Charlie McConalogue (Donegal, Fianna Fail)
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I welcome the opportunity to present the Revised Estimates for 2022 to the committee. Budget 2022 was set with the ongoing challenges of Brexit and Covid in the background and in the transition between the current Common Agricultural Policy and the new CAP. The agriculture Vote for 2022 provides my Department with the resources to deal with these current challenges and opportunities across the various sectors in agriculture, food development, marine and forestry.

My sole focus as Minister for Agriculture, Food and the Marine is the protection and enhancement of the incomes of those who are the bedrock of the sector, namely, farmers, fishers and food producers and their families.

In a time of transition, farmers can have confidence that the budget protected farm family income and supported action to improve safety and sustainability on farms. We succeeded in protecting all the crucial farm schemes and the budget provision allowed us to provide additional funding for a number of policy priorities.

The resilience of the sector is demonstrated by the fact that exports of agrifood products in 2021 are estimated to be around €15.2 billion, an increase of almost €1 billion or 7% on the 2020 figure of €14.2 billion and a 70% increase on the €8.9 billion recorded in 2010. These figures include €1.7 billion in non-edible agrifood sector goods, including forestry and animal feedstuffs, which are not included in the Bord Bia food and drink figure of €13.5 billion. My Department and its agencies, in consultation with stakeholders, continues to monitor the impacts on the agrifood sector as the situation evolves, and to provide appropriate supports to the sector coming out of Brexit.

For 2022, the total Exchequer contribution to the Vote of my Department amounts to €1.891 billion. That is comprised of €1.574 billion in current expenditure and €317 million in capital expenditure. This figure represents a gross increase of approximately 4% or €65 million on the 2021 allocation and builds on the 11% increase on the allocation I secured in budget 2021.

It is anticipated that the Department will receive further funding from the Brexit adjustment reserve during 2022 through Supplementary Estimates, thereby giving the committee an opportunity to examine the proposals at that stage too. We are working closely with the Department of Public Expenditure and Reform in this regard.

When appropriations-in-aid are considered, the 2022 net Vote is estimated at €1.461 billion. This is arrived at by deducting the income we receive in appropriations-in-aid from our overall expenditure. The agriculture Vote is subdivided into four expenditure programmes corresponding to the four key strategic objectives set out in the current statement of strategy. I will now speak about each of these four programmes, A to D, and the key themes.

Programme A relates to food safety, animal and plant health and animal welfare. The total allocation for programme A in 2022 was €341 million, an increase of 6%. Irish farmers, fishers and agrifood companies produce world-class food that is known across the world. They produce products to the highest international standards of food safety and quality. Our food safety and traceability systems continue to be recognised as among the very best in the world. Regarding programme expenditure, I am continuing to fund vital services to ensure those standards are maintained, including the meat inspection service and the various supports provided by the Department testing laboratories.

The level of bovine tuberculosis in Ireland continues to be relatively low with progress being made during 2021 thanks to the new TB strategy I launched at the end of 2020. TB levels are lower than in the previous year for the first time since 2016. Enhanced actions to clear infection from herds experiencing extended breakdowns were initiated in June 2021. The goal is to eliminate TB infection from such herds to help them go clear as soon as possible and reduce the risk of repeat breakdowns. The TB forum, supported by Department officials, will continue, during 2022 and beyond, to implement the policy options outlined in the bovine TB eradication strategy. Our focus will be set on reducing disease year by year. The strategy is not set in stone. It is very much a roadmap and will be subject to revision on an ongoing basis in line with the trajectory of the disease. I have increased funding in the wildlife programme to help to further drive down TB rates this year and beyond. I have discussed with members the importance of this matter at meetings of the committee over the past year.

The programme for Government committed to a doubling of the ex gratiafunding for animal welfare organisations within two years. Funding has been provided in 2022 to fulfil this commitment. Funding in programme A will also support the wind-down of fur farming operations in the State. I will be progressing Report Stage of that legislation in the Dáil later this evening.

Programme B relates to farm sector supports and controls. It is where the vast majority of our farm schemes are housed. A total of just over €939 million is available to programme B in 2022, to be paid almost exclusively to farm families. That is in addition to €1.2 billion funding from the European Union in respect of the various direct payment schemes.

Keeping farmers farming and assisting them in producing the world-class, safe and sustainable food they do is a key priority of mine. This support is also vital to farmers who deliver public goods and environmental benefits. As well as the inherent environmental benefits involved, this investment enhances our sustainability credentials, which are invaluable as we serve increasingly demanding and knowledgeable customers at home and around the world.

There are several key provisions in programme B in my Department’s Estimate for 2022. Conscious of the pressures on the tillage sector, I will allocate some €15 million of this sum specifically for that sector. This is an increase of €5 million on the outgoing year.

Beef and sheep farming is the lifeblood of many rural communities and helps ensure a balanced regional economy. The 2022 Estimate provides €104 million in targeted supports for livestock farming. I am providing more than €85 million to support sustainable beef farming. This includes over €40 million for the beef data and genomics programme, BDGP, during the transition period. It also includes over €44 million for the beef sector efficiency pilot, based on the BEEP-S scheme.

