Oireachtas Joint and Select Committees
Tuesday, 24 January 2017
Joint Oireachtas Committee on Agriculture, Food and the Marine
Impact of the UK Referendum on Membership of the EU on the Irish Agrifood and Fisheries Sector: Discussion (Resumed)
I remind members, witnesses and people in the Public Gallery to turn off their mobile telephones for the duration of the meeting as they interfere with the broadcasting equipment.
I welcome Mr. Michael Cavanagh, chairman and Mr. Seán O'Donoghue, chief executive officer of the Killybegs Fishermen's Organisation; Mr. Francis O'Donnell, chief executive officer, Irish Fish Producers Organisation; Mr. Hugo Boyle, chief executive officer, Irish South and East Fish Producers Organisation; Mr. Patrick Murphy, chief executive officer and Mr. John D. Sullivan, chairman and Mr. Greg Casey, adviser, Irish South and West Fish Producers Organisation Limited and Mr. Lorcán Ó Cinnéide, national secretary, Irish Fish Processors and Exporters Association. I thank all of them for coming to this meeting to discuss the impact of the UK referendum on membership of the EU on the Irish agrifood and fisheries sector.
Before we begin, I draw the witnesses' attention to the fact that they are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the Chairman to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him or her identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.
I understand Mr. Seán O'Donoghue will make an opening statement on behalf of the Killybegs Fishermen's Organisation, the Irish Fish Producers Organisation and the Irish South and East Fish Producers Organisation. I now invite him to do so.
Mr. Seán O'Donoghue:
I thank the committee for the invitation to attend this meeting on a subject of huge importance for the fishing and seafood industries. As stated by the Chairman, I am making this presentation on behalf of the Killybegs Fishermen's Organisation, the Irish Fish Producers Organisation and the Irish South and East Fish Producers Organisation. Before I get into the key issues, it is worth putting in context the implications of Brexit before moving to the problems and issues arising. First, the fisheries sector is unique. It is nothing like the car manufacturing sector where cars are built in one country and not shared with another. We share the fish resource. Second, it is of huge concern to us that fisheries is in the top five priorities in terms of the UK Prime Minister's negotiating strategy. Third, we are hearing in the media every day that we are heading for a hard rather than a soft Brexit. This will have huge implications for the fisheries sector. Fourth, the final deal that will be done between the UK and the EU will be based on qualified majority voting. This means that to enter the community a unanimous vote will be needed but to exit only qualified majority voting will be required. Why am I highlighting this? I am doing so because we can be rolled over by a majority of the other member states in terms of a deal. We need to be conscious of that. A Common Fisheries Policy is in place under the treaty and we have to operate on that basis. I would like to see a bilateral deal between Ireland and the UK on fisheries. I am sure we could do a fantastic deal with the UK but this will not be legally possible as Ireland will be part of the EU. In other words, Ireland cannot negotiate a bilateral deal in this area. That is the context.
The seafood industry is a significant industry which is comprised of many of our coastal rural peripheral areas. It is a €1 billion industry, with a first sale value on the quay side of €500 million and exports of approximately €560 million. There are 11,000 people employed in this sector. I would like now to focus on the key issues for us in terms of Brexit. There are three key issues, two of which could be extremely negative, namely, access and our quota share. As part of the quota share, which I will elaborate on further later, we have a Hague preference dating back to 1976, which was negotiated by the late Dr. Garret FitzGerald. The positive element is the trade area. I will outline the linkage between all three areas at the end of my presentation. While my presentation is short, I hope it will give members a flavour of the real issues and problems we face in terms of Brexit.
On access, the slide which members are now seeing shows the exclusive economic areas of the UK - highlighted in red; the EU waters - highlighted in blue - and other waters, including in Norway and the Faroe Islands and Iceland - highlighted in green. The map shows that in terms of access approximately 35% of the waters are owned by the UK, such that when it leaves with EU it takes that water-access with it.
We need to keep that in the back of our minds.
We have only made an analysis of the 2015 data for the European fleets. We are approximately 31% dependent on access to the UK zone for our stocks which amount to 32% in terms of value. However, that distorts the real problem. There are two economic drivers for the industry, namely, mackerel and Dublin Bay prawns-nephrops. For both we require between 40% and 60% access, depending on the year. These species account for some 70% of the first-sale value of all fish landings.
The second issue is quota shares. I have picked a picture from The Guardianfor members. They will know the person in the front of the picture, but I am more interested in the person at the back, the UK Minister for Fisheries, Mr. George Eustace. The picture dates from 20 October, well after the Brexit vote. He was assuring Scottish fishermen that they would be thousands of tonnes of fish better off after Brexit. If they are, we will lose significantly. The quota share is, therefore, a major problem for Ireland. Of the species included in the total allowable catch and quotas we share 48 with the United Kingdom. In the Brexit negotiations we will be negotiating shares for 48 stocks. Unfortunately, the priority stocks the United Kingdom has in mind include two of ours, namely, mackerel and nephrops.
