Food and Agriculture: A Value Chain Analysis

On 1 January 2021, the Brexit transition period between the United Kingdom and the European Union officially ended, meaning that the UK is no longer a member of the European single market and that future trade in goods or services with the UK will be provided in accordance with the EU-UK Trade and Cooperation Agreement. Using current-price data from January-February 2018 and January-February 2021 (the most recent data available), this chapter illustrates the change in Ireland’s trade in agricultural products and food and drink since Brexit became an economic reality.

It should be noted that there are significant limitations associated with the analysis in this chapter. Firstly, it is important to note that the COVID-19 pandemic was still ongoing during 2021, so the figures presented should be interpreted in this context. It should also be kept in mind that this is monthly data which can be far more volatile than annual data. Finally, it is also likely that many Irish firms conducted a higher volume of trade with Great Britain in the months leading up to Brexit in anticipation of potential legal and administrative issues disrupting trade between the two countries. Stockpiling of products in the months leading up to Brexit would likely lead to a significant reduction in Irish trade with Great Britain in January-February 2021. Despite these limitations, this chapter provides a timely indication of the impact of Brexit on Irish trade in agricultural products, and food and drink using the most recent data available.

The current-price totals of agricultural products imported by Ireland in the period January-February 2018 and January-February 2021 are shown in Figure 5.1 above. These are shown by country, with data for the UK split into Great Britain and Northern Ireland. In total, agricultural imports fell significantly by €41m (-17%) between the period January-February 2018 and the period January-February 2021. The overall decrease in agricultural imports was largely explained by the substantial decrease of €51m (-72%) in imports from Great Britain. There were also increases in imports from some countries, in particular a relatively large increase in imports of €13m (+55%) from the Netherlands. Nevertheless, there was no significant substitution effect, leading to the overall decrease in agricultural imports. In the period January-February 2018, Ireland imported more agricultural products from Great Britain than from any other country, accounting for 29% of total imports. In the period January-February 2021, this was no longer the case, with Great Britain accounting for just 10% of total imports, and Ireland importing more agricultural products from the Netherlands (18%).

The totals of food and drink products imported by Ireland in the period January-February 2018 and January-February 2021 are shown in Figure 5.2 above. Total food and drink imports fell substantially by €224m (-18%) between the period January-February 2018 and the corresponding period January-February 2021. The overall decrease in food and drink imports is almost entirely explained by the fall in imports of €335m (-64%) from Great Britain. Over the same period, imports in food and drink products from Northern Ireland saw a large increase of €76m (+75%). Ireland imported more food and drink products from Great Britain (18%) than from any other country in the period January-February 2021, but this is significantly less than the same proportion (41%) for the period January-February 2018.

Agricultural product exports from Ireland in the period January-February 2018 and the corresponding period in 2021 are illustrated in Figure 5.3. In total, agricultural exports grew by €22m (+33%) between these two periods. Agricultural exports to Great Britain increased by €7m (+21%), while exports to Northern Ireland also increased by €3m (+17%). However, growth in exports to the UK was out-paced by growth in other markets. Great Britain remains the largest export destination for Ireland’s agricultural products. It accounted for 47% of total agricultural exports in the period January-February 2021, down from 51% in the period January-February 2018.

Figure 5.4 illustrates the totals of food and drink products exported by Ireland in the period January-February 2018 and January-February 2021. Total food and drink exports fell by €101m (-5%) between the two periods. The overall decrease was largely explained by a significant reduction of €223m (-35%) in food and drink exports to Great Britain; exports to seven of Ireland’s ten largest food and drink markets actually increased over the period. Exports to Northern Ireland saw a large increase of €63m (+67%) over the same period. Great Britain remains the largest export destination for Ireland’s food and drink products. It accounted for 23% of total food and drink exports in the period January-February 2021, down from 33% in the period January-February 2018.

The early indications from the data available for comparison indicate that trade between Ireland and Great Britain in agricultural and food and drink products in the period January-February 2021 has significantly decreased compared to the same period in 2018. While these decreases also likely reflect an overall decrease in Irish international trade due to COVID-related effects, the change is far more pronounced for trade with Great Britain than for other countries. This suggests that Brexit has led to an overall decline in trade between the two countries, and Irish trade overall. This may become clearer as more data becomes available, but it provides an early indication of the effect of Brexit on Irish trade in the interim.

Go to next chapter: Conclusion