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

I thank the Senators who contributed to this broad-ranging debate on the agrifood sector. Before I go into details, I echo the sentiments expressed by Senator Boyhan on the passing of our former colleague, Seymour Crawford, who was a man of great intellect and common sense and would always have been at the heart of agricultural debates win the Houses. My sympathy goes to his family on his passing.

I also echo Senator O'Reilly's comments on the new merged entity of Lakeland Dairies and LacPatrick. I wish Mr. Michael Hanley and his management team all the best as it beds in.

There were a number of common threads to the Senators' contributions and I will try to deal with them as effectively as possible. As some mentioned, it is important to set the debate on agriculture in context. Sometimes, we are overwhelmed by the negativity surrounding incomes in the agriculture sector. Obviously, that is a critical issue for farmers, but as an island nation that exports our agricultural offering to more than 180 countries worldwide, we should never lose sight of the big picture. The Food and Agriculture Organization of the United Nations has stated global food production needs to increase by 70% by 2050 to feed the world's growing population. That is an opportunity for us. In taking it and given that the environment is important, we must produce food as sustainably as possible, but we are starting from a relatively good position. Perhaps it is not widely known, but, alongside New Zealand, this country is considered to be the most carbon efficient on the planet in dairy production. We are also the fifth most carbon efficient producer of beef in the European Union. That is not for one moment to argue that we deserve a pass on the legally binding obligations on the agriculture sector to achieve certain targets by 2030 - far from it. We can, will and must do more, primarily because it is the right thing to do by future generations but also because, if we do not do it, we will be clobbered by punitive financial penalties. Another reason we must do it is the market and the consumer demand it of us. I have been privileged to be on trade missions with representatives of the food industry.I have been in those boardroom meetings with our retail partners globally when they have asked us about our credentials from the point of view of sustainability. If we want to move our product higher up the value-added chain, get a better price and be better able to deliver a better price to the primary consumer, then we must embrace the sustainability agenda in the context of agriculture. On the basis of my engagement with farmers and farm organisations and leaders I believe they are up for that challenge.

Earlier, reference was made by speakers to Teagasc, which is a fantastic asset in our armoury in terms of meeting that challenge. Teagasc delivers advice, undertakes research and delivers education by way of knowledge transfer to farmers. We have invested in Teagasc over the years, including most recently in the context of Brexit. We have invested in the prepared consumer food hub and the meat technology centre as well as a food innovation hub in Moorepark on the dairy side. All of this is part of preparing the groundwork for efficiency in farm production.

One third of emissions come from the agricultural sector. In that context our profile is different from the emissions profile of other countries, but that is because we do not have the legacy of heavy industry here. Some ill-informed people will point the finger and say that agriculture is a major contributor. In terms of our profile we are, but in terms of our carbon emissions per unit of output we compare favourably by international comparison. That is not widely understood. Anyway, we can and will do more.

Senator Kieran O'Donnell asked what we could do. There is no silver bullet but we can do many things that collectively will improve the emissions profile of the agriculture sector. For example, we are spending €300 million in the current rural development programme, which runs up to 2020, on improving the genetic merit of the beef herd. What will that do? It will improve profitability for farmers. That is a by-product in a way but it is an important by-product. The herd will have a smaller suckler cow but a bigger weanling. It will have a cow that is in calf every year and that calves easily. There is one consequence of all the genetic data that we gather - knowledge is power. This knowledge will enable the farmer to make breeding decisions on the herd that will improve the profitability but drive down the farmer's carbon footprint as well. We are investing significantly. We are world leaders in the context of the collection of data relating to our beef herd.

We are using milk recording as an instrument or tool to inform breeding decisions on the dairy side. The dairy side is attracting a good deal of attention in the context of the growing dairy herd at present. People are saying that we are growing our herd and contributing to emissions. If we have a herd that is more and more genetically efficient, then we will be able to reduce further the carbon footprint of our dairy output. We need to bear in mind the context of the Paris Accord and the framework within which we are operating legally. The Paris Accord holds that we must reduce our carbon footprint but that is in the context of not compromising food production. That is important. What is the point in dismantling what is a carbon-efficient industry, one on a journey to greater carbon efficiency that stands up to any international scrutiny? What is the point in dismantling that and have the associated product displaced on supermarket shelves by product that has a heavier carbon footprint?