There is also a problem with the non-TAC and quota species, particularly crab, for which there is no quota but to which we have a lot of access, with up to 40% access for some carp, depending on the year. There will also be a problem with the Hague preferences which date back to 1976 and relate to additional quantities of fish that Ireland and parts of the United Kingdom were given in recognition of the underdeveloped nature of the industry prior to TAC-quotas coming on stream in 1993. We have to keep a very close eye on the Hague preferences because when the United Kingdom leaves, we will no longer have its support in respect of the Common Fisheries Policy. These preferences are always fought over tooth and nail at the December Fisheries Council, but they will no longer apply and we will be on our own when they are being negotiated.
On the United Kingdom's position on quotas, it joined the European Union at the same time as Ireland in 1973, but the negotiations on the sharing of stocks did not start until 1976 and there were six or seven years of negotiations before the sharing of stocks was agreed to in 1983. There was an historical basis for this between 1973 and 1978 and we received a blank cheque which, unfortunately, we could not write at the time. The United Kingdom was a full participant in the process and its underdeveloped parts were given the benefits of the Hague preferences, as Ireland was. The calls of the British for a quota to repair what was done wrong in 1973 have no basis in fact and do not stack up in any analysis. If they have a problem, it is their own fault for not negotiating properly between 1976 and 1983. Ireland also had its opportunity, but it did not take advantage of it.
On trade, the position is positive from our point of view. Imports from the United Kingdom into Ireland were at a figure of €148 million, 65% of total Irish imports of seafood products. In return, we export some €71 million worth of product. Therefore, the difference is a factor of two. The figure amounts to about 13% of our seafood exports. The United Kingdom is hugely dependent on the EU market for almost 70% of the value, equating to a sum of €1.34 billion. Four key products account for approximately 70% of that figure, namely, salmon, nephrops or Norway lobster, scallops and crab. This is the real issue.
The message the three producer networks want to give to members is that this needs to become a priority for the Government. We do not believe it is nearly as high on the list of priorities as it should be because we are in a unique position in sharing a resource. The entire Government and the Taoiseach need to get involved. The Taoiseach has been on various missions with counterparts across Europe and met the Spanish Prime Minister last week or the week before. I very much doubt if fisheries were on the agenda, but they should be, as otherwise we stand to lose a lot.
We stress that in the negotiations there has to be a link between access and quotas - the fisheries aspect of the issue - and trade. If they are separated, we will be in a disaster zone and the game will be over for us.
We must also make every effort to protect and enhance our Hague preferences. This has to be part of the negotiating strategy. In the past, when negotiating shares and access, fisheries were used as a bargaining chip. Fisheries should not be used in this way. In fact, in terms of fisheries, the overall trade situation needs to be used as the bargaining chip.
We must avoid a cliff fall. By that, I mean that the UK may have exited the EU in two years time but we may not have an agreement in place. Will that mean that the shutters are pulled down and that from a fisheries perspective we end up, given that we are sharing a resource, with no access for a year or two to the UK waters or they to ours? That would be another disaster for us. We need to ensure that any transitional arrangement recognises fisheries. We cannot have a falling off the cliff.
The seafood industry needs to be part and parcel of the negotiating team. The Minister is holding a stakeholder meeting next week, which is fine, but we need to be front and centre in the negotiations over the next 18 months.
I thank the members for listening.
Mr. Patrick Murphy:
I thank the committee and the Chairman for giving us the opportunity to attend today. We would slightly disagree with some of the points made by Mr. O'Donoghue in terms of the fall-out and what this will mean for Irish fishermen. Europe bases its share-out of fish on relative stability. This means that a certain percentage of fish was given to each country. To give an example, if 1,000 tonnes of fish are available and England decides to increase its share, from its current 20%, that is 200 tonnes, to 300 tonnes, this will leave 700 tonnes of fish remaining. However, if relative stability remains in place, Ireland will still get the same share of fish, which is 10%, meaning it will lose 30 tonnes of fish. If England takes back its waters, which it has indicated it intends, it is looking, as Mr. O'Donoghue quite elegantly stated, to increase its share of fish in its waters. One of the main access routes for us for the prawn fishery is in English waters. Approximately 50% of the fish is caught there. As shown in Mr O'Donoghue's charts, that is one of the biggest and most important fisheries to England. Therefore, there will be a huge temptation for it to increase its share in that fishery. Rolling back, this will mean that Ireland will get a share of the fish in accordance with the way that it is being given out by our European counterparts, so our share will automatically reduce. Access is, as Mr. O'Donoghue stated, a huge issue.
