Willie Penrose (Longford-Westmeath, Labour)
Link to this: Individually | In context | Oireachtas source

10. To ask the Minister for Agriculture, Food and the Marine the action which has been taken to support the Irish mushroom industry in light of Brexit; his future plans in this regard; and if he will make a statement on the matter. [37566/16]

Willie Penrose (Longford-Westmeath, Labour)
Link to this: Individually | In context | Oireachtas source

One of the first casualties of the UK's June decision on Brexit and the consequential fluctuation in sterling was the mushroom industry. At least four significant farms have gone to the wall and more will follow. More than 90% of our mushrooms are exported to Britain and it behoves us all to design an appropriate scheme of help for the producers at this critical juncture for the industry.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | 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.

Willie Penrose (Longford-Westmeath, Labour)
Link to this: Individually | In context | Oireachtas source

While the establishment of the cashflow support agricultural loan scheme is welcome, I suggest it is a kind of patchwork solution. More concrete measures are needed. The grant payments that were mentioned by the Minister of State are always delayed. It is incredible. Grant payments to the mushroom industry always come at the very end. When this matter was considered by the agriculture committee, complaints were made about the slow payment of grants. Given that the mushroom industry is located in rural Ireland, including areas where people would never qualify for any other schemes, and in light of the importance of providing work for rural people, surely the rendering of temporary assistance to the industry should be considered to help it to get over this problem and to secure its future. Perhaps a temporary reduction in employers' PRSI from 8.5% to 4.25%, as was done in 2012 and 2013 to assist other industries, could be considered as a way of helping this industry to get over the hump in the interim.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I appreciate the points that have been made by the Deputy. As my colleague, the Minister, Deputy Creed, mentioned in an earlier response, he is going to London again to meet his UK counterpart, Andrea Leadsom. He has made several similar trips to meet the chief executives of the various retail multiples that sell Irish produce on to consumers. These multiples are our customers in our biggest market. The reality is that if they do not buy into the problems we are encountering as a result of the fluctuations in the value of sterling, a solution that will work in the long term cannot be found. I think that has been recognised. The Department is working closely with the various players, including some of the major players, to develop a long-term strategy that will provide some kind of mudguard against this kind of fluctuation in the future. It will not be easy to develop such a strategy in the absence of a stark realisation on the part of our purchasers in the UK that they need to act as well. That is why such an effort is being made to reaffirm to them the point that they must make a gesture that shows they are prepared to increase prices. Irish producers are doing everything right. They supply a product of the highest possible quality and they do so on time.

Pat Gallagher (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I remind anyone who might be planning ahead that there are just ten minutes left on Question Time.