Martin Heydon (Kildare South, Fine Gael)
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38. To ask the Minister for Agriculture, Food and the Marine the measures being taken within his Department to protect and promote the agricultural sector following the UK vote on Brexit; and if he will make a statement on the matter. [21314/16]

Kevin O'Keeffe (Cork East, Fianna Fail)
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40. To ask the Minister for Agriculture, Food and the Marine if he envisages supports being put in place in view of the collapse in price in the dairy sector as milk prices will come under further pressure following the United Kingdom's exit from the European Union. [21318/16]

Michael Creed (Cork North West, Fine Gael)
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The decision of the UK to leave the European Union is one that creates considerable challenges for the agrifood sector. The UK is by far our largest trading partner. Last year we exported almost €5.1 billion worth of agricultural products. This included more than €1.1 billion in beef products and almost €970 million in dairy exports. Ireland is also the UK’s largest destination for its food exports, worth €3.8 billion last year.

This bilateral trade takes place on the basis of harmonised EU rules on animal and public health, and labelling, without complex certification, quota limits or customs duties and tariffs. It is underpinned by the vital support of the CAP budget, to which the UK is a significant net contributor.

Given these linkages and as the UK is a net food importer, both countries have a strong interest in maintaining a close agrifood trading relationship. In addition, the resilience of the Irish agrifood sector is well recognised. Together with the strong commercial relationships built up over years of trading, this will help us to negotiate our way through the challenges ahead.

It is important also to bear in mind that the precise implications of the referendum outcome will depend on the trade and other arrangements ultimately negotiated between the European Union and the United Kingdom. These negotiations may take up to two years - perhaps longer - and over that period existing arrangements will continue to apply.

Nevertheless, my Department has engaged in detailed contingency planning for the possibility of this result and has published a summary of the key actions we are taking to address the contingencies arising from the UK’s decision.

The most immediate concerns for exporters centre on euro-sterling exchange rates. It should be noted that the fall in the value of sterling against the euro, while significant, is not unprecedented. Nevertheless, a sustained period of currency volatility could be of concern. In that regard, the Central Bank of Ireland has pre-established contingency plans to deal with market volatility surrounding the referendum result. The bank will engage with the Department of Finance and individual financial institutions regarding potential risks. Actions by ECB and other global actors will be monitored closely.

I have also asked the relevant agencies, including Bord Bia and Enterprise Ireland, to provide practical guidance to SMEs. Last week Bord Bia announced a number of measures to support food and drink businesses. These measures cover areas such as managing volatility impacts, providing consumer and market insight, deepening customer engagement and extending market reach, with the aim of helping companies maintain their competitiveness. Similar support is also being provided by Enterprise Ireland.

Aside from currency fluctuations, the main areas in which potential impacts are foreseen relate to tariffs and trade, the EU budget, regulations and standards, and Customs controls and certification, while complex issues also arise for the fisheries sector.

Additional information not given on the floor of the House

However, we must remember that our trading relationship with the UK is not altered in any way until the negotiation process that will dictate the terms and conditions of the UK’s departure is completed.

In the meantime, and as part of our overall contingency planning, I have taken a number of measures to ensure a sensible, coherent approach is adopted, namely: I have established a dedicated unit in my Department to work on all of the issues that I have mentioned; I have convened a consultative committee of stakeholders, which met for the first time last week, to ensure a full exchange of information as the negotiations proceed; I am also ensuring that the response of the relevant agencies is fully co-ordinated through a contact group established under the Food Wise 2025 high level implementation committee; and the Department will continue to feed into the central contingency framework being co-ordinated by the Department of the Taoiseach.

Martin Heydon (Kildare South, Fine Gael)
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We discussed this matter the last time the Minister took questions before the vote on Brexit. At that time he outlined some of his efforts to communicate with Northern Ireland farmers and others as his predecessor also did. Unfortunately, from an agriculture perspective we have got the result we did not want. The Minister has outlined some of the very good reasons we did not want it to happen and it will be a challenge for us. There is considerable concern among many farmers and businesspeople in the agriculture and food sector. I ask that those specific agriculture-related concerns are raised when the Taoiseach is meeting various European leaders. It is one of the strongest reasons for us needing special consideration for our position.

The bloodstock industry, which is worth €1.1 billion to our economy, is inextricably linked to the UK in terms of our sales of foals and horses. Any changes to tariffs or borders with implications on trade would have a devastating impact on a bloodstock industry that is worth a huge amount to our economy and employs over 16,000 people. These are the key points that I am sure the Minister and his officials are bearing in mind.

Kevin O'Keeffe (Cork East, Fianna Fail)
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One does not want to have too much repetition today, but it is a crisis situation. Everybody talks about when the British will trigger article 50. My concern is the six months leading into it. It is like the sheriff being sent to a property and the person in trouble gets word of it - he could clear out the contents. That is my concern. There is a window of six months before the incoming British Prime Minister proposes to trigger article 50 and I am concerned that the damage could be caused by then regarding our trade deals etc.

My question related to the milk sector in general. Over 12 months ago, organisations were putting the Government under pressure about collapsing milk prices. At that time it was barely above the cost of production at 28 cent or 29 cent a litre. Now the base price is 21 cent or 22 cent a litre. Farmers have gone very silent. They are not silent because they are doing well; they are silent because they are afraid to talk out. There is concern there. I go to agricultural shows around the county and one would know there is a problem there, but they are saying nothing. It is a new form of protest to say nothing. They are afraid that they are not being listened to. I ask that more emphasis be placed on the next six months as opposed to the period after that when the UK leaves the EU.

