Oireachtas Joint and Select Committees

Tuesday, 6 October 2020

Joint Oireachtas Committee on Agriculture, Food and the Marine

Impact of Covid-19 on the Agriculture Sector and Priorities for CAP and Brexit: Minister for Agriculture, Food and the Marine

Photo of Charlie McConalogueCharlie McConalogue (Donegal, Fianna Fail) | Oireachtas source

I thank the Chair and all the members of the committee for their good wishes and their comprehensive questions. The Chair asked about the meat plant in Banagher, and there was a later reference to it as well. The situation is that the Department is expecting a report to be submitted shortly and we will consider that when it is received.

Turning to the questions from Senator Paul Daly, he started by asking about the impact of Covid-19 on live exports. It is true that the drop in demand on the Continent for a veal this year has led to a reduction in live exports. That was balanced, somewhat but not fully, by the increase in live exports of older calves. It is certainly something that we will have to keep an eye on. The Senator also referred to the importance of maintaining marts and keeping them open. The entire country will be moving to level 3 tonight on the five-level national scale. Marts will continue to operate as they did under level 2 according to the protocols already agreed with the local veterinary offices of the Department. I accept the Senator's point regarding the importance of marts and the role that they play.

I also want to acknowledge the tremendous work that marts have done in implementing those operating protocols and in continuing to provide a service, which is working well, to the farming community during this time.

On the issue of whether departmental inspections under Covid-19 are holding back appeals, there is no backlog of inspections within the Department. I know Bord Bia has moved to online inspections over the period of Covid-19 and that has made a significant contribution.

On Brexit, the Senator mentioned the tripartite arrangements and the situation with horses from France. That is a concern in relation to the ongoing negotiations with Brexit and that tripartite agreement is important for the movement of horses. It will be subject to the outcome of Brexit but we will be doing all we can to try to ensure there is a positive outcome with it.

On CAP, the Senator asked what flexibilities there will be for the transition period and with regard to Covid-19 money as part of that transition. The transition regulations have not yet been fully agreed but it has been indicated that the potential will be there to roll over the existing schemes and that is something I will be prioritising. It is important, particularly in the year we are going into, that we have schemes continuing for farmers following on from the transition regulations. When we get the CAP strategic plans agreed, which will in all likelihood last for five years from the start of 2023, the new schemes will be fully fleshed and thrashed out. As we go into next year, it is important that farmers get a stability of income as well as of output and that significant outputs are achieved as a result of those schemes.

Deputy Carthy also brought up the issue of transitional payments and the importance of the existing schemes. That is something I agree on. I strongly feel it is important that we ensure there is a continuation and that there is not a gap in schemes. That is something I am working hard to try to achieve as part of the budget's Estimates process. That process still has to be concluded but it is my objective to ensure we continue those schemes in a strong and steady manner for farmers in the year ahead. The Deputy made the point that there should have been no gap years under the REP scheme. That speaks to the same point of the importance of continuing the schemes because they are important schemes for the incomes of farmers and they are also important in what they deliver for the public good, the environment and biodiversity. It will be a missed opportunity if farmers cannot participate in those schemes and contribute in that regard, as well as being paid for the work they are doing.

The Mercosur trade deal is something I have expressed real concern on from the beef point of view. We expect to receive an EU Commission impact assessment of that in the near future. That will inform how we approach this issue going forward. The key matter which has been raised is the fact that we cannot have a situation where anything that is not equivalent in standards is being stood over. Anything that is coming into the EU cannot be of a lower standard from a quality and an environmental point of view than what we are producing here. That is an essential qualification for how the Mercosur deal will be considered.

On Covid-19 and support for the suckler sector in the form of a payment, I want to say that our beef sector is an important one and I previously outlined the importance of continuing the supports that are there and working to try to ensure we support the sector.

Going forward, we will have two transitional years while we are moving from the previous CAP to the next one. A great deal of engagement and consideration will be required around the issue of how we will support incomes in the suckler sector in terms of the new CAP strategic plan. I welcome the committee's input and considerations in that regard. Coming up to this budget, it is important that we continue to support the schemes that are in place and that is a priority.

