Since the Brexit referendum in the UK, three Irish mushroom farms have closed down, causing the loss of 130 job. Irish mushroom growers are being pushed out of business due to the fall in the sterling exchange rate, which falls under market disturbances eligible for EU aid, according to the IFA.
IFA president Joe Healy has called on the European Commission to provide support for mushroom producers who have been badly hit .
“Mushroom contracts are negotiated in sterling and prices are forward agreed, generally for contract periods of up to 12 months,” he explained in a statement this Tuesday 25 October. “Mushroom producers cannot renegotiate the price they are receiving in response to the sterling decline because the contracts are for a fixed time period.”
While many producers signed contracts when the exchange rate averaged €1=£0.76 in the second half of 2015, it is now €1=£0.90 – a 15% drop in their euro sales, according to IFA calculations.
“The European Commission must provide exceptional support for the mushroom sector, for which an external political event has had an immediate and negative economic impact,” IFA mushroom committee chair, Gerry Reilly argued.
Last week, Donal McCarthy, chief executive of the main Irish producer group Commercial Mushroom Producers (CMP), told the Irish Farmers Journal that the freefall in sterling has driven most growers into loss-making territory.
One example is Schiele and McDonald Mushrooms in Tipperary town, which closed down earlier this year with the loss of 70 jobs.
Some 80% of mushrooms grown in Ireland are exported to the UK through CMP.
Speaking to the Irish Farmers Journal in Dublin last Friday, European Commissioner for Agriculture and Rural Development, Phil Hogan, acknowledged that the mushroom industry needed help, but argued that this should come from Irish exchequer funds under EU state aid rules.
Source: farmersjournal.ie