Not only that, we have a situation where we are not at the negotiating table. Again, Europe is negotiating for Irish fishing rights and Irish waters, but we have no one looking after our interests. We are expecting some other country to put our needs ahead of their own and we have seen how that has gone in the past. We are seeking assurances that the EU negotiators that will meet with their UK counterparts do not use the access to valuable fishing grounds and natural resources and that they are not traded as a means to achieve benefits in non-related industries or services. The UK's exit will, as depicted in Mr. O'Donoghue's map, result in the changes in the 22% we now have. England has 33%. When that is removed, our share of EU waters will increase to 33%. Approximately 44% of the fish landed in Europe is caught in Irish waters, but our share-out is way less.
The EU's common fishery policy is founded upon and guided by the concept of relative stability. Over the past 25 years, some member states have come to feel they are entitled to a share of European fish stocks that is wholly disproportionate to the extent of their own waters and stocks. Ireland, unfortunately, has paid a grievous price for the conferring of the wealth of our waters on the other member states. This highlights the extra problem that will occur. We have no negotiators at the table negotiating Ireland's fishing rights. Under relative stability, we will lose out. We attended a recent meeting with officials from the Department of Agriculture, Food and the Marine. We were told that, under relative stability rules, we would have the same percentage of less fish because the UK has already indicated that it intends to increase its catches and that this is definitely on the cards.
I have provided a written answer to some of the questions asked in the e-mail the committee sent. Should I go through them now or will we leave them until later?
Mr. Murphy can elaborate on some of the points if he wishes or we can deal with them later during the question and answer session when members will have the opportunity to ask the questions directly. Perhaps we will get the other presentation first. I call Mr. Lorcán Ó Cinnéide.
Mr. Lorcán Ó Cinnéide:
I represent the Irish Fish Processors and Exporters Association, which represents - by value - more than 50% of the fish processed in the country. All in all, the sector employs 3,800 people. These are not all full-time employees but there is approximately 2,800 full-time equivalents. To give an idea of the scale involved, the sector has 42 shellfish companies, 40 whitefish companies, 15 pelagic companies and 17 companies dealing with salmon. I have borrowed an infographic from Bord Iascaigh Mhara, which has done a much better job on this than we have. It demonstrates the points on the size of the sector that Mr. O'Donoghue made. More than €500 million worth of exports are at stake. The committee will note that the infographic, as Mr. O'Donoghue pointed out, also shows the €148 million worth of exports to the UK. From the perspective of the processing and exporting sector, while it is clear that there is a balance of trade advantage - imports versus exports - Brexit poses a significant threat. We have been dealing with two different currencies - the euro and sterling - but the fluctuations in sterling may well make UK product more competitive on the Irish market. There is a further issue in terms of the value of sterling on international markets in so far as the UK and Ireland are sending a lot of fish into third country markets outside the EU.
To cut to the chase, I concur with the Mr. O'Donoghue's analysis of the industry in general as well as the catching sector. The interests of the processing sector are very much aligned with those of the catching sector in this regard, as the processing sector is largely based on landings by Irish vessels. The threat to supply, as represented by Brexit, is a threat not only to the boats but also to those the boats supply, that is, my members.
As has been pointed out, a very large amount of that supply comes from vessels fishing in the UK zone. To take an agricultural analogy, this is not simply a question of access to the UK market, it is the right to the farm. It is about the right to catch the resources in question. There has been a very significant investment in processing over the years and many Government plans and industry strategies call for increasing the percentage share of the fish that is processed, and increasing its value. Food Wise 2025 and Harnessing Our Ocean Wealth are the two main documents governing the development of the industry. They were very ambitious and had realisable targets for adding value but they are now under significant threat from Brexit. The period between now and the negotiations could be two years or five years and the uncertainty is a threat to our plans. I do not doubt the threat of Brexit to various other industries but we have to be very alive to the existential threat to the viability of both the catching and processing sectors.
The British ambition for Brexit and its macho posturing over a hard Brexit, ruling out involvement in a customs union or the Single Market, bring into question tariffs, trade agreements and WTO rules. That view of life represents a very significant potential distortion, not just of our trade with the UK but of the trade for which we compete with other countries, within Europe or outside.
The processing sector is not saying the sky is falling as this will only happen if our negotiations are not successful. The fundamental impact of this needs to be taken on board by our Government. The departmental advisory group which is looking at Brexit is meeting next week and the Minister has invited us. We will attend but it is very important that the Department of the Taoiseach is represented, both on this group and in the negotiations. These negotiations will be carried out between the European Union and Britain and the European Union needs to take on board the unique set of circumstances that exist in Ireland. The positions taken in these negotiations must reflect that or we will be in very serious difficulties.
There is a view in Ireland that when we entered the European Economic Community, now the European Union, we sacrificed our fish stocks as part of the overall package for the islands. Fisheries were not a priority for our Government or for the British Government and it is interesting that the latter is now going around the coastal fishing communities and belatedly presenting itself as their champions. If our fisheries have not been a priority for Governments down the years, what makes the witnesses believe they are going to be one now? What gives them hope that anything will be different in these negotiations?
