Mr. Joe Healy:

I thank the Chairman and the members of the committee for the opportunity to input into the debate on the future of Europe. This is a subject of major importance to Ireland today and it is timely that I am making this presentation on the same day as the Government is launching the citizens' dialogue on the future of Europe. I welcome the Taoiseach's comments and his support for the future of the Common Agricultural Policy, CAP, and assure the members that the IFA will not be found wanting in spreading the message. I am joined by our director general, Mr. Damien McDonald and our Oireachtas liaison officer Ms Elaine Farrell, who is well known to the committee.

The UK decision to leave the EU will impact hugely on Ireland. It is timely, therefore, to take stock of what the EU project now stands for and what direction it should take. Of all of the sectors in society, farmers are those who are most aware of the benefits that EU membership has brought. For Irish farmers, EU membership has meant access to a market of 500 million consumers, the stability provided by CAP payments and the ability to grow and diversify our export markets.

The Common Agricultural Policy was provided for in the Treaty of Rome in 1957, and its objectives were set out in that treaty. These are to increase agricultural productivity, to ensure a fair standard of living for farmers, to stabilise markets, to ensure the availability of supplies, and to ensure that supplies reach consumers at reasonable prices. These principles remain equally relevant today.

Financial solidarity was a key principle of the new CAP, with spending on the CAP to be borne by the central European budget. The CAP is of vital importance for producers and provides European consumers with a plentiful supply of high quality, sustainable food produced at affordable prices. There is now recognition for the multiple roles of farmers as food, fuel and energy producers in addition to meeting environmental requirements and other public goods. Over the years, it has undergone significant reforms, responding to the demands of European society and consumers. The current two-pillar structure of the CAP addresses complementary but differing needs. The role of the basic payment and market support measures in Pillar 1 is to support farm incomes and the delivery of public goods. The main focus of the rural development programme under Pillar 2 is on farm-based, economic, environmental and social programmes delivered at member state and regional level.

The next CAP reform will take place in the context of new challenges facing Europe, including market volatility, climate change, and the UN sustainable development goals, SDGs. Farmers are committed to delivering on the public good requirements relating to the environment and climate change. This is in addition to the delivery of quality food and meeting the highest regulatory standards in the areas of food safety and animal health and welfare. In return, farmers must be provided with a fair standard of living. Low farm incomes in many sectors continue to provide a challenge to the sustainability of farming enterprises across the EU, and to attracting new entrants into farming. Simplification of the CAP is also critical. The reform of the CAP over many decades has led to a serious increase in the regulatory burden on farm enterprises. The EU is blamed for the bureaucracy and red tape associated with the CAP. The rules of the payment system and inspection regime must take into account the realities of farming, and the increased use of technology and risk-based analysis must be progressed. The IFA believes that the EU should set as a target in the next CAP reform the delivery of a strong, sustainable and competitive agriculture for the benefit of farmers and consumers alike.

This requires a strongly funded CAP budget, reversing the cuts imposed in the multi-annual financial framework, MFF, for the period 2014 to 2020, through direct income support and market management measures in pillar 1, and co-financed farm schemes in pillar 2.

In the Commission's White Paper on the future of Europe, published last March, a number of potential scenarios for the development of the EU project are outlined, and their potential impact on key policy areas are summarised. From a farming perspective, the IFA believes that continuing the completion of the Single Market remains very important. Now, more than ever, free access to and regulatory coherence within the EU market is very important. However, this should not be the sole focus of the future EU. In addition, strengthening existing common policies, such as the CAP, is critical to securing a strong future for the EU, and in demonstrating to citizens the positives of EU membership. The Commission's June reflection paper on the future of the EU finances identifies that the CAP reaches farmers and citizens even in the most marginal areas of the EU, having a positive impact on economic and social development in those areas. It further suggests that improvement to the policy can arise from putting more emphasis on incentivising farmers to deliver environmental and climate public goods and services. The IFA is very concerned, however, that in four of the five scenarios outlined for the future EU budget in the paper, a reduction to the CAP budget, either as a percentage of the overall EU budget, or a direct cut, is envisaged.

The IFA recognises the challenges facing the EU budget, including the withdrawal of the UK, a net contributor, from the EU, and the need to finance new priorities. It is unacceptable, however, that existing budget programmes, such as those associated with the CAP and cohesion funding, would be simply reduced to accommodate new challenges. The IFA believes that member states should increase their contributions, if necessary, to take account of Brexit, to fund existing policies, such as CAP and cohesion policies, and to take on new priorities, where agreed between member states.

The last MFF was agreed against a backdrop of economic downturn in the European Union, with direct cuts to the CAP budget. Since then, there has been a significant recovery for the EU economy. The IFA believes the future CAP budget should be linked to the growth of the EU economy, which would enable increases in funding.

