Priority Questions

Agrifood Sector

Charlie McConalogue

Question:

1. Deputy Charlie McConalogue asked the Minister for Agriculture, Food and the Marine the immediate contingency steps he is taking to safeguard the interests of the Irish agrifood sector and CAP payments following the decision by UK voters to leave the European Union; and if he will make a statement on the matter. [32461/16]

The United Kingdom's decision to leave the European Union presents significant challenges for the Irish agrifood sector. My Department, together with its agencies and stakeholders, has been carefully considering the potential impacts of a UK exit, looking at 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 currency fluctuations, tariffs and trade, the EU budget, regulations and standards, and customs controls and certification. The United Kingdom's exit vote raises complex issues for the fisheries sector. Significant challenges are also foreseen from a North-South perspective.

My Department is engaged in detailed contingency planning and has published a summary of the key actions we are taking by way of an immediate response to the United Kingdom's decision, as well as feeding into the central contingency framework being co-ordinated by the Department of the Taoiseach. We are also continuing to deepen our analysis of the likely impacts.

A number of steps have been taken to ensure a sensible and coherent approach will be adopted. They include the establishment of a dedicated Brexit unit, the convening of a consultative committee of stakeholders and the establishment of a contact group under the auspices of the Food Wise 2025 high level implementation committee. The Department is also participating fully in the new sectoral work groups established by the Department of the Taoiseach under the auspices of the interdepartmental group on Brexit which, in turn, feeds into the new Cabinet sub-committee on Brexit. The Department has also chaired the first meeting of a special agrifood subgroup which took place on 19 October.

The most immediate impact for agrifood exporters has arisen from changes to the euro-sterling exchange rate and a number of actions are being taken to mitigate it. Bord Bia and Enterprise Ireland have been providing practical guidance for small and medium-sized enterprises, SMEs. Recently, Bord Bia announced a number of measures covering areas such as managing volatility impacts, providing a consumer and market insight, deepening customer engagement and extending market reach, which are aimed at helping companies to maintain their competitiveness. Similar support is being provided by Enterprise Ireland.

Budget 2017 financially underpins the Department's Brexit mitigation efforts through strategic investment in key areas of my Department, its agencies and the agrifood sector. They include access to an innovative low-interest agriculture cashflow fund of €150 million, agriculture taxation measures designed to address income fluctuations, increased funding for Bord Bia and Bord Iascaigh Mhara, BIM, investment in research and development and innovation, and increased expenditure on the rural development programme and the seafood development programme.

I continue to support efforts to diversify market outlets in order to reduce our dependence on the UK market, including through participation in trade missions such as the one recently to South-East Asia and the planned mission to north Africa and the Gulf region.

As regards CAP payments, there are potential implications for the EU budget. It is expected that the UK exit will result in the loss of the United Kingdom's contribution to the EU budget of between 5% and 10%, or approximately €10 billion. This will likely have implications for future spending decisions in what is already a tight budgetary framework. CAP funding accounts for some 37% of the EU budget and we can expect additional pressure for further contraction in CAP funding in the years ahead. I am aware of the potential issues in this regard and assure the Deputy that my departmental officials and I will be focusing on this aspect during the exit negotiations.

The importance of the UK market to the agrifood sector has been well rehearsed. Some €4.5 billion in agrifood exports, including more than 50% of our beef and one third of our dairy exports, go to the United Kingdom. Of concern is a recent report that indicated that almost 80% of employment in the food and beverages sector was based outside Dublin. As well as the need for as strong a response to Brexit as possible, this serves to emphasise the importance of the UK market to job creation in the regions where it is more difficult to create employment and which have suffered, in particular. The Minister indicated that a consultative committee on Brexit had been established in his Department. However, it has only met twice. Given the importance of the issue, that there have only been two meetings is inexplicable. Why has it not met more?

The Minister indicated in his response today that the €150 million loan and the tax changes in the budget were related to the Brexit response but that fund was primarily driven at European level because of the pressures already being experienced in relation to a livestock crisis. As such, it is not directly related to Brexit.

We have not, unfortunately, had the immediate response required from Government to aid the sectors, particularly the mushroom sector, that are under intense pressure. In regard to the mushroom sector and the other sectors that are particularly exposed, what are the immediate supports the Minister is planning to put in place to ensure they are not put out of business?

