Michael Creed (Cork North West, Fine Gael) | Oireachtas source

There are, but there is a degree of commonality as well. I will try to deal with each of the topics.

The issue of access to credit was raised by all three speakers. Ensuring access to credit is not a core activity of the Department of Agriculture, Food and the Marine. It must be acknowledged, however, that our initial foray into this area was due to the fact that the banking system was not functioning as it should in terms of providing access to working capital for the farming community. There have been many studies, including, if I recall correctly, the Central Bank quarter 2 report from 2016, in which the cost of credit across the eurozone was reviewed. Those studies found that Ireland was in the relegation zone in terms of the league table relating to the cost of credit. We made our initial foray into the provision of working capital and €150 million was made available at a rate of 2.95%. That product was a success and 4,249 farmers benefited from it. As Deputy Cahill pointed out, however, many did not. In the context of the 136,000 farmers operating in this country, 4,249 it is a relatively small number of beneficiaries, but the benefit of it was far greater than just in the context of those who drew down loans. It generated competition in the marketplace for other products as the financial institutions responded. There is evidence that there are now similar products for working capital. The market has responded. The pillar banks that delivered the €150 million loan scheme have taken initiatives. One of the products is a three-year loan of €30,000 at a rate that is virtually identical to that which applied in the context of the €150 million loan scheme.

The question now is whether it is beneficial to invest another tranche of taxpayers' money into developing a product that is already in the market place thanks to the financial institutions, or whether there is another area of activity in which there is a need for greater competition. I acknowledge that in the context of last year's budget there was a demand for both. In the context of the €25 million we secured in last year's budget for this purpose, we take the view that, because of the competition that has been stimulated in the area of working capital, in order to build resilience in the industry and for primary producers, the appropriate response is to focus on the area of access to affordable capital for investment purposes rather than for working capital.

I accept that there is concern in this regard. Some people would like to see movement in both areas. There are those who dispute the fact that there is sufficient competitions. However, all of the indications are that, whether it is via the pillar banks, merchant credit delivered through co-ops or the activities of particular credit unions, there is a great deal more competition in that area.

Relatively speaking, the bigger return for investment in that space now relates to supporting affordable finance for capital investment. We got €25 million and we are working with a number of strategic partners to deliver a product in the area of capital investment. I have outlined the detail of that.

On unsecured borrowing, it is important that we compare like with like. We are talking about unsecured borrowing over a period of eight to ten years. In that context, the relevant products are not available at competitive rates. What we envisage is to have a product that would be available at less than 5%. Such a product is not in the marketplace at present. For example, unsecured borrowing is not available for young farmers or new food businesses at present. In the context of unsecured borrowing, €500,000 is the cap and the minimum loan amount is €50,000. Those are the parameters that would apply to the new product we would develop. People ask why this product is not in the marketplace already. We delivered earlier this year - also through SBCI - a €300 million working capital fund for the SME sector. Of this, 40% was ring-fenced for the agrifood business. It was not until we got that product into the marketplace that we were ready to engage with SBCI and a number of other partners, including the European Investment Fund, in terms of delivery. There was an announcement last year to the effect that the money we obtained would be paid over in order to secure the availability of the fund. However, the product was never going to be available for draw down until the start of the year. The detail of what is involved is available now and we will work on the remaining steps that need to be taken in order to deliver it to the market.

In terms of the sequence of events, first the €150 million was made available and then the €300 million fund was launched in March. At that point, we began our engagement with SBCI, the European Investment Fund and the Departments of Finance and Business, Enterprise and Innovation. There are so many parts to the fund that we do not control all the levers relating to it. If we did, we probably would have a product in the marketplace already. As already stated, we are dealing with a number of partners. We will get that product out to market. It will be different and it is not a repetition of the previous one because competition has been leveraged by virtue of the previous initiative we took in that space.

The other matters to which everyone referred are the beef and suckler cow sectors. I acknowledge that a challenging scenario exists and that it has been tied in to the beef forum, beef prices, etc. The beef forum is a useful creation to enable engagement between all of the stakeholders on the range of issues and I personally will raise with the processors the obligation to recognise that this is a symbiotic relationship between beef farmers and the processing sector. It is not a forum where prices can be fixed. That is clearly understood and acknowledged by all of the farm organisations. I want a situation whereby primary producers get a fair return for their product. The forum is an opportunity to engage on a range of issues.

One of the initiatives we have put forward in respect of the beef sector is on the agenda for discussion tomorrow. We provided funding for it via the RDP. There were calls in recent weeks for the beef forum to be convened and we have acceded to these. One of the items on the agenda for tomorrow's meeting is how we might progress matters in respect of the producer organisation for which we have provided funding. It is not a panacea for all of the ills, as I have said, but it works in other commodity areas. It works in other jurisdictions in terms of the beef sector and there is potential for it to have greater clout in terms of engagement with the processing sector than would be the case with farmers acting individually. That is something I will explore with the forum when it meets tomorrow.

