Wednesday, 22 June 2022
Saincheisteanna Tráthúla - Topical Issue Debate
I note that the Minister of State, Deputy Butler, is giving the reply which will have been given to her. I do not expect the Minister of State necessarily to be in charge of this particular issue. I wanted to raise the issue of the Brexit Adjustment Reserve, BAR, fund, as it relates to the fishing industry. I anticipate that the Minister of State will tell me they are working on it and that it is open to the SME sector. This fund was set up to ensure that money flows into the fishing industry to meet the effects of Brexit. This is money that could very easily go into the fishing industry to allow for supports for processing in particular in a way that ensures jobs are maintained, capital investments are made and innovations can be brought to the industry to allow it to at least survive in the teeth of the storm that is Brexit and its impacts.
I have been in contact with the Irish Fish Processors and Exporters Association, IFPEA. It tells me six larger companies are now excluded from the processing capital investment scheme resulting from BAR. This is completely wrong and contrary to the principles of the Brexit Adjustment Reserve, where no one is left behind. The six projects earmarked by these companies would have a massive positive impact in their respective communities and would also be real drivers for change within the fishing industry, creating new employment and greater value in exports. They would sustain their companies with product diversification and high-end value added. As a member state, Ireland should be highlighting and pushing forward projects such as these as opposed to the current approach where the fund is deemed to be accessible only to SMEs.
The Minister of State may refer to the issue of state aid rules in her reply. When he visited Killybegs in September 2021, the Commissioner for fisheries said that there are no state aid rules and we have absolute flexibility to prioritise our funding. We could open that up to larger producers and bring them under the scheme as well. That flexibility is key to ensuring there is a successful scheme. The larger companies themselves can grow the number of employees they have. There is the issue of sub-supply of plant and machinery into the sector under the capital expenditure element. Contractors are ready, willing and able to provide services. They are all waiting for news of this scheme. Increasingly they are becoming frustrated by the fact that the scheme is not up and running and that the manner in which the scheme is devised excludes larger processors. I am asking the Minister of State to take that on board.
I thank the Deputy for his question. As he quite rightly said, I am responding on behalf of the Minister, Deputy McConalogue, who is unable to attend. The Department of Public Expenditure and Reform has responsibility for administering the European Union's Brexit Adjustment Reserve, BAR, in Ireland. My colleague, the Minister, Deputy Michael McGrath, is best placed to provide an overview of how Ireland's approach to the BAR is evolving more generally. I am, however, on behalf of the Minister for Agriculture, Food and the Marine, happy to provide an update on the latest developments in BAR-related measures to support the agrifood and fisheries sectors.
A core objective of the BAR is to provide financial support to the member states and economic sectors most affected by Brexit. Both the fisheries and agrifood sectors were identified from an early stage as two of the economic sectors in Ireland most likely to face very difficult consequences. It is also worth recalling that the eligibility criteria set by the European Union to qualify expenditure under the reserves are stringent.
A key criterion is that any proposed expenditure must demonstrate a direct link to negative impacts arising from Brexit.
As regards the fisheries sector, the outcome of the EU-UK Brexit negotiations resulted in a reduction in access to fish stocks for the sector. This clearly has negative consequences for the sector that are directly associated with Brexit. In response to this outcome, the Minister, Deputy McConalogue, established the seafood sector task force in March 2021 to examine in detail the impacts on the fishing sector and coastal communities and to recommend mitigation measures. Several schemes recommended by the task force have been put in place to support the sector and these schemes are likely to be supported by the Brexit adjustment reserve. The schemes include: the voluntary tie-up schemes for 2021 and 2022, worth more than €30 million; a €3.7 million inshore fisheries business model adjustment scheme; a €1 million inshore marketing scheme; a €35 million local authority marine infrastructure scheme; a €25 million blue economy enterprise development scheme; and a €45 million seafood processing capital support scheme.
In respect of the agrifood sector, to date in 2022 support measures worth more than €4 million have been implemented in the horticulture sector, including supports for the seed potato sector and a UK promotional campaign for Irish mushrooms. A further €7 million has been allocated to fund an Enterprise Ireland capital investment scheme for meat and dairy processing. This investment is being used to fund development of new products and markets.
For the agrifood sector, it is clear that the full impacts of Brexit are still developing. For example, the UK has not yet imposed full import control requirements on agrifood products arriving from the EU which, when applied, will add costs to Irish supply chains to the UK. In addition, the ongoing uncertainty associated with the implementation of the Northern Ireland protocol will have negative impacts on Irish exporters to the UK in terms of their planning and investment decisions. Finally, the UK agrifood market will continue to evolve in the coming years, including as result of trade liberalisation via new UK free trade agreements with third countries, and this can only increase competition in the UK market for Irish exporters.
All these consequences of Brexit are ongoing for the Irish agrifood and fisheries sectors and will impact on their future competitiveness on the UK market. I take on board what the Deputy said in respect of six larger fishery organisations being excluded. I will certainly bring that back to the Minister.
I thank the Minister of State. When the scheme was being set up, there was an interaction with the task force and discussions on this issue. My understanding is that the recommendations of the seafood task force were to support all sectors of the industry equally because no sector of the Irish fishing industry escaped the negative impacts of the Brexit deal. Enterprise Ireland intervened at the task force to outline where flexibility existed and how state aid would permit supports to the non-SME sector, similar to what occurred during Covid. It was self evident at the task force meetings that some people within the Department had an ideological difficulty with the State supporting certain sectors of the fishing industry even though the European Commission clearly permitted it and actively encouraged it. The evidence of that is the statement of the fisheries Commissioner to which I referred. In addition, we have the remarks of Elisa Ferreira, the Commissioner for Cohesion and Reforms, who stated:
In moving forward, we do not want to leave anyone behind.The funding that Ireland will receive will contribute to improve living standards, support economic growth in the country and mitigate the negative impacts in local communities. Those are fishing and coastal communities.
At the end of the day, we want to see the money flowing. Money needs to start flowing into those communities and into processing, along with providing real-time supports for a sector that all present will agree has taken a hammering as a result of Brexit. We do not want to be creating bureaucratic entanglements that prevent money from flowing into the communities that so badly need it.
I again thank the Deputy. The Department of Agriculture, Food and the Marine is currently assessing whether these evolving impacts are eligible to be addressed by the BAR-funded measures that would future-proof the sector against such impacts, as the Deputy stated. It is also engaging with stakeholders and the Department of Public Expenditure and Reform to confirm which impacts and measures are eligible and meet the criteria for BAR funding. I again assure the House that the Government will explore all opportunities to develop measures to support the industry to adapt to the challenges Brexit continues to present for Irish food and fish producers. As I said, I will certainly raise the issue with the Minister and ask him to reply directly to the Deputy.