Ms Sinéad McPhillips:

I thank the Chairman for the opportunity to brief the committee on the latest position in respect of the beef sector and Food Wise 2025.

The agrifood sector is Ireland’s largest indigenous industry, accounting for 7.8% of modified gross national income, 7.9% of employment and 11.1% of merchandise exports. According to the Central Statistics Office, CSO, the estimated output value of the beef sector at farm level in 2018 was almost €2.4 billion. Last year agrifood sector exports totalled €13.6 billion. Irish food is produced by thousands of farmers, fishermen and agrifood companies around the country and this locally produced food is exported to more than 180 countries worldwide. In 2018, beef exports were valued at €2.4 billion.

I am conscious that the past year has been difficult for the beef sector, particularly in terms of unprecedented weather events, which resulted in increased input costs due to fodder shortages. The Department is deeply committed to fully supporting and developing Ireland’s beef sector.

One of the unique strengths of the agrifood sector as a whole has been the shared vision for the sustainable development of the sector in Food Wise 2025. It is crucial that we all continue to work together to address the challenges facing the sector. The Minister for Agriculture, Food and the Marine, Deputy Creed, at meetings of the beef round table, has highlighted the need for stakeholders to recognise their interdependency, to support the sector through efforts to add value and to increase the strength of all links in the supply chain.

Officials in the Department are currently engaging extensively with stakeholders regarding beef producer organisations which have strong potential to help strengthen the position of the primary producer in the supply chain.

The Department is also engaging with the Directorate General of Agriculture and Rural Development and with stakeholders in giving consideration to the possible development of geographical indication, GI, status for Irish beef.

The Minister has also made considerable efforts towards facilitating and developing the live export trade, including leading a trade delegation to Turkey last year. The live trade will again be a focus of efforts in 2019.

I know the committee has had briefings from colleagues in the Department on Brexit impacts and preparedness as part of the whole-of-Government Brexit preparations. Brexit poses enormous challenges for the agrifood and fisheries sectors, and for the beef sector in particular. Almost half of our beef exports, by both value and volume, go to the UK market, accounting for almost €1.2 billion of exports in 2017. In a worst case, no-deal scenario, tariff and non-tariff barriers, sterling volatility, potentially transport delays and additional overheads would all impact significantly on the competitiveness of Irish beef exports to the UK.

In stepping up to the challenges posed by Brexit, the implementation of the Food Wise 2025 strategic recommendations seems more relevant than ever.

Food Wise 2025, the ten-year strategy for the agrifood sector, includes more than 400 detailed recommendations, spread across the cross-cutting themes of environmental sustainability, market development, competitiveness, innovation and human capital, as well as specific recommendations for key sectors including beef. The strategy suggested that ambitious growth projections for the value of the sector were achievable if the recommendations were implemented, for example, projecting an increase of 85% in the total value of exports to €19 billion, and an increase of 23,000 in direct and indirect employment, by 2025. I should stress that these projections did not include volume growth targets.

Food Wise 2025 implementation is very much a live and continuously updated process. The Minister chairs the high level implementation committee, HLIC, involving senior officials from relevant Departments and State agencies. The committee meets seven times annually to review progress, as well as engaging with stakeholders on key sectoral issues. The meat sector is discussed in detail at the HLIC on a regular basis.

A strengths, weaknesses, opportunities and threats, SWOT, analysis was undertaken for each sector and published as part of the Food Wise 2025 strategy in 2015. This SWOT fed into the actions for beef, and across the wider themes of Food Wise 2025, which are updated quarterly and reported to the Minister through the HLIC.

The beef sector SWOT illustrates the strengthsof the sector as one of our most important indigenous industries. The strong reputation of Irish grass fed beef production, our welfare friendly production system, our cattle and beef traceability systems, and Origin Green’s sustainable quality assurance scheme, support our strong reputation in traditional markets.Opportunities for the sector were identified in the global growth in protein demand and the possibility for expansion into new markets, building on the reputation and quality of our beef. In addition, the use of beef genomics, breeding indices and sexed semen were identified as opportunities to address beef quality from the dairy herd and improve technical efficiencies in the suckler herd.Weaknesses were also identified in the sector, including structural issues, low profitability, the sector’s dependence on direct payments and dependency on the UK market. Threats identified by the SWOT included animal disease outbreaks, food safety incidents, raw material supply changes linked to dairy expansion, and the possible threats linked to new trade deals and CAP reform.

I will now outline how the issues raised in the beef SWOT have been addressed across the five cross-cutting themes of Food Wise 2025. Market development identifies the need to ensure that food exports are targeted at the right markets, and at the right segments within these markets. Opening and developing new markets is a key part of the Government's response to the uncertainties arising from Brexit, and is particularly important for beef exports. The opening of the Chinese beef market, following a huge effort by Team Ireland over a number of years, presents an excellent opportunity for the beef sector from farmers right through to processors.

In 2018, the Minister, announced also the opening of the markets in Qatar and Kuwait to exports of Irish beef, poultry and sheepmeat; again reflecting ongoing efforts on market access and market development. As part of the Department's action plan on intensifying international market access, a new online international market access tool was developed. This portal provides information across some of the major export sectors of dairy, meat, seafood and live animals. These initiatives should be of direct assistance to the beef sector. They are consistent with the Food Wise 2025 strategy, and are all the more relevant against the background of Brexit. The Department will keep market access efforts under review, to ensure that resources are deployed to best effect and that our efforts are focused on making real progress in priority markets.

