The Dairy Council of Northern Ireland has warned of a ‘certain doomsday scenario’ hitting the industry in the event of a no–deal Brexit.
“Northern Ireland’s dairy industry is facing a major crisis in terms of the ability to service profitable markets, to process all milk and support the jobs and livelihoods of more than 3,000 farm families across Northern Ireland,” said the Council.
In what was described as the starkest warning to date on the outcome of the UK crashing out of the EU without a deal, the Council added that the sector is ‘seriously exposed’.
Dr Mike Johnston CEO of Dairy Council NI further commented that current trade tariffs for exporting both raw milk and finished product would be in excess of £300m which would directly result in an impact on the price paid to farmers for their milk.
“Based on Dairy Council NI calculations in a no–deal Brexit, trade tariffs on both raw milk and finished products moved from NI to the EU would total £320m, before you calculate the cost of the administrative burden customs will place on dairy processors.
“This tariff represents 25% of the value of our entire industry. In a sector where the margin is, at best, 3% or 4%, trade tariffs of that magnitude would wipe out the industry.
“The reality is stark for farmers. Our analysis suggests that the milk price paid to farmers would fall by over 10 pence per litre from its current base should such tariffs be imposed.”
The Ulster Farmers’ Union agreed that a no-deal Brexit would be the worst possible outcome for Northern Ireland dairying.
“It would be totally unsustainable for our members and the entire Northern Ireland dairy industry if these tariffs were put in place,” said the union’s deputy president Victor Chestnutt. “Our farmers, who are the primary producers, will pay the price for high tariffs ultimately wiping out their livelihoods.”