We have all seen the famous map with the red zone identifying British waters and BIM presented the same map when its representatives were here. It is very stark and clearly presents the threat to our interest. Will the blue zones, representing Irish and EU waters, be squeezed even further? Will Spanish, Dutch and French trawlers be squeezing our waters even more as a result of this?
Mr. O'Donoghue drew our attention to the level of dependency of Britain on the EU market, with two thirds of its fish coming from the EU. He said this gave him hope that we could get a deal and asked that his organisation be part of these negotiations and the trade negotiations. How should we use the UK's dependency on the EU to provide something positive? It would be one of the few positive things in this threat we face.
The vista presented by the witnesses is very stark and the stakes are very high for our fishing industry arising from Brexit. Mr. O'Donoghue stressed the key importance of keeping the issue of trade tied to water access and fish access. I assume that we are trying avoid a case where, with a very hard Brexit, Britain could put up the barriers and take the water entirely for itself. How much would that be worth to Britain in fish values, allowing for the fact that it would be blocked from other European waters in which it can currently fish? How does that compare to the impact of trade barriers and tariffs? How do British fishermen view Brexit? How do fishing organisations in the UK see this and what kind of a deal do they want to drive forward? What mood are they in to negotiate? It is particularly complicated because if access to British waters is reduced we will be in conflict with our European neighbours over the supply of fish. There is always competition but are they our allies to any extent? Are they thinking in the same way as Ireland as they go into these negotiations? Are we at one as regards the possible outcomes?
In the event of there being reduced access there will be competition. What are the witnesses' perspectives on where other European countries are positioned as we enter the negotiations?
I thank all the witnesses for their presentations, which are very useful. Some of the my questions will reflect some of Deputy McConalogue's questions regarding the UK's agenda for what it hopes to achieve for its fisheries sector from the Article 50 negotiations. It was mooted last year that the UK would opt for a Norway-type arrangement and negotiate along those lines where there would be reciprocal arrangements. Do the witnesses consider that is still what the UK intends to do in terms of its fisheries? I note from the photograph Mr. O'Donoghue showed of the Foreign Secretary, Boris Johnson, that was he holding a foreign salmon. I do not know if that signifies anything about what the future for English fisheries may be post-Brexit. What arrangement would the fisheries organisations in England and particularly in Scotland like to see emerge from the Brexit negotiations? Would it be a Norway-type arrangement or a harder arrangement?
I would like Mr. O'Donoghue to tease out further what he said about not separating access from the trade in the negotiations. If these negotiations fall, it will be on the trade issue. It might be possible to have interim access arrangements negotiated separately. The UK might try to use access as a bargaining chip in the overall trade negotiations. I do not know if tying the two elements intimately together is the best tactic. I would like to Mr. O'Donoghue to expand on that.
How often has the departmental advisory group on Brexit met? What sense do the witnesses have of the Government giving priority to making a case for our fisheries sector in Europe? What is the potential for our fisheries sector of the potential replacement of UK fish imports? Bord Bia has outlined to us that the larger portion of that would be with respect to foreign salmon. Therefore, the potential for displacement of fish produce in Ireland is not that large in terms of profitability.
Mr. O'Donoghue showed a PIE chart of UK exports to the rest of Europe. We might have more potential to target some of that business, particularly crustaceans, bivalves and the pelagic fish exports to Europe. What work are the witnesses' organisations doing to gear up for that to try to corner that end of the market? If we are excluded from UK waters, it comes down to whether we will have the capacity to facilitate any additional business in terms of raw materials for processors. Also, with respect to the Norway deal which provides for relative stability of supply, in terms of negotiations over north-western waters, would that provision also apply?
Mr. Seán O'Donoghue:
I thank the members for their questions which are pertinent and to the point. I will respond to Senator Mac Lochlainn's questions first in the order in which he put them. He rightly identified issues involved in the fisheries negotiations but I would remind the members that there were no discussions prior to 1973 on shares of stocks or tax and quotas. The only discussions in 1973 related to access in the context of the six-mile and 12-mile zones at that time. There was a major issue around that but there were no discussions about tax and quotas. Those discussions started in 1976. Six to seven years were spent negotiating this between 1976 and 1983. In that period we got a special recognition for the Hague preference but we got more than that in that we got a blank cheque and were told to report back to them with what we intended to catch. Unfortunately, we were not able to write that cheque at the time. That came down to the politicians and the Civil Service at the time and also to the industry which was party to that as well. Unfortunately, we missed a huge opportunity in that respect. It is important to note that the relative stability provision that was mentioned was not discussed prior to our entry into the European Union.
The Senator asked what hope do we have this time round, which is a pertinent question. Part of the reason we are pleased to appear before the committee is that we have to live in hope that we will get these sectors on the priority list of the Government and of the Taoiseach. To be fair, it is on the priority list of the Minister but that is not enough given the importance of these sectors. They need to be a Government priority and then they need to be a priority for Michel Barnier, the chief negotiator for the EU.
