By DAVID YOUNG
A no-deal Brexit would bankrupt many Northern Ireland farmers amid a “catastrophic” collapse of the agri-food market, MPs have been warned.
Ivor Ferguson, pictured right, president of the Ulster Farmers’ Union (UFU), told a Westminster committee on Tuesday that livelihoods would be ruined if there was not an “orderly and managed” EU exit.
Mr Ferguson painted a bleak picture when asked what the consequences of a no-deal would be for his industry.
“Right from the word go, we realised that a no-deal would be catastrophic for our farming members in Northern Ireland,” he told MPs.
“It would be catastrophic across all sectors of farming and indeed for the agri-food business in general and, of course, agri-food business and farming is the biggest sector in Northern Ireland, so it would have a detrimental effect even on the Northern Ireland economy.”
He said the potential for significant tariffs on goods moving into the Republic of Ireland was the most concerning threat, as he highlighted that 30 per cent of milk and 50 per cent of lambs produced in Northern Ireland go South.
“What would it mean for us? It would mean market failure, it would mean bankruptcy for a fair percentage of farmers,” he said of a no-deal.
“So obviously you can understand, it is a place that we just don’t want to go.”
It has been suggested that, in order to avoid a hard border in Ireland, the UK might be prepared to consider a customs partnership with the EU that would see it collect tariffs on the EU’s behalf on goods arriving by sea to Northern Ireland.
Importers that retained those goods within Northern Ireland, and did not transport them on to the EU, would then be potentially eligible to claim back the duty paid.
Dr Esmond Birnie, senior economist at the Ulster University, estimated the potential upfront duty costs on goods moving from Great Britain into Northern Ireland could be £500 million a year.
“So businesses would be up-front out of pocket, as it were, for a considerable sum of money,” he said.
“And then there would be a certain degree of administrative burden on their part to retrieve that money.”
Dr Birnie said the administrative process for securing rebates could be “fiendishly difficult”.
Roger Pollen, from the Federation of Small Businesses Northern Ireland (FSB), told MPs that the system could potentially work if there was no movement of money required, and the tariff and rebate cancelled themselves out in one transaction.
“If that was a process that could be done in a simple transaction that would show tariff paid and tariff due to be reclaimed, and you would complete the transaction so there was no actual movement of money, just reconciliation, then people (FSB members) felt it was manageable,” he said.
“It comes down to level of detail – what will actually be behind that sort of transaction? If it is as seamless as that, then it is something people will deal with and take in their stride.”