Seanad debates

Tuesday, 15 November 2016

Commencement Matters

Brexit Issues

2:30 pm

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael) | Oireachtas source

I reassure Senator Gallagher that I am acutely aware of the challenges the mushroom sector is experiencing in the aftermath of the UK referendum decision to exit the EU, particularly in light of recent fluctuations in currency. I am focused on working with the industry to meet these difficulties in the months and years ahead.

The impact that the devaluation of sterling is having on mushroom producers and growers is a problem that has happened over a very short space of time. Grower production of this highly perishable product must be well aligned with demand and the mushroom sector, like many other exporting sectors, is particularly at risk because of the high dependency on the UK market.

I am monitoring sterling fluctuations closely and my Department has established a dedicated unit considering the impact of Brexit. Additionally, Bord Bia is working closely with the sector on market intelligence, UK consumer research and quality-assurance measures. It recently held a currency and negotiation workshop, specifically targeted at the sector, which I understand was very well received by the mushroom industry. In the coming weeks, the chief executive officer of Bord Bia and the Minister, Deputy Creed, will continue to meet senior executives from the UK retailers to highlight the obstacles that producers are facing. Bord Bia is also running a marketing intensification programme, which 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.

As announced in last month's budget, an extra €700,000 has been secured for capital investments in the commercial horticulture sector. This will increase the budget for this scheme to €5 million in 2017. Additionally, the horticulture sector will have access to the €150 million low-interest cashflow-support loan fund announced in the budget, providing access to highly flexible loans for up to six years for amounts up to €150,000 at an interest rate of 2.95% with an option to pay interest only over the first three years. There have been significant expressions of interest from people in the mushroom sector in that product.

I also draw attention to the ongoing support being provided to the industry through national and EU schemes. Under the National Development Plan 2007-2013 my Department implemented the scheme of investment aid for the development of the commercial horticulture sector. During this period, my Department paid over €4 million in grant payments to mushroom growers, supporting €10.1 million in investment.

To ensure ongoing support for the sector, the Department extended, under EU sanction, the scheme of investment aid for the development of the commercial horticulture sector to run until the end of 2019. In 2014 and 2015 a total of €1.635 million in grant aid was paid to mushroom growers. The grant aid paid supported some €4.1 million in investment by these growers. Under the 2016 scheme of investment aid, my Department issued approvals amounting to €1.33 million in aid to growers in the mushroom sector, supporting €3.3 million in proposed investment.

The EU producer organisation scheme is also vital for mushroom growers, with 65% of Irish growers in a producer organisation at present. This scheme provides an important mechanism for growers to achieve greater bargaining power in the marketplace by becoming part of a larger supply base. In the ten years from 2005 to 2015, a total of €39.8 million was paid to mushroom producer organisations as part of the scheme. Recently, my Department delivered a payment of just under €1.57 million to one of the mushroom producer organisations.

I fully recognise the challenges for food exporters to the UK market arising from the fall in sterling and my Department and its agencies will continue to work positively with the industry during this challenging time.We are always trying to figure out new ways to help people. The mushroom sector is in the eye of the storm, being the most exposed to the short-term ramifications of what has happened with sterling. We are not neglecting the Border area or any rural area in that regard.


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