The Senator's final question related to the squeeze factor in that our area would be reduced, which is correct. That is probably part of the answer but some of the stocks in which the northern member states are interested such as North Sea herring, which is approximately 0.25 million tonnes of a fishery, can only be fished in the North Sea. The North Sea member states need 70% or 80% access to the UK waters for that. They cannot come to the west or the south of Ireland to fish for that species. However, there are some white fish stocks, particularly in the south east, that could be under pressure depending on the outcome of the negotiations.
The Senator also mentioned the trade issue. If we break the linkage between trade and accessing quota, I believe the game will be over. We will lose out because the UK has made it clear that it wants to separate fisheries from trade because it has seen the other side of the coin. It has seen that it has an Achilles heel on the trade issue but it has the upper hand on the access issue. Whatever we do collectively, the big picture here is that we cannot split the trade and the access issues.
I will move on to Deputy Pringle's questions as Deputy McConalogue had to leave. Deputy Pringle raised a number of pertinent queries. In terms of our involvement with other industries, since the first week of July 2016 when we knew the result of the vote on Brexit, we have been building alliances and bridges with all our European fishery colleagues. At this stage we would have a joint position in that we are all trying to ensure that we do not lose out on access and share of stocks.
We have been working very hard and done a lot of work behind the scenes to that end, but noting what I said about Article 50, one can be rolled over by member states. It is much better, therefore, to try to build alliances and friendships. I am not privy to it, but I hope that is what is going on at official level.
Interim access arrangements will be very important for us. One cannot have a situation where one negotiates a two-year deal, following which the United Kingdom will state that from then on it will take an extra share. I know my fisheries colleagues in Scotland and other parts of the United Kingdom pretty well. They see Brexit as their opportunity to make gains on some critical stocks that we share. The problem with this is that if they take an extra share and we maintain our existing share, there will be significant overfishing of these stocks which will lead to a decline. There is, therefore, the issue of overall management.
Deputy Thomas Pringle said there were opportunities on the trade side. To me, they are very much linked with trying to secure increased access and an increased share and balancing them, rather than stating there are opportunities for us in going down the trade route. Breaking the link is a problem.
I do not know whether the Chairman wants me to cover Deputy Charlie McConalogue's questions.
Mr. Patrick Murphy:
As Mr. O'Donoghue said, there would be a displacement of effort if England was to close its borders and every boat with an entitlement or track record of fishing in its waters had to go somewhere else. If a cow and calf were in a field in similar circumstances, they would both starve. As Mr. O'Donoghue said, it would have a knock-on effect on stocks and the level of fishing in certain areas. Again, it comes back to relative stability. The Common Fisheries Policy was built on the protection of stocks. If it continues, there is only one choice - we will have to take less. If we take less, that will call into question the viability of our fishing fleet across the board. As I said, if very valuable fishing areas suddenly lie inside the United Kingdom's borders, that will be a significant bargaining chip for it in terms of a trade-off on access. If Irish negotiators are not at the table, who will take the spoils? It is a major problem.
Another question was about the history of the sector. My father told me a story about when he began to fish in Howth. He remembered a time when fishermen caught and landed fish but they were not be paid because they did not have money to install the proper technologies on their boats. As Mr. O'Donoghue said, when they were offered a cheque to cash, the number of fish caught was sufficient to supply their markets. It was a catch-22.
The situation in fishing can be compared with that in the farming sector. When Ireland joined the European Union, a farmer who owned a 200 acre farm was only able to plough 20 acres with a horse. If today the same farmer owned a tractor with which he or she could plough 200 acres and was told that because he or she did not have a track record and did not cash a cheque, he or she would not be allowed to use the tractor to plough the 200 acres and would instead have to stick to ploughing 20 acres, it would be a hard pill to swallow.
Mr. Greg Casey:
The term "relative stability" keeps being thrown around. It is a concept that first appeared in EU legislation in 1992, but it was not defined until ten years later. It was designed to act as a balancing mechanism to take account of the economic and social circumstances of competing interests and areas across the European Union. Remoteness from the market, in other words, peripherality must be taken into account as part of the balancing exercise. We submit that, in the context of Ireland's share, after the concept of relative stability was introduced in 1992 and subsequently defined ten years later, Ireland's relative remoteness from the market should have been taken into account. The situation is about to become far worse in that we will have to pass through the no man's land of Britain to get to the EU market with, possibly, two trade barriers along the way. Ireland's social and economic circumstances and remoteness for communities along its coast that rely on fishing were never taken into account in the sharing out of stocks on the basis of relative stability. Essentially, that is all I have to say on the issue. The concept of relative stability has been kicked around for the past ten or 15 years. If one asked people what it actually meant, almost everyone would give a different answer. Its definition was actually set out in a European regulation ten years after the concept had first been used, which is extraordinary. We submit Ireland never canvassed on peripherality and remoteness from the market as a means to target a higher share of stocks and quotas.
