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

I am pleased to have this valuable opportunity to present the current challenges and opportunities across the various sectors in agriculture, food development, marine and forestry to the committee. My key focus for 2019 is protecting vulnerable farm incomes, supporting sustainable farming and jobs in rural and coastal communities, and assisting the sector in meeting the challenges of Brexit.

In 2019, the Exchequer contribution to the Vote of my Department will amount to €1.6 billion. This comprises €1.341 billion in current expenditure and €277 million in capital expenditure, including a €22 million capital carryover. This represents an overall increase of €31 million over last year when carryovers are taken into account. Regarding our 2018 performance, I note that expenditure was €1.546 billion. Almost 99% of the current allocation was spent, reflecting a very strong delivery of crucial supports to the agrifood sector. As members may recall, our allocation for 2018 included a €30 million supplementary allocation which provided additional funding for measures introduced last autumn to alleviate the fodder situation. I thank my colleague, the Minister for Public Expenditure and Reform, and the European Commission for support given last year when we were presented with unprecedented difficulties by weather impacts on farmers.

I am conscious that we meet today at a very uncertain and challenging time for the agrifood and fisheries sector. If a no-deal Brexit emerges, I am confident that the Government and our colleagues in Europe will not be found wanting in responding to the needs of our sector. However, the Estimate I present to the committee today is as set out in the 2019 Revised Estimates as published in December 2018, which were framed for a Brexit scenario presuming implementation of the withdrawal agreement.

I will now speak about each of the four programmes and the key themes. Programme A shows a substantial increase in pay and non-pay administrative allocations. This reflects the allocation to this programme of the vast majority of the Department’s additional funding for what is termed a "central case Brexit scenario". This covers preparations for the additional checks on east–west trade, including the associated development of IT systems and equipment. Obviously, this will be adapted to any change in circumstances that may arise in the weeks ahead.

I am providing for a substantial increase in programme expenditure, which includes additional funding for the meat inspection service. This relates to a new arrangement recently agreed between my Department and Veterinary Ireland regarding the engagement of temporary veterinary inspectors. I have provided a once-off sum of €4 million in additional funding to support the introduction of sheep electronic identification, EID, with funding both for producers and to provide readers for marts. I am also providing additional funding for ERAD, recognising that even with good progress in many aspects of the tuberculosis, TB, programme, we have seen a slight rise in herd incidence rates. The work of the TB forum will be very instructive as to the ways and means to achieve our ambitious goal of eradication by 2030.

Turning to programme B, a total of €863 million is available in 2019 to be paid almost exclusively to farmers, with €640 million allocated to EU co–funded rural development programme, RDP, schemes. That is in addition to the €1.2 billion in funding from the EU for Pillar 1, the basic payment scheme. These figures reflect the mature level of RDP implementation. The allocation for our agri-environment schemes is lower than 2018, at just over €228 million. The reason for this is that an exceptionally high level of expenditure in 2018 of €232 million on the green low-carbon agri-environment scheme, GLAS, and a further €22 million on other schemes succeeded in removing the large hangover of 2017 scheme payments and paying the vast majority their 2018 advance payments, hence reducing the funding requirement for 2019. The agri-environment options scheme, AEOS, and rural environmental protection scheme, REPS, are now virtually completed with only some residual payments due.

This support to farmers who deliver public goods and environmental benefits is vital. As well as the inherent environmental benefits involved, this investment enhances our sustainability credentials, which are invaluable as we serve increasingly demanding and knowledgeable customers at home and around the world. In that regard the allocations for organic farming schemes and locally led schemes are increasing. We will be investing in three highly significant local schemes concerning the pearl mussel, the hen harrier and Burren farming in 2019, as well as a number of smaller and even more localised schemes. This work is very much in sync with the objectives of the recently published report of the Oireachtas Joint Committee on Climate Action and the whole-of-Government approach to ensuring Ireland’s transition to a low-carbon economy.

We have increased the allocation to the areas of natural constraints, ANC, scheme by a further €23 million to €250 million, restoring the scheme to pre-downturn levels. This year is the first year of the new ANC scheme, with land eligibility now designated according to biophysical criteria. The redesignation process has been lengthy and forensic and it arrived at a very reasonable outcome. On budget day I described this latest increase as a very important part of building our Brexit resilience by giving invaluable direct financial support to farmers with land in the many naturally constrained parts of the country. The average ANC payment of approximately €2,500 will be an important part of income for producers, many of whom are farming in challenging circumstances.

Another element of our Brexit response for 2019 is included in the B6 subhead, namely, beef sustainability schemes. This now includes the well-established beef genomics and data programme, BDGP, and the new beef environmental efficiency pilot, BEEP. For 2019, the pilot has been allocated €20 million for farmer payments and another €1 million for weighing equipment. I am pleased that the application process for BEEP went smoothly and has attracted a very good level of applications. It will offer an immediate income boost for participants and provide practical guidance for the future viability of our suckler herds.

It will complement very well the BDGP, for which €46.5 million will be available in 2019. I have also increased the allocation for knowledge transfer to €25 million for the third year of the three-year programme.

Moving to the sheep sector, the sheep welfare scheme allocation for 2019 at €18 million will provide for the balancing payment from the 2018 scheme year and the advance payments for the 2019 scheme year. As I have mentioned already, under programme A I have provided more than €3 million for payments to farmers for sheep EID. The new system will significantly reduce record keeping for farmers and will result in a simpler and more effective sheep traceability system.