It is important that we continue to engage in this journey. Senator Boyhan remarked about agriculture being very much a science-based industry. That is true. We need innovation, research, development and application through knowledge transfer etc. We need more young people. I am conscious that as I address the House we have a school delegation in the Gallery. There are real and important career opportunities in agriculture for the future. Not only are there important opportunities inside the farm gate but we need the best available science, technology and marketing graduates to assist in the journey that this important and exciting industry has embarked upon.

Collectively, we can meet the targets, reduce the carbon footprint and simultaneously improve profitability for the industry. An interesting pilot has been under way in recent years involving the IFA and the Environmental Protection Agency. The agency does not in any way pull its punches in the context of its obligations to ensure the industry is as efficient as possible. The cumulative research delivered from the pilot project led to the conclusion that by reducing carbon efficiency we also increase profitability. The actions taken are good for the environment and good financially for farmers too. We need to accelerate that journey because we will miss our 2020 targets - there is no point in saying otherwise. In any event, we simply cannot afford to miss our 2030 targets because, for all the reasons I have outlined, they are critical.

Genetics are important. We are grant-aiding low-emissions slurry spreading. What does that do? It reduces the ammonia release when a farmer spreads slurry in the countryside. That is really important. That is one of the emissions areas where we are right up against the ceiling and so we need to take action in that regard.

Switching from calcium ammonium nitrate, a nitrogen product for fertiliser, to protective urea reduces the nitrous oxide release. That is really important. Many simple steps can improve significantly the efficiencies. As I have said there is no silver bullet but we can do many things without compromising food production. We can continue to realise the true potential of our agriculture sector, which, for many decades was constrained by virtue of quotas in the dairy side. We are now unleashed from those constraints. However, the environment will be a new constraint except that we will box clever in the context of meeting and achieving our potential. We need to do this in a collaborative way. That is a key point. It is a matter for state agencies, my Department, farm organisations and the processing sector. All of us together can ensure we do this in an informed way.

Another point mentioned by many Members was the Common Agricultural Policy and the journey we are on to a new policy post 2020. The greatest fear I have concerns the budget available for it. We have been in the vanguard of an endeavour to create some political momentum around protecting the current level of the budget. That is not easy because to reverse the proposed cuts we need unanimity around the table in Europe. The proposed Common Agricultural Policy cuts of 5% would mean in an Irish context cuts of €90 million per annum for farmers. The Commissioner for Agriculture and Rural Development can only spend the money given to him by member states. It is not open to the Commission to borrow money. The Taoiseach has addressed the European Parliament and said that we are prepared to contribute more. We make that offer not from the point of view of Ireland seeking the traditional handout or additional contributions. We are a net contributor to the European budget and project. In fact, we are among the highestper capitapayers into the European project. That point is not often understood in the context of the offer we are making to contribute more. As I have said, agreement needs to be unanimous. Unfortunately, the critique of many member states of the Hogan proposals of early June centred on the view that the cuts did not go far enough. The analysis of the Commission proposals from the Dutch, Danes, Swedes and Austrians concluded that the cuts in agriculture did not go far enough. It will be a sizeable task to reverse the political decision of those member states and to ensure we have unanimity around a greater budget contribution.

If we can secure an adequate budget then we can begin to tackle the things that are really important in the context of meeting climate change targets, creating incentive in agriculture in that area and addressing the generational renewal issues relating to the age profile of farmers etc.

I want to deal briefly with the Brexit issue, which has been alluded to by several speakers. I will set out a graphic example in the context of Lakelands and LacPatrick. This was alluded to by Senator Hopkins in her contribution. Some 28% of the milk pool in Northern Ireland comes south for processing to plants in the Republic. That is only a small example of the all-island approach we have to the agrifood economy. We send cattle north. Farmers buy cattle in the west and they are bought by farmers in Northern Ireland for finishing. Sheep come south for processing. It is a seamless all-island economy.

