Oireachtas Joint and Select Committees

Tuesday, 20 November 2018

Joint Oireachtas Committee on Agriculture, Food and the Marine

Implications of Brexit for Agriculture Sector: Discussion (Resumed)

3:30 pm

Photo of Jackie CahillJackie Cahill (Tipperary, Fianna Fail)
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I thank Mr. Brennan for his comprehensive presentation. It is just what one would expect from Bord Bia. I had the pleasure to be on the board of Bord Bia for six years and it is an organisation that does its work very professionally and diligently. This report shows its preparedness, what it is putting in place for Brexit, as well as the implications it can have for this country. Unfortunately we are dealing with a lot of variables at present and we do not know what the deal will be. From Bord Bia's point of view, all it can do is what it is already doing, and to try and get companies prepared for the worst and most doomsday-like scenario one can imagine, which is a no-deal Brexit and the problems that will bring to our shores. Bord Bia has covered and closed off a lot of the dangers and pitfalls by preparing companies as much as it possibly can for it. Hopefully, we will not get into that scenario.

What happens when standards begin to vary between the two countries? At the moment one has rigid standards that are operable both here and in the UK. If standards start to vary along with currency fluctuations, I refer to the damage that will do to trade and how difficult that will make things. We saw the pressure our mushroom industry came under when the first talk of Brexit broke. Currency fluctuations will be a huge issue under that scenario.

There is one issue on which I do not see anyone focusing very much. It is the case of other countries that engage in significant trade with the United Kingdom and what will happen when they have their products displaced For example, the Dutch engage in a serious amount of trade. Their agrifood trade figure with the United Kingdom is 15% higher than ours. If there is a no-deal Brexit, they are also going to be looking for new markets and competing with us on the same playing field. That is one aspect on which I have not seen too much of a focus, namely, that the Dutch, the Danes and the Poles will all lose market share in the United Kingdom. On what markets will they focus post-Brexit?

We are down to a figure of 48% of our beef going to the United Kingdom. Realistically, it would be desirable to get it down by another 7% or 8%, which is going to be a serious job. For a good number of years we have been working to diversify markets. The United Kingdom has always been our best paying market. The beef industry is in serious bother. There is a kill rate of 40,000 head and returns to the primary producer are at a very low ebb. What are we going to do with all of that beef and what possible markets can we find for it? We have seen live exports grind to a halt in the last couple of months. Turkey was seen as the great white hope, but owing to problems with its currency, there are no cattle going there, which is putting a lot of pressure on the system.

Bord Bia has talked about the additional staff it has employed. In the last two budgets there have been extra resources for it. I will ask Mr. Brennan an awkward question, but it is in the context of a no-deal Brexit. How much extra could be used by Bord Bia? Establishing new markets is not something that happens overnight with the flick of a switch; it is a slow process. Is giving Bord Bia an extra €5 million or €6 million realistic in the context of what it needs to diversify markets, given the huge volume of products we export to the United Kingdom? We will just not find a home anywhere else for the quantity of cheddar cheese going to the United Kingdom. Where can we go with that product? It might be difficult for Mr. Brennan to give a definite answer, but exactly how much extra in terms of resources could Bord Bia use to successfully establish new markets?

I want to ask about Food Wise 2025 and the targets set in it. We have the Mercorsur and other threatened trade deals. Having regard to the serious emphasis being put on the need to tackle climate change, does Mr. Brennan believe the Food Wise and Food Harvest 2020 targets need to be revisited? We are hitting a lot of them and people are surprised by the rapid expansion on the dairy side which has exceeded even the wildest expectations. Are the targets set in the interests of primary producers? Last night I attended a meeting in Mallow, at which it was indicated that the figures by which we had increased production were great, but, unfortunately, the incomes of primary producers have moved in the other direction. If we produce all of the product by 2025, will it be possible to have it marketed that will give a return to the primary producer because that is definitely not the case at present?