Mr. Lorcán Ó Cinnéide:
I understand Deputy Thomas Pringle referred to the structures in place for us to interact with the Department on Brexit. The Minister is organising a seminar next week, to which we have all been invited and in which we will all participate, to consider the sectoral impacts. We participated in a high-level group meeting. We very much welcome such interaction. However, the message we are trying to put across is that given that there are existential implications for all those involved in the industry, it goes to the heart of the use of the catch in processing. We are not jumping up and down to be members of committees, but there is a need for a very clear acknowledgement, at the highest level, that there is an understanding of the particular circumstances of the industry. This may involve more meetings. This committee is valued and a very valuable part of that process.
As I have explained in other fora, as a relatively small sector of the food industry, we have to elbow our way to the front and make sure our particular concerns have been understood at that level. We must then elbow our way into the consciousness at the level of the Department of the Taoiseach, the Minister for Foreign Affairs and Trade and the people who will be engaging in the negotiations in Brussels with the objective of ensuring our position will become part of the position the European Union will take in its negotiations with Britain.
There is a worrying degree of political and industrial ambition in the seafood and fisheries sector in terms of Brexit. It is almost seen as a litmus test of the value, or otherwise, of Brexit to the United Kingdom. Those concerned are likely to ascribe disproportionate significance to the outcome in fisheries in a situation that I firmly believe will be bad for them in general. It is critical that the Government and the European Union fully understand our position in the light of the level of ambition shown.
Mr. Seán O'Donoghue:
That is the position. Although the Minister is committed to making this a priority, that is no good because we need a Government commitment. That is really what we are all saying. From an industry perspective, we have been really active in trying to build alliances and bridges with our European fishery partners, other than in the United Kingdom. As Mr. Ó Cinnéide said, no one has talked to our UK colleagues. He hit the nail on the head in saying the level of ambition was such that they believed they could do well from this.
The first question asked by Deputy Charlie McConalogue was about trade, our share and access. I am repeating myself, but I absolutely believe the overall food trade, not just the seafood trade, needs to be linked with the question of access and share. If that is not done, we will have serious problems on the fisheries side.
I was asked about the attitude of our British counterparts. As I have just said, there is huge ambition in the UK industry. It was given various commitments by the previous Minister, Mr. Eustice. He is now the Minister again. I showed members a picture in that regard. The Minister has travelled to Scotland and other parts of the United Kingdom and said these regions will do well from Brexit. As I said, from an industry perspective, we are actively building alliances and currently meeting key people in the European Union. Ultimately, I believe the United Kingdom cannot legally throw everybody out of its waters because of the United Nations Convention on the Law of the Sea. What it can do - this is our real problem - is state we can have access while demanding a greater share.
I will be very brief as most of the important issues have been aired at this stage.
It is important that we acknowledge the contributions made by all of the organisations represented. Their core issue is that they want to make sure the fishing industry will be at the top of the agenda and will not be left behind. Our report and the contributions heard today are very important in that regard because issues concerning fish quotas, with fishing being used as a bargaining tool, are very much key and pertinent. The big issue for the committee is taking on board the comments we have heard today and making sure they will become one of the key focal points of the report we will be submitting to the Government. It will be the ultimate document for us as a committee.
A key and frightening statistic is evident on the map that shows the territorial waters of the United Kingdom. Their scale indicates clearly where we are going and what we need to do. If we lose access to or quota rights for these waters, the knock-on effect on the fleet will be absolutely frightening. If there were to be no access to European markets, we would then be stuck with only a percentage of the quota left for European waters. What would the knock-on effects be on the fishing fleet and the processing industry? These figures represent the key issues we need to consider. If we have figures indicating what could be the doomsday scenario, they could be included in the report in order that the Government could strengthen our hand to ensure the fishing industry could and would be protected.
I welcome all of the delegates. Ultimately, the 35% of the waters affected by the United Kingdom's exit from the European Union are such that we are almost setting ourselves up for a renegotiation of the Common Fisheries Policy rather than a review or tinkering with it. While Brexit presents very few opportunities, this may be one of them. The territorial waters of this nation, being an island, also make up a large proportion of European waters. We should be using this fact in every way possible to make our position very clear, particularly given all conservation measures and other developments. If all of the boats currently fishing in British waters have to come to the remaining EU waters, there will be very many of them coming into what are, in effect, Irish waters. On the point made about putting more cows and calves into a field, there would be less grass and some of them would starve. It needs to be brought home to the negotiators that we need to consider putting everything on the table and engaging in a full renegotiation of the Common Fisheries Policy to ensure the industry in Ireland will not be left in circumstances in which it will just die. That is really what will happen unless something big happens.
On the engagements the delegates have had so far which I acknowledge have been limited enough, is there concern of the level about which I speak? Are officials from the Department and elsewhere still finding their feet in respect of what exactly they will do? Do they have a plan and a vision as to where this can take them? What is going to happen?