Michael Creed (Cork North West, Fine Gael)
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I thank the Deputies for their questions. The Government has done a great deal of contingency planning for Brexit. This work has been done across all Departments and has been co-ordinated by the Department of the Taoiseach. The Department of Agriculture, Food and the Marine has been representing the interests of the agrifood sector as it has been feeding into the Brexit contingency process. Those interests can be summed up by the fact that we export agricultural products worth €5.1 billion to the UK. We are doing everything we can at that level. We are very conscious that the immediate impact relates to the decrease in the value of sterling. I have dealt with that issue already. I acknowledge the point made by Deputy Heydon about bloodstock exports, in particular. This question was raised as a specific concern when I met representatives of the bloodstock industry yesterday. Obviously, we are very anxious to maintain such exports. The Department of the Taoiseach has been doing preparatory work. As the Deputy will appreciate, the Taoiseach visited Angela Merkel earlier in the week and the Minister, Deputy Flanagan, has met his German counterpart. I will be meeting my colleagues in the Council of Ministers. We are creating and elevating an awareness of the unique position we are in because of our relationship with the UK and our trading exposure there.

Deputy O'Keeffe raised a few points about this matter as it affects the dairy side. This matter will be on the agenda at next Monday's meeting in Brussels of the Council of Agriculture Ministers, which I will be attending. We expect to receive from the Commissioner some proposals to assist the dairy industry. On previous occasions, we have successfully prosecuted the case for assistance at Commission level. My Department made payments earlier this year on foot of an announcement that was made in October 2015. That funding of €12.7 million was matched by €12.7 million in Exchequer funding. Deputy O'Keeffe will be interested to hear that these moneys went to both the dairy and pigmeat sectors. I appreciate that such approaches do not constitute an answer in themselves in light of the scale of the losses, especially this year when prices have decreased so significantly. Consideration must also be given in this context to the provision of direct aid, the bringing forward of single farm payments and the initiation of discussions with the banks. I accept the point made by Deputy O'Keeffe in the last case. I have met representatives of the three major banks - Bank of Ireland, AIB and Ulster Bank - to create awareness of the fact that a cohort within the dairy industry is significantly exposed as a result of investments that have been made. I have to say my request for forbearance in that context received a good hearing from the banks. I appreciate that a perfect storm is brewing at the back end of this year when merchant credit, tax liabilities and superlevy bills will come together. We need that kind of forbearance from the banks. We are working within the leeway we have been given by the Commission to develop other financial packages that might assist farmers, particularly in the context of the difference between the cost of a package that we might be able to put together and the cost that is being paid at present for credit, especially merchant credit and short-term loan facilities from the banks. We are working on a range of issues.

Martin Heydon (Kildare South, Fine Gael)
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I thank the Minister for the response. I was about to make a point about the assistance that can be provided by financial institutions and others. It is good to see that the Minister is on top of such an approach. Will he outline whether any opportunities that Brexit might provide for the agricultural sector have been revealed during the contingency process? I appreciate that the opportunities in the financial services sector and other sectors are more obvious. We are trying to look for a silver lining in every cloud. Does the Department believe there are some areas in which Brexit might benefit the agricultural sector? I particularly welcome the Minister's comments on the bloodstock sector which, like the beef production sector, is a key area that is very vulnerable. It is important for the Government to take a co-ordinated approach. As the Minister has outlined, such an approach is being taken by the Minister for Foreign Affairs, the Taoiseach and the officials in his own office.

Kevin O'Keeffe (Cork East, Fianna Fail)
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I thank the Minister for his response. On the issue of financing, would the Government be prepared to put in place a low-cost credit scheme under the state aid mechanism? Would that be possible? The Minister mentioned earlier that the CAP payments are secure for this duration, but I remind him that the mid-term CAP review is ongoing. The Minister and his colleagues have followed up the Food Harvest plan with Food Wise 2025. Farmers need to be able to look forward as regards projected incomes and sources of income from the EU. They need to know how they can make a living.

Michael Creed (Cork North West, Fine Gael)
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While I appreciate that markets are extremely difficult on the dairy side at present, I remind the House that markets bounce back. The Brexit situation is complicating what was already a difficult situation, but the markets will recover. I do not want to predict when that will happen, but there are straws in the wind. I will not put it more strongly than that. We may have bottomed out and the recovery may be evident in 2017. That remains to be seen. It is important we do not add to the volatility in the market by making statements suggesting we are in a doomsday scenario. The market will recover. We will manage to ride out the sterling issues. If additional policy interventions and instruments are required, they will be considered by the Government in due course. We have been in this space - I refer to where sterling is today relative to the euro - on a number of occasions over the past ten years. I assure Deputy O'Keeffe that we are exploring the option of low-cost credit. I accept that our bank charges are out of kilter with the cost of credit internationally. We are working with organisations like the Ireland Strategic Investment Fund and the Strategic Banking Corporation of Ireland to examine how this issue might be addressed. We are working on a range of fronts. I regret to tell Deputy Heydon that I do not see an upside of Brexit for the agriculture sector. We are trying to ensure our unique relationship with the UK and our dependence on the UK as a significant market is recognised during our negotiations on Brexit.