Catherine Murphy (Kildare North, Social Democrats)
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5. To ask the Minister for Agriculture, Food and the Marine his contingency plans both short and long-term in the context of a Brexit both with and without a backstop in view of well established and highly integrated Ireland and UK supply chains; and if he will make a statement on the matter. [41575/18]

Catherine Murphy (Kildare North, Social Democrats)
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This questions relates to contingency planning for Brexit, with or without a backstop.

The agrifood sector is exposed to risks and geography plays a part in the fresh food industry. Will the Minister give an indication of the scenario where there is a deal and of the scenario in which we will rely on the backstop?

Michael Creed (Cork North West, Fine Gael)
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In line with the Government decisions of 18 July and 18 September, my Department has been working closely with other Departments on Brexit preparedness. The primary focus has been on the staffing, infrastructural and IT requirements that will arise in the context of the implementation of import controls at ports and airports on an east-west basis.

Depending on the shape of the final deal, these requirements are likely to be significant and will arise in respect of the import of live animals, plants and products of animal and plant origin from the UK into Ireland and the EU once the UK has become a third country. There are also likely to be significant export certification requirements for the export of such products to the UK, although this is a matter for the UK authorities.

Accordingly, I have made provision in my Department's Estimate for 2019 for the commencement of a phased process of recruitment of additional staff to carry out the greatly increased volumes of import controls and export certification arising from Brexit. A sum of €4 million has been set aside for this purpose, with a further initial provision in 2019 of just over €3 million to address ICT hardware and software requirements. Further expenditure is planned in these areas in 2020 and 2021, with full-year staffing costs from 2021 estimated to be €28 million.

My Department is also continuing to engage intensively with the Office of Public Works and other Departments on the additional infrastructure that will be required at ports and airports, in accordance with the Government decision of 18 September 2018.

Together with my colleagues, the Tánaiste and Minister for Foreign Affairs and Trade, Deputy Simon Coveney, and the Minister for Business, Enterprise and Innovation, Deputy Heather Humphreys, I recently launched a new Government communications campaign on Brexit preparedness. This will provide information to stakeholders on our planning activities, and includes a series of so-called "Brexpo" events during the month of October.

Additionally, the Government has introduced a range of measures to deal with the short-term impacts of Brexit. To deal with competitiveness issues, my Department introduced a €150 million low-cost loan scheme, new agri-taxation measures and increased funding under the rural development and seafood development programmes in the 2017 budget. In budget 2018, I provided €25 million to underpin a €300 million Brexit loan scheme to provide affordable flexible financing to Irish businesses, at least 40% of which will be available to food businesses. This scheme will be rolled out in 2019.

Under market diversification, my Department is supporting Bord Bia in its investment in market insight through its The Thinking House, and in market prioritisation initiatives aimed at identifying and developing potential diversification opportunities. I have increased funding to Bord Bia by 60% since 2014.

Additional information not given on the floor of the House.

As regards product diversification, I am supporting Teagasc in the development of a new national food innovation hub in Fermoy and will provide €6 million for this purpose in 2019.

I also announced further measures worth €78 million in this week's budget, which are aimed at helping farmers, fishermen, food SMEs and my Department navigate the many challenges associated with Brexit.

I assure the Deputy that the Government remains focused on supporting the agrifood industry through the challenges ahead. The Government will be firm in arguing that any agreement reached between the EU and the UK must take account of the serious challenges presented by Brexit for the sector, particularly given the unique circumstances on the island of Ireland and the importance of our economic relationship with the UK.Of course, ultimately, Ireland's objective in the negotiations is to have a trading relationship with the UK which is as close as possible to the current arrangements.

Catherine Murphy (Kildare North, Social Democrats)
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The short-term impacts for some, particularly smaller producers, will be on their survival and the flexibility of a loan scheme will be important. The smaller the producer, the less expertise they will have available to them. It will probably be about keeping the show on the road for small niche producers. The requirement for proximity to the market for fresh food producers means there is a high dependency on the UK. Has the Minister evaluated the flexibility of the loan scheme and examined its availability or the uptake of it by smaller suppliers in the sector? We all understand there are likely to be controls and checks at borders, and this infrastructure must be put in place, but looking at it from a producer's perspective, what contingency plans are in place for the survival of smaller producers?

Michael Creed (Cork North West, Fine Gael)
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I thank the Deputy. The agrifood sector has exposure to the UK market, which accounts for almost 40% of our exports, and if smaller and artisan producers want to put their toe in the water to export, the UK is the logical and obvious place to go. They are particularly challenged, and very often they do not have in-house expertise or resources to navigate all of the challenges. This is why considerable effort has been made by State agencies, including Bord Bia and Enterprise Ireland, to, in a way, handhold, reach out and assist these industries to prepare, to look at market diversification opportunities and to look at how they can navigate the challenges in their supply chain logistics, particularly because the sterling impact will be immediate. This is detailed work, which has been informed by the stakeholder consultation. The responses of agencies such as Bord Bia has been to tailor products to meet the specific needs of individual companies.

On the loan scheme, 40% of the existing €300 million working capital scheme is ring-fenced for small and medium-sized agrifood enterprises, including artisan food producers, because of the Department's contribution. It has only been on the market since earlier in the year and the drawdown is beginning to accelerate. It will be available over a number of years. I am anxious that awareness and access will improve in the coming weeks.

Catherine Murphy (Kildare North, Social Democrats)
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What are the stakeholder meetings telling the Minister about the flexibility of the loan scheme? Is he listening to the stakeholders? Is he taking initiatives to change the nature of the scheme? Hand holding is fine to point people in directions but it may well be that systems are required to link suppliers as opposed to individuals trying to get a loan through the loan scheme and trying to navigate it themselves. It may well be that a collaborative approach is required and State intervention might be needed to assist.

Michael Creed (Cork North West, Fine Gael)
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The range of assistance is significant and some of it takes the form of loans. Loans are not always what are needed so in this year's budget the Department has a €13 million loan fund for small and medium-sized enterprises to assist with innovating new products. It will also assist companies with a product that was specifically targeted to the UK market to diversify and tweak the product for a different market. There is capital grant assistance and assistance for product innovation through further investment in the food innovation hub in Moorepark and the prepared consumer food facility at Ashtown. There is a range of incentives. The €300 million loan scheme is for working capital for a sector that has proved it is Brexit exposed. The consultation also identified a need for access to loans at competitive rates for capital investment. We will bring to market a further €300 million loan fund specifically geared for longer-term low-interest finance for capital investment in plant or facilities that will assist companies to navigate the Brexit challenge.