Economic relationships between Ireland and Britain are deep-rooted. 40% of total Irish exports are consumed in the British market, making it our largest trading partner. Ireland is the fifth largest market for British exports - Britain does more trade with Ireland than with Russia, China, India and Brazil combined.
Food and drink exports underpin the relationship. In 2012, 42% of Irish food and drink exports, worth €3.8 billion, were consumed in Britain. The market accounted for over 52% of total Irish beef exports and 36% of dairy products and ingredients in 2012.
However, despite Ireland's dominance as a food exporter, market forces ensure that the flow of trade is not one-way. The value of food exports from Britain to Ireland is in the region of €2 billion per annum.
The poultry sector is a prime example of the level of inter-trading that takes place. Despite the British market accounting for 85% of total poultry exports from Ireland, worth €175 million per annum, Ireland imports €90 million worth of British poultry meat per annum, mainly due to the disproportionate demand for breast meat among Irish consumers. A similar trend is evident in the pig meat sector, with exports to Britain worth €250 million per annum and imports from Britain worth €75 million per annum.
Clearly there is a unique relationship between Britain and Ireland. However, as processors and retailers continue to squeeze farmer margins there is a natural tendency to look to imports as the culprit for lower prices.
As an industry we can waste time arguing over technical differences in Quality Assurance (QA) standards and compliance with retailer-imposed labelling regulations. However, this will do nothing to develop Irish or British agriculture.
Classing finished cattle with full birth to beef traceability as "nomadic" solely on the basis of labelling issues is not reasonable in the culture of a single market. Similarly, blaming "cheap" Irish cheese imports for driving down domestic prices is equally hard to justify when the Irish milk price has consistently tracked higher than the British price for cheese manufacturing since 2010.
The distraction allows processors and retailers to remain in full control of both markets.
Irish and British farmers produce food to some of the highest standards in the world for one of the most demanding consumer bases. Both operate to the same strict EU standards, environmental regulations and within the same climatic conditions. But perhaps more importantly, production costs in both regions are broadly similar. The impact that imports from countries with lower standards and production costs can have on domestic prices was evident in 2005 when cheap Brazilian beef flooded into the EU.
On the liquid milk side, market deregulation with no provision for a higher seasonal milk price is leading to real pressure on production systems on both side of the Irish Sea. Sensible farmer co-operation in market management is required; otherwise the migration to seasonal production for export will continue.
There is no long-term gain to be achieved from driving a wedge between British and Irish producers. Britain needs to import food, with self sufficiency across the main food groups ranging from 55% to 80%. With dairy production having declined by over one billion litres in the last decade, imports now stand at 900,000 tonnes per annum, with 400,000 tonnes imported as cheese. Self-sufficiency in beef production stands at just over 80%, with an import requirement of 355,000 tonnes in 2012.
With British dairy and beef production forecast to continue to decline, Ireland should not be seen as a competitor but as a strategic food partner- a partner with similar production costs that can meet the exacting standards of a demanding consumer. Allowing for the normalised flow of produce and live cattle across both the Irish Sea and into Northern Ireland would be in the long-term interests of both Irish and British farmers. It would serve to weaken the processor/retailer control in both markets and prevent price differentials emerging that are not in the interests of farmers on either side of the Irish Sea.