Mr. Lorcán Ó Cinnéide:
I am not sure where to start. In terms of the engagement that I had with the officials, despite the limited number of formal meetings, there is an ongoing dialogue, both formally and informally. There is a very high degree of concern. I think that there is a very high degree of awareness at Government level, and that they would support the view that we are taking in terms of the threat that this represents. We are hand in hand in that. There may well be differing views as to exactly what the tactics on that might be. I am fairly sure they do not extend to the renegotiation of the Common Fisheries Policy, CFP, which is another complication subsequent to the fact. We need to keep our eyes on what the issues are here in regard to Brexit and not over-complicate them. All we can do is continually use every forum at our disposal, including this one, and I am very glad to hear the sentiments expressed by members in support of what we are saying.
Talking about the impact on catching or processing, I am open to correction on the following figure but a report commissioned for the Scottish fishing industry indicated that 38% of the mackerel, which is probably the joint largest and most important species and the building block of our pelagic industry, is caught in UK waters. There is not a direct correlation between that and processing and supply, but if one takes that out of the supply, obviously it would have a very big knock on effect on the whole business, including the people who supply the fish, the fishermen, and obviously in terms of the processing plants and the processing industry that has been built up over the last 25 years based on that.
Mr. Seán O'Donoghue:
I will address the impact. I did not show it but we have started doing the analysis on the employment effect on the fleet, on the processing side and on the upstream end of things. Based on 2015 data and assuming there is a hard Brexit, there would be a 50% reduction in the net profits of the entire EU 27 fleet, as such. I need to break that down with regard to the Irish end, but one can take it that it will not be far off that, because the Irish are part of that 50%. Similarly, the crews on board the vessels would have to take a 15% reduction, whether they are on a share or whether they are on an employment contract. The net effect of that is that 500 to 600 vessels would go out of business. More importantly, coastal communities would be destroyed. They would be wiped out. Obviously, we need to do more analysis on that but I am just giving the first figures.
With regard to Deputy Martin Kenny's idea concerning the renegotiation of the CFP, I would certainly be very cautious about going down that road, because at the end of the day there will be majority voting here. If we open the renegotiation on the CFP, and considering there are member states which will be hit by Brexit, including ourselves, there could be a double whammy effect. We need to be very careful about how we go about this. Brexit is so serious that we cannot afford to start fighting among ourselves internally and taking the eye off the ball in terms of Brexit. I would be very cautious about going down that route.
Is it open to Norway to negotiate bilaterals with the UK after this or will it have to respect the European Economic Area after Brexit? I am not clear on that. According to the National University of Ireland Galway, NUIG, in 2014, 66,000 tonnes of Irish mackerel was caught in UK waters. Obviously, mackerel is migratory. By delaying the fishing season to let the mackerel migrate into Irish waters, there would be a cost because quality would be slightly reduced and the fish might be a bit more scattered, so they might be a bit harder to catch. Is there an option there to allow the fish to migrate into Irish waters before the fishing starts and reduce the impact of losing that 66,000 tonnes?
Mr. Michael Cavanagh:
For those who really do not understand the industry, one might wonder why we catch our fish in Scottish waters rather than Irish waters. In terms of the quality of the fish, from October to this present day, the fat content is high. Japanese will stop buying fish in Killybegs tomorrow, and they are a big player in it. Once they stop buying the price of the fish drops. It is important that we are able to catch the fish when the quality is right, because after the third week of January, the roe content in the fish starts to increase and the value is less. That is the reason for the vessels catching their fish in Scottish waters. That is very important. We might lose out in percentages, but we will lose even more when considering the added value and the quality of the fish.
Mr. Seán O'Donoghue:
I will address Deputy Pringle's other question on bilaterals, which is a really important issue. If one goes back to the famous red map and looks at the green area between the Norwegian zone and the UK zone, I can guarantee that it makes much more sense for Norway to look at a bilateral with the UK rather than a bilateral with the EU. That is an avenue we are very conscious of because the UK would be totally free to do a bilateral agreement with Norway, and Norway would see it as very much in its interests to do that as well. That is another threat that we have to really look at.
Mr. Patrick Murphy:
I would like to thank Senator Lombard for saying that this is very important. It is really important that this committee takes on board what we are saying on behalf of all the industry. We feel that this is of real importance for our country going forward, for the fishing industry and for our coastal communities that depend on it. It is their life blood. There will be no second chances at this. If we do not secure, as Mr. O'Donoghue said, access to get into these waters to catch the fish, our fleets will not be able to catch the fish anywhere else. They cannot increase, under relative stability, their quota. They cannot say that they will catch the fish elsewhere. They cannot do so because it will impact on the maximum sustainable yield, MSY. We cannot just go into one area and fish out the fish. The scientists will say that the stocks will be damaged.
