Words by: Chris McCullough
After 47 years of being shackled to the rules and regulations of the European Union, the UK finally severed ties with the bloc on December 31, 2020.
Although that tumultuous journey is over, a new one has just begun as the UK sets itself up for trading battles to find new markets for the food produced by its thousands of farmers.
The final Brexit deal agreed between the two nations was a long time coming and kept the world on tenterhooks right until the very end. But at last everyone can move on with the next era – the clean-up!
So what does this mean for farmers in both Northern Ireland (NI) and the Republic of Ireland (RoI)? Well, it’s very complicated!
Northern Ireland is part of the UK but is connected via land to the Republic of Ireland, which is still in the EU.
As part of the historic Good Friday agreement, both the UK and Irish governments agreed that the border between NI and the RoI should be invisible, which was easy when both were part of the EU.
However, after Brexit it was agreed that NI would follow many of the EU’s rules and therefore a customs border was set up in the Irish Sea between NI and Great Britain (England, Scotland and Wales).
This was called the Northern Ireland Protocol and it came into force on January 1, 2021. This means goods such as meat, milk, fish and eggs can be checked coming into NI from GB under direction from the EU. Still following?
In a nutshell, this has caused all sorts of logistical nightmares for food exporters in both the UK and the RoI as well as trucking companies that are drowning in a sea of red tape and being buried under tonnes of paperwork.
In 2019, the RoI exported about 1.8 billion litres of milk to the UK, worth about €870 million (NZ$1462m), which is more than 30% of the UK’s dairy imports. RoI is by far the biggest supplier of dairy produce to the UK, with France and Germany second and third respectively.
While the politicians battle to get the trading channels between the RoI and GB opened up more freely, dairy farmers on both sides of the Irish border are still milking their cows.
That milk is still being processed and consumed, generating quite healthy prices for the farmers, probably more so down to the Covid-19 pandemic rather than Brexit.
Indeed, while the dairy industry experts say it is way too early yet to decipher if Brexit will have any major impact on Irish milk prices, the most promising factor is that demand for dairy is currently strong in both the UK and Ireland.
However, dairy farmers in the RoI are expected to tap into a €1 billion (NZ$1.68b) support package allocated to the country by the EU as compensation for trade lost to the UK by Brexit.
Both countries are still battling through lengthy Covid-19 lockdowns that were previously set for six weeks, but could be extended.
Although the initial closure of the foodservice sector saw a drop in demand for dairy, the overall market for dairy has strengthened with more people cooking and baking at home.
In fact, the latest outlook for the dairy industry in the UK predicts further growth as people continue to work from home and cook from scratch as home budgets become further stretched.
Brexit benefits
Since its divorce from the EU, the UK government has ramped up its own support for its dairy farmers in the form of a new code of conduct and has embarked in a new direction of gene editing.
Imbalances of power within the dairy supply chain were believed to be causing instability for dairy farmers, such as where milk buyers have the ability to set and modify the terms of a contract at short notice.
The responses to this consultation clearly demonstrated the need to introduce new regulations to require certain standards for contracts between those producing and buying milk for processing. The consultation also revealed that the distinctive circumstances in NI may need to be reflected in regulations, and this will be considered.
Although banned in the EU, Brexit has also offered up the opportunity for the UK to make its own decisions on gene editing.
If given the green light, gene editing could be a real game-changer in the dairy industry, boosting the overall genetic profile of the dairy herd, possibly reducing the use of antibiotics, and boosting milk quality.