On Brexit, the Deputy mentioned plans to protect farmers. That is a consideration that we are engaging with the Government on in terms of the Estimates process. It is essential that we have contingency plans in place for a potential no-deal Brexit and the budget has been framed in the context that a no-deal Brexit is the base consideration. In terms of the national Exchequer, we are engaging with the Minister for Public Expenditure and Reform, Deputy Michael McGrath and the Minister for Finance, Deputy Donohoe, in that regard. From the European side of things and the Brexit adjustment fund, €5 billion was put aside for the potential for Brexit adjustments. That is essential in the event of a shock to the system and of a good deal not being the outcome, which is our objective. We would get a significant proportion of that fund and we would be in a position to fully support our agrifood sector during that period, with the undoubted change and shock that would ensue.

Deputy Danny Healy-Rae mentioned the GLAS scheme and the importance of same. That is something I have touched on and that I concur with. He mentioned the fair deal scheme as well and as he said, it was something which was addressed in the Dáil today and to which the Taoiseach responded. I am working with the Minister of State at the Department of Health, Deputy Butler, and I will liaise with her on it. I know it is a scheme she is keen to progress. On the importance of supports for young farmers, I note the Deputy's emphasis on that and on the importance of supporting them. As we bring in the next CAP, supports to encourage generational renewal will be important.

Senator Boyhan mentioned the need to encourage horticulture and forestry. Both of those are key objectives in the programme for Government. As we move forward, year on year we will want to see both of those sectors growing and developing. The forestry sector has significant potential to contribute to our climate change objectives in carbon capture, in broadening out the type of forestry we are planting, in increasing the plantations of native species and in agroforestry.

On the common agricultural policy, the Senator touched on the importance of supporting farmers in completing the green transition. When one looks at the backdrop to the CAP, our objectives are to try to ensure that everything we do is done in a sustainable way and in a way that has consideration of its full impact on biodiversity and on the environment. The next CAP will be framed in that context and it is important that it will be intelligently structured to ensure that the way we produce food in this country and across Europe is done in a manner that considers all aspects and contributes to all objectives in improving the environment and biodiversity, while at the same time ensuring that incomes are supported, maintained and protected.

The Senator mentioned the eco-scheme and the point I referred to in my opening contribution on the potential for funds to be lost from same. The new CAP proposals from the European Commission outline that an eco-scheme would be mandatory as part of Pillar 1. It is not clear yet whether there would be a minimum percentage of funds that would be allocated to that eco-scheme within Pillar 1 but we have a real concern, which I strongly expressed at the AGRIFISH Council meeting last month, and we need to ensure that funds are not lost in the process.

Under the current proposals, if the take-up of the eco-scheme in pillar 1 among farmers was not as expected, the funds not used within pillar 1 would revert to the European level and would not remain in the Irish envelope. I would not like to see that happen and I want to ensure it does not. We want to encourage farmers into the eco-scheme in pillar 1 so we will have to ensure it is attractive to them. We have to bear in mind that we do not want the funds to be lost and ensure they go towards the objectives of achieving environmental outcomes while delivering incomes for farmers in the process.

The Senator also mentioned the importance of supporting the suckler sector and asked about plans with regard to the green, low-carbon, agri-environment scheme, GLAS. As I outlined, it is important that we continue to support the existing schemes during the transition period.

Deputy Michael Collins mentioned the organic scheme for small farmers. Increasing our organic footprint and the number of farmers involved in organic schemes is a key commitment in the programme for Government and we will be keeping a keen eye on this as we develop our policies and the various budgets the Government will produce. The Deputy asked about the timeline for the rural environment protection scheme, REPS, and what that scheme will look like. We are looking at commencing a pilot REPS next year. We are looking at options in that regard within the Department and I am discussing funding for it in great depth with my Government colleagues. The Deputy also mentioned the Mercosur deal, which I have covered.

I mentioned that there was 20% yet to be spent within the rural development programme. It has already been indicated where it will go; it is now a matter of making sure it is fully drawn down. The country always draws it down in full and it is important and absolutely essential that we do. As I mentioned in my opening remarks, while we have drawn down 80% so far, the European average is 60%. This speaks to the fact that we have a very strong record in ensuring that these funds are fully spent, which is important.