Let me refer to a couple of the other issues that arise. Brexit presents the most serious threat to Irish farming and our agrifood sector since we joined the EU. With 40% of our food exports going to the UK, no other member state and no other sector is as exposed in these negotiations. The outcome of the Brexit discussions, and the impact on different member states and sectors, is very much linked with the discussion on the future of Europe. The IFA has set as key priorities for the agriculture sector in these negotiations the maintenance of the closest possible trading relationship between the UK and EU, while preserving the value of the UK market, and the provision of a strong CAP budget following the UK's departure. The optimum outcome is that the UK remains within the customs union and the Single Market. This would address both trade and border issues. The next best option is that we have a comprehensive free-trade agreement between the EU and UK with tariff-free trade for agricultural products and food; the maintenance of equivalent standards on food safety, animal health, welfare and the environment; and the application of a common external tariff for food imports to both the EU and the UK.

On EU trade policy, within the EU there must be greater coherence between the CAP and EU trade policy. It is essential that the correct balance be found between the opening new markets, availing of trade opportunities and protecting sensitive sectors. The value of the EU market cannot be undermined by increases in low-cost food imports that do not meet the high food-safety, animal welfare, health and environmental standards that are required of EU producers. Mercosur is a case in point. The EU seems hell-bent on securing a Mercosur deal regardless of the costs to agriculture and the impact on rural areas.In recent weeks, the EU have already offered an additional 70,000 tonnes of beef quota to Mercosur countries, and this comes on top of preferential market access they already have, representing 246,000 tonnes. There is already talk of more.We know from the Brazilian weak flesh fraud those concerned fail to meet EU standards on all of the key issues of traceability, food safety and the environment.Indeed, the latest EU report from the Food and Veterinary Office states the Brazilian competent authority is not in a position to guarantee that the relevant export requirements are met.In addition, the report states the competent authorities are signing export report certificates despite being unable to ascertain the veracity of certain statements therein.In Ireland, the sector is based on meeting the highest standards and environmentally sustainable grassland production systems.Irish beef production systems are between two and four times more efficient than South American production in terms of climate change and greenhouse gas emissions. It is well established that the growth in South American beef exports, particularly exports from Brazil, has come about on the back of widespread destruction of the rainforest in the Pantanal and Amazon regions. It would be a total contradiction of EU policy on climate change for Europe to agree a Mercosur deal that replaces sustainable EU beef production for European consumers with product from South America, which has a much higher carbon footprint.

On top of all of these issues, we have Brexit. Half our beef exports go to the UK market. Therefore, Mercosur negotiations at this time make no sense whatsoever. I would go so far as to say they are reckless. We are requesting that our Taoiseach and Minister redouble their efforts in opposition to Mercosur in defence of our key beef sector.

In the area of climate change, while I am concerned by retired professor Alan Matthews's proposal to the Citizens' Assembly to introduce a further €30 million trade-distorting carbon tax on the sector, I am reassured by the perspective of An Taoiseach, Deputy Leo Varadkar, that Ireland's focus on cutting emissions should be on energy and transport, given that greenhouse gas emissions have increased by 130% since 1990, at a time when emissions from the agriculture sector have declined by almost 6%, despite our output increasing by more than 40%.

Turning to the European focus of today, I am extremely concerned about the impact on the future sustainable development of Ireland's agrifood sector arising from positions taken by our Members of the European Parliament regarding the Commission's 2030 climate proposals. Their position fails to recognise the October 2014 European Council decision that recognises that agriculture has multiple roles and that food production must not be threatened when addressing the climate challenge. Of specific concern are the amendments to change the 2030 starting point from the average of 2016, 2017 and 2018 to 2020 and the reduction in the LULUCF allowances. These will impact most on Ireland and will lead to an additional liability of more than €1 billion. The strong position taken by Government, particularly the Minister for Communications, Climate Action and Environment, Deputy Naughten, is welcome in the ongoing discussions.

Ireland is taking a leading position in Europe by targeting European funding, through the CAP, at measures that reduce greenhouse gas emissions in the sector.

Some 87% of the measures in Ireland’s rural development programme have climate reducing elements. Irish farmers participate in carbon monitoring, measuring and management through programmes such as Bord Bia’s Origin Green programme, the Department of Agriculture, Food and the Marine’s beef data and genomics programme and the green low carbon agriculture scheme, GLAS. All of these schemes promotes the retention of soil carbon stocks through the encouragement of climate-friendly agricultural practices. Farmers will continue to build on our sustainable model of food production and to seek to make improvements in carbon efficiency right across the food supply chain.

One of the initiatives in place is the IFA-led smart farming programme, run in conjunction with the Environmental Protection Agency, EPA. Smart farming is farmer-led and focuses on demonstrating win-win situations that improve farm incomes, enhance the environment and reduce greenhouse gas emissions.

I thank the Chairman for the opportunity to input into the discussions on the future of Europe. The coming months will be very important in the context of expected initial proposals on the multi-annual financial framework post 2020, and the further development of the Commission position on the reform of the CAP. It is critically important that the Government, led by the Taoiseach and Minister for Agriculture, Food and the Marine, as well as Commissioner Hogan at EU level, make the strongest case for a fully-funded CAP post 2020. Irish farmers remain strongly positive towards the European Union, recognising the benefits that EU membership and the CAP have delivered. I hope that the outcomes of these discussions can deliver practical changes and contribute to delivering a stronger and better Europe for all its citizens.