Mr. Aidan O'Driscoll:

I thank the joint committee for giving me this opportunity to attend. I am sure the Department will enjoy with it the same positive relationship that it had with the previous committee.

It might be timely to mention our new statement of strategy which we are finalising. The requirement for a new statement follows on from the formation of the new Government. The statement has been the subject of extensive consultation with stakeholders and staff and will be submitted soon to the committee, as well as the Civil Service Management Board, CSMB, and the Department of the Taoiseach. The new statement also follows on from an internal organisational review which we conducted during the past year. Teams of departmental staff and senior management looked at the organisation's strengths and weaknesses on strategy, operations and staff development. It was a forward looking exercise which produced a useful and practical plan for change in the Department, which we are implementing. The review was carried out entirely by our own staff, without recourse to external consultants.

The Department is a complex organisation with a wide brief covering the development and regulation of agriculture, the food and drinks industry, forestry, fishing and aquaculture. It has almost 3,000 staff and 12 agencies under its aegis. It has five main business areas: food safety, animal and plant health, in which area approximately half of the staff are engaged; farm supports and controls - this area includes all of the big payment schemes; strategy and policy co-ordination; seafood; and corporate development.

The Department works closely with stakeholders on policy and operational issues. Food Wise 2025, our latest ten-year strategy for the sector, the 400 plus recommendations of which guide many of our actions, was drawn up on this basis, as was our forestry programme and Harnessing our Ocean Wealth. The Minister, Deputy Michael Creed, chairs the Food Wise high level implementation committee, HLIC, in which the CEOs of the main State agencies and I participate. This mechanism ensures joined-up State actions around the Food Wise priorities, as well as providing a platform for interaction with key stakeholders. Of course, we also operate in close collaboration with other Departments, particularly in implementing the programme for Government which contains approximately 100 commitments of direct relevance to the Department.

Our work priorities for 2016 reflect the scale and breadth of our responsibilities, are published on our website and have been circulated to the committee. For the sake of brevity, I will mention just a few key areas, but I underline the importance we attach to our many responsibilities. I will touch, in particular, on Brexit; developments in key commodity markets; climate change; animal health; farm supports, both direct payments and RDP measures, and seafood development.

On Brexit, the United Kingdom's decision to leave the European Union presents enormous challenges for the Irish agrifood sector. The main areas in which impacts are foreseen are currency fluctuations which have been quite dramatic, tariffs and trade, the EU budget, regulations and standards, and customs controls and certification. The UK exit vote also raises complex issues for the fisheries sector. Significant challenges are also foreseen from a North-South perspective.

My Department is engaged in detailed contingency planning and has published a summary of the key actions we are taking by way of an immediate response to the United Kingdom's decision, as well as feeding into the central contingency framework being co-ordinated by the Department of the Taoiseach. We are also continuing to deepen our own analysis of the likely impacts.

Among the early steps we took were the establishment of a Brexit unit within the Department, the convening of a consultative committee of stakeholders and the establishment of a contact group among the State agencies under the auspices of the Food Wise high level committee.

The Department is participating fully in the new sectoral work groups established under the auspices of the interdepartmental group on Brexit and chairs a specific agrifood subgroup. There are ongoing contacts between the Irish, Northern Irish and UK administrations at political and official levels. The Minister, Deputy Creed, had a discussion with the Northern Ireland Minister, Michelle McIlveen, at the North-South ministerial summit in July. Senior officials have met on a number of occasions since then and are currently putting together a joint work programme. Contact with the UK Department of Environment, Food and Rural Affairs is well under way at senior official level, with two meetings in recent weeks. The Department is also working closely with Ireland's EU partners. We are conscious of the fact that while we seek to continue our close relationship with our UK colleagues during this challenging process, we will be on the other side of the negotiating table as a continuing member state of the EU.

