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07/10/2019
NI Dairy Industry 'Will Not Survive' No-Deal
Northern Ireland's dairy industry would be plunged into a major crisis in the event of a no-deal Brexit, a representative organisation has warned.
Trade tariffs for exporting both raw milk and finished products would rise to over £300 million, a figure that would effectively wipe out the industry, according to the Dairy Council of Northern Ireland (DCNI).
"Dairy processors and their farmers will not survive unless there is a deal," cautioned Dr Mike Johnston, CEO of the organisation.
The "certain doomsday scenario", which would result from a no-deal Brexit, would cripple the industry in terms of its ability to service profitable markets, to process all milk and support the jobs and livelihoods of more than 3,000 farm families across Northern Ireland.
DCNI represents milk processors in NI 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 NI farms each year.
Dr Johnston set out the anticipated problems facing the industry. He said: "Based on Dairy Council NI calculations in a no–deal Brexit, trade tariffs on both raw milk and finished products moved from NI to the EU would total £320m, before you calculate the cost of the administrative burden customs will place on dairy processors.
"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."
Dr Johnston sounded a word of caution around the milk processing capacity availability in Northern Ireland. At present, 35% of the entire NI milk pool is processed at facilities in the Republic of Ireland.
"After maximising NI milk processing capacity, there is a processing shortfall of some 600 million litres that will not have a viable home if politicians cannot find a solution to the current Brexit impasse," he explained.
"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."
The organisation has communicated the risks, described as "significant", to relevent authorities in NI, the Republic of Ireland and London, however no "satisfactory outcome" has been proposed as yet.
Concluding, Dr Johnston demanded greater clarity for the industry: "Farmers and processors are extremely worried about the outcome of a No–Deal Brexit.
"We are now less than 25 days away from Brexit and we are still faced with more questions than answers and more uncertainty than certainty. Our farmers, their families, our customers and the entire rural economy of Northern Ireland need greater security and clarity.
"If we crash out on 31st October, we do not have the capacity to process all the milk that will be produced, and we will not be able to afford to pay EU tariffs nor navigate the EU certification requirements such that we can process that milk in the Republic of Ireland.
"Put simply, dairy processors and their farmers will not survive unless there is a deal. 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."
(JG/MH)
Trade tariffs for exporting both raw milk and finished products would rise to over £300 million, a figure that would effectively wipe out the industry, according to the Dairy Council of Northern Ireland (DCNI).
"Dairy processors and their farmers will not survive unless there is a deal," cautioned Dr Mike Johnston, CEO of the organisation.
The "certain doomsday scenario", which would result from a no-deal Brexit, would cripple the industry in terms of its ability to service profitable markets, to process all milk and support the jobs and livelihoods of more than 3,000 farm families across Northern Ireland.
DCNI represents milk processors in NI 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 NI farms each year.
Dr Johnston set out the anticipated problems facing the industry. He said: "Based on Dairy Council NI calculations in a no–deal Brexit, trade tariffs on both raw milk and finished products moved from NI to the EU would total £320m, before you calculate the cost of the administrative burden customs will place on dairy processors.
"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."
Dr Johnston sounded a word of caution around the milk processing capacity availability in Northern Ireland. At present, 35% of the entire NI milk pool is processed at facilities in the Republic of Ireland.
"After maximising NI milk processing capacity, there is a processing shortfall of some 600 million litres that will not have a viable home if politicians cannot find a solution to the current Brexit impasse," he explained.
"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."
The organisation has communicated the risks, described as "significant", to relevent authorities in NI, the Republic of Ireland and London, however no "satisfactory outcome" has been proposed as yet.
Concluding, Dr Johnston demanded greater clarity for the industry: "Farmers and processors are extremely worried about the outcome of a No–Deal Brexit.
"We are now less than 25 days away from Brexit and we are still faced with more questions than answers and more uncertainty than certainty. Our farmers, their families, our customers and the entire rural economy of Northern Ireland need greater security and clarity.
"If we crash out on 31st October, we do not have the capacity to process all the milk that will be produced, and we will not be able to afford to pay EU tariffs nor navigate the EU certification requirements such that we can process that milk in the Republic of Ireland.
"Put simply, dairy processors and their farmers will not survive unless there is a deal. 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."
(JG/MH)
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