The sheep welfare scheme provides a valuable support to sheep farmers for undertaking actions which make a positive contribution to flock welfare. I was pleased to be able to secure additional funding for the scheme in budget 2022. This underlines my commitment to the sheep sector. The allocation for sheep welfare scheme has increased from its original allocation of €17 million in 2021 to €19.5 million in 2022 to cover the continuation of the scheme in 2022 and the change of reference year, leading to an increased number of sheep being able to avail of the scheme.

These measures, together with the allocation of more than €450 million for schemes such as the green, low-carbon, agri-environment scheme, GLAS, the results-based environment agri pilot, REAP, and areas of natural constraint, ANC, scheme will support livestock farmers to improve the economic and environmental performance of their herds while providing valuable income support for the sector. I am also providing €79 million, made up of €50.287 million in subhead B5, which includes a €29.9 million carryover, as well as €29 million in European Union recovery instrument, EURI, funding, including the capital carryover, for targeted agriculture modernisation schemes, TAMS, to support investment on farms and the continuation of the TAMS during the transitional period.

Turning to forestry, which I know is a priority of this committee, I am providing €100 million in support of the forestry sector. This provision is in recognition of the vital contribution it can make in mitigating climate change and supplementing farm incomes. In 2022, our aim is to increase the number of afforestation licences we issue. The overall output of licences increased by almost 60% from a low base in 2020. This demonstrates significant progress and we are determined to see that trajectory continue through this year.

Supplies of timber for the processing sector have thankfully stabilised over 2021. This time last year we were in a real crisis with supply. The backlog of forestry licence appeals, which had been a significant administrative burden and a delaying factor in many licence applications, is being dealt with, piece by piece and bit by bit, making progress each week and month.

In addition, an independent regulatory review of the forestry licensing system has been commissioned, a new system facilitating a pre-application engagement between the forester and the Department is being piloted and arrangements are being made to provide a financial contribution to applicants towards the cost of environmental reports. We will also publish a new forestry strategy for Ireland this year.

The carbon tax allocation has been reduced from €23 million in 2021 to €3 million for 2022. The programme for Government commitment provides for additional current funding of €1.5 billion of carbon tax funding for new schemes that will incentivise farmers to farm in a green and more sustainable way up to 2030. This funding will be additional to that provided for by the Common Agricultural Policy. This commitment is being met in full. It is intended to programme the carbon tax funding to enhance the new schemes proposed under the CAP strategic plan.

In the programme for Government the clear commitment was to direct the additional carbon tax funding specifically towards enhancing the environmental scheme in the CAP. Because the new CAP was delayed by two years and will not start until January 2023, I have reduced the profile of the carbon tax in 2022. The funding will be available to be pumped into the environmental scheme between 2023 and 2027. This is being true to the programme for Government commitment on expenditure of the carbon tax. This will allow funding to be programmed into the CAP strategic plan, ensuring compliance with agriculture state-aid rules and with a view to securing Commission approval for the interventions proposed in the CAP strategic plan. We will see a coherent green architecture in CAP strategic plan that will run from 2023 to 2027.

Programme C deals with policy and strategy. The total allocation for programme C is almost €403 million. Many of the programme C allocations reflect the comprehensive approach to Brexit responsiveness. Access to finance is crucial for business needs and is a key part of the Government’s response to the challenges posed by Brexit. In addition to liaising with the main banks on issues relating to the agrifood sector, my Department and I work closely with the Tánaiste and Minister for Enterprise, Trade and Employment and his Department, as well as with the Minister for Finance, Deputy Donohoe, and his Department. The Estimates for 2022 will provide for ongoing access to the loan schemes through the Strategic Banking Corporation of Ireland for farmers, fishers and food and drink SMEs.

To support our food industry a provision of €7 million has been made for this year through the Enterprise Ireland capital investment scheme. This is to support the meat and dairy sectors investing in greater product and market diversification. We will support Irish research and innovation activity to enable the sector to innovate and deliver greater efficiency and economic, environmental and social sustainability.

In 2022, for the first time, there is a dedicated budget for farm safety of €2 million. I recognise the ongoing work of the Minister of State, Deputy Heydon, in making real progress in this area. This new funding will play a significant role in achieving cultural change around safety on our farms. They are working environments and we must continue to work together to make them safer. Reductions in the rate of fatal and serious incidents on farms will happen only by changing behaviours, increasing awareness, training, and investment in key farm safety and in farmer mental health and well-being measures. The €2 million allocation is in addition to the continued funding for farm safety equipment under TAMS, a recently launched accelerated capital allowances for farm safety equipment scheme, and a range of locally-led schemes focused on farm health, safety, and well-being projects.

In recent budgets increased funding has been provided to Bord Bia to strengthen its understanding of consumer priorities and preferences in Ireland and in distant markets and to communicate these insights to Irish food companies for use in product promotion, development, branding and marketing. The Bord Bia grant is €53 million in the 2022 Estimate.

