Concern among food and agribusiness SMEs about Brexit has increased from 21% last year to 42% this year, according to a report published by ifac, the professional services firm for the farming, food and agribusiness sector.
That is a 100% increase year on year, but it is still surprisingly low when we have been told that food and agribusinesses will be hit the hardest if there is a no-deal Brexit.
David Leydon, Head of Food and Agribusiness with ifac, explains that it is surprising if you are looking through the lense of a larger agribusiness. "Larger businesses in the food and agri sector have definitely taken a lot of steps towards Brexit planning in terms of supply chain, logistics and currency hedging," he said, but it is not as straightforward if you look through the lense of a micro, small and medium sized business.
As of July, only 51% of companies in general had an EROI customs number in place which is the most basic requirement to trade with the UK.
In terms of food and agri SMEs, 82% of their trade is within the Republic of Ireland so some of them do not feel as exposed. Mr Leydon said SMEs have time and management constraints when it comes to preparing for Brexit. "There is definitey still a hope that a deal will be done at the last minute," he added.
There are 4 key things that food and agribusinesses have to do now, according to ifac:
- Apply for the EROI number.
- Invest in logistics, supplier and export customer relationships.
- Get tariff advice. Make sure you know how to make a customs declaration, and make a payment.
- Have a financial buffer in place.
"They need to have a financial buffer in place to survive a hard Brexit if it happens," Mr Leydon said. "That financial buffer is critical."
Many agribusinesses still plan to increase sales to Northern Ireland and the UK in spite of Brexit, but they are also looking further afield to other export markets.
"For those companies that are just beginning to export, Northern Ireland and Great Britain are still the best locations to start in terms of proximity, the networks we have there, the ease of doing business, so if a business is just getting to the point where they are about to export, they are still very much looking at Norther Ireland and Great Britain. Enterprise Ireland have put in some great supports to help them develop more."