Deputy Michael Collins also mentioned fishing in the context of Brexit. He is absolutely correct with regard to the real concerns that have been raised, particularly in recent days as we have seen the rhetoric increase with regards to the negotiations and the UK Government indicating that it will seek to make gains in this area. We are very strong in our position on the importance of our fisheries sector and ensuring that is protected in the talks as they come, it is to be hoped, to a successful conclusion.

The Deputy also mentioned the statutory instrument on the introduction of penalty points, which was debated in the Dáil last week. We debated this in great detail. It goes back to an EU regulation introduced in 2012. This obliged all EU maritime nations to ensure they had a penalty points system in place to oversee vessels, whether Irish or international, fishing within their waters. We were the only country which had not yet implemented a penalty points system and our funding from Europe was being decreased by way of a fine for that reason. As a result, the taxpayer would have had to pay up if we did not address the issue. I know the fishing sector had concerns about the new system. There had been a lot of engagement in that regard.

A number of amendments were proposed by my own party following the Dáil debate on the previous statutory instrument in 2018. We considered whether those amendments could be incorporated into a penalty points system while remaining compliant with our obligations under the EU regulations we had to implement. Two amendments were accommodated in the new statutory instrument but we were unable to accommodate the others while remaining compliant with our obligations. I have told the fish producer organisations that I am open to any submissions or suggestions they wish to make to me as regards how we could remain compliant while accommodating any suggested changes.

My door is open to discussing these matters with them but the bottom line is that we have to comply with our obligation to introduce a penalty points system. Very serious thought and consideration went into the issue, which led to the statutory instrument now being put in place.

Senator Lombard mentioned plans for a food ombudsman. That is certainly a key priority of mine. In the past year to 18 months in particular, we have seen the challenges that arise when there is a lack of trust in the food supply chain. This led to blockades of factories and very significant conflict between producers and the processing sector. I am determined to address this issue by increasing transparency as to how price margins are overseen and the intelligence in that regard. We are obliged to transpose directives on unfair trading from EU level to national level by the middle of next year. I intend to give a food ombudsman responsibility in that area as well as responsibility in the areas of pricing and transparency so that we can oversee margins, shine a light on matters and ensure that, as far as possible, farmers get a fair price domestically given the prices available on the international markets to which we export. We export 90% of all our beef, so we are very dependent on the prices available internationally. The crucial thing is to ensure that price is returned, in the best way possible, to our primary producers.

The Senator also mentioned serial testing for Covid and accountability where cases are found. That is a matter for public health authorities. All businesses have similar responsibilities in that regard. Communication around, and the management of, such cases are led by public health authorities.

He also mentioned a European free trade agreement and how that might impact on Northern Ireland and Republic of Ireland produce. That requires further examination with regard to rules of origin and free trade agreements between the EU and third countries. It is certainly a complication arising from Brexit. I have engaged with affected companies on the matter and I will continue to engage with them in detail in that regard.

The Senator also mentioned the climate legislation discussed at Cabinet today, which we plan to publish this week. As he will know, the Government's approach is clearly outlined in the programme for Government. Between now and 2030 we will seek to achieve an overall reduction in emissions of 7%. We are also signed up to the European Union 2050 obligations and the UN and Paris Agreement obligations. The programme for Government makes clear that full account has to be taken of the important economic and social role of agriculture in approaching these obligations. We must also take into account the scientific evidence from the Intergovernmental Panel on Climate Change with regard to the particular effects of biogenic methane. I can confirm that the legislation is consistent with the programme for Government commitments in that regard.

The Senator mentioned the importance of calf exports. I absolutely agree that they form a very important outlet for our beef market. It is important that, in managing our dairy herds, there be much more circular thinking with regard to the food supply chain, breeding and the progeny of the dairy herd. We need to have an eye to its value from a beef perspective. It is very important that this be given consideration in future and that more attention is given to it.

Deputy Fitzmaurice asked about Brexit and the engagement between the Department of Agriculture, Food and the Marine and the Department of Transport on live exports. That is something the EU is teasing out in terms of its engagement with the UK, but it is something on which we have given considerable thought with our European partners. He also mentioned tariffs on cattle and sheep. That is entirely dependent on the nature of the free trade agreement that comes out of the negotiations. Our hope is that it would be tariff-free and quota-free. The withdrawal agreement and the Northern Ireland protocol provide for one island from a food point of view and that it would be tariff-free as well.

