Mr. Brendan Gleeson:

I thank the Chairman. I thank the committee for the opportunity to address it today on developments in relation to the future of the Common Agricultural Policy. With a view to framing the discussion, it might be useful to remind ourselves of the contribution of the CAP to the citizens of Europe and of Ireland. Within the EU, the farming and the food sectors provide employment for 44 million people. Ireland's agrifood sector employs more than 173,000 people, or 8.6% of total employment, and accounts for approximately 7.6% of GDP. This employment is largely rural based and contributes to the survival of rural and coastal communities, where alternative employment may not readily be available.

The agrifood sector is Ireland’s largest indigenous sector, contributing €26 billion in turnover, with an economic multiplier that exceeds that of other manufacturing industries because most of its inputs are indigenous. Total agrifood exports in 2016 were €12.2 billion. This is a 56% increase since 2009, so agrifood was resilient through a period of extreme difficulty in the Irish economy. The raw material for this vital sector is produced by approximately 129,000 farm families, and their activities are supported by the EU's Common Agricultural Policy. The 2016 Teagasc national farm survey indicates that CAP supports account for 75% of family farm income on average, with a range from 37% in dairying to 113% in cattle rearing farms.

In addition to this, CAP, through the rural development programme, funds a range of activities to improve competitiveness and efficiency, and improve technology adoption on farms. It also supports farmers who engage in the public good of positive environmental actions, such as nutrient management, retention of biodiversity, better breeding policy, protection of watercourses and the planting of hedgerows. Within the period of the current multiannual financial framework, Ireland is projected to receive €12 billion from CAP, with €10.7 billion, or approximately 85%, in respect of Pillar I direct payments and Pillar II rural development payments.

We have now reached the point, following the reform in 2013, where it is necessary to look at the development of the policy that will bring us beyond 2020. With this in mind, the Commission opened a public consultation online on 2 February 2017. This ran for 12 weeks up to 2 May 2017. What is most remarkable about this consultation is that of 322,000 replies received, only 7% of respondents described themselves as being involved in farming, which shows CAP is a policy in which the EU citizens who fund it take a significant interest. Some of the themes that emerged from the consultation included public support for the need for CAP to deliver more benefits for the environment and climate change, the need for direct income support for farmers, the need to improve farmers' positions in the value chain, and to support investment in restructuring and innovation.

I want to turn briefly to issues related to the funding of any future CAP. Earlier this year, the budget Commissioner published a reflection paper on the future of the EU finances. The paper is a prelude to financial framework proposals expected to emerge from the Commission in mid-2018. It acknowledges the likely pressure on EU finances arising from the departure of one of the Union's larger net contributors, and the emergence of new priorities, such as migration and security. Against this background, it outlines five scenarios for future funding. Four of these would involve either a reduced overall budget or a reduced share for CAP or both. While this is a reflections paper only and not a proposal, it seems clear that the financial background against which discussions on the reform of CAP take place will be challenging.

I will turn now to a specific reflection on the future of CAP. Many committee members are aware of a document believed to have been leaked from the Commission on 19 October. The document is entitled "The Future of Food and Farming", and it outlines a range of principles and some specific proposals on the shape of a new CAP. I want to be clear that the document has no official status whatsoever. It is a leaked document. The extent to which its content will be reflected in the final communication is therefore unclear. Even if it were clear, the detail in the Commission communication will only be the starting point for a complex negotiation with member states. It is, nonetheless, a useful vehicle for framing a discussion on the future of CAP. In brief, the leaked document proposes a simpler CAP, with significantly more flexibility for member states and a sharper focus on objectives and results, particularly in the environmental area.

Some of the major themes include greater simplification; a commitment to a streamlined CAP, with reduced bureaucracy and administrative burden for farmers and member states; more subsidiarity; greater freedom for member states to implement CAP in a manner that suits their climatic and environmental conditions, with basic policy parameters and objectives laid down at EU level; a smarter CAP, with a focus on knowledge transfer, innovation and technology adoption; continued support for farm incomes; a continued commitment to EU funded direct payments, with a further move towards capping of direct payments, average support rates across the European Union and better support for small farmers - these are issues on which it is stated we need to reflect and as such not exactly proposals but food for thought.

Other themes include continued support for investment and financial instruments; support for farm investments for modernisation and diversification, including in new opportunities in bio and circular economy and climate friendly energy production; and better risk management. We know that some of our sectors have been affected by dramatic price volatility in global markets in recent years and the document refers to an integrated approach to risk management, combining EU level interventions with member state strategies and private sector instruments with different types of instruments tailored to regional and sectoral needs. The document also refers to more results based and relevant sustainability measures, which puts the flexibility back to member states in that they are required to define measures and targets to meet environmental and climate objectives laid down at EU level; and prioritising generational renewal. This is a challenge worldwide; as we know, the average age of farmers in Ireland is 57.

This would allow member states to develop their own incentives through CAP, cohering with national measures such as tax incentives, land regulation inheritance law or territorial planning and addressing consumer concerns, for example, about food security, the production of foods with specific characteristics, such as geographical indications or organic foods, addressing health issues such as antimicrobial resistance or in promoting healthier lifestyles through measures such as school schemes for fruit or dairy products.

As I said, this is a leaked document. If these are the basic principles underpinning the EU discussion on the future of CAP, then Ireland can support many of them. However, as always, the devil will be in the detail. We know from experience that greater latitude for member states is not always necessarily consistent with simplification. One needs to look at the specifics of a proposal to determine whether it is workable. Nonetheless, the leaked document would appear to be a reasonably good platform from which to initiate discussions on the future of CAP, and perhaps also to initiate a discussion today.

I look forward to hearing members contributions and I will endeavour to answer any questions that emerge. This is, I believe, the beginning of future engagement on CAP as we move forward.