If we cannot spread out, get in there and get the fish, and since England is looking to increase the amount, somebody will have to pay that back otherwise there will be overfishing. That goes back to relative stability. I differ slightly from my colleague, Mr. Sean O'Donoghue, on that matter. Arguing over the crumbs, as we would refer to them in our industry, in one of the richest waters in the world, does not make sense to us. We have the raw resources there but we are not allowed to catch them for historic reasons. As Mr. O'Donoghue said, we need to be careful if we renegotiate in that our EU colleagues will use their numbers to tell us to go back to the old days. They will say we are not getting it, that there are more of them and they are taking our resources whether we like it or not. I think that is very dangerous language. That is one of the reasons England pulled out. That is why it is putting, as Mr. O'Donoghue said, fishing in the top five of its markers to see what its success rate will be from leaving the European Union even though trading in London for a couple weeks will be more than it will ever receive from fishing. It is still using that to measure its success when it leaves the EU. That should not be lost here.
As my colleague, Mr. Casey, pointed out, this was a big issue for the coastal communities. They are areas that are no longer alive. When I started fishing in 1988, the biggest problem in Baltimore, where I fished out of, was available berthage. One could not get to the pier. There were boats four and five out. If one goes down there today, the place is a ghost town. Three or four boats are all that are left there. As Mr. O'Donoghue said, 500 boats will be taken out of our fleet if we do not get the access. That is a quarter.
One has to understand that it is not just fishing. If there are not the facilities and not enough boats coming in, the services will die as well. It has a knock-on effect. Coastal communities will be wiped out. It is happening already. I do not agree that we should just forget about renegotiating our fishing rights. The fish are in our waters. If we were able to take our waters back, as England is doing, we would have no problem. Our fleet would be quite happy. There are plenty of fish there. It is really important this committee stresses that it is of considerable importance that we have somebody there negotiating on this. We should have a voice there. I cannot understand why we do not. No other country in Europe would accept it. Some 44% of fish being caught by EU fleets is being caught in Irish waters, and we have nobody at the negotiating table. It does not make any sense to me.
I realise and appreciate that. I thank the Chairman for accommodating me. I had the opportunity to read the presentations and I would like to thank the organisations. All of this can be understood by looking at the maps, the red and the green. Of course the Scottish fisherman would be most anxious to ensure that there is Brexit. Once they trigger Article 50, my understanding is that there is no looking back. After the Article 50 negotiations, the UK will realise that it is too late at that stage and that there is no going back. We are squeezed in between the red and the green. When one looks at the red, we see it is not only Irish boats which are fishing there but also other European boats and they will be excluded and will have to find fish in other European waters.
There is only one resolution there. Negotiations must include the coupling of trade and fisheries. Looking further down the road, if Brexit happens and if we are excluded from these waters, the only solution for us and the other European maritime states is to renegotiate the Common Fisheries Policy. Then we will have an opportunity to have a greater percentage of the fish in our waters. Apart from that, I agree with the comments that it could spell the death knell of the fishing industry because vessels are finding it difficult to survive at the moment. The owners of vessels have made financial decisions over the last number of years to buy new boats, to have boats lengthened and to refurbish their boats, and now they find themselves in this position. I want to thank them and say that they have done the industry some service and have educated the politicians but the Government and the Taoiseach must take on board that it is not a question of getting the best deal. There is no best deal here for fisheries. There has to be a renegotiation of the Common Fisheries Policy post-Brexit. We would then get our fair and equitable share and maybe reverse the injustices that were done in the past.
Mr. John D. Sullivan:
No, I do not think so because we have the most productive waters within the EU. Some 44% of fish caught in Europe are caught in Irish territorial waters. That is the jewel in the crown. We should be at the top of the negotiating table. We should have special status because it is our future - the west coast. I have been fishing for 40 years and I have seen enough of people emigrating from Bere Island, Castletownbere and everywhere else along the coast. I have seen coastal towns and fishermen with their backs to the wall trying to keep going. This will be an opportunity and if we lose it, it will be the death knell of the fishing industry. It is up to all the Members of the Oireachtas to get together. It is Ireland's treasure; it does not belong to the coastal communities. We, as a country, have €200 billion in debt and yet we are throwing a fortune away every week. It is very hard for fishermen to live within the quotas they have. It is a total and utter disgrace. This is a chance to turn the table.
Look at Iceland and the Faroe Islands. Fishing is their top priority. It is a renewable resource and the jobs are permanent. If there is a renewable resource, the jobs are permanent. There could be oil wells in the Porcupine Bank but they could be gone in 30 years' time. Fishing is going to be there for 1,000 years. We have the richest fishing grounds in the world but it is up to members.
I thank the members and witnesses who have made their points very clearly and succinctly. We have taken them on board. Today is our last day of hearings on matters relating to Brexit, as those here probably know. We have had a number of meetings with the stakeholders involved over the past number of weeks, and people have made their points very clearly. We will be publishing a report in the next number of weeks and the contributions today will be invaluable from that point of view. The issues raised today will be highlighted very strongly in the report. I thank everyone for appearing before the committee and for their presentations.