The IMI Report on proceedings at the IFA organised Economic Forum of Farming and Farm Industry Leaders held in the RDS earlier this month has identified the 30% depreciation of sterling against the euro as a very significant threat to the economy, costing thousands of jobs and threatening the viability of Ireland’s export-dependent agri-food sector.

Launching the Report in Dublin today, IFA President Padraig Walshe said, “the deliberate policy of the UK Government to weaken sterling is hitting Ireland hard and undermining the competitiveness of Irish exports into the UK.�The problem is especially acute for the agri-food sector, which exports over 40% of its products to Britain. Also, cheaper UK imports into Ireland are threatening fresh produce production in the home market.

By the end of the year, IFA estimate that job losses in the sector as a result of the sterling devaluation will top 10,000, and is impacting very negatively on incomes in all farming enterprises. Many more thousands of jobs are also being lost in the wider economy as a result of sterling's devaluation.”

For the agri-food sector, with its high dependence on the UK, exports will by down by €1.1bn this year. The stark impact is being felt in every farm home this winter. For example, an average Irish beef producer has seen his income fall by at least €2,000 directly because of the currency crisis.

Padraig Walshe continued, “At EU level, the Irish Government must pursue a solution to this internal EU currency problem which is especially damaging to Ireland. The sterling depreciation constitutes a major distortion of the EU Single Market, and the Commission must now look at the reintroduction of Monetary Compensatory Amounts (MCAs: see attached note) to address the issue.”

The EU has strict rules governing sovereign debt, etc, and it is totally unacceptable that it can ignore the trade-distorting effect on a small open economy of the effective devaluation of a currency by a member state.

The IMI Report contains 15 key action points for the agri-food industry, including the need to invest in the primary production base, reducing bureaucracy and other uncompetitive costs in the economy, protecting farm families from price and income volatility, and regulation of the retail sector to rebalance the food supply chain.

Padraig Walshe called on the Government to immediately take on board the key action points identified in the IMI Report so that the agriculture and agri-food industry can overcome its

short-term problems and set about delivering on its potential to increase exports and create jobs going forward.

He said, “Government investment in primary production by maintaining key farm schemes is essential to achieve the potential of the sector, including the opportunity for the agriculture and forestry sectors to contribute to meeting Ireland’s GHG emissions and renewable energy targets.

Farmers need the support of the Government at this time to help them overcome the worst income crisis in a generation. Investment in primary production will be well rewarded through economic activity and employment across rural Ireland.”