Thursday, 14 July 2022
Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
My Department is currently in discussion with the Department of Public Expenditure and Reform about the potential for further support measures for the agrifood and fisheries sectors to address negative impacts from Brexit. The Brexit Adjustment Reserve has strict criteria that must be met to qualify for funding. In particular any proposed measures must address the direct negative impacts arising from Brexit.
A number of sectors have been adversely affected by Brexit with immediate effect. To date, measures have been funded to support the fisheries and horticulture sectors, including the new measure, the Minister of State, Senator Hackett, announced last month to support the development of the seed potato sector. A capital investment scheme to support the processing sector in diversifying into non-UK markets is also in place.
Overall, however, the value of our main agrifood exports to the UK has been resilient, with increases in many categories in 2021. Nonetheless, we will continue to monitor the impact of increased competition in the UK market for Irish food exports as a result of new UK free-trade agreements with third countries. Non-tariff barriers may also increase costs for Irish businesses exporting products to the UK. Over the coming years, these factors may increase the competitiveness challenge for Irish products on the UK market, which is why I am exploring whether BAR funding can support measures which would future-proof and build resilience in the agrifood sector. This approach is not explicitly provided for in the BAR regulation, so it requires further analysis which my Department is currently undertaking in consultation with the Department of Public Expenditure and Reform.
I emphasise that the eligibility criteria for BAR in respect of any measures proposed must be met, as must other regular EU funding control requirements, including state aid rules.
The Minister will recall that during the Brexit negotiations, stories of Irish farming, fishing and rural communities were at the forefront not only of the Irish political approach, but also the EU's deliberations. Those stories ensured that Ireland was allocated €1 billion from the BAR. I do not believe they have received the benefit of that. I welcome that the fishing sector received a large allocation. I also welcome the €3 million allocated to the seed potato sector, something I advocated for. As the Minister said, €100 million has been provided to the processing sector. Considering all the challenges and the fact that Brexit has had an impact not just on market access but also on input costs, we need to go much further much quicker.
Brexit posed a massive challenge to our economy across the board. As the UK is the main destination for our agrifood exports, the risk factor there was massive.
The fact that there was a trade and co-operation agreement mitigated some of the worst fears we had in regard to tariff barriers and other issues. Thankfully, since Brexit, trade with the UK has been very strong, as have prices and value. Of course, there are structural challenges in regard to how that evolves over time. We are working hard to see what opportunities might be there. While the trade and co-operation agreement has protected the wider economy and sheltered agriculture, it has had a very real impact on fisheries. We are in the process of delivering up to €400 million in funding for the fisheries sector to support and invest in it. Any ideas in this regard that Deputy Carthy may have are very welcome. My ears are fully open. As he is aware, I want to support the agri-food sector in every way possible, including any mechanisms that might be there through the BAR. If Deputy Carthy has any particular suggestions, I would welcome them.
The Minister is aware that I sent my ideas to him in March in respect of the sectors that could benefit from this reserve. The difficulty is that farmers are told that there is a pot of €1 billion to support those who are impacted by Brexit, and although their sector is potentially most impacted, they have not got a fair share as of yet. We know that there are significant challenges facing the sector, in particular as a result of input costs soaring in the past year or so.
Unfortunately, the European crisis reserve was not utilised through co-financing. We have not seen the benefit of the €1.5 billion from carbon tax receipts that we were told would be additional to the CAP. Instead, they were incorporated into the CAP. In terms of the Brexit adjustment reserve, I fear that farmers will not get their fair share. Of course, I am happy to work with the Minister in any way I can to support his efforts, but can we ensure that this issue is prioritised across the Government?
As I said in my response, we are looking at that in great detail. The criteria for qualifying for the Brexit adjustment reserve are very specific. One has to show the direct impact. Thankfully, agri-food has done well since Brexit, in particular our trade with the UK. We are looking at any potential options.
In terms of any content the Deputy might have or particular suggestions, it is easy to talk about a fair share and to talk in generalities, but there is not much content or proposals in what he has said this morning.
That is what my Department is looking at in great detail, because we want to support the agri-food sector in every way we can.
As Deputy Carthy is aware, in terms of the immediate cost pressures, I have provided a €56 million fodder support scheme, which delivers €1,000 to each family farm in the country up to 10 ha, directly to support the sector and farm families to deal with the cost challenges that exist. I have done it separate to the emergency support of €15 million because there is less red tape involved by going through national Exchequer funding.