Deputy Cahill referred to live exports in the context of the beef sector. The numbers are running significantly higher. The figures for 2017 were up 30% on those for 2016. Likewise, the figures for 2018 are up 30% on those for 2017.

Significantly, in respect of the beef sector, in the spring and early summer of 2018 primarily, 147,000 calves were exported. Deputy Cahill raised, in particular, the Turkish market in the context of live exports. The devaluation of the currency in Turkey as a consequence of geopolitical events outside of our control means market is in some difficulty for us now. We are always looking for new market opportunities, whether it is in EU countries such as Spain for weanlings, some of which find a migratory route from Spain into north Africa, or for sales directly to north Africa, particularly to Libya. I met recently an Egyptian delegation here. We are active in exploring all those opportunities. I am committed to live exports as an important outlet for competition in the marketplace and will remain active in that space. I have met all the live exporters at a round-table meeting in the Department to emphasise the importance of the sector to the beef industry and that their continued participation and activity in that space is important.

On Bord Bia funding, one should look at the trajectory and the staff complement. It has gone in the right direction. It faces challenges not only in the area of beef but in also in other commodity areas because of Brexit. There has been a significant increase in its funding and in its staff recruitment. Not all of the judgment should be based on the numbers of additional staff, although I understand in the region of 30 additional staff have been recruited. Contract staff are also being used to deliver assistance to companies on the ground. There is a great deal of activity in that area.

I am acutely aware of the issues relating to suckler cow enterprises. We need to be measured. I accept there is a challenge in the sector. I am committed to ensuring that it remains a key producer of high quality beef because of the associated benefits associated with export earnings, etc., and the primary objective to ensure that we get a fair return for the primary producer but it is important that we do not overstate the extent to which there is a flight from suckler cows as well. The issue needs to be addressed in different fora both in the context of domestic and CAP policy, but there was always an expectation that following the abolition of dairy quotas, there would be a rebalancing. That has not happened to the extent that many experts predicted. The reduction in the herd is 7% since the dairy quotas were abolished. It is most pronounced in the areas where there was direct migration to dairy enterprises. The largest reductions were in Carlow, Kilkenny, Waterford and Cork, with some people moving entirely to a dairy holding by eliminating a beef enterprise. The reduction is not as great as has been suggested. We need to do everything we can through the policy instruments available, including CAP, under which the greatest level of supports is provided, to ensure those in the sector can see a future for themselves.

We have, for example, delivered on ANC payments. Many beef farmers have been beneficiaries of this. We put an additional €25 million into ANC payments this year and we focused it on those who operate on the most marginal land. Some of the members referred to the prevalence of this enterprise on the western seaboard, in particular, and much of that land was the beneficiary of the focused approach we took in the Department in respect of the additional money.

On the issue of food wise 2025 strategy, Deputy Martin Kenny stated that there was an overemphasis on volume rather than value. There is no volume target in the strategy. The ambition is to increase the value of our exports to €19 billion by 2025. There is no volume target for any specific commodity. In essence, the strategy identifies the impediments or roadblocks for all commodities.

It is the function of all stakeholders to clear those impediments and roadblocks to enable the industry, whether it is the dairy, pork, sheepmeat, beef or tillage sectors, to respond to the opportunities that will be presented. No volume target is set in respect of beef or dairy but there is a value target. As we seek to develop products that go higher up the value added chain, value rather than volume will drive returns. We are addressing the roadblocks and allowing the industry to respond. People have said we should rein in our ambition because of Brexit or climate change but, on the contrary, it has never been more important to have a blueprint containing our stated ambition. These obstacles stop us from achieving that ambition. The figure of €19 billion, or 23,000 jobs, may be achieved but we should focus on the impediments and on human capital, sustainability and the other pillars of Food Wise 2025.

Electronic identification, EID, was mentioned, which is something I have not had the opportunity to discuss at the committee previously. No one would defend the existing system as being fit for purpose but whether we feel obliged to defend it, when the Food Safety Authority of Ireland said our current traceability system was not fit for purpose, it was a game changer. Having received the report, doing nothing was not an option. We decided to address it and the best available technology is clearly electronic identification. We have responded substantially to the concerns of the industry in respect of the timeline and the cost to farmers. I have always acknowledged that there is a cost but there is also a cost associated with doing nothing. It was never an option to fail to respond to the food safety report, which stated that the fact that we did not have traceability could become an issue of public health. If we could not recall products, it could have consequences in the marketplace and for our reputation and, therefore, we moved on it. No party to the process, whether marts or farmers, is entirely happy about it but there is an obligation on all stakeholders to respond and we have come up with a reasonable response. We have moved on the support we are paying to farmers, with a maximum of up to €100, and we have made financial assistance available to marts as central points for recording data. We have made a reasonable effort on an issue on which we had no choice but to proceed. EID is now being introduced in the sheep sector and that matches what neighbouring jurisdictions have done. It is the best available technology and it is inevitable that it will become the identification process for the bovine sector as well. It will be more affordable in the context of the value of a bovine carcass as opposed to a sheep carcass.

