UK crashing out of the EU without a deal, Northern Ireland's dairy processors said the sector is "seriously exposed".
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"Based on DCNI calculations in a no-deal Brexit, trade tariffs on both raw milk and finished products moved from Northern Ireland to the EU would total £320m, before you calculate the cost of the administrative burden customs will place on dairy processors," Dr Johnston said.
"This tariff represents 25% of the value of our entire industry. In a sector where the margin is, at best, 3% or 4%, trade tariffs of that magnitude would wipe out the industry.
"The reality is stark for farmers. Our analysis suggests that the milk price paid to farmers would fall by over 10 pence per litre from its current base should such tariffs be imposed."
DCNI represents milk processors in Northern Ireland including Dale Farm, Glanbia Cheese, Glanbia Ireland and Lakeland Dairies. These four companies account for over 90% of the 2.4bn litres of milk collected from farms here each year.
Dr Johnston also expressed a word of caution around the milk processing capacity available in Northern Ireland and said that the country simply does not have the appropriate facilities to process all of the milk that is produced here.
"After maximising NI milk processing capacity, there is a processing shortfall of some 600m litres that will not have a viable home if politicians cannot find a solution to the current Brexit impasse," he warned.
"That would be a devastating situation for the Northern Ireland dairy industry, farming families, rural communities and the Northern Ireland economy.
"If we don't get a Brexit deal and cannot transport raw milk south, without significant delays and/or certification requirements, then our industry is facing a crisis of epic proportions. All processing sites in Northern Ireland will be full while there is no spare capacity to process that volume of milk in Great Britain."
Dr Johnston added that DCNI has informed the authorities in Northern Ireland, the Republic and London but has not got a satisfactory outcome so far.
"Put simply, dairy processors and their farmers will not survive unless there is a deal," he said. "NI farmers, processors and customers need a deal to mitigate trade tariffs and enable the continued movement and trade in raw milk and finished products."
SDLP agriculture spokesman Patsy McGlone MLA has said that the UK Government must address the concerns of dairy farmers and processors here.
"Our local economy remains highly dependent on the sustainability of our agri-food sector. The future arrangements within the UK, on the island of Ireland, and with the rest of Europe will be essential to securing its continued success," he said.
"The warning from the Dairy Council that a no-deal Brexit would be devastating for the local dairy industry, farming families, rural communities and our economy should come as no surprise. It has been pointed out consistently, by the SDLP and others, that such a scenario would be a disaster for the agri-food sector here.
"The positioning by the current British Government and its enablers in the DUP means that a no-deal Brexit remains a real and present danger to the NI dairy sector. Any imposition of tariffs and non-tariff barriers to trade on the island of Ireland would threaten the jobs and livelihoods of more than 3,000 farm families across the north.
"Neither the British Government nor the DUP can bury their heads in the sand and ignore these concerns any longer.
"They will be directly responsible for the economic chaos that will follow a no-deal Brexit."
DUP MEP Diane Dodds encouraged the dairy industry to press Dublin and Brussels to work for a sensible deal.
Mrs Dodds said: "I have been working with the dairy industry. We are very aware of their concerns. I have encouraged them to press Dublin and Brussels to lift their 'not an inch' approach to the negotiations and work constructively for a deal.
"For our part, we want to see a deal. Our agri-food sector is one of the principle drivers. That's why we supported the Prime Minister in placing a reasonable and fair deal on the table last week. Its not everything of our choosing but it is a sensible route.
"In 2016, 34% of all Irish dairy exports were destined for the UK market. The UK has already issued a very generous tariff scheme for a no-deal scenario which would ensure no tariffs between Northern Ireland and the RoI. If the EU/Irish Government will not respond on a reciprocal basis then there needs to be equivalent tariffs on RoI product going into the UK market."