Michael Creed (Cork North West, Fine Gael) | Oireachtas source

I am very happy to have the opportunity to speak to the House today about the implications of Brexit for our agrifood and fisheries sectors. In my opening comments, I would like to provide Members with an outline of the areas that are most likely to be affected by the UK leaving the EU and to give an overview of the preparatory work carried out by my Department to date. I will also explain how we are feeding into the overall Government response to Brexit. I look forward to hearing Members' contributions and engaging with them on this very important topic.

The UK's decision to leave the EU raises enormous challenges for the Irish agrifood sector.The UK is by far our largest trading partner. Last year, we exported almost €5.1 billion worth of agricultural products. Ireland is also the UK's largest destination for its food exports, worth €3.8 billion in 2015. My Department, with its agencies and stakeholders, has been carefully considering the potential impacts of a UK exit, examining the areas in which the greatest risks may arise and on which we will need to focus when negotiations begin. The main areas in which impacts are foreseen are in respect of currency fluctuations, tariffs and trade, the EU budget, regulations and standards, and customs controls and certification. The UK exit vote also raises complex issues for the fisheries sector. However, it is important to remember that our trading relationship with the UK is not altered in any way until the negotiations that will dictate the terms and conditions of the UK’s departure are completed.

The Department of the Taoiseach is co-ordinating the overall Government response to Brexit. It has established a contingency framework which sets out the key issues that will be most important to Ireland and has published a summary of the key actions that will be taken to address them. It has also established an interdepartmental group to follow up in practical terms on the outcome and implications of the referendum vote and support the work of the new Cabinet committee on Brexit. This interdepartmental group will be supported by six sectoral work groups which will provide key sectoral and thematic advice to the Cabinet, committee and Government. My Department will participate in the work groups dealing with the implications for the economy and trade, the EU budget and customs and excise. It will also chair a subgroup examining the implications for the agrifood sector, which met for the first time last week. We are also continuing to deepen our analysis of the likely impacts and feed these in to the central contingency framework being co-ordinated by the Department of the Taoiseach. However, much of the work will depend on the UK's Article 50 notification and its likely asks regarding its future trading relationship with the UK.

A dedicated Brexit unit has been established in my Department and a consultative committee of stakeholders has been convened in order to ensure a full exchange of information, as negotiations proceed. The consultative committee held its first meeting in July and its second last week. The Food Wise 2025 high-level implementation committee has tabled a standing item on Brexit on its agenda. It has also agreed the establishment of a contact group with representatives from my Department and the various agencies in order to ensure a coherent response to any issues arising. This contact group will be absorbed into the central agrifood subgroup to which I referred earlier.

The most immediate impact for agrifood exporters arises from changes to the euro-sterling exchange rate. While this was not unexpected in light of the uncertainty caused by the referendum result, a sustained period of currency volatility would be of major concern. The Central Bank of Ireland has pre-established contingency plans to deal with market volatility. The Central Bank will continue to engage with the Department of Finance and individual financial institutions on the risks involved. Actions by the European Central Bank, ECB, and other global actors will continue to be monitored closely.

Bord Bia and Enterprise Ireland are also providing practical guidance to SMEs. Recently, Bord Bia announced a number of measures - covering areas such as managing volatility impacts, providing consumer and market insight, deepening customer engagement and extending market reach - with the aim of helping companies to maintain their competitiveness. Similar support is also being provided by Enterprise Ireland. In the context of budget 2017, I announced a number of measures that will financially underpin the Department's Brexit mitigation efforts through strategic investment in key areas of the Department, its agencies and the agrifood sector. This includes access to an innovative, low-interest agri-cashflow fund of €150 million, agri-taxation measures designed to address income fluctuations, increased funding of Bord Bia and Bord Iascaigh Mhara, investment in research and development and innovation and increased expenditure on the rural development programme and the seafood development programme.

It is also important that we renew our focus on the need to reduce our dependence on the UK market. The development of new markets and the exploitation of opportunities in emerging markets is a key component of the Food Wise 2025 strategy. I have been following it up in a very real and practical way through my participation in trade missions. Following a very successful visit to South-East Asia in early September, I plan to undertake further trade missions to north Africa and the Gulf region in the coming weeks. These activities will continue into the future, given that they play a key part in our efforts to provide as many markets as possible for Irish agrifood exports. Beyond the immediate currency difficulties, there are potentially very negative impacts arising from possible differences in tariffs, a movement by the UK away from the common regulations and standards of the Single Market, the reconstitution of border controls and the reintroduction of veterinary certification. These will inevitably add to the costs of Irish producers and processors, affect their competitiveness and disrupt trade.

We also face significant difficulties on the fisheries side, where the most complex issues are those related to the possibility of restricted access to fishing grounds and resources. We face a very uncertain situation regarding the management and sharing of a large number of different fish stocks that we currently share with the UK and other member states under the Common Fisheries Policy framework. This could lead to restricted access to traditional fisheries grounds and resources.