Deputy Kenny asked about state aid rules. There is ongoing engagement at EU level about enabling the State to engage directly with enterprises that are directly impacted. I spoke about generational renewal recently. The taxation issues referred to by Deputy Cahill, such as stamp duty and stock reliefs, are all important but the best signal we can send to young people is one that will enable them to see an opportunity to generate an income and make a career out of the industry of their choice, akin to their peers in any other sector.

That is what motivates me in the negotiations on CAP reform.

I would be concerned if the signal we were sending by reducing the budget, albeit in a framework of identified supports for generational renewal, was that Europe is cutting its budget for the agricultural sector and its support for farm families producing high-quality products and delivering on things such as water quality and biodiversity, which are deemed to be for the public good. It would be dangerous to send out such a signal in light of the fact that global demand will increase by 70% by 2050 as a result of growing populations. We will need additional food to meet the needs of those populations. The age profile is reaching a critical point. How can we produce the necessary food if no one takes up the challenge in the future? There is a high risk of land that is used for productive agricultural purposes being abandoned and there are risks of increased urbanisation, desertification, etc.

The incentives are important in the context of the issues raised by Deputy Cahill but the most important signal we can send to young people is that the CAP values what they do and funds it accordingly. We have been very active in trying to get other member states to dig deeper in terms of financial contributions. We have to signal that we are prepared to pay more but Europe can only spend money which it is given by member states. There has to be a unanimous decision on the part of all member states to increase the budget. The Commission cannot borrow money to spend. Other member states see other challenges such as, for example, in the areas of migration and security. I acknowledge that there are big challenges in that regard. Those in the Mediterranean region see people landing on their shores on a daily basis so migration and security are really important issues for them. However, those challenges need new money and are not a reason to raid the CAP budget. We are trying to encourage other member states to acknowledge that. Following the Swedish election results, a Eurosceptic party now has the balance of power. What are the prospects of Sweden contributing more to the CAP when the criticism from such member states is that the response of the Commission did not go far enough?

Deputy McConalogue also asked about fodder. The response of the stakeholder group to the fodder crisis was quite phenomenal and we owe a debt of gratitude to every one of them, as well as to the farm organisations. The recommendations and the initiatives we have taken all grew from that group but the best thing that came out of the process was the advice given to individual farmers by Teagasc, private consultants or the co-operatives. The figure in the audit of July was 28% but in early October it had fallen to 11%. There has been a lot of endeavour and people have been baling silage at a ferocious rate over the past week or ten days. It is probably tapering off now but a lot of progress is being made. Quite a volume of May silage is yet to be harvested and other stuff is coming in under the tillage initiative. If we can keep cattle out until the start of November and can hope for a normal spring, we will have the bones of a solution alongside the fodder initiatives, GLAS flexibilities and the extension of the dates for slurry spreading. The stakeholders have made an enormous contribution to that.

I am aware of the point made by Deputy McConalogue about the farm management deposit scheme.

He also mentioned the low-interest loans. There is a cash-flow problem for farmers as well, which is partly why there was a request to the commission to bring forward the payments. It is money that would come to farmers anyway but they asked it to be brought forward at a time when cash-flow is pinched. It is an assistance, and those early payments enable €260 million of additional money to be put in the rural economy. We in the Department are likely to need a supplementary Estimate to enable us to fund that higher level of payment, whether it is the areas of natural constraint, ANC, scheme or the 85% imbalance under green low-carbon agri-environment scheme, GLAS, organics, which are the two main schemes driving the reason for the supplementary.

In the broader context, the agri-taxation committee that sat and was reviewed over the past number of months has delivered an enormous amount. There are some outstanding issues such as the farm management deposits scheme that would be of great benefit to the farming community but I suspect there is unlikely to be any great take-up of it in the year ahead because of the challenges therein. Not many people would require to shelter income because of cost and, therefore, it would primarily be of benefit to the dairy sector. It will not be an issue for the beef people whom we talked about earlier, who make up the greatest number of farmers in the livestock sector. I suspect that even on the tillage side there may not be any great demand for it. As a hedge to volatility, however, it is an outstanding issue that remains important.

On Brexit, I remain convinced we can get a deal. Any deal we get will not be as good as the current arrangements because if one is outside the Single Market or the customs union it cannot be as good as what is currently available. In that sense it is an exercise in damage limitation. I remain convinced we can get a deal and once the Tory party conference is out of the way I think we will enter a more realistic engagement rather than megaphone diplomacy, of which there is an element at the moment.

On harness racing, we have looked at it and given some funding earlier this year. Some €64,000 was given in funding this year as a training initiative or pilot project to tackle what is a big problem on the roads, as Deputy Cahill will be aware in his own neck of the woods and elsewhere. There is a problem in the northside of Cork city also. We have worked with the association to try to enable it to organise itself better in order that it may become an instrument for further funding in this area, and we have made some progress with it.