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

The United Kingdom's decision to leave the European Union presents significant challenges for the Irish agrifood sector. My Department, together with its agencies and stakeholders, has been carefully considering the potential impacts of a UK exit, looking at the areas in which the greatest risks may arise and on which we will need to focus when negotiations begin. The main areas in which impacts are foreseen are currency fluctuations, tariffs and trade, the EU budget, regulations and standards, and customs controls and certification. The United Kingdom's exit vote raises complex issues for the fisheries sector. Significant challenges are also foreseen from a North-South perspective.

My Department is engaged in detailed contingency planning and has published a summary of the key actions we are taking by way of an immediate response to the United Kingdom's decision, as well as feeding into the central contingency framework being co-ordinated by the Department of the Taoiseach. We are also continuing to deepen our analysis of the likely impacts.

A number of steps have been taken to ensure a sensible and coherent approach will be adopted. They include the establishment of a dedicated Brexit unit, the convening of a consultative committee of stakeholders and the establishment of a contact group under the auspices of the Food Wise 2025 high level implementation committee. The Department is also participating fully in the new sectoral work groups established by the Department of the Taoiseach under the auspices of the interdepartmental group on Brexit which, in turn, feeds into the new Cabinet sub-committee on Brexit. The Department has also chaired the first meeting of a special agrifood subgroup which took place on 19 October.

The most immediate impact for agrifood exporters has arisen from changes to the euro-sterling exchange rate and a number of actions are being taken to mitigate it. Bord Bia and Enterprise Ireland have been providing practical guidance for small and medium-sized enterprises, SMEs. Recently, Bord Bia announced a number of measures covering areas such as managing volatility impacts, providing a consumer and market insight, deepening customer engagement and extending market reach, which are aimed at helping companies to maintain their competitiveness. Similar support is being provided by Enterprise Ireland.

Budget 2017 financially underpins the Department's Brexit mitigation efforts through strategic investment in key areas of my Department, its agencies and the agrifood sector. They include access to an innovative low-interest agriculture cash flow fund of €150 million, agriculture taxation measures designed to address income fluctuations, increased funding for Bord Bia and Bord Iascaigh Mhara, BIM, investment in research and development and innovation, and increased expenditure on the rural development programme and the seafood development programme.

I continue to support efforts to diversify market outlets in order to reduce our dependence on the UK market, including through participation in trade missions such as the one recently to South-East Asia and the planned mission to north Africa and the Gulf region.

As regards CAP payments, there are potential implications for the EU budget. It is expected that the UK exit will result in the loss of the United Kingdom's contribution to the EU budget of between 5% and 10%, or approximately €10 billion. This will likely have implications for future spending decisions in what is already a tight budgetary framework. CAP funding accounts for some 37% of the EU budget and we can expect additional pressure for further contraction in CAP funding in the years ahead. I am aware of the potential issues in this regard and assure the Deputy that my departmental officials and I will be focusing on this aspect during the exit negotiations.

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