I thank the Deputy for his question. It is true that on the agrifood side the impact will be most adversely reflected in the rural economies. The Deputy's reference to the study which refers to 80% of employment being outside of the greater Dublin region is relevant in this regard. This is the reason for all the serious initiatives we have taken.

The stakeholders forum has met on two occasions. The list of representative groups with which I have met bilaterally to discuss their concerns is quite lengthy. Brexit is a standing item on the agenda of the high level implementation group, HLIG, on Food Wise 2025. It is an issue that consumes every waking moment. Every policy is Brexit-proofed in terms of how we can assist a sector. The €150 million loan fund was not driven by Europe. We got €11 million from Europe for the livestock sector. We thought it was strategically far more important to put €14 million of Exchequer funding alongside that €11 million and thereby leverage a loan fund of €150 million rather than spread the €11 million across 100,000 family farms. The €150 million fund is not an EU-led scheme.

On the mushroom sector, we have specific initiatives in place. We already make significant funding available to producer organisations. There is a €5 million capital investment scheme available in my Department for the mushroom sector in particular. That sector also has access to the €150 million loan fund. My colleague, the Minister of State, Deputy Andrew Doyle, has met with some of the substantial players in the mushroom sector. That engagement continues. In what is a fluid situation, appropriate policy instruments are being developed not only in my Department but across the whole of Government.

As proposals are being discussed and developed, jobs are being lost in the mushroom industry. The Minister will be aware that 700 jobs have been already lost in this sector. What we need are responses now and not discussions on what might happen in the future. There is an immediate crisis in this sector. The mushroom sector is at the cliff face of that crisis. It is not good enough for the Minister to talk about things that may happen in the future. This sector needs to be rescued now. Supports must be put in place to ensure that more companies do not go out of business.

On this sector in general, why did the Minister, Deputy Creed, and other Ministers not ensure that a fund was put in place to specifically support those companies that are most exposed to the fall in sterling, most of which are in the agrifood sector? The Minister indicated that he has been meeting with the partners on Food Wise 2025. Food Wise 2025, which is the strategic plan for the agrifood sector, was developed prior to the referendum on Brexit. It is important that Food Wise 2025 is reviewed in light of the implications of Brexit on this sector. It must be Brexit-proofed and updated so that it is a plan that ensures the sector can move forward taking into account the new challenges posed by Brexit.

On the latter point, Food Wise 2025 is an industry-document that my Department facilitated in terms of development. We have previously had challenging issues in this sector, including BSE, foot and mouth disease and the pork dioxin crisis, all of which, at the time, were enormous challenges to this sector. Brexit is not sufficient to derail the ambition, which is a long-term ambition for this sector. While we must react and take account of the challenges we face this is not a time to wilt in the context of the ambition for the industry over the longer term. Most of the industry commentators would accept that.

On the specific issues which the Deputy raised in regard to the agrifood sector and the need for Government to do more to bail out the sector in the context of Brexit, there are limitations on what the State can do under EU state aid rules. It is for this reason the access to low interest loan finance is a tailored initiative. An Bord Bia, Enterprise Ireland and BIM have all been in contact with their individual client companies and are bringing them through in so far as they can without breaching state aid rules. They are assisting them in terms of new market development and deeper engagement with their client base in the UK given the current difficulties they are experiencing in that regard. They are also helping them to navigate the waters in terms of renegotiating contracts. It is inevitable that there will be food inflation in the UK arising from Brexit and a weaker sterling. Over a period of time this will deliver some comfort to the Irish food industries exporting into that market. What we need is assistance in the interim to help them to navigate the current difficulties. That is what my Department is focused on. It is also what the whole of Government approach is focused on.

Horse Racing Ireland

Martin Kenny

Question:

2. Deputy Martin Kenny asked the Minister for Agriculture, Food and the Marine if, considering the statements of the chairman of Horse Racing Ireland to the Joint Oireachtas Committee on Agriculture, Food and the Marine, admitting that proper procedure was not followed in the appointment of its CEO and calling into question the legality of that appointment and considering his approval of that appointment in those circumstances and the statement by the HRI chairman that he would make the same appointment in the same manner if given the opportunity, he plans to reconsider Government funding of €64 million to this semi-state body. [32348/16]

This question relates to Horse Racing Ireland, HRI, and the appointment of Mr. Kavanagh as chief executive officer of the board of HRI and whether that appointment was in breach of Government guidelines and also whether the proposed salary was in breach of Government guidelines. Representatives of Horse Racing Ireland recently appeared before the Joint Oireachtas Committee on Agriculture, Food and the Marine, arising out of which it became clear that there are many issues in regard to this organisation, including the level of funding it receives and accountability in that regard. I would welcome a statement from the Minister on those issues.

