Shane Cassells (Meath West, Fianna Fail)
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207. To ask the Minister for Agriculture, Food and the Marine if his Department performed an analysis of the economic impact on the agricultural sector here of a potential Brexit, and if so, to provide the details and data from this analysis; and if he will make a statement on the matter. [15249/16]

Shane Cassells (Meath West, Fianna Fail)
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208. To ask the Minister for Agriculture, Food and the Marine if his Department put in place measures to deal with the impact on the agricultural sector of a potential Brexit, and if so, his Department’s strategy for protecting farmers and the agricultural sector if the United Kingdom votes to leave the European Union on 23 June 2016; and if he will make a statement on the matter. [15250/16]

Michael Creed (Cork North West, Fine Gael)
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I propose to take Questions Nos. 207 and 208 together.

The UK is by far our largest single trading partner. According to CSO figures, in 2015 we exported almost €5.1 billion worth of agricultural products, and imports from the UK were worth €3.8 billion. The prospect of a UK vote to leave the EU therefore has serious implications for the agri-food sector.

This is borne out in the reports that have been produced in recent months on the potential impact of a UK exit on Ireland. An ESRI report last year estimated that the potential reduction in bilateral trade flows could be as high as 20%, with an even higher impact on agriculture, food and beverages. Teagasc, at the request of my Department, has carried out a deeper analysis, which found that, depending on the assumptions made, the minimum impact could be a reduction of 1.4% or €150 million per annum in the value of Irish agri-food exports, with a possible worst-case scenario involving a reduction of over 7%, or €800 million, per annum.

However, it is important to note that there would be no dramatic change straight away, and that the actual impact of a UK exit would depend on the post-exit relationship that will have to be negotiated between the EU and the UK. The Treaty on European Union provides for a period of two years of negotiations, with extensions possible if agreement is not reached in this period.

There are four main areas in which concerns arise from an agri-food perspective. These are tariffs and trade arrangements, the EU budget, standards and customs controls.

Potential differences in tariffs after a UK exit could restrict trade in both directions and affect traditional supply practices, particularly for raw materials. Once the exit negotiations have been completed, the UK would be free to negotiate free trade agreements with other third countries. This is particularly relevant in relation to meat imports from South America. This could present a competitiveness challenge for third country suppliers, such as Ireland. However, negotiating such agreements could be a lengthy process.

The UK is a net contributor to the EU budget. A UK exit could result in a loss of its contribution of between 5 and 10%. Given that the CAP accounts for some 37% of the EU budget, we could expect additional pressure for further contraction in CAP funding in the years ahead.

Currently the EU operates a common regulatory regime, and the rules of the single market allow free movement of goods between Member States. While the EU and the UK may wish to keep such arrangements in place for as long as possible, deviations between UK and EU standards could give rise to trading difficulties and additional costs.

Under most scenarios, a British exit from the EU would see the return of some sort of border controls, customs or administrative procedures that would replace the current free movement of goods. This would add to administrative costs. Similarly, and even with a constructive approach from the UK on market access terms and veterinary certificates, the administrative burden in relation to veterinary and health certification could be considerable.

Finally, the possibility of UK exit poses a serious and complex situation for our fisheries sector. While the negative impact on trade could be significant - the UK is our second largest market for seafood after France - the most complex fisheries issues are those related to the possibility of restricted access to fishing grounds and resources. We would face a very uncertain situation related to the management and sharing of large numbers of different fish stocks that we currently share with the UK and other Member States under the Common Fisheries Policy Framework.

I and my Department are continuing to reflect on these matters so that we are prepared, if the UK decision is to exit, to establish our priorities for the negotiations in the agri-food and fisheries sectors, and to engage in these negotiations at an early date. We are also in ongoing consultation with our Government colleagues to ensure that there is a coherent, whole-of-Government approach to the issue.