Mr. Tom Moran:

I thank the Chairman for the invitation to this meeting. We are delighted to be here and I have brought a very senior team, including three assistant secretaries from the Department. Committee members have copies of the six-month report on developments in the EU from July to December 2013 and it gives details of dossiers progressed under the Lithuanian Presidency. I will provide a brief overview of the work carried out by the Department during that period.

The period in question focused predominantly on Common Agricultural Policy, CAP, deliberations around finalisation of the CAP reform package agreed under the Irish Presidency. Agreement was reached on the final legal texts of the four pillar dossiers under CAP on direct payments, the common organisation of the markets, rural development measures and the horizontal measures. Discussions also commenced on a series of delegated acts on CAP reform. These are the detailed rules for implementation of the reform package and the texts were finalised earlier this year.

The Minister launched a consultation process in July 2013 on how the direct payments regulation would be implemented from 2015. There was a considerable amount of feedback from the various stakeholders, including this committee's submission. At this point, most of the decisions have been taken and have been well flagged so I do not propose to go into detail here. However, I would be happy to answer any questions members may have. Further stakeholder consultation took place on the outline of our rural development programme, RDP, and the Minister announced the details of our funding commitments under the RDP for the period 2015 to 2020. Our draft RDP was submitted to the EU Commission last week and we hope to receive, and will press strongly for, early approval for the suite of measures we have developed.

By way of background, the new rural development regulation moves away from the old axes structure and is instead based on six priority areas for rural development. These areas are fostering knowledge transfer and innovation, enhancing competitiveness, promoting food chain organisation and risk management in agriculture, restoring, preserving and enhancing ecosystems, promoting resource efficiency and supporting the shift towards a low carbon and climate resilient economy and promoting social inclusion, poverty reduction and economic development in rural areas. The new RDP will be a vital support in terms of enhancing the competitiveness of the agrifood sector, managing natural resources in a sustainable manner, and ensuring the balanced development of our rural areas.

Under the Lithuanian Presidency, the Commission organised a conference in September to discuss the future of the dairy sector following the expiry of quotas, which will end in March or April of 2015. Although there were few developments on this issue in the period we are reviewing, I think it may be worthwhile to bring the committee up to date on developments that have taken place this year on the matter. A growing number of member states, including Ireland, has been arguing for an adjustment in the final year of quotas. We are arguing that the soft landing envisaged for the expiry of quotas is not happening in all member states. However, there have been attempts by some member states to link the soft landing issue with the post-quota policy. The situation in the dairy sector was discussed at every agriculture Council of Ministers meeting under the Greek Presidency and the Italian Presidency also indicated it will be on the agenda at the next Council on Monday. The position is that the Council is divided on the steps that should be taken in the run-up to the abolition of quotas and afterwards.

The Minister has lobbied for measures to be taken to address this, notably through an adjustment of the butterfat correction coefficient. Our allies on this include Denmark, the Netherlands, Germany, Austria, Poland, Luxembourg, Estonia, Belgium and Latvia. However, another large and influential group of member states, including France, Spain, the UK, Sweden and Italy, is opposed to taking action. Some are linking this issue to the policy direction to be taken after quotas expire. There are subtle hints that some would like to see the reintroduction of some form of supply control in the event of a crisis in the sector. As I said, the matter will be discussed on Monday and at this stage it is difficult to say what the outcome will be. The reality is the Council is divided on the issue and it would be unwise to anticipate changes to the current quota arrangements, especially for farmers during a year of strong grass growth.

On the Common Fisheries Policy, the regulation on the European Maritime and Fisheries Fund was concluded during the Lithuanian Presidency. The three pillars of the fund are to help fishermen in the transition to sustainable fishing, to support coastal communities in diversifying their economies and to finance projects that create new jobs and improve quality of life along European coasts. The Minister recently secured EU funding to the tune of €148 million from this fund. This is a huge increase on our allocation, more than double the €72 million allocation for 2007 to 2013. Ireland must now prepare a programme setting out the arrangements for spending the fund and submit this to the Commission by 20 October 2014. The Department has been working on the new operational programme since 2013 and has engaged with stakeholders on a number of occasions to date. Further public consultation and a strategic environmental assessment will take place over the summer of 2014 and the process mirrors that applied to the rural development programme. The Commission also published its annual proposal for total allowable catch, TAC. Following stakeholder consultation in November, Ireland successfully negotiated a TAC of around 270,000 tonnes that, importantly, included increased quotas for Celtic Sea herring, mackerel, boarfish and blue whiting.

Regarding international trade agreements, negotiations and technical discussions are ongoing between the EU Commission and a number of countries in pursuit of free trade agreements. In the period under review, political agreement was reached on a deal with Canada while negotiations continued with a number of other countries including US, Japan, India, Thailand and the Mercosur countries. The Department continues to work closely with the Department of Jobs, Enterprise and Innovation to ensure our position is represented in the trade policy committee meetings where the ground work is completed.

