Dairy farms in Northern Ireland will “go out of business” after Brexit if barriers to trade with the Republic of Ireland are erected, the government has been warned.
The risk centres not just on the potential loss of exports to the supermarkets in the republic but the loss of a highly successful global business in cross-border production of milk and cheese products, a House of Commons select committee was told on Wednesday.
About a third of milk from cows in Northern Ireland is transported across the border for production into butter, cheese and infant formula, Mike Johnston, the Northern Ireland director for Dairy UK, told the Northern Ireland affairs committee.
“Dairy farmers would have to go out of business as a consequence of their milk not being able to be processed,” he said.
He told the committee more than 25% of the region’s raw milk went south of the border to be processed but a hard Brexit would close down that flow, not just because of tariffs and customs checks, but because of the burden of paperwork relating to issues including traceability, animal welfare and food standards.
He said 25% of pasteurised milk went south of the border for use in products such as infant formula.
That business could ultimately be picked up in Northern Ireland after Brexit, but there was not enough time in two years to build facilities to replace those in the republic, he said.
The Brexit evidence-gathering session threw fresh light on the specific challenges facing farmers on both sides of the border in Ireland.
Politicians and business leaders on the island have warned of the “incalculable damage” Brexit threatens but the detail on cross-border agricultural business has until now not been discussed so publicly. Individual farmers and food manufacturers have been reluctant to speak on the record with the media.
Johnston told MPs there had been “significant rationalisation” across the island of Ireland in diary production, driven by the need to compete with farmers in the southern hemisphere.
This had led to “site specialisation” with infant formula plants in the republic, for instance, and the creation of the largest cheese processing facility in Europe in Dunmanbridge in County Tyrone, Northern Ireland, said Johnston.
“This goes beyond hard or soft border,” said Johnston. “If we cannot overcome issues around labelling, traceability, common standards, then that business north and south would grind to a halt,” he said unless there was a transition period during which EU regulations “copied and pasted” into UK law would apply.
“In terms of the border, it’s a major, major issue for the dairy industry. We are very, very dependent on what we call an all-island value chain. If we have any interruption in the current practices it is going to affect the longer-term viability of the industry,” he told the committee.
The committee heard that Northern Ireland exported to up to 100 countries, including more than 50 countries which had a trade deal with the EU.
Johnston told MPs that the current 15-16% tariff imposed on their products in countries such as Thailand and Malaysia would “at least double” once the UK withdrew from Europe. “That would kill that business,” he said.
The committee also heard that 40% of lambs went south of the border with much of the meat from sheep going on from the republic to France, a supply route that could also be adversely affected by a hard or soft border.
Barclay Bell, the president of the Ulster Farmers’ Union, highlighted the challenges facing those trying to drum up business outside the EU and called on the government to put more effort into getting access to China.
“We’ve been trying to get pig meat into China for years, it just seems to be a very prolonged process. We feel resources at Westminster need to be expanded in some way … there needs to be a speeding up of the process. Other countries seem to be getting access,” he said.
If future UK exports to Europe were subject to World Trade Organisation tariffs, “quite chunky charges” would be added to agricultural products from the UK.
Current tariffs on bovine products are around the 13% mark, while butter from outside Europe was subject to a tariff ranging from €1.90 to €2.30 a kilo, Bell told the MPs.
The Northern Irish farming industry was also questioned about the heavy reliance on migrant workers, with 65% of the workforce in the food-processing business coming from elsewhere in the EU.
Bell told MPs the industry would be crippled without these workers. “People from the red meat processing centre, they will tell you, local people don’t want to work in the food processing. They have basically said to us if we don’t have access to that migrant labour we’re gone,” he said.