Budget 2017 financially underpins the Department's Brexit mitigation efforts through strategic investment in key areas of the Department, its agencies and the agrifood sector. This includes access to an innovative low-interest cashflow loan fund, agri-taxation measures designed to address income fluctuations, increased funding of Bord Bia and Bord Iascaigh Mhara, investment in research and development and innovation and increased expenditure on the rural development and seafood development programmes. The Department and Bord Bia are continuing their efforts to support companies, especially small and medium-sized enterprises, to cope with the fallout from Brexit and the fall in sterling by providing advice at Bord Bia seminars, opening new markets and engaging in market promotion in the UK and alternative markets. The Minister, Deputy Creed, and the Minister of State, Deputy Doyle, led a successful trade mission to China, Vietnam, Singapore and Korea in September. A further mission to Algeria and Morocco will be undertaken next month.

Some agricultural markets, notably in the dairy, pigmeat and fruit and vegetables sectors, had been experiencing difficulties for almost two years prior to the impact of the fall in sterling being felt. This was due to a combination of increased global supply, the effects of the Russian ban on the import of EU agrifood products and fluctuating global demand for dairy products in places, for example, such as in China. The Minister and the Department have sought action at EU level. The Commission has responded to these difficulties through the deployment of support measures under the Common Agricultural Policy, first in an ad hocmanner and subsequently in the form of two wider packages in September 2015 and March 2016. The main elements of these packages have included the extension and broadening of more traditional support measures, such as intervention and aid to private storage. In addition, more flexible and targeted direct aid has been allocated to member states to spend in accordance with their national circumstances.

The Commission presented a further package of measures at the Agriculture and Fisheries Council meeting in July. The main component is a fund of €500 million, which consists of two elements. The first element of this fund is a €150 million EU-wide measure that will compensate farmers at a rate of 14 cent per kilogram for reducing their milk output in the final quarter of 2016 compared with the same period in 2015. Some 4,500 Irish suppliers who produce over 70 million litres applied for the first tranche of the scheme and 500 suppliers applied for the second phase this week. The second €350 million element of the package includes an allocation per member state, with Ireland receiving €11.1 million. In budget 2017, the Minister, Deputy Creed, announced a new low-cost loan fund for the livestock, tillage and horticulture sectors, which will utilise this allocation in conjunction with national funds to leverage €150 million of low-cost loans for farmers. These flexible loans of up to six years, for amounts up to €150,000 at an interest rate of 2.95%, are available to livestock, tillage and horticulture farmers. While there has been some welcome recovery in dairy market prices, we continue to be vigilant. Beef prices have been negatively affected recently by seasonal factors and the fall in sterling. The opening of the Turkish market for live exports is providing some useful support to demand. This underlines the importance of diversification of markets, which we will continue to emphasise in our work. The emphasis in the tillage sector will be on efficient production, added value and the value of native grain.

Climate change has been a major area of policy work in the Department in recent years and this has intensified recently. Ensuring food security for all and preventing climate change are two of the biggest challenges facing mankind today. This was acknowledged by global leaders in last year’s Paris agreement and highlighted within the sustainable development goals. While Ireland is one of the world's most efficient food producers in terms of carbon footprint per unit of output, there is no room for complacency. The Irish agriculture sector reduced emissions by 13% between 1998 and 2014, but it still accounts for approximately 33% of Irish greenhouse gas emissions. It is predicted that Ireland will fall short of its emissions target for 2020. All sectors will face significant challenges in meeting the national targets that are being negotiated under the EU climate and energy framework to 2030. The Minister and the Department are deeply engaged with this process because of its importance for the sector. In support of our national policy, we are undertaking a range of actions, including subsiding our afforestation programme, promoting best practice through new knowledge transfer groups, carbon-footprinting individual farms through the origin green programme, implementing the cutting-edge beef genomics scheme, supporting emissions reduction through the green low-carbon agri-environment and targeted agricultural modernisation schemes and promoting the carbon navigator tool through several channels. We are far ahead of all, or almost all, other countries in this regard. However, we are also much more exposed because the structure of our economy means that agriculture plays a much bigger role in our national emissions. Climate change, water quality, which is a very important issue, and biodiversity will continue to be priority areas for agricultural policy and action by the Government, farmers and processors in the years ahead.

