Michael Creed (Cork North West, Fine Gael) | Oireachtas source

I acknowledge that 2016 has been a difficult year for agriculture and the agrifood sector. It has not been easy for fisheries either; therefore, my focus in the 2017 budget for agriculture and fisheries has been on securing funding for strategic decisions that will enable the Department to meet the challenges that are ahead, which include those associated with volatility in commodity markets and the United Kingdom's decision to exit the European Union, given the fact that it is our single biggest market in the agrifood sector, with over 43% of our export destined for that market. There are just over €1 billion in exports on the beef side and just under €1 billion in dairy. It is our closest market, the one we can access most easily, the market we understand best and the market easiest to navigate for many small and medium enterprises making their first foray into export opportunities.

Next year the Exchequer-funded element of the Vote in my Department will be €1.47 billion, of which approximately €238 million will be on the capital expenditure side, an increase of €120 million over this year's budget figure. Taken in conjunction with the €1.2 billion in EU-funded direct payments, the total expenditure is €2.7 billion. The key focus was on maintaining farm payments and on protecting vulnerable farm incomes against market volatility, promoting and supporting sustainable investment and jobs in rural and coastal communities and strengthening the sector to meet the challenges arising from Brexit.

The United Kingdom is our biggest market, with €5.3 billion in exports and €3.8 billion in exports from the United Kingdom to the Republic of Ireland, a trade surplus for us. The challenge, politically, has been to create awareness of this and to that end we have established a dedicated unit in the Department and a stakeholders' forum, which has met already and will meet again on 20 October. This forum gives every stakeholder in the agrifood sector, both inside and outside the farm gates and in the fisheries sector, which will be particularly challenged in the context of the Common Fisheries Policy, a platform on which they can articulate their concerns in order that the Department can be best informed as to how to position itself to meet the coming challenges.

We also feed into the overall Government approach, which is being run by the Taoiseach's Department, to tackling the challenges ahead. We are working with the various agencies under my Department such as Bord Iascaigh Mhara, BIM, and Bord Bia and their client companies with which they are working to navigate the difficult challenges arising immediately because of the sterling differential. They are also exploring new market opportunities, something in which my Department is very active. Some would argue that our dependence on the United Kingdom is excessive, given the fact that 43% of our agrifood exports go there, but in a relatively short period of time, China has become our second biggest market in dairy and pork exports and is one we hope to penetrate for beef exports too. Brexit negotiations will begin with the triggering of Article 50 in March 2017 so there is an opportunity to create political awareness and I have met with my Northern Ireland equivalent on three occasions on the very complex cross-Border issues. I am meeting my UK equivalent and the Secretary General in my Department has met his equivalent in both Britain and Northern Ireland on a number of occasions; therefore, it is not true to say the Government is sleepwalking into the challenges that are ahead. They are very significant challenges, but there is a whole-of-government approach and a interdepartmental approach involving every Department which is impacted on. There is a significant challenge for both farmers and the agrifood sector.

Budget 2017 financially underpins the Department's mitigation efforts through strategic investment in key areas, from providing access to an innovative low-interest agri cashflow fund of €150 million to agri taxation measures which are designed to strategically smooth income fluctuations. Budget 2017 provides a robust pre-emptive response to the Brexit challenge. Supporting and developing our food business is central to what we do as a Department. In budget 2017 increased allocations for Bord Bia and BIM, strategic investment in research and development and innovation such as increasing the definition limit for micro brewer to 40,000 hectolitres mean that we are putting forward practical solutions for businesses. As well as a dedicated unit in my Department and a consultative stakeholders committee, we have constant momentum behind implementing the Food Wise 2025 strategy, on which there is regular consultation with stakeholders.

I am also active in area of seeking new market opportunities. As I said, I was recently in China on a trade mission and will be travelling to North Africa soon in that context, to look, in particular, at opportunities there for live exports, which is critical, given the increased number of livestock arising from the expansion of the dairy herd following the abolition of quotas.

My approach to budget 2017 involved a three pillar strategy, including the availability of low-cost credit which includes the aforementioned €150 million loan. It is important to say this is enabled by our matching the €11 million available from the European Union with €15 million. In other words, the call was for the Government to match the €11 million being provided by the European Union with €11 million, but we have gone higher and put €15 million of Exchequer funding into the facility in order that we are in a position under the minimalist rules to provide aid for the cereal and horticulture sectors. The interest rate in this regard is 2.95%, which means that it is a ground-breaking initiative. There is no other financial product available in the marketplace at that rate and which also provides for an interest only period of repayments. It is a six-year loan repayable on an interest only basis for up to three years. As we finalise the arrangements to bring the product to the marketplace, I encourage farmers to examine their cash flows. Merchant credit is extraordinarily expensive. A lot of farmers, particularly in the tillage sector, are investing on the basis of merchant credit. They now have an opportunity to switch their loan facilities in that regard.

Increased investment inside the farm gate is a critical part of what the Department of Agriculture, Food and the Marine does. A key priority for budget 2017 was to prioritise the ongoing implementation of the rural development programme and the seafood development programme and to fulfil the commitments in A Programme for a Partnership Government. I have also continued to provide support for the forestry and horticulture sectors, various State agencies within my remit and the horse and greyhound fund. My colleague, the Minister of State, Deputy Andrew Doyle, will update the House in more detail on these areas of expenditure.

The €4 billion rural development programme provides a vitally important stimulus for the rural economy. In 2017 rural development funding will be increased by more than 21%, from €494 million to over €600 million. The agri-environmental scheme, GLAS, will benefit from additional funding. The uptake of the first two tranches has been a major success, with a total of 38,000 farmers already having signed up to the scheme. The additional funding will enable me to open up the scheme further in the near future. We anticipate that an additional 12,000 applicants could be accommodated. I am also increasing funding for locally-led schemes, including farming in the Burren, the freshwater pearl mussel scheme and a scheme which specifically targets further conservation measures for the hen harrier.

A sum of €52 million will be provided for the beef data and genomics programme next year. The funding which I am making available will permit the reopening of this innovative scheme to some new additional participants.

I am providing €50 million for the TAM scheme in 2017. We already have funded six measures and will launch a TAMS tillage measure in the near future. A sum of €25 million is being provided for a knowledge transfer scheme which will include participants in the beef, dairy, equine, sheep, poultry and tillage sectors.

As members are aware, €25 million is being provided for the sheep sector, as per a programme for Government commitment.

The €241 million European Maritime and Fisheries Fund provides for a €43 million investment in 2017 in a range of programmes, including capital investment in the seafood processing and aquaculture and fishing sectors to foster growth in production, value and employment and enhance sustainability and competitiveness. On the marine sector, in particular, I know that the Leas-Cheann Comhairle will welcome the announcement of a tax credit of €1,270 for fishermen employed in the sector, giving them an ability to earn a decent living and bringing them into line with others involved in the fishing industry.

The budget also provides for measures to address income tax volatility and provide supports for the self-employed through the earned income tax credit, the extension of PRSI benefits and so on. Overall, this is a positive budget for a sector that has helped to rebuild the economy from its knees following the crash in recent years. I commend it to the House.

See this speech in context