Mr. Phil Hogan:

Deputy Cahill mentioned the impact of Brexit and I agree with him. He has seen how the mushroom growers in his constituency have been affected by the impact on the currency already. We did have exceptional measures for the Russian embargo when €5.3 billion of exports were eliminated from the EU's agricultural trade at the stroke of a pen in 2014. It was a Europe-wide problem. All we can do is propose to the Minister, the sector and this committee that we will facilitate support for the de minimusarrangement we have in terms of giving up to €15,000 per farmer or €500,000 for a particular company over a three-year period. If any member state makes a submission to us on those grounds, we will consider it on the basis of not having to conflict with state-aid rules. This is the only way in which we can help the sector. There are other ways to deal with this by negotiating with the Irish Bankers' Federation to see if the financial institutions involved can provide better terms. The loan facilities being leveraged through the rural development programme are, perhaps, another way to deal with this. A series of measures can be taken but there will no special aid directly from the EU in the sense of a fund being created for one sector over another. It must have a Europe-wide dimension. That is the difficulty. It needs the support of all member states.

I do not have to tell this committee about the implications of Brexit for agriculture. The trading relationships are very problematic and there will have to be some study of the North-South dimension because 50% of the processed beef in the country and 3 million litres of milk go from Northern Ireland to the South each day for processing. All of these issues will be complicated but important to resolve, if we are to have a satisfactory outcome for the island of Ireland.

In response to Deputy Martin Kenny there has been no submission from the Irish Government regarding areas of natural constraint, ANCs, or areas with other specific constraints. However, we are examining the criteria relating to how we might adjudicate on this. I have been in politics long enough to know that delineating boundaries is always difficult. A total of €1.35 billion is being paid into ANCs in Ireland over the programme period 2014 to 2020, of which an additional amount goes to the Border, midlands and western, BMW, region. The BMW region has done a bit better than the rest of the country but, nevertheless, it will want to know what is going to happen in the future. This will be discussed in the context of the 2018 decisions that we have to make about budget in the EU and the criteria for ANCs. We have to see the submission from the Irish Government first.

Deputy Kenny and Senator Mac Lochlainn mentioned the food chain. They will understand that there are significant differences of opinion between northern European and southern European countries. By and large, northern European countries, with the exception of the UK which was surprising, are against an interventionist approach to these issues while southern European countries are for it. Nevertheless, I am of the view that we can work out an improvement on the current situation. What is happening in respect of the producers vis-à-visthe processors and retailers is not sustainable. We will be studying the outcome of the agricultural markets task force in November for the recommendations that we can implement in 2017. I know that I have the support of President Juncker in this because he mentioned it twice in his state of the union address to the European Parliament.

In response to Senator Lombard, the tillage sector is part of the package now seeking approval from Brussels for the €150 million loan facility. We will not delay too long more in giving that approval to the Minister to help him discharge whatever he can to help these sectors, such as the tillage and the mushroom sectors.

There is always volatility, with the last crisis in the dairy sector occurring in 2008. Farmers were getting 42 cent per litre of milk in 2013 and 2014 and everyone compares the price being achieved today with that benchmark. Farmers are seeing reasonable pricing levels which, if they were more stable, would make them very happy. However, the reality is that we are in a market-orientated situation, dictated to by unintended consequences such as Brexit, the Russian embargo and global overproduction. The scheme we devised to seek to balance demand and supply came into effect on 1 October and is already oversubscribed. At 14 cent a litre, farmers are voting with their feet to participate in that scheme. It will take 1.2 billion tonnes of milk out of the marketplace and, as a consequence, we are now seeing competition for milk between the co-operatives participating in the scheme and prices starting to go up for the farmer.

The laws of supply and demand come into play in all sectors. We must seek to drive up demand in countries outside the European Union and, at the same time, manage the market in such a way that we do not have overproduction to the extent we had in the past. Farmers were told in 2014 to drive on and produce as much as they could but the market circumstances changed in 2014, with the Russian embargo, and again in 2015. We have invested €1.5 billion across all sectors, including the dairy sector, pigmeat sector and fruit and vegetable sector, to mitigate some of the financial damage to farmers. I acknowledge it will never be enough but we are working to do all we can. We have also put additional moneys into promotion measures to help us find new markets in the Far East and around the world. That has resulted in a 6% increase in exports of food and drink products in 2016 to date, which is a major achievement for our agriculture and food sector in a context where we must find new markets to replace the €5.3 billion we lost arising from the ban on exports by Russia. We will continue to monitor the situation but I am glad to see the trend is in a better direction. We have a long way to go to ensure that trend favours the pocket of the farmers who lost money in 2015 and 2016 to date.