Teagasc’s capital allocation has been increased by €3.85 million to €10.45 million. With this funding Teagasc proposes to establish the national agricultural sustainability research and innovation centre at Johnstown Castle. This is a strategically important project to support strategic national commitments to increase the sustainability of our agricultural and food systems. The project has been in gestation for some time due to funding requirements. I was pleased to secure €9 million in Exchequer grant aid towards the construction costs from the Department’s capital budget on a phased basis to 2024. The allocation this year is €3 million. This funding represents a strong commitment by the Government to provide farmers and other stakeholders with access to practical solutions to improve soil health, restore and protect biodiversity, improve water quality, reduce emissions of greenhouse gases and ammonia, and enhance soil carbon sequestration.

I was very glad to be able to visit Johnstown Castle prior to Christmas to turn the sod on the new research and innovation centre and officially open the newly revamped Johnstown Castle. It is now opened to the public. It was my first time there and anyone in the area should visit it. It is a tremendous castle that has been well restored. It is well worth a visit. It is on the same grounds as the existing facilities and the new national agricultural sustainability research and innovation centre. Johnstown Castle is where much of the research was done to verify the emissions reduction potential of low-emission slurry spreading, which enabled us to programme the gains we are getting from it into our national inventory to reduce our overall emissions. It is a real-life example of the work that has been going on there. The new innovation centre will help to drive this forward and will be very important in the coming decade.

The allocation to the horse and greyhound racing fund is €89.7 million. This is a reduction of €7.8 million when compared with last year's allocation. As we welcome back spectators to both sports the fund’s 2022 budget allocation is appropriate.

Programme D deals with the seafood sector. The provision for the Department’s seafood programme has been increased by 17% to a total of €207 million for the continued promotion of the environmentally sustainable development of our fisheries sector, aquaculture and wider seafood industry. This sector supports some 16,000 direct and indirect jobs almost exclusively in coastal communities. The provision will help fund vital investment in our fishery harbours, most particularly in Killybegs, Howth and Castletownbere. I also announced significant investment of €25 million for a new deep water harbour in Rossaveel.

The budget allocation for the Sea-Fisheries Protection Authority, SFPA, in 2022 will allow it to continue to meet its national and EU obligations as Ireland’s competent authority for the enforcement of sea fisheries and seafood safety law, and to meet challenges coming from Brexit. The core areas of the SFPA include the costs associated with certifying seafood in food business premises throughout the country and providing 24-7 inspection services at the main fishery harbour centres and numerous secondary ports around the coast.

In response to the impacts of the trade and co-operation agreement I established a seafood task force in March 2021 to examine these impacts and make recommendations on appropriate measures to mitigate them. The Navigating Change report of the seafood task force recommends 16 support schemes with an estimated cost of €423 million to assist the seafood sector and coastal communities to mitigate the impacts of the trade and co-operation agreement, including temporary and permanent cessation schemes for the fishing sector, capital investment schemes for seafood processing and aquaculture, marketing supports, marine infrastructure renewal, enhanced community-led local development through the seven fisheries local action groups, and liquidity support for co-operatives and processors.

Most of the schemes recommended by the task force are proposed to be funded in 2022 and 2023 under the EU Brexit adjustment reserve. An amount of €31.5 million has been allocated to Bord Iascaigh Mhara in this year's Estimate to manage schemes that are approved under the Brexit adjustment reserve along with its other normal important work.

The recommendations of the task force are being urgently examined and assessed across government with regard to available funds, eligibility under the Brexit adjustment reserve, state aid and the public spending code. A Brexit temporary fleet tie-up scheme recommended by the task force was implemented in 2021 and provided supports to vessels in the polyvalent and beam trawl segments to temporarily cease fishing activity in a particular calendar month, thus increasing the quota available for remaining vessels that were fishing. The scheme had a total of 229 applicants of which 179 were successful. The cost of the scheme was approximately €10 million. The task force has recommended a second temporary fleet tie-up scheme for 2022 and I am considering that.

In January I announced a Brexit inshore fisheries business model adjustment scheme to provide support to assist inshore fishers in adjusting their business model to the post-Brexit market environment. As recommended by the task force, one-off payments of €2,700 are available to owners of vessels under 8 m in length and €4,000 for owners of vessels between 8 m and 18 m in length. That scheme has a total budget of €3.7 million. The Brexit adjustment reserve funding is an initial allocation for 2022 and I will be announcing other schemes in the coming weeks and months. These will be rolled out on a phased and prioritised basis as recommended by the task force.

This is a comprehensive, if not especially brief, overview of some of the key issues and the range of measures that apply in the agrifood and marine sectors for this year. I am satisfied that the 2022 allocation, together with the supports to be provided under the Brexit adjustment reserve, will provide a good, balanced package of measures for farmers, fishers, coastal communities and the food sector. I look forward to taking questions on specific areas and further developing some of the key points on which I have given an overview.