On 23^rd June, the UK will vote by referendum on whether to remain or leave the European Union. In recent days, the EU Commissioner for Agriculture, Phil Hogan while speaking in Belfast reminded farmers in Northern Ireland that the CAP constitutes £8.70 out of every £10 earned by farmers north of the border.

However, the consequences for the EU and Ireland will be much wider and far reaching should the UK vote to exit the EU, known as Brexit.  The Irish agri-food sector is extremely vulnerable when considering that in 2015, Ireland exported €5.1 billion worth of agricultural products to the UK, including €970 million worth of dairy products. We also imported agricultural goods from the UK worth €3.8 billion in 2015.

On 13^th April, the Agricultural Economics Society of Ireland and the Department of Agriculture, Food and Marine organised a conference on this pressing matter. At the event, Edgar Morgenroth from the Economic & Social Research Institute (ERSI) presented a report, which examined the possibility of Brexit across four areas including trade, foreign direct investment, energy and migration. He concluded that a Brexit could reduce bilateral trade flows between Ireland and the UK by 20% or more.

Trevor Donnellan from Teagasc analysed the implications for the agri-food sector in more detail. His findings indicate that a Brexit may result in a reduction in the value of Irish agri-food exports to the UK by between €150 million to €800 million. While, the UK has a significant trade deficit in the area of agri-food, Mr. Donnellan points out that the possibility of trade diversion arising from Brexit may impact on Ireland.

From a policy perspective, Brid Cannon from the Department of Agriculture noted that in the event of a leave vote, exit negotiations would be led by the European Commission with the input of Member States through a designated committee. These negotiations can last for up to two years according to the EU Treaty.

Ms. Cannon examined a number of areas that exit negotiations would potentially touch upon. One area of note is the continuation of preferential import arrangements negotiated by the UK when they joined the EEC in 1973. This includes the New Zealand butter quota. These preferential imports will have to be transferred in some way to the UK, according to Ms. Cannon.

As the UK is a significant net contributor to the EU budget, a Brexit will also have consequences for future CAP funding after 2020.

It is presumed that the UK will maintain a similar agricultural policy to the CAP, at least in the short term. Nevertheless, regulations and standards may diverge over time, including in the area of labelling.  Ms. Cannon is also of the understanding that a Brexit would see the return of some sort of border controls, customs or administrative procedures. Finally, sensible arrangements will have to be made to deal with milk purchased in Northern Ireland and manufactured in the south.

Overall, the evidence clearly suggests that Ireland is best served by the UK remaining in the EU.

Eamonn Farrell

Agri-Food Policy Executive