In 2017 we exported €700 million worth of product to Northern Ireland and Northern Ireland exported approximately €600 million to the Republic in value terms. The all-island economy is very much in the cross-hairs of the Brexit conundrum and how we resolve the issue. That is why the issue of the Border and the Government position in the context of the negotiations under way on Brexit are really important. We cannot have a situation whereby that trade is impacted. We cannot allow the other issues that arise from the Border and the identity politics of different traditions on the island, especially in Northern Ireland, to have an adverse impact. We know about the implications of going back to a situation where the Border infrastructure would be reintroduced. That is what informs the Government position in the negotiations.Diversification is equally an important part of that strategy, for example, beef exports to China started earlier this year. We have been following the opportunities available to us by virtue of our membership of the European Union in a focused way. We are riding the coat-tails of recent engagement by the Commission on new or improved deals between the EU and other trading blocs such as Canada, Mexico, Japan and Korea, following in and opening up opportunities for the Irish agrifood sector. Who would have thought, not that long ago, that while the UK is our biggest market for dairy products, for example, it imports 80,000 tonnes of cheddar cheese a year, the next biggest market for Irish dairy exports would be China? It is also the second biggest market for pork exports. I appreciate that Senator Mac Lochlainn has raised the difficulties for the pork industry. It is not one that benefits directly from CAP supports but the global reach of the Irish agrifood sector and new market opportunities is an important way of minimising the risk associated with Brexit.

It is important to be truthful about this, when we talk about a good Brexit outcome we are hellbent on trying to achieve a trading relationship as close as possible to the current one, bearing in mind that is not easily facilitated by red lines imposed by the UK on leaving the customs union, the single market, etc. A good deal can never be as good as the deal we have. When it is outside the customs union and the single market a good deal means costs and friction for the industry here and that means loss of profitability and jobs. Brexit is a damage limitation exercise from our point of view. I believe it will also inflict damage on the UK but it is a democratic decision that we have to respect and get on with.

Given our significant exposure in the agrifood sector, €5.2 billion worth of our exports went into that market in 2017, that is over 50%, 280,000 tonnes of our beef, 80,000 tonnes of cheddar cheese. In the context of a worst-case scenario, a hard Brexit and World Trade Organisation, WTO, tariffs on those products, it is not easy to find a home. That is a nightmare scenario that I do not believe is likely because of the scale of the calamity were it to happen. I believe the British Prime Minister recognises that reality as well but the negotiations are not easy. Market diversification is a key part of the strategy but the UK should, and hopefully will always, be probably the most important single market for us because of our geographical proximity, and cultural and historical ties. It is the market we understand best. It is the best paying market for many of the commodities we export. That is why our endeavour is to keep the relationship as close as possible to the present one but bearing in mind that a good Brexit outcome is not as good as what we enjoy now.

I firmly believe this industry has great potential. It was once described in the other House as a sunset industry. To reverse that analogy, it is only sunrise time. The potential is enormous here. In the context of a growing global population we have real natural advantages for the industry in our grass-based sustainable production system. We need, however, to marry that natural advantage with the benefits that new technology will bring us so that we can maintain our position as a world leader in this sector. That is possible because of the collaboration on which the industry is built. We are too small to do things except in that way. That close collaboration between the Department and the agencies in the Department have been referred to in the context of Teagasc and An Bord Bia but it applies also to the dairy processing sector, the meat industry, the farm organisations, etc. That is what has enabled us to achieve what we have, which is not insignificant, particularly in the context of the difficult years and the engine that the indigenous sector has been to our economic recovery. It is also what will see us through all the challenges that have rightly been outlined by Members. The overwhelming message we should send to the community at large is that this sector has great potential. We need to do more on efficiency, such as grassland management, to make sure we are as efficient and as good as we can possibly be. If we are that we will navigate and overcome the challenges ahead of us.