Willie Penrose (Longford-Westmeath, Labour)
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I thank Professor Matthews for what was a useful presentation in which he addressed the issues. As he said, this has the potential to be an economic and administrative nightmare, one which will have a seismic impact on the general economy and, in particular, the agrifood industry. Apart from the price differential, there will be a difficulty in securing alternative markets. We should be clear about this rather than live in an ivory tower or fantasy land. There will be currency fluctuations, tariffs, customs barriers to regulate, veterinary inspections, phytosanitary controls and so on, but there is a sense of utopia around the place. I wonder whether I am in a different place altogether when I hear people suggest we can influence the outcome. We will have a major job to try to hold back this barrier.

The country has produced Food Harvest 2020 and Food Wise 2025, one of which I realise is within Government control, while the other is outside its control. They will have to be reviewed carefully. Prudent advice will have to be furnished to farmers in the coming years, but there will be a major hullabaloo and everyone will be whinging.

Deputy Cahill is right. I come from a beef area. It is hard enough now to produce beef economically and profitably, so what will it be like in this new scenario? There is a challenging environment ahead. We must accept that the UK agriculture industry has always been treated as a Cinderella industry by UK Governments. Their focus is on consumers. Only ten or 15 years ago, 19% or 20% of what they consumed originated in Brazil and Argentina. That was reduced to 9% under the trade agreement approximately ten years ago, so already there is potential for the UK to bring in another 11% without any big deal. That means our 50% will be hit straight away. We had better realise that the UK will start with cheaper food imports for their consumers and with environmental objectives. We should know that. In the UK's overall view, the wider industrial and services sectors are as important as agriculture and the car industry dwarfs all of that. We need only consider one big factory in Sunderland. The UK made sure that Nissan was going to be secured. The farmers will be on the outside, and that will be an issue.

In that context, one would not want to have today's announcement. As Professor Matthews said, it is a clean break with the trading bloc and the customs union. Even some of the right wing Tory newspapers last night were not predicting that. They thought it might well be kept in reserve, but the entire flush of cards came out today.

The UK is a net contributor of €10 billion or €11 billion to the budget. I have been speaking about this regularly. Approximately €7 of every €10 in the CAP budget goes on direct payments. Without the UK there will be a massive hole in the bucket. Is it credible, as some people in this country have started saying, that other countries will be asked to contribute to fill that hole? We must start asking these questions. Is it the more likely scenario that member states will be asked to make bigger contributions, moving towards almost the co-financing of schemes? That would raise significant issues for this country. One does not replace €11 billion in a budget in seconds. This could be serious and I consider it very serious. We might well work our way through the other issues in a slow way, not totally neutralising the impacts of today's announcement, but this matter is huge. Other countries will be looking for a bigger slice of the cake and they will say we have reached the development zone. Does Professor Matthews think this will be the issue or am I wrong? Member states will have to make a larger contribution and that would be a significant move towards co-financing, which would be an absolute disaster for us. We have always articulated that over the years. Those are the scenarios that now emerge and they trouble me. We all have an obligation to the more than 100,000 productive farmers in the farming community and the approximately 250,000 people in the agrifood industry who depend on them. We must be up-front with them and tell them what this means, in so far as we can.

Until today, the only certainty was the uncertainty. Now, instead of paddling along there is something of a foundation. Professor Matthews, whom I have known for a number of years, will now be in a position to give better prognostications of the impacts. He produced a paper six or eight months ago and he probably will revise that, as will the Teagasc economists. Even in terms of our report, if we consider all of the evidence we have received over the last seven or eight weeks, today's announcement transcends all of that and changes the dynamic of the report we will prepare.