In terms of capital expenditure, I have maintained the allocation of €70 million for the targeted agricultural modernisation scheme, TAMS. I expect this to be fully spent as payment claims are being submitted on an ongoing basis, with more than €20 million paid already this year. Despite the uncertainty the sector faces, many farmers recognise the value of upgrading their equipment and improving their facilities, and we will continue to match them in their ambition and pragmatism. I am also increasing the allocation for the commercial horticulture scheme to €6 million, recognising the need for greater efficiencies and innovation in that sector in the face of the challenges already endured and those ahead. I welcome the fact that the level of applications to this year’s scheme exceeds previous years.

Turning to forestry, the level of new afforestation we achieved last year was substantially lower than target but I am hopeful that at least some of the reduced rate was weather related and that activity will pick up this year. A strong programme is crucial to our sector's contribution to climate change mitigation. By the same token, I am fully aware of the concerns regarding afforestation in certain communities and my colleague, the Minster of State, Deputy Doyle, has recently established a group to examine this matter and to report this year.

Many of the programme C allocations reflect the comprehensive approach to Brexit responsiveness and how that intertwines with the continuing implementation of the Food Wise 2025 strategy. It includes additional funding for capital investment by food companies, initiatives for artisan producers and further support for the prepared consumer foods centre at Ashtown. I have also made a substantial contribution to Teagasc's national food innovation hub at Moorepark, which is reflected in the €4 million increase in the capital allocation. These initiatives, fostering innovation and product development, have been given a greater focus by Brexit but are consistent with the direction of travel of Food Wise 2025. The implementation to date of Food Wise 2025 has positioned the sector to defend its market presence in the UK robustly and develop new markets. In that regard, the allocation for Bord Bia has been increased by almost €5 million and now stands at almost €47 million compared with €32 million pre-Brexit decision in 2015.

The extraordinary export success of our indigenous food sectors did not come easily or quickly. Maintaining and growing this foothold in higher value markets requires huge efforts in the face of stiff competition and challenges such as Brexit. In 2018, after years of work, we achieved a very substantial breakthrough in opening the Chinese market for bone-in beef and further deep work is needed to exploit that hard-won opportunity fully. In that regard, I will also be expanding my Department’s global footprint. My Department has eight agricultural attaché posts in embassies in the European Union and across the world, including in Beijing and Washington DC. I intend to expand this network by 50%, adding extra posts in the key locations of Berlin, Tokyo, Seoul and Mexico. Trade missions play an important role in market development. In 2018, I led missions to US, Canada, China, Indonesia and Malaysia. This year I have already visited Turkey in early March and I plan to lead Government agrifood trade missions to China in May, Japan and South Korea in June, and Algeria and Egypt in November.

I have also increased the allocation for the horse and greyhound fund by €4 million, a 5% increase to help with the work in promoting and supporting these sectors. I am pleased that the greyhound Bill has made good progress in the Seanad and I hope it will pass into legislation later this year. I hope that with its financial position greatly improved after the sale of Harold's Cross stadium, the sector will move forward with confidence. Horse Racing Ireland is investing heavily in new facilities and services and we continue to be a very important partner to the industry.

The zero allocation for Brexit resilience as presented in the Revised Estimates Volume 2019 in contrast to the €25 million in 2018 might give cause for concern. However, as I have set out, we have a very intense focus on Brexit, with an overall package of €78 million in funding distributed across a number of subheads, including the €7 million for staff and information technology to facilitate my Department's regulatory role. Moreover, the 2018 allocation for the future growth loan, which involved a contribution via the Strategic Banking Corporation of Ireland, SBCI, to the European Investment Bank, EIB, has just been launched, so the benefits of the investment in the loan funding will start to flow to both primary producers and processors in 2019.

Part of our Supplementary Estimate for 2018 involved the transfer of savings from various subheads into the World Food Programme, WFP, to allow for the earliest possible payment of our 2019 contribution to that programme. Accordingly, when taken together with that voted amount and a further allocation of €4 million from later identified savings, the total WFP contribution in 2019 will amount to €22 million. This is an increase of 10% on our contribution for 2018.

With respect to programme D, the provision for my Department’s seafood programme has been increased by €6 million, mostly by way of an increased allocation to the fishery harbour centres to a total of €27 million, and this will help fund vital investment in Castletownbere and Killybegs harbours. The budget provision will also allow the Marine Institute to commence the planned replacement of the 21 year old Celtic Voyagerwith a new 50 m modern research vessel. The other significant change in programme D is the reduced allocation for the Haulbowline remediation project. This reflects the great progress made in 2018, resulting in the completion of the east tip remediation.

The majority of funding for Bord Iascaigh Mhara, BIM, is in respect of various schemes under the European Maritime and Fisheries Fund, EMFF, operational programme. This is fully operational, with a total of 19 schemes. The investment will fund a range of programmes, including capital investment in the seafood processing, aquaculture and fishing sectors to foster growth in production, value and employment, enhance sustainability and competitiveness, and support training, skills development and stakeholder capacity development. We continue to support the sector in what we all know to be a very challenging period.

I have not referred to another very important aspect of the work of the year ahead, namely, the negotiation of the Common Agricultural Policy, CAP, post 2020. Although it is not visible in the Vote, there is much work under way in my Department in preparing for the next CAP and we can discuss this further during the course of the meeting.

These funding allocations will assist us in focusing on competitiveness, innovation, new market development and environmental sustainability while responding to the uncertainty and challenge posed by Brexit. This is a brief overview of the range of measures that apply in the agrifood and marine sectors for 2019. I look forward to the discussion and questions from committee members.