Brexit bill spells uncertainty for Northern Irish dairy farmers

Philip Haffey rustles a feed sack and the cows come trotting to him. The fourth-generation dairy farmer in Northern Ireland’s County Armagh produces 1.4mn litres of milk a year. The grain his cattle eat, when they are not chomping grass or silage, is imported from Great Britain.

But those cereal imports could prove a nightmare for him under Boris Johnson’s new bill to unilaterally rewrite the Brexit trading rules for the region. Farmers say the prime minister’s initiative threatens the dairy sector, which is worth £1.5bn a year to Northern Ireland and is part of the largest integrated industry across the island.

The bill envisages a dual regulatory regime, where goods entering the region could be produced either to UK or EU standards. But if rules diverge and the grain that Haffey feeds his cattle is grown with pesticides not permitted in the EU, he would no longer be able to send his milk for processing in the Republic of Ireland.

That would do more than just inconvenience a farmer who happily voted for Brexit. The region does not have enough plants to process all the milk it produces, meaning the 800mn litres a year produced by Northern Irish farmers that is processed south of the border — a third of the region’s output — would have nowhere to go except Great Britain.

Milk from north and south is also mixed together so butter, cheese, Baileys Irish Cream liqueur, baby formula and other products are made with supplies from both jurisdictions indistinguishably.

Haffey objects to Irish Sea customs checks for British goods entering the region under the post-Brexit trading arrangements, known as the Northern Ireland protocol. “We are part of the UK, so things should flow as freely to Northern Ireland as they do to Wales,” he said. “I think pressure needs to be exerted on the EU.”

But even he stops short of calling for the protocol — which London says is causing “peril” to societal and political conditions in the region — to be scrapped altogether, for one simple reason. As Alan Cleland, a farmer in County Down put it: “Loads of bits and pieces of the protocol are problematic. But from the point of view of our milk, it seems to be working.”

Alan Cleland, a dairy farmer from County Down: ‘From the point of view of our milk, [the Protocol] seems to be working’ © Paul McErlane/FT

London’s bill to give ministers power to tear up parts of the protocol is already undermining the industry’s image, said Gerry O’Reilly, a dairy farmer south of the border in County Cavan and a shareholder in Lakeland Dairies, a large processor.

Northern Irish milk, including from Haffey, keeps Lakeland supplied, particularly at the end of the year when herds like his are not producing, he said. “Already, even, damage has been done,” O’Reilly said. “If you’re an international buyer you’d say ‘I want steady supply for five to 10 years but you have all this political nonsense’. It weakens us straightaway.”

In order to preserve the 1998 Good Friday Agreement that ended three decades of conflict, the protocol left the region inside the EU’s single market for goods and subject to EU rules and oversight, rather than put customs checks on a land border that is now largely invisible.

But unionists say the customs checks in the Irish Sea that were imposed instead undermine the region’s status as part of the UK. The Democratic Unionist party has paralysed local political institutions to press its demands for the Irish Sea border to be scrapped.

Dairy, which trades on its image of rolling pasture lands, has become one of the most emblematic all-island industries in the quarter century since the Good Friday Agreement.

“Dairy is Ireland’s flagship,” said Conor Mulvihill, director of Dairy Industry Ireland, a trade body. The industry is worth €13bn to the Republic of Ireland and 85,000 people are employed in it on both sides of the border. “It’s mental what is being proposed.”

Whiskey is another industry with North-South supply chains that, since the Good Friday Agreement, has boomed, rising from just four two decades ago to 42 distilleries. Malt and grains cross the border every day, as does newly distilled spirit to be matured.

“It’s very important we have a single set of rules,” said William Lavelle, director of the Irish Whiskey Association. “If the protocol is in any way undermined or disapplied . . . it would just bring a whole range of new headaches.”

But other industries complain that the protocol has brought costly red tape that could make it difficult for some products, such as sausages, to be sold in Northern Ireland.

This week’s bill aims to introduce a “green lane” with no customs checks for goods from Britain that are staying in Northern Ireland and to end oversight of the rules by the European Court of Justice.

Mike Johnston, head of the Dairy Council for Northern Ireland, welcomed London’s recognition that there is no “one size fits all” approach.

But he said the worst-case scenario bill could mean “we would just have to stop buying grain” from Great Britain. The industry buys 400,000 tonnes a year, so “UK cereal farmers could lose out . . . there’s a lot hanging on this”.

UK officials were divided over the extent of the potential crisis. One said there were “misconceptions out there” and that industries selling into the bloc would continue with EU regulations.

But another said: “There’s obviously no fix. They’re stuffed. The dual regulatory regime can never work for agri.”

Dairy farmers said the risks were very real. The UK in 2021 authorised the use of an EU-banned insecticide, although London says it was not used in the end, and UK standards on gene editing are diverging from EU rules.

Charlie Weir, another farmer in County Armagh, regretted voting to leave the EU “because it’s just been one lie after another” from London. “Why, if the protocol is so bad, is Northern Ireland the only region in the UK that in the first quarter has grown?” he said.

“We could be left with higher costs and lower prices,” said another Armagh farmer who voted to stay in the EU and asked not to be named because of deep, enduring divisions in the region.

“The protocol is unbelievably good for Northern Ireland — it’s just the best of both worlds,” he said.

Additional reporting by Peter Foster in London

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