Horse Racing Ireland is a commercial State body established under the Horse and Greyhound Racing Act 2001 and is responsible for the overall administration, promotion and development of the horse racing industry. The appointment of the chief executive officer is a matter for the board of HRI subject to the consent of the relevant Ministers. In this instance, the Minister for Public Expenditure and Reform and I accepted the case made by the chairman and provided the necessary consents for an appointment by the board.  This was an exception to the guidelines for the appointment of CEOs to State agencies based on the proposition advanced by the chairman that the reappointment of the CEO in this instance was in the best interests of HRI and the sector generally given the significant challenges it faces in the coming years. I have already indicated that it would have been more appropriate for the board to have had a full discussion on the case made by the chairman prior to its submission. I understand that the chairman accepts this. I further understand that the board has issued a statement confirming that the chairman’s actions and intentions reflected its views regarding the CEO’s contract but recognising that a more collegiate approach would have improved the process.  The board's statement also indicated that the best result was achieved for HRI and the industry with the completion of a new contract. I am particularly cognisant of the fact that appointment of a CEO can only be made by the board. This was done.

On the question of funding, the Deputy will be aware of the very significant contribution that the horse racing industry makes to the Irish economy, most particularly in rural areas. Successive Governments have considered it appropriate to support the sector on that basis.  I do not believe that the issues of sequencing around the appointment of the chief executive have a bearing on the funding of this very important sector but as with all such bodies I expect such funding to be carefully managed and fully accounted for in accordance with Government accounting rules.

The horse racing industry receives funding of €64 million per annum, with no expectation in terms of accountability. Every other sector that receives funding, be it the sheep sector in terms of the new sheep grant system and so on, is required to adhere to a particular set of conditions. For example, farmers are required to keep records and to meet particular outturns in terms of husbandry and so on. None of this regulation exists in the horse racing industry. Most of the funding provided by the State to Horse Racing Ireland is used as prize money in big races. We are speaking in this regard about taxpayers' money being transferred into the hands of the wealthy elite. People have a problem with that. I am not suggesting that this industry does not deserve to be funded: it does. I accept it requires development, particularly in terms of small breeders, new markets for horses and so on but to hand over this level of funding to the industry and not require any accountability in that regard is totally inappropriate.

On the appointment of Mr. Kavanagh, the truth is that there was no business plan and nothing was put in place that could convince anyone that he was the best person for the job. It was simply an inside deal done by a handful of people and a question of pulling it over the line and getting it through. It has not worked. This shines a very bright light on an inappropriate way of doing business.

The Standards in Public Office Commission has guidelines for everyone in all sectors, but it has no guidelines in place after 12 years for people on public bodies as to what they do and how they co-operate. That is a final aspect of this that needs to be dealt with.

It is entirely wide of the mark to say that the board of HSI gets a sum of money from the Exchequer and that there is no further accountability. The board publishes an audited set of accounts annually and clearly shows what it does with the money. I invite the Deputy to look at HSI's capital infrastructure programme to improve racecourses in Tralee, Killarney, Mallow and the new flagship redevelopment at the Curragh. There is scarcely a racing venue which has not received funding that comes from this. This is not a pot of money given to a collective board to spend without a plan. Importantly, it is not a fund that is going to an elite. The backbone of the industry is in rural Ireland in breeding establishments on small farms that have a number of mares. That is the bedrock on which the edifice that has positioned us as global leaders in the equine industry is built. We should remember that this industry is hugely internationally mobile. This industry could up and relocate. There are 14,000 jobs across every corner and rural county in Ireland. As such, it is very wide of the mark to say this is something going to an elite handful of people. That is far from being the case.