The Deputy also mentioned the Banagher project. I replied earlier to Deputy Cahill's question on the same issue and stated that the Department will consider submissions, which it expects to arrive in the near future. Deputy Fitzmaurice mentioned the PGI applications and the potential delays in that regard. It is something on which we have seen progress in the past year or two and it offers great potential for the period ahead. Any PGI applications that have been made are receiving consideration from the Department. The Deputy will also be aware of the very significant engagement at the moment by the beef market task force on the PGI proposal being put forward by Bord Bia. That is something on which it is important that all farm organisations would liaise because, ultimately, PGI status will require farmers being fully behind it, but industry and the State must also work as one in terms of promoting it and ensuring it results in as much of a premium as possible when produce is sold.

Deputy Fitzmaurice also mentioned suckler cow supports, which I touched on earlier in terms of the importance of supporting the sector during the transition period, in particular how it is done as part of the next CAP strategic plan and likewise with schemes such as the young farmers and TAMS regarding convergence. The Deputy will be aware that the European Commission has indicated that over the course of the next CAP programme that would move to 75%. That is something we would fully support. There is a wider issue and discussion to be had on whether that would go any further and that is something on which I will engage and discuss broadly before any decision is made in that regard.

There is a delay in the Department with the PCS numbers for sanitisation, which arose because of the increased number of applications for such products due to Covid. Additional staff have been allocated to deal with the task and the Department will do its best to address the backlog.

As Deputy Fitzmaurice is aware, forestry and timber is something we have given a lot of attention to in recent weeks. Significant issues have arisen due to the backlog of licences and that is something we hope the legislation will resolve. I acknowledge the co-operation of parties and Independent Members as well in terms of facilitating the discussion of the legislation in the Dáil and Seanad in the past two weeks. I also acknowledge the co-operation of the Chair of the committee in that regard.

Deputy Fitzmaurice also raised the TB categorisation of animals. I called on the TB forum to discuss it last week and we had a very constructive discussion. I have also sought bilateral meetings between the farming organisations and the Department to discuss the issue further. It is important that we would now ensure a new TB strategy is developed in the coming weeks because the recent increase in the number of TB infections is causing tremendous hardship on farms, is leading to significant income loss and is also costing the State significantly. The projection is that over the next ten years, for example, the TB scheme would cost the State €1 billion. We could do a lot of things with €1 billion in the farming sector, but as it stands we will spend €1 billion on the TB testing and eradication scheme. That is a very significant spend.

Given the level of investment that is being made, we need the scheme to achieve a reduction in the numbers rather than the numbers going up. The numbers had reduced significantly previously but in the past two to three years they have been going in the opposite direction. A concerted effort is required by all, led by farmers, to address that.

I thank Deputy Martin Browne for his questions. He referred to the importance of us getting our share of the Brexit adjustment fund. I fully concur with that. It will be a key priority of mine to ensure that happens. The Deputy also mentioned the importance of GLAS and whether it will be replaced by the REP scheme. The REP scheme will be the successor to the GLAS scheme. It is a key commitment under the programme for Government that we would introduce a scheme that would not only contribute to incomes but would also be a key driver in terms of environmental outcomes and also helping with biodiversity. My key priority is to ensure that we would continue to have people on schemes while developing a REPS pilot scheme which would then be fully up and running as part of the new CAP programme.

Deputy Martin Browne also mentioned the importance of suckler cow and sheep supports and the need for those sectors to be supported. I concur with that and I will take what he said on board. The Deputy also mentioned the importance of Covid testing as well. That is something that is continuing and it is important that it does and that best practice is being followed. SIPTU is working with Meat Industry Ireland to put arrangements in place. The HSA is overseeing that with unannounced inspections to ensure there is confidence and that everything that can be done is being done to keep employees safe and to ensure that the meat sector and the food processing sector continue to do their essential work and ensure everybody is fed not only domestically but internationally with the food we grow and produce domestically.

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