James O'Connor (Cork East, Fianna Fail) | Oireachtas source

I thank the Minister for being here. I am conscious that I am probably one of the first Deputies elected to Dáil Éireann who grew up with the Good Friday Agreement in place. I am part of a generation that saw peace come to this island and violence eventually come to an end.

This peace is now being threatened by the withdrawal of the United Kingdom from the European Union and the UK Internal Market Bill. It is welcomed that the EU will not allow the UK Internal Market Bill or any other legislation that would undermine the protocol in Northern Ireland to be used as a negotiating tactic by the United Kingdom. We cannot and must not allow peace on this island to be undermined or an international treaty obligation to be broken. I support the Minister, the Government and the EU in ensuring that these laws are upheld.

However, we must recognise that from 1 January 2021, the way we trade with the United Kingdom will be dramatically different. We must prepare accordingly and ensure a smooth transition occurs. I am keen to take the opportunity today specifically to speak about the needs of our agricultural sector, with a focus on protecting family farms. I live on a family dairy farm. I am acutely aware of the potential harm that could be done to this sector by a disorderly Brexit. Brexit will change the way the Irish agrifood business trades with the UK, its customers and suppliers. The United Kingdom will become a third country at the end of the transition period. This will see the introduction of new customs formalities, including import and export declarations, prenotifications for certain products and produce, licence requirements and other regulatory requirements. I wish to highlight the issues faced by the dairy industry. I do so because thousands of families in my constituency of Cork East rely on the agrifood sector for their income.

While I am the first to recognise that Ireland's dependence on the UK market has fundamentally changed since Ireland and the UK first joined what was then the European Economic Community, it is clear that the Irish dairy industry is highly reliant on exports to the UK market. The UK is Ireland's largest market for food and drink, with 40% of our food exports destined to the United Kingdom. In 2016, 34% of Ireland's dairy exports went to the UK, representing 53% of our cheese exports, 29% of our butter and 12% of our skim milk powder, SMP. Exports of cheddar cheese were 78,000 tonnes, representing 82% of all cheddar imported by the UK in 2016. Ireland is the only significant exporter of cheddar to the UK market and the UK is the only market of significance for Irish cheddar. We must ensure this market is protected and a sensible agreement must be reached to ensure that such markets stay open.

We face two major issues with the dairy industry. The first is an over-reliance on a single market and the potential disruption of a vital supply chain. While I welcome the supports that the Government is proposing in its Brexit readiness action plan, including a €2 billion credit guarantee scheme, we need to think more broadly about market diversification of this industry. Major capital investment has been made across the country by family farms in recent years since the abolition of the quotas. There is a real fear that this will potentially all go to waste. Irish farm output has jumped by almost 50% since 2010, predominantly because of the lifting of the milk quotas. Frankly, there needs to be more focus on a transition out of the UK market. We cannot act within the reality of what we want but must act on the reality that is. It is growing every more likely that we will find it difficult to have any sort of comparable access to the UK market that we previously enjoyed. We must act accordingly.

I know great work has been done by the likes of Bord Bia and other semi-State bodies to promote market diversification. However, it is critical that supports are put in place at local level to ensure small family farms are supported in this market transition. We should not be seen to be simply plastering over the cracks and hope that the house will not collapse when we should have been looking for a new house to start afresh.

The second issue I mentioned was the need to ensure that the Northern Ireland protocol is upheld. We must ensure the Union customs code and other EU provisions necessary to preserve the integrity of the Single Market are upheld and ensure that they continue to apply to and in Northern Ireland. The current highly integrated all-Ireland milk processing structures will not survive if these are not upheld. It is true that were we able to reconfigure our supply chain in the wake of Covid-19, and many efforts have been made to do so, it could do much to protect the sector. However, in terms of viability, the dairy sectors of Northern Ireland and the Republic of Ireland will be dramatically and negatively impacted if a configuration away from Northern Ireland was to arise. We must have all-Ireland approaches when it comes to managing our resources. Any negative blockade to this would be unwise for the maintenance of peace. It would be unjustified economically and not in the best interests of family farms across the country. I know the Minister is committed to ensuring the Northern Ireland protocol stays in place. We need to do all we can to protect our agrifood connections with the United Kingdom.

I wish to echo Deputy Richmond's comments welcoming the new British ambassador to Ireland. I know he arrived in the past week. I also wish the former ambassador the best of luck in his future career.

See this speech in context