I dispute that, in particular when one looks at the Indecon report which was published a number of years ago. Practically nothing in that report has been implemented. On the notion that there is a plan in place, the reality is that Indecon was that plan and it has not been implemented in any sense. In truth, the vast majority of small breeders and guys out there who have a few horses and are struggling to get by get little or nothing out of this. I have spoken to them. It all goes to an elite at the top in the hope that it will trickle down. We all know what trickle-down economics has done in this country. It has simply not worked because everything spirals to the top. It is continuing to do so in this industry. We need to look at alternative ways to fund the industry, one of which is the betting tax. The betting tax must be increased to try to bring in more money and help the people at the bottom. It is inappropriate that so much taxpayers' money is going into this sector with so little return.

The Deputy will be aware that there is a betting tax now and that it is contributing significantly in this area. The question as to whether it can do more is one that could usefully have been asked in the debate we have just had on the Finance Bill. It is a new development and it is raising significant funds.

I re-emphasise the point that there is an accountability structure in place and that a set of audited accounts is provided on an annual basis. There is an investment that is being made in racing infrastructure. I have met the people in rural Ireland to whom the Deputy has referred and I acknowledge that they would like a better slice of the cake. That is a legitimate point but it is not a reason to decimate the industry by pulling the public funding it gets. There is a case for looking at the foundations of the industry in terms of its reach and the small farmers who have a number of mares and the crisis in terms of the cost of running point-to-point races. It is the conveyor belt at the lower level on which the industry is built. It is a legitimate point and one I urge the Deputy to make to the appropriate authorities. It is a concern I have myself. However, it is not a basis on which to dismantle HRI in a fit of pique over a single issue which could have been handled better. The board, however, is entirely satisfied that the outcome achieved, albeit in a manner that was not entirely satisfactory in terms of sequences, is one of which it entirely approves.

Before moving to Question No. 3, I remind Members that if we do not adhere to the time limits, we will not get through the Priority Questions. I ask them to bear that in mind.

Strategic Banking Corporation of Ireland Funding

Charlie McConalogue

Question:

3. Deputy Charlie McConalogue asked the Minister for Agriculture, Food and the Marine if he will provide operational details on the new SBCI agrifund; if he will provide a breakdown of funding sources and financial providers that will loan moneys to farmers; and if he will make a statement on the matter. [32462/16]

I ask the Minister to provide the operational details of the new Strategic Banking Corporation of Ireland agrifund, including a breakdown of funding sources and also the financial providers who will lend money to farmers.

In view of the sustained period of lower commodity prices and the cashflow difficulties this has caused for farmers in several sectors, I have committed to working with all stakeholders at national and EU level to address the issues involved and to ensure that we continue to have a sustainable and resilient sector.  One of my priorities is to support the provision of lower-cost flexible finance. Therefore, I was pleased to announce on budget day plans for a €150 million agriculture cashflow support fund. The fund will support highly flexible loans of up to six years in duration for amounts up to €150,000 at an interest rate of 2.95%.  It will be available to livestock, tillage and horticulture farmers. The proposed interest rate will represent a significant saving to farmers when compared with other forms of finance currently available. The loan fund is part of the three-pillar strategy to respond to income volatility that I announced in the recent budget along with additional tax measures and farm payments.

Further details of the loan fund will be provided shortly, but it is expected that it will be operational as soon as possible in early 2017. The Strategic Banking Corporation of Ireland, SBCI, will make an open call for lending institutions to participate and I have spoken to the main banks to encourage them to make this facility available to their customers. Normal lending assessment criteria will apply although the loans will be unsecured in nature thereby facilitating a more straightforward application process. My Department and SBCI are breaking new ground with this innovative approach to delivering support to farmers. It is designed to maximise the leverage achieved on the funding available. The provision of €11.1 million in EU funding and €14 million in national funding by my Department will enable the SBCI to leverage the total fund of €150 million. I encourage farmers to consider their cashflow and borrowings situation now and, if it is appropriate to their circumstances, to be prepared to apply for these loans when they become available.

There is a real dearth of detail in the Minister's reply on the start date and the criteria which will be in place for farmers who apply. I note the extent of the income pressure on farmers in the past week. We see it in beef and tillage at the moment and have seen it in the past year in the dairy sector and the mushroom sector.

What is the specific information the Deputy seeks?

When exactly will it start?

In early January.

