Charlie McConalogue (Donegal, Fianna Fail)
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17. To ask the Minister for Agriculture, Food and the Marine the contingency steps he is taking to safeguard the interests of the agrifood sector, CAP payments and the fishing sector following the decision by the UK voters to leave the EU; and if he will make a statement on the matter. [12356/17]

Michael Creed (Cork North West, Fine Gael)
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I would like to remind the House that I and my Department have been actively engaged in assessing the impact of the Brexit vote on the Irish agri food sector, consulting with appropriate stakeholders and engaging with the relevant politicians and institutions.  This work is being done in conjunction with the overall Government response being co-ordinated by the Department of the Taoiseach.

I fully recognise the potential difficulties that the agri food sector could face in the event of a hard Brexit. The sector is of critical importance to our economy and its regional spread means it underpins the socio-economic development in rural areas in particular. The sector employed approximately 173k people (i.e. 8.6% of total employment) in 2016, and the total value of agri food exports was more than €11 billion. 

The highly integrated nature of agri food trade between Ireland and the UK is shown in CSO  trade figures, with some €4.8bn (39%) of  exports to the UK last year, and  €3.7bn (46%) of agri food products  imported from the UK.

A number of credible analyses have been conducted on the potential impact on Ireland of a UK exit from the EU, and all of these show that the result will, most likely, be unambiguously bad for the Irish agri-food sector. The more immediate impacts relate to the significant drop in the value of sterling against the euro and the effects this is having on industries with significant trading activity in the UK, particularly the mushroom and forest products sectors.

The medium to longer term impacts will revolve around the potential application of tariffs, the implications of divergence in regulations and standards, border controls with the Great Britain and Northern Ireland and certification, including the related areas of veterinary and animal health certification.  There will also be difficult challenges in relation to potential restricted access to fishing grounds and resources.

In response to the challenges being posed by Brexit I have undertaken a number of important steps within my Department, which include the establishment of a Brexit Response Committee and a dedicated Brexit Unit. I have also created a Stakeholder Consultative Committee, which is complemented by frequent contact with representative organisations and companies on an ongoing basis.

In addition I hosted two All-Island Civic Dialogues for the agri-food sector, to which interested stakeholders from both sides of the border were invited.  The first of these - focusing on the dairy, cattle, sheep, pigs and poultry sectors - took place on 15 December 2016.  The second - dealing with the prepared consumer foods, horticulture, forestry and cereals/animal feed sectors - took place on 8 February 2017. A Civic Dialogue for the seafood sector was held on 1 February 2017.   All of these opportunities for consultation allowed me and my Department establish the issues of critical concern to industry stakeholders.

I am also in regular communication with Commissioner Hogan and my officials have taken part in meetings with the Commission and the Barnier Task Force.

At EU level, I have had regular contact with the Commission and with  counterparts in the UK and other member states, including meetings with  my Spanish and Maltese colleagues on the margins of last Monday’s Council of Ministers.  Arrangements are currently being made for further formal bilateral meetings over the coming weeks involving – Germany, The Netherlands and Denmark over St. Patrick’s weekend and Poland, Austria and Estonia at the end of the month.

In all of these engagements I am making clear our demand for continued unfettered access to the UK market, without tariffs and with minimal additional customs and administrative procedures, as well as keeping the UK market viable for Irish producers by minimising the risk from UK trade agreements with third countries.

In relation to fisheries, Ireland wants to maintain current access to fishing grounds in the UK zone in the Irish Sea, Celtic Sea and north of Donegal and protect our quota share for joint fish stocks. 

Last October, as part of Budget 2017, I announced measures aimed at alleviating the pressures of income volatility and the potential impact of Brexit.  These measures included the introduction of the ‘Agri Cashflow Support Loan’ fund of €150 million; enhanced taxation measures and an additional allocation of €1.6m in 2016 and €2m in 2017 to Bord Bia to ensure that they are in a position to provide Brexit-related supports to affected companies.  I also provided for increased funding under the Rural Development Programme and Seafood Development Programme.

I recently awarded over €1.8 million in grants to 19 seafood enterprises under the European Maritime and Fisheries Fund Operational Programme for the seafood sector.  The aim of these grants is to incentivise seafood innovation and new product development as a means of meeting the Brexit challenge.

The UK’s decision to leave the EU reinforces the need to develop as many outlets for our agri-food exports as possible, in order to minimise our dependence on any one market. Indeed this principle of market development is already a key component of Food Wise 2025. We have been very active in recent years in our efforts to diversify markets, and in aiming to respond to consumer demands in emerging markets.

Inward and outward trade visits will play a key role in our efforts to provide as many markets as possible for Irish agri-food products. Last September Minister Doyle and I led very successful trade missions to China, Singapore, Vietnam and South Korea and to North Africa in November.  I have just returned from leading a trade mission to Saudi Arabia and the United Arab Emirates which was very successful and I am currently considering potential further destinations for later in 2017.

In relation to CAP payments the UK decision to leave the EU will result in a loss of the UK contribution to the EU budget of between 5 and 10%.  This could have implications for future spending decisions in what is already a very tight budgetary framework.  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. However, it is important to remember that the amount of CAP funding per Member State under Pillars 1 and 2 is fixed under 2020 in the Regulations of the Council and European Parliament and it will require a co-decided amendment on these Regulations to change the figures.

Notwithstanding this, the future of the CAP is of course a very important issue for Ireland’s agriculture sector.  I strongly believe that the CAP has evolved considerably and very effectively in recent years in response to changing market, consumer and environmental demands. 

At the Council of Agriculture Ministers earlier this week, I stressed the importance of ensuring that the CAP continues to evolve in the way that it has over recent reforms, and that it supports the achievement of European strategic objectives. This will help to reinforce the relevance and effectiveness of the policy, and to secure a strong CAP budget for the period post-2020.

I wish to assure the House that the Government remains very focused on supporting the agri-food industry through the challenges ahead. I will continue to consult with the industry as the negotiations develop, and press Ireland's case for continued free access to the UK market, without tariffs and with minimal additional customs and administrative procedures.