McIlveen says farm subsidies would continue after Brexit – but no guarantee of how much

Farming minister Michelle McIlveen has said there is “no reason” why subsidies to farmers would end if the UK votes to quit the EU in the upcoming referendum.

However the DUP MLA – whose party favours an exit from Europe – did not offer a guarantee that it will be at the same level as present.

The effect of a Brexit on farming in NI is hotly contested

The effect of a Brexit on farming in NI is hotly contested

Her predecessor Michelle O’Neill – from pro-EU party Sinn Fein – has previously told MLAs the UK Government is unlikely to maintain the same degree of support to farmers that the EU currently offers.

Mrs McIlveen’s statement to the News Letter last night is believed to be the first time she has commented on the subject since taking up her new post in late May.

The referendum is on Thursday.

The News Letter had requested an interview with her.

However, the DUP instead issued a statement in her name which read: “Since taking up post I have been taking the opportunity to talk to as many farmers as possible…

“Whilst there are always differing views, I was immediately struck at how different reality was from the lazy assumption that all farmers would be cheerleaders for the EU.”

“Right across Northern Ireland, farmers are sceptical about the European Union.

“Agriculture does rely on subsidies but there is no reason why these would cease outside the EU, but rather responsibility would move to a national level. Many farmers also see a reduction in red tape and bureaucracy as strong incentives to leave.

“Our agri-food industry is vital to the economy of Northern Ireland and those within the industry can be assured that, whatever the result, I will fight for their interests.”

Mrs McIlveen did not explicitly state if she believes subsidies will continue at the exact same level as the EU would provide.

However, the DUP said that in the event that the UK opts to pull out and stop contributing to the EU, the Westminster Treasury would have the resources to do so.

Speaking in the Assembly in February, her predecessor Ms O’Neill told MLAs that subsidies under Pillar One of the Common Agricultural Policy (the main stream of money for farmers) amounted to €2·3bn in Northern Ireland over the period spanning 2014 to 2020.

She said: “The British Government have consistently pushed for reductions in the support going to farmers and rural development under the Common Agricultural Policy.

“They do not regard that spending as value for money, so I believe that the Treasury would be unsympathetic to our calls for some of the money saved from withdrawing as a member state from the EU to be used to maintain support to farmers and rural communities.”

What about trade, not subsidies?

The News Letter recently requested internal documents from the now-defunct Department of Agriculture and Rural Development (DARD, which has since been replaced by the Department of Agriculture, Environment and Rural Affairs, or DAERA) about what may happen to the farming community if the UK votes to quit the EU on Thursday.

Many of the documents addressed questions of subsidy, re-stating the old Sinn Fein minister’s position that farming support risks drying up if the UK leaves.

However, one document also addressed in detail the possible effects on trade.

The document – called ‘Preliminary Consideration of UK Exit from EU’ – states that 28 per cent of all Northern Irish sales of food-and-drink produce was to EU states in 2013.

It said that just over half of all these Northern Irish exports (52 per cent) were to the Republic of Ireland.

It states that while some non-EU countries – such as Norway – are still able to gain access to the single European market, “these free trade arrangements do not, however, include agriculture”.

These countries must still pay cash to the EU in exchange for these arrangements.

It adds: “One estimate suggests that Norway, as a non-member of the EU and with no effective power to shape EU single market law, nevertheless contributes the equivalent of £106 per person per annum to the EU budget, compared with a current UK contribution of just over £150 per person.”

Alternatively, the briefing document from DARD – which does not include a date, author, or details of where it was circulated – goes on to suggest that the UK could strike a deal with the EU which would be governed by the World Trade Organisation.

Whilst a deal of this kind could include agriculture and food, “the EU tariff barrier can be substantial (eg, around 13p per litre for liquid milk)”.

It continues: “EU agricultural tariffs in 2013 covered almost 2,100 product lines and applied at a rate of just under 15 per cent on average (but ranged from zero per cent to 197 per cent).”

It states there are other alternative deals which the UK could strike.

However, a Turkish-style “customs union” largely does not apply to agriculture.

Meanwhile a new, over-arching trade deal between the EU and UK – which the document’s author said “could well be the most likely outcome following a UK exit” – would still entail things like import licences and border checks (including customs posts on the Irish border).

The document goes on to add that a major cut in agricultural support would “not necessarily result in a major reduction in the level of agricultural output”.

However, it notes that such support has the effect of inflating rural land prices, and that cutting it “would lead to a reduced rental return to landowners”.

It concludes that some effects of an EU exit “could be positive for Northern Ireland, some negative, but the overall balance is impossible to estimate”.

The DUP said: “Tariffs would ultimately be part of the negotiations following an exit. UK is a huge market for other nations to export into so the will to impose high tariffs might not be as great as some people claim.”

Leave a Reply