Mr. Trevor Donnellan:

Regarding new markets, some products with a large proportion going into the UK are mushrooms, as the Deputy mentioned, cheese and timber. Mushrooms and timber are low-value and bulky products that are not easily shipped long distances at a low cost. The feasibility of developing new markets for some of these will be challenging. Dr. Hanrahan mentioned cheddar cheese. It is a specific product for which there is not really a market on continental Europe. We would probably need to consider making different types of cheese. We already do to some degree, but the cheddar market in the UK is an important one for the Irish dairy sector because it is a retail-type market selling cheese that is directly purchased and consumed by customers as opposed to being sold as a cheese ingredient, for example, to a company that makes pizzas, which is what one might have to do to continue being involved in the cheese market.

There has been a general trend in Ireland anyway towards trying to reduce dependency on the UK market. Brexit might accelerate that. Growth areas for food products internationally are mainly outside the EU. The EU is a fairly mature market in which there is not much population growth and its consumers' preferences are shifting away from some of the products that Ireland produces. Beef is an example. Demand for it across Europe is not particularly strong, whereas demand outside of the EU is probably better. Regardless of Brexit, the Government may have a role in this regard by funding marketing initiatives in order to develop Ireland's non-EU markets, but Brexit probably increases the importance of doing that.

Deputy Penrose asked about the timeline. We agree with him. A companion set of slides goes with the report, although I do not know whether it has been made available to the committee. We can provide it in due course. Although it was speculation on our part in advance of the Brexit vote, we considered at the time that it could take up to a decade for the UK to untangle itself from the EU. That view has been expressed in recent weeks by some others. Two years is extremely ambitious. That period has only been mentioned because it is mentioned in Article 50. Many would say that that clause was written without the expectation that it would ever have to be used. It is a complex issue. Perhaps some of those involved in the negotiations have not yet realised quite how complex it is. Five years might not be an unrealistic timescale to have in mind.

The Deputy also asked about the UK's contribution to the EU budget. That budget was probably under pressure even before Brexit arrived on the scene. In the recessionary period of recent years, member states have been re-evaluating what they are getting out of the EU. Their willingness to increase their contributions to the overall EU budget was probably already limited.

With the UK leaving, the immediate question for the EU is whether it will operate with a smaller overall EU budget or member states will be asked to increase their contributions. That is a question to which we do not know the answer as this point. If one were to guess, one might suspect that member states would not be willing to increase their contributions because there would immediately be a large squabble about who should provide more money.

The CAP accounts for 42% or 43% of the total EU budget, which is a large share. There is pressure to reduce that share. If the EU budget gets smaller, there is pressure to reduce the share of it that is represented by the CAP and there are further pressures within the EU to try to equalise to a greater degree the amount of money that is going to various member states on a per hectare basis or whatever measure one chooses, one must conclude that Ireland's share of the CAP may come under pressure.

Alternatively, what if member states can be convinced to increase their contributions so that the EU budget remains more or less the same and the missing €10 billion is made up by them? That would leave Ireland in a difficult situation. On the one hand, it might find itself increasing its contribution to the EU budget and, on the other, wondering how much it will get back. The main mechanism by which Ireland gets funding from the EU budget is the CAP. As we move to being a net contributor, we could find ourselves trying to maintain the amount of money that is coming to Ireland through the CAP while contributing more to the EU budget than we are getting back. It is a tricky issue that may need to be played out in future.