Urgent need for no-deal Brexit action, warn agri-food groups
EU agri-food operators are clamouring for extra aid as the clock ticks down to cliff-edge Brexit.
They have written to the EU’s lead Brexit negotiator, Michel Barnier, to push for special customs, product labelling, road haulage and market intervention measures that would kick in for 18-24 months after March 29, if the EU and UK fail to reach a final Brexit deal.
Farmers’ federation Copa and Cogeca, the European Liaison Committee for Agricultural and Agri-Food Trade (CELCAA) and industry grouping FoodDrinkEurope say that existing EU contingency measures “will not prevent significant disruption of supply chains in case of no-deal”.
“The impact of a no-deal will be immediate and harsh, therefore the EU agri-food chain is asking that the Commission be ready to act,” the letter says. “There is therefore an urgent need for time-limited EU contingency measures to decrease business risks associated with a no-deal Brexit and the UK must be encouraged to ensure reciprocity.” They want “unilateral contingency measures” for the agri-food sector, including temporary fast-track customs procedures, mutual (EU and UK) recognition of food safety and phytosanitary standards, a grace period on product labelling and a rollover on haulier licences.
They are asking the Commission to help producers with geographically protected products (such as Parma ham or Irish Cream liqueur) to transfer their products to the UK’s general trade mark system or any future UK scheme.
And they want budgetary support to cope with market disruptions, including “Emergency Brexit Funds”, private storage aid and trade promotion grants.
After meeting the Taoiseach last week, EU Commission president Jean-Claude Juncker promised to “step up our preparation for a no-deal scenario” to deal with the “specific challenges that Ireland and Irish citizens, farmers and businesses will face”.
EU officials refuse to go into detail about those “specific challenges” and any counter-measures that will be available to Ireland, and confirm only that “intensive talks” are ongoing on the matter.
The EU can drum up emergency aid, as it did following the Russian embargo on EU fruit and vegetables in 2014 – when €1.7bn was found from outside the agriculture budget to support (mainly continental European) growers.
A €2.8bn agricultural crisis reserve fund was set up under the 2014-2020 budget to deal with emergencies like the Russian embargo. And EU rules on “common market organisation” (CMO) provide for intervention in specific markets during a crisis, as the Commission did for skimmed milk powder in 2016 (although there is no advance funding set aside for this in the EU budget).
Another option open to the EU – and widely used during the banking crisis – is a suspension of competition rules, which dairy producers and cooperatives availed of during the milk price crash, when they were allowed to band together to limit production.
Brexit pressure will fall particularly heavily on the European agri-food sector in the event of a no-deal Brexit. They are extremely sensitive to any transport delays or trade restrictions given their integrated supply chains, just-in-time processing and perishable products, while smaller operators may face export procedures for the first time.
The EU27 export more than twice as much agri-food produce to the UK as the UK does to the EU.