The Minister said early 2017. We will hold the Minister to the early January 2017 date. It is much too late, however, because action is needed now. There is a real crisis in incomes across the farming sector and the support is not there for it as we speak. The Minister has also failed to provide detail today on the exact criteria to be met in order to apply for these loans. Will people be able to refinance existing loans? Will it specifically target merchant credit, which is due now, not next January? How are those farmers going to fare? Many tillage farmers were not able to salvage their crops or harvested crops which were not worth salvaging. When I brought this up with the Minister a few weeks ago seeking a specific fund, he said he would revisit the question once the harvest was in.

Will a specific fund be put in place for tillage farmers now? In fairness, they need a crisis fund, not more loans.

I remind Deputy McConalogue of the time. To be fair to other colleagues, we will run out of time if Members continue to go over their allotted time.

Let it be clear that I am not encouraging farmers to borrow money. I am inviting them to avail of this option if it is appropriate. Whether the answer is to refinance existing loans will have to be looked at on a case-by-case basis. If there is a penalty for early payment of a loan, this may not be appropriate. If a farmer is making investments under TAMS next year, it might be appropriate. If a farmer has merchant credit, it might be more appropriate. Certainly, that may be so if a farmer has overdraft facilities at high interest rates. It is designed to be working capital. There will be a very simple credit application for an unsecured loan. A farmer will not have to put up the deeds to the farm to secure this loan. It is six-year finance at 2.95% and has an interest-only option for the first three years. It will be developed at the earliest possible date. My ambition is to have it in place in early January and the public call will go out from the SBCI shortly. What more information can I give? The interest rate is 2.95% and there is nothing like it in the market. It would be nice if the Deputy acknowledged the widespread welcome for this funding scheme. It is a new departure in terms of access to finance for the sector. It is available to the mushroom and tillage sectors.

A tender will be issued to commercial banks, such as AIB and Bank of Ireland, to apply for the scheme. It will be Fianna Fáil's position that the Strategic Banking Corporation of Ireland should instead be licensed to provide funding directly to farmers and small businesses, in cases where they apply for separate funds.

The dearth of information continues. There is a total lack of clarity. In the Minister's first response to me he said it is hoped the scheme will be up and running in early 2017. When I pressed him on the matter, he gave a date of January, and he has now said it is his ambition that will be operational in early January. It is all very loose and does not give me any confidence that the fund will be in place for farmers at that point in time. It is very clear it is not in place for farmers now, when they actually need it.

I ask the Minister to respond specifically on the issue of tillage farmers. The Minister said he would reconsider the matter once the harvest was in because he did not want to interfere with the salvage operation and cause people to cease the salvage of crops. That time has now passed. It is clear that many farmers are in exceptional distress. They do not have the cashflow to pay merchant bills, other bills or even conacre bills because they have not harvested or stored crops or do not have tonnage to sell. Will the Minister put in place a crisis fund specifically for them?

The SPCI does not have the necessary network to deliver this loan product. It operates out of an office in Dublin and does not have a branch network. Those in Letterkenny, west Kerry or west Cork who want to access the loan product need access through a local financial institution. The SBCI will put out a call for partners to deliver the scheme. I have spoken to Bank of Ireland, AIB, and Ulster Bank. It is open to others. I was recently asked whether the scheme is open to credit unions - I suspect it is, if they can demonstrate a capacity to deliver the product in a manner that is acceptable to the SPCI. We want these institutions to be involved because they have the required network and existing exposure to and understanding of the agricultural lending sector. Let us get the scheme up and running as quickly as possible.

Many tillage farmers have had a very difficult year. Since we last spoke, they have salvaged a lot of crops. Some of it was low yield and there was high moisture. I acknowledge it has been a very difficult year. I have met representatives from the sector and engaged with them in my Department this week. They are quite welcoming of the fact they will have access to this fund, in particular in the context of the TAMS tillage applications that will be available early in the new year. The schemes will work side-by-side in terms of access to finance to enable farmers to invest in projects in the tillage sector.

The Deputy has asked for a specific fund to bail out the sector. That is not permitted under state aid rules. What we are availing of de minimus is to extend the loan facility to the tillage sector.

The Minister could have asked for an exemption.