As I mentioned, political agreement on the Canadian agreement was reached last October. However, technical discussions are ongoing between Canada and the Commission regarding some issues, including arrangements for the administration of the tariff rate quotas for cheese and beef. These are of significant importance for Ireland and the Department continues to engage with the Directorate General for Agriculture and Rural Development and the Directorate General for Trade. At this point, we understand that the licensing system that will be put in place will regulate the trade evenly over the year.

On the much-discussed trade agreement, TTIP, between the EU and the US, three rounds of negotiations took place during the period under review. The main objectives of the agreement are eliminating tariffs, solving regulatory barriers and working to avoid future regulatory barriers. Discussions between the Directorate General for Trade and the Office of the United States Trade Representative, USTR, are ongoing. There are significant opportunities for Ireland under this agreement to increase our exports of dairy products and consumer foods, including oatmeal, sports nutrition drinks and so on, to the US.

There are also opportunities for the meat sector, including in the context of pork, beef and lamb. For beef and lamb in particular, we envisage the development of a niche market - possibly along the east coast - focused on the Irish diaspora. However, we must also be mindful of any quota that may be offered to the US in beef. We continue to urge caution regarding the size and, significantly, composition of any beef quota offered to the US under these negotiations. As members are probably aware, the US Secretary of Agriculture, Mr. Tom Vilsack, recently visited Ireland and had wide-ranging discussions with the Minister about the EU-US negotiations and with regard to access for Irish beef and lamb to the US market. A United States Department of Agriculture, USDA, inspection of Irish beef-producing plants took place last week. Assuming they meet the US standards, exports of Irish beef to the US could commence later this year. We are happy with the way the inspections went so we are hopeful that the process will move on. Last month the Minister led a trade visit to the US highlighting, among other things, the importance of the US market to Irish producers.

Negotiations with the Mercado Común del Sur, MERCOSUR, stalled in the second half of 2013. A commitment for the exchange of market access offers between the EU and MERCOSUR by the end of the year was not met. We are monitoring ongoing developments in respect of this matter very carefully. Ireland has repeatedly expressed concerns about the threat to both the EU and the Irish beef industry from a badly handled MERCOSUR deal. We have worked with other member states, in particular France, but also with Austria, Finland, Greece, Hungary, Lithuania, Luxembourg and Poland on different aspects of the issue in order to highlight our concerns. This matter has been raised at official level at the trade policy committee by the Minister at the Agriculture Council and we have had several meetings with the EU Commission at both ministerial and senior official level. We have made clear our view that the beef offer should not be increased and that it should be structured to avoid a focus on high value cuts, fully respect equivalence and include in-quota tariff rates. We know that our concerns are fully shared in the Directorate General for Agriculture and Rural Development, DG Agri, up to and including the Commissioner.

In the context of other free trade agreements, FTAS, negotiations are ongoing between the Commission with Japan, India and Thailand. The Department continues to monitor developments and provide input into these negotiations.

I wish to deal now with plant health, veterinary and food safety issues. The legislation in this regard covers animal health, plant health, seeds and propagating materials and includes Regulation (EC) 882/2004 on official controls. The intention behind it is to simplify the administrative controls in the areas to which I refer. During Ireland's Presidency the relevant technical discussions commenced and were continued under the Lithuanian and Greek presidencies. These are substantial dossiers and are not expected to be finalised until 2015 at the earliest. The final part of the so called five-part package, which covered plant reproductive material, was rejected by the Parliament and is now with the Commission for redrafting.

On the food sector, the European Commission launched a proposed reform of the established information and promotion regime for European agricultural and food products in November 2013. The new policy is based on an evaluation of the current policy framework and was developed in parallel with the CAP post-2013 reform process. The aim is to increase the added value of the agrifood sector and its contribution to the European economy by moving towards a European and global promotion policy that will be more focused on the commercial aspects of the sector. Following intensive negotiations earlier this year the package was signed off under the Greek Presidency. It is the fastest ever agreement reached under co-decision with the European Parliament in the agricultural sector.

The six-monthly report on forestry refers to the ongoing discussions on a legally binding agreement on forests in Europe. These discussions have continued into 2014. There are a number of inter-institutional differences regarding the preferred strategy to be adopted and these will be discussed further at a ministerial conference on forests, the timing of which has not yet been confirmed. In addition, discussions on proposals for a forest law enforcement, governance and trade licensing scheme for timber imports into the EU have now concluded, with agreement with the European Parliament on amendments to the existing regime.

That concludes my opening statement. I would be happy to answer reply to any questions or discuss any issues which members may wish to raise.