The Minister, Deputy Creed, launched a consultation process on the national farmed animal health strategy for Ireland, which is a new animal health initiative, last month. It is vitally important for the agrifood industry, public health and animal welfare, as well as in the interests of protecting the environment, that we have a robust animal health strategy in place. The draft strategy proposes a comprehensive set of actions for execution by stakeholders. I will not attempt to summarise those actions here. The main thrust of the strategy is to establish a comprehensive and co-ordinated plan for collective action by all stakeholders to support and sustain animal health, and to avoid losses or risks rather than being reactive to negative events. In essence, it can be summed up in a pithy but well-known phrase, "prevention is better than cure". We have asked for submissions on the draft strategy by the end of this month. It is planned to finalise and launch the strategy by the end of the year.We would welcome an input from the joint committee to the development of this strategy.

While I am on the subject of animal health, I must mention briefly our work on bovine TB. The herd incidence of TB has declined from 5.9% in 2008 to 3.06% as of 10 October last. Obviously, that figure could change by the end of the year. The quality control measures that have been introduced, including interferon gamma blood testing, have had a significant impact on disease levels through earlier removal of reactors. The significant reduction can also be attributed to the wildlife and badger removal programme. At the same time, Animal Health Ireland is working on production or non-regulated diseases which affect farming productivity but are not significant from a public health perspective. It is concentrating on a number of key programmes relating to bovine viral diarrhoea, Johne's disease, infectious bovine rhinotracheitis, beef health check and mastitis. The bovine viral diarrhoea eradication programme, which is led by the industry, has already resulted in a 75% reduction in the incidence of the disease. This has led to an annual estimated return to farmers of €66 million. Animal Health Ireland has a vital role to play in enabling Irish farmers to access best international practice in achieving high standards of animal health.

A robust animal identification and traceability system is essential in the protection of animal and human health. Bovine tagging is an important part of that system. Following representations from interested parties, the Department decided last July to move from a single supplier system for the supply of ear tags, based on a competitive tender process, to a tag approval system whereby multiple suppliers would be approved. Under the new arrangements, the tags will be objectively assessed for compliance with certain standards. This is ongoing and I hope it will reach a conclusion in the next few days. The current rules regarding the tagging and recording of sheep are widely acknowledged as being unduly complex. The system is very labour-intensive at farm and factory levels. Its considerable reliance on manual recording significantly increases the potential for errors. This has the potential to undermine consumer confidence and puts Ireland at a marketing disadvantage. The limited additional costs that would be imposed on farmers by the electronic identification of sheep would be very small relative to the €25 million sheep welfare scheme that was announced recently. Such a system would have a major advantage for farmers as it would significantly reduce the administrative burden relating to form-filling for sheep movements. Therefore, the Minister has decided to initiate a consultation process on electronic identification of sheep. This will commence in the near future.

Again, we would welcome the committee's input on this issue.

Turning to direct payments, the Department continues to prioritise the processing of applications for schemes such as the basic payments scheme and the areas of natural constraints scheme. To date in 2016, some €914 million has been paid to farmers under these schemes and pay-runs continue on a regular basis to ensure cases are paid once they are cleared. The increase in online basic payment scheme applications this year to over 100,000 has helped the Department to introduce further efficiencies into the processing of payments. For example, this year saw the introduction of preliminary checks for online basic payment scheme applicants which allowed certain types of errors to be rectified by applicants in advance of any possible penalty being applied. As the Department moves towards 100% online application in 2018, further efficiencies will accrue which will have direct benefits for farmers. Last year there were some problems with long delays for farmers and advisers in getting through on the phone to the Department on payment queries. They arose principally due to staff shortages and the pressure of implementing new CAP schemes. We have put in place new systems this year that are designed to deal with this and a significant improvement in service is already apparent.

Turning to rural development, in May last year we received EU approval for our €4 billion co-funded rural development programme and since then the Department has successfully rolled out an impressive range of schemes under the programme. It has been underpinned by the introduction of tailored on-line applications systems. The rural development programme measures are a key component in our overall strategy for enhancing the competitiveness of the sector and achieving more sustainable management of our natural resources.