Agriculture Industry

Mattie McGrath

Question:

4. Deputy Mattie McGrath asked the Minister for Agriculture, Food and the Marine the steps being taken to support and safeguard the agri-industry from the huge risks and fallout associated with Brexit; the efforts being taken to support the beef industry which has experienced a massive drop in prices due to the fall in sterling; the steps his Department is taking to seek out alternative markets for exports of Irish agricultural products; and if he will make a statement on the matter. [32509/16]

I wish to ask the Minister what steps have been taken to support and safeguard our vital agricultural industry from the significant and unknown risks and fallout associated with Brexit. What efforts are being made to support the various sectors of the industry, such as beef, tillage, sheep, cattle, mushroom and manufacturing sectors? What steps is the Department taking to seek alternative markets for exports of Irish agricultural products? Will the Minister make a statement on the matter?

As I have said, the UK’s decision to leave the EU presents enormous challenges for the entire Irish agrifood sector, including beef where the UK accounts for some 50% of our exports. I, together with my Department, our agencies and stakeholders, have been carefully considering the potential impacts of the UK vote, looking at the areas in which the greatest risks may arise and on which we will need to focus when negotiations begin.

The uncertainty generated by the vote has had an immediate impact on sterling, even though the UK remains a full member state of the EU. The exit process will have implications for tariffs and trade, regulations and standards, customs controls and certification and, of course, the EU budget. The exit vote also raises complex issues for the fisheries sector.

Earlier this year, my Department published a summary of the key actions we are taking by way of immediate response to the UK’s decision. As I already outlined, a number of steps have been taken to ensure that a sensible and coherent approach is adopted. These include the establishment of a Brexit unit within the Department, the convening of a consultative committee of stakeholders and the establishment of a contact group under the auspices of the Food Wise 2025 high level implementation committee. The Department is also participating fully in the new sectoral work groups established by the Department of the Taoiseach, under the auspices of the interdepartmental group on Brexit, which in turn feeds into the new Cabinet committee on Brexit. The Department has chaired the first meeting of a special agrifood sub-group, which took place on 19 October.

As to the changes to euro-sterling exchange rates, a number of actions have been taken to try to mitigate these impacts. These include the provision of practical guidance to SMEs by Bord Bia and Enterprise Ireland. The guidance covers areas such as managing volatility impacts, providing consumer and market insight, deepening customer engagement and extending market reach.

In addition, I announced a number of measures in budget 2017 that will financially underpin my Department's Brexit mitigation efforts through strategic investment in key areas of the Department, its agencies and the agrifood sector. This includes the €150 million loan we have just discussed.

The UK’s decision to leave the EU also reinforces the need to develop as many outlets for our agrifood products as possible, in order to minimise our dependence on any one market. As the Deputy knows, 40% of our total exports go to the United Kingdom. Therefore, we are considering new market opportunities. That is why in Food Wise 2025 we identified south-east Asia as a key market. The Minister of State, Deputy Doyle, and I visited the region.

I am going to north Africa next week to look at new market opportunities, in particular live exports which might be beneficial to the current difficult trading situation in the sector, for example. These activities will continue into the future, as they play a key role in our efforts to provide as many markets as possible for Irish agrifood products.

I am extremely concerned, as are all rural Deputies. Every day we meet farmers and those with small businesses who are involved in the agricultural sector. They are bewildered as to what is happening. On top of the poor harvest and the price of milk for over the past two years, there are issues with beef and there is devastation in the mushroom industry. The Minister used phrases like "managing the volatility". That is not much good if people do not have money to pay their bills. I have worked in the industry, and I know there are people in it who have always paid their bills and have a proud record of doing so. We need more than platitudes and fancy words.

I mean no disrespect to the Minister, but we need a Minister for Brexit because as he knows 75% of the jobs outside of Dublin are associated with agriculture. The Minister referred to the fact that 43% of exports go to the UK. What are we going to do? The UK is looking for a hard Border. There are major issues. We need more action. I am not asking the Minister to try to manage the volatility of the situation. People cannot manage volatility if they do not have money in their pockets but have bills to pay, a family to rear and everything else to do. We need the Minister to do a lot more than that.

I am on the record as having said there is no upside to Brexit for the agricultural sector. That continues to be the case, and the more anybody analyses it, the more apparent it becomes. There is a naive simplicity to the suggestion that a Minister for Brexit would solve all of the problems. Indeed, some of those who shouted loudest for that have not made an appointment with the spokesperson for Brexit.

Leaving aside my Department, if one had relations who worked in the UK for a time under the current regulations they can combine their social insurance contributions. Brexit impacts on social welfare, health and education. It is far too big for any one Minister. It is a whole-of-Government issue. That is the level