Mr. Paul Kelly:

We would hope to see that. We have seen it come from 91p back to 86p or 87p. It stayed at that level over the past week. If we move into much more political certainty and get the withdrawal agreement over the line, there should be an improvement. The extent of the improvement remains to be seen. What is becoming clearer is that, while there is relief or the potential of relief that this revised protocol may hopefully be ratified by the UK Parliament and then by the European Parliament, the future trading relationship will look like a hard Brexit. That is not going to be particularly beneficial economically for the UK and certainly will not be for us. There are several points traders will need to digest. We should see further improvements in the exchange rate. The extent of it, however, remains to be seen.

Regarding insulating against the marketplace, it is down to how to make Irish businesses more competitive. This comes back to improving skills, improving innovation and more capital investment in businesses. In the period of uncertainty in which we remain, the big capital investments are difficult decisions for many companies to make at this stage. Product and market diversification into the rest the EU and third countries is another point. There will be different target markets depending on the part of the food sector involved.

In terms of the landbridge, as it stands, the fresher one’s produce and the shorter shelf life it has, the more compelling it is to use the landbridge. For some companies whose produce tends to be more ambient or frozen, as well as those with longer supply lines, the direct sea route may be an improving option. Companies are looking at this and doing test runs on the direct route. Ultimately, it will boil down to how the Dover-Calais pinch point will actually work.

Many of the main concerns relate to a no-deal Brexit, which would be disorganised and chaotic. If we have a transition period of sufficient duration, which effectively will be business as usual, and if we can then move on to an organised free-trade agreement environment, we should see a lessening of the concerns about landbridge. There is one proviso, however. If the UK is outside the customs union, we will still face substantial customs administration. That customs administration will impose costs on businesses, both in terms of paperwork and delays. The form those delays will take remains to be seen. They will not be as bad as a chaotic no-deal Brexit. However, there will be checks at all the relevant borders. As we progress through this and as the free-trade agreement starts to take shape, we will be able to assess the impact on the landbridge and make decisions at that point.

On the specific issues raised by Senator O'Reilly in respect of the beef sector, there is a beef task force agreement. One hopes that it will get the opportunity to hold its first meeting in due course. That is the route for the entire sector to address these issues.

Overhanging everything, however, are some fundamental issues with a weak UK market and the sterling issue, which I mentioned earlier. Having said that, there was very good news on market diversification earlier this week with the announcement of 14 additional beef plants gaining access to the Chinese market. It is worth acknowledging the efforts of all of the industry, particularly the market access efforts. It is also worth acknowledging the resources the Department has devoted to this. There has been a widening of the market, and that will be important. A lot more work will need to be done on market diversification.

I acknowledge the point regarding the number of the regions whose economic outputs are below the Irish average. Senator Mulherin alluded to this in the earlier session. The regions in question are the most exposed. We have touched on this briefly in our statement and in some of our earlier analysis of the exceptional case for state aid. It very easily points to the fact that a number of these regions are exposed economically and will need support. It would certainly be the case in a no-deal scenario but we argue that, as the deal is currently framed, many of those supports will still be needed.