I will mention just a few of the schemes under the rural development programme, although I will not go through all of the bullet points in my written submission to save time. On the green low-carbon agri-environment scheme, GLAS, the committee will be aware that we now have a total of 38,000 farmers in the scheme and a third tranche will open next year. Some of the commitments under the scheme are set out under the second bullet point in my written submission, including the protection of protection of 12,000 km of watercourses and preservation of 90,000 hectares of habitat and so on.

The targeted agricultural modernisation scheme, TAMS, consists of a suite of six measures, as set out in my written submission. The scheme has been opened in three month tranches with the fifth tranche due to close in mid-January 2017. To date, 8,900 applications have been received. More than 5,000 applications were received in the first two tranches of the scheme alone, approvals have issued in more than 80% of these cases and a new online claim system is now open to applicants. A new TAMS tillage scheme will be added shortly.

The six-year beef data and genomics programme is now in its second year with 24,500 farmers positively engaging with the scheme. Compliance with all aspects of the scheme is very positive, with payments expected to commence in December. I expect that the 2016 budget of €52 million will be fully consumed by year end.

The new organic farming scheme was launched in April and has been hugely successful since its launch. When all applications into the new scheme have been processed we should have over 1,600 organic farmers in the system managing some 65,000 hectares of land.

The locally-led measure is a new approach to tackling some of the environmental and other challenges facing the agriculture sector. This will empower local groups to develop new solutions to local challenges. We will recruit projects by open call before the end of the year. At the same time, we are also rolling out two new projects focusing on the conservation of the hen harrier and the freshwater pearl mussel. These too will be locally-led.

We have submitted two amendments to the rural development programme in recent times. The first was submitted in 2015 and the second in 2016. The first was approved in June of this year and provided for some new measures under TAMS, including tillage and sheep fencing, and some adjustments to GLAS and the Burren scheme. The second was submitted to the Commission in September. It includes provision for the new sheep welfare scheme, support for beef producer organisations and some adjustments to GLAS and European Innovation Partnerships. Our expectation is that, given progress to date, formal approval will be issued by year end, but we are dependent on the Commission in that regard.

The €241 million European maritime and fisheries operational fund, launched in 2016, is being rolled out and will be rolled out further in 2017. We will be spending approximately €20 million this year and €40 million next year. This investment will fund a range of programmes including capital investment in the seafood processing, aquaculture and fishing sectors to foster growth in production and to enhance sustainability and competitiveness. The Department also continues to develop the infrastructure at the fishery harbour centres with €15.9 million allocated this year for the six fishery harbour centres and Cape Clear and €4.5 million for local authority harbours.

In conclusion, the Department is a diverse organisation with a broad variety of skills and experiences providing a dynamic range of services to our customers. We have engaged in significant restructuring over the past number of years. In fact, the staffing of the Department has declined by more than one third since 2005. This restructuring has been driven by investment in IT development and greater use of on-line facilities and facilitated by reductions in animal disease levels. Currently IT technology across the world is undergoing a seismic growth, particularly in the areas of data analytics, social media, cloud computing and sensor technology, and the Department is currently compiling a new ICT strategy which will focus on these rapidly emerging technologies.

During the moratorium on recruitment to the public service, our staff levels decreased to critical levels. However, our staff displayed great resilience and commitment and continued to deliver a high quality service. We are now in the early stages of a rebuilding phase, which will see some increase in staff numbers, but within very strict financial limits.

Before I finish, I would like to mention our new Oireachtas liaison unit. This was set up in June this year to assist Oireachtas Members with individual queries received from constituents. To date, there are 73 Deputies and Senators using the system and it is expected that this will grow quickly. We think it is working very well and hope that Members will find it useful and a more efficient means of getting relatively straightforward queries dealt with in a fast turnaround time.

I thank the Chairman and look forward to working with the committee as we continue our work.