Of course, ensuring the highest standards of food safety is fundamental to our industry, and particularly to our export success. Environmental sustainability is at the heart of Food Wise. Ireland is one of the world’s most efficient food producers, in terms of carbon footprint per unit of output, but under Food Wise 2025, we are implementing measures to drive down the carbon intensity of our food production even further. Initiatives such as Bord Bia's world leading Origin Green programme, Teagasc's research on climate change and environment and the support for national and locally led environmental schemes and knowledge transfer programmes provided under the Department's rural development programme, RDP, as well as our forestry development programme, all contribute to improving the environmental, as well as the economic and social, sustainability of the sector.

The joint committee will be familiar with the overall climate challenge which Ireland faces. The Minister has reiterated that every sector will need to play a part and step up to do more on climate action.

Food Wise 2025 identifies competitiveness as a key theme and includes a recommendation that stakeholders work to "improve access to finance for agriculture, forestry and seafood producers and agri-food companies" and the Department has been involved in a number of initiatives in recent years, including the agriculture cash flow loan support scheme, the Brexit loan scheme for SMEs, and the forthcoming future growth loan scheme, focused on capital investment for farmers, fisheries and SMEs. These initiatives have also acted as a catalyst to encourage financial institutions to improve and develop new loan products for the sector.

Significant progress has also been made on agri-taxation measures focused on the areas of land mobility and succession.

Under the human capital theme, Food Wise identified a series of actions that support the development of ongoing and lifelong education, training and knowledge transfer programmes for farmers. The knowledge transfer programme under the RDP has provided significant investment in providing high quality training and upskilling for Irish farmers. The beef programme currently includes approximately 570 knowledge transfer groups comprising approximately 9,300 participants. Participation by those in the beef sector is by far the largest of all six sectors involved in knowledge transfer.

Under the innovation theme, a key Food Wise 2025 action was the establishment of a meat technology centre, as a centre of excellence for meat processing and innovation. Meat Technology Ireland opened in 2017. It is an €8.1 million five-year research and innovation programme, developed by industry and co-funded by Enterprise Ireland and a consortium of nine beef and sheepmeat processing companies. It is hosted by Teagasc at its Ashtown Food Research Centre facility, with DIT, DCU, UCC and ICBF as research providers. The centre has an agreed research programme focused on topics, including genomics, tenderness, shelf life, carcase characterisation, meat and health. Food Wise 2025 also recommended the establishment of a high level innovation team. This high level team was established last year, and will report back to the HLIC in 2019.

Regarding other supports for beef farmers, the Department has rolled out a range of schemes as part of the €4 billion RDP. The beef data and genomics programme, BDGP, is currently the main support specifically targeted for the suckler sector, which provides beef farmers with €300 million in funding during the current RDP period. This scheme is an agri-environmental measure to improve the environmental sustainability of the national suckler herd by increasing genetic merit in the herd. In addition to the BDGP, other supports which are available for suckler and sheep farmers under Pillar 2 of the CAP include GLAS, areas of natural constraints, ANCs and knowledge transfer groups. Suckler farmers also benefit significantly from the basic payment scheme, BPS, and greening payments under CAP Pillar 1. Teagasc's national farm survey data suggests that suckler farmers receive support equivalent to approximately €500 per suckler cow on average across all schemes. It is also envisaged that suckler farmers will be the primary beneficiaries of the €23 million increase in the areas of natural constraints, ANC, budget announced in the Budget Statement 2019.

A sum of €20 million has been made available under the beef environmental efficiency pilot, BEEP, scheme which was recently launched by the Minister and is open for applications until this Friday, 22 February 2019. The pilot is aimed at further improving the economic and environmental efficiency of beef production, by measuring the weaning efficiency of suckler cows.

In November 2018, Michael Dowling presented the Food Wise Meat Implementation Group report to the HLIC. This group was convened to monitor and drive the implementation of the meat-specific Food Wise 2025 actions and the future development of the meat sectors. The report followed a series of meetings between the Department and stakeholders across the beef, sheep, pig and poultry sectors. The Department was encouraged that this group, comprising stakeholders across the meat sectors and in different tiers of the supply chain, collaborated to produce a useful report, which will provide valuable input in the effort to deliver on the ambition of Food Wise 2025.

The issues raised in the group's report included an acknowledgement of the need for specific supports for the suckler sector, and the need to work on the issue of beef from the dairy herd. The possibility of introducing some form of targeted support for the suckler sector was recommended by the group. However, it is accepted that such measures, in addition to providing income support, should be clearly geared towards bringing environmental and welfare quality benefits. Consideration of these issues has fed into the development of additional supports for the sector such as the BEEP pilot.

The Department's key priority in respect of CAP reform is to ensure an adequate CAP budget for the agrifood sector. The CAP budget is fundamentally important to Irish farmers, particularly now at a time of Brexit uncertainty and in the context of dealing with serious climate change obligations and challenges in the future. Based on nine objectives, the future CAP will continue to ensure access to high-quality food and strong support for the unique European farming model. The Department is currently examining all appropriate measures to support the different agrifood sectors during the CAP reform process.

Finally, we have now begun preparations within the Department on developing the next ten-year strategy to replace Food Wise 2025. It is envisaged that this will be published in 2020. Without pre-empting the content of the next plan, it is clear that the broad, cross-cutting themes contained in the current strategy will continue to remain highly relevant. Clearly, there are broader policy developments that will have a strong impact on the development of the strategy, particularly the outcome of CAP reform, climate action and Brexit.

In terms of process, 2019 will see the preparation of background discussion papers, a public consultation, a stakeholder event, the establishment of an independent committee by the Minister, and the beginning of that committee's deliberations. In 2020, the committee should conclude its work by agreeing a new strategy, which will then be subject to an environmental assessment before finalisation. The Department will be seeking the views of the joint committee as part of the process, and looks forward to input from the committee on the new strategy.