Andrew Doyle (Wicklow, Fine Gael) | Oireachtas source

I am keenly aware of the challenge that the mushroom sector is experiencing in the aftermath of the British referendum decision to exit the European Union. In particular, in light of the recent fluctuations in currency, I am focused on working with the industry to meet these difficulties in the months and years ahead.

A payment of just under €1.57 million was made to one of our mushroom producer organisations in October. The budget for 2017 underpins my Department’s efforts through strategic investment in key areas, such as its agencies and the agrifood sector. As part of the budget, additional funding of €700,000 has been secured for capital investments in the commercial horticulture sector. This will increase the budget for this scheme to €5 million next year. The horticulture sector will also have access to the €150 million low-interest cashflow loan support that was announced last month in the budget. This will provide access to highly flexible loans for up to six years for amounts up to €150,000 at an interest rate of 2.95%. The impact of the devaluation of sterling on mushroom producers and grower margins is a problem that has developed over a short space of time. Grower production of this highly perishable product must be well aligned with demand. The mushroom sector is at particular risk because of its high dependency on the UK market. I am monitoring closely the situation with regard to sterling volatility. The Minister has established a dedicated unit in the Department to consider the direct impact of Brexit on the industry. There has been a modest reversal in the decreasing sterling exchange rate, with sterling now holding at approximately 85p to the euro. The Department and the various State agencies, particularly Bord Bia, Teagasc and Enterprise Ireland, are working closely with the industry to provide the necessary support and assistance. Bord Bia is actively supporting this sector in the areas of market intelligence, UK consumer research and quality assurance. It recently held a currency and negotiation workshop that was specifically targeted at the sector. I understand this was well received by the mushroom industry.

Additional information not given on the floor of the House

Bord Bia is running a marketing intensification programme that aims to provide targeted marketing supports to companies with high dependency on UK markets. Grant supports will be prioritised to assist companies in strengthening their position in that market and in their efforts to identify new markets. In the coming weeks, I will continue to meet senior executives from the UK retailers to highlight the obstacles producers are facing. I understand that representatives of our growers have received a more positive reaction from their UK multiple customers in recent weeks as they have sought to make the case for fair and reasonable returns for their produce from the marketplace. I draw attention to the support being provided to the industry through national and EU schemes. Under the 2007-13 national development plan, the Department implemented the scheme of investment aid for the development of the commercial horticulture sector. During this period, the Department paid out €4,039,629 in grant payments to mushroom growers. This supported €10.1 million in investment. To ensure ongoing support for the sector, my Department extended the horticulture investment aid scheme under EU sanction to run until 31 December 2019. In 2014 and 2015, a total of €1,635,190 in grant aid was paid to mushroom growers. This supported investment of €4.1 million by those growers. Under the 2016 horticulture investment aid scheme, my Department issued approvals of €1.33 million in aid to growers in the mushroom sector, supporting €3.3 million in proposed investment. I will provide a commitment to ensure payments under this scheme are made as early as possible to try to alleviate financial pressures growers are facing. The EU producer organisation scheme is a vital support for mushroom growers. Approximately 65% of Irish growers are in a producer organisation at present. This scheme is an important mechanism that allows growers to achieve greater bargaining power in the marketplace by becoming part of a larger supply base. A total of €39.8 million was paid to mushroom producer organisations as part of the producer organisation scheme between 2005 and 2015.

See this speech in context