Oireachtas Joint and Select Committees

Tuesday, 13 December 2016

Joint Oireachtas Committee on Agriculture, Food and the Marine

Impact of Brexit on Irish Agriculture and Fisheries Sectors: Discussion

4:00 pm

Mr. John Comer:

I thank all of the Deputies and Senators for their comments and questions. The ambition of Food Wise 2025 is to increase national exports from the agriculture sector to €19 billion, which will be difficult. From a farmer's perspective, it has to happen through increasing value as much as volume. If it is all about increasing volume, farmers will go broke. It must come down to increasing value. How do we extract value from global markets when we have to export more than 90% of what we produce, leaving out our UK market share? We can only do so with value-added products. It cannot be done with skimmed milk powder, butter, whole milk powder or any of the other powders, particularly given from where we have just come, when the only buyer in the European market for a European product was the European Commission. That is a statement of fact.

Let us not overemphasise the role and function of Bord Bia. It is a very valuable organisation and completely different from Ornua. Ornua is a farmer-owned co-operative, while Bord Bia is an arm of the State which certainly needs more funding in the context in which we now find ourselves. The increase in funding should be to the tune of 20% which would give good value insofar as we could add value to Irish products.

I will not go through all of the questions again, but I was asked a specific question by Deputy Charlie McConalogue about the advice we gave farmers. Our role and functions, as a farm leader, are to try to lead the industry and individuals out of this situation in which there is the potential to have a very negative impact. All farmers have a responsibility to be as efficient as they can and adopt modern technology and practices on their farms. After that, there is very little they can do. However, I believe there is a role for farm leaders and politicians alike not to overplay the negatives and make everybody too afraid to make business decisions. We have to make business decisions, even without the certainty everybody craves. The reality is that there will be no certainty. There has to be a counterbalance.

There were many other contributions. One specific question asked by Deputy Charlie McConalogue was about whether the dairy sector was more sheltered. There are global markets and the dairy sector is sheltered from that perspective. We are on an upward trajectory. The reality is that dairy farmers will increase and expand. Whether they should is a more complex question, but let us deal with the realities. Make no mistake about it - that is what is going to happen and we must prepare for it as an industry and the Government must facilitate it as best it can. I know - I believe everybody present knows - that there has been a paradigm shift in the trading environment in which we are going to have to operate because of Brexit, but farmers will expand, particularly in the dairy sector. That is almost certain and we must cater for it in our processing. There are synergies and many symbiotic relationships have been developed between the North and the South. Spare capacity in the South has been used up. We must remember that only two years ago, before Brexit ever happened, British farmers had to ship distressed milk to Ireland to have it processed because nobody was investing in the processing sector in Britain. I often give out about processors and so on, but at least we facilitated investment in processing facilities in this country which has stood us in good stead.

On the issues raised by Senator Tim Lombard, I believe I made the point very strongly, but I will re-emphasise and reiterate it because it is key. We have to be proud of the CAP and understand why we have a CAP budget. We have to make sure that we negotiate to retain it because there will be a deficit if the United Kingdom leaves the European Union. I know that the overall total is €9 billion or €10 billion, but the agricultural portion is €1.3 billion. As an industry, farmers and a Government, we will have to figure out a way to justify why we receive that much taxpayers' money and indicate the service we are providing for it. To be perfectly honest, I do not think we are doing a great job in that regard. That incorporates Deputy Jackie Cahill's point and nearly incorporates everybody else's points.

What can Ireland do, given how small it is in the European Union? There are two things that we need to do and we are probably doing them behind the scenes. The key to getting a reasonable deal for agriculture could be what happens on the UK side because it pays no heed to agriculture. However, Scotland does and Ms Nicola Sturgeon is a very strong First Minister. I certainly believe we need to have back-room discussions with her. To enable her to protect Scottish farmers, she might be able to extract a good deal from the United Kingdom's perspective. The same applies to Ms Arlene Foster in Northern Ireland. There is leverage to work with them.

Leaving aside that issue, it was mentioned several times that France, Germany and all of the other power brokers wanted to make an example of the United Kingdom.

That is actually the real sentiment. As a small member state, Ireland can act as a counterbalance by stating how stupid that is. We do not want to see the United Kingdom on the naughty step. We need to work slowly and repetitively to build a common-sense reaction to this immediate knee-jerk reaction. A reasonable deal that allows for trade and does not make an example of the United Kingdom is in the interests of the United Kingdom and the European Union. It is as simple as that. If we are to be an effective counterbalance, we need to repeat that simple point for the next five years until we get a clear line of sight to the final outcome.