Martin Heydon (Kildare South, Fine Gael) | Oireachtas source

While the future of agriculture in Ireland is uncertain and there are challenges in the short term, it also has hugely exciting opportunities. Despite difficult economic circumstances, food and drink exports reached an estimated value of €10.83 billion in 2015, which constituted an increase of almost 50% since 2009. The basis exists for growth, as outlined in the Food Wise 2025 initiative, with its highly ambitious targets. The potential for exponential growth in food and drink exports remains, but this will require careful management of the risk factors ahead. Adequate finance is a key factor for the primary producer and it is crucial that it be maintained through these turbulent times. I refer to the creation by the Ireland Strategic Investment Fund, Glanbia, Rabobank and Finance Ireland of the €100 million Glanbia MilkFlex Fund, which was announced in March. It is the way forward because it is the first time a financing mechanism has been linked directly to the price of milk. Financial institutions must roll with the sector during this time of particularly low commodity prices because they will still be there to make the profits in the future when the primary producers have returned to making profits. This is the kind of joined-up thinking and approach that is needed. Financial institutions must come on board, together with the merchants, which also have a role to play. In fairness to them, in recent years merchants have been playing the role of bankers, probably to a greater extent than they ever had intended, in many cases where there have been gaps in funding. However, in the dairy sector and all other sectors, this support, while necessary, also must be managed responsibly. Where a merchant or a co-operative sells the inputs to the farmers, buys the produce and acts as a banker, it has the potential to cause a debt spiral because it is buying back the outputs and the produce and the farmer loses his or her ability to argue for a competitive price. This is because it is extremely difficult to negotiate one's final bill for fertiliser early in the year if the merchant with whom one is dealing has all of one's grain in the hopper, drawn in when the price still was not agreed upon. Consequently, financial institutions and merchants must buy into the importance of the symbiotic relationship with the primary producer to ensure a long-term mutually beneficial relationship that lasts into the future.

I greatly welcome the Minister's confirmation of approval from the Commission for the inclusion of a specific scheme for investment in tillage farmers under TAMS. Tillage farmers have endured three really difficult years, and it is not just about the tillage farmer; it is also about all the other sectors, including the pigmeat, dairy, beef and sheep sectors, which depend on that grain. It would not be desirable to lose the tillage industry, making Ireland dependent on grain imports, because that is not a good basis on which to grow into the future. Members must recognise that the tillage sector has struggled greatly. The sheep sector welcomes the fencing investment scheme, and in respect of the beef sector, producer organisations have a critical role to play in the future to ensure a fair deal for the primary producer. Ongoing analysis of the relationship between the primary producer, the processor and the retailer is absolutely crucial to ensure that everyone can make a profit into the future within each sector. This is crucial for the farmer, the agricultural sector and rural Ireland in general, about which so much debate in this House is concerned.

The Minister outlined his concerns about the issue of Brexit, which I share. These are the key areas that require negotiation between the Council of Ministers in Europe and the relevant Commissioners for Trade and Agriculture, and which must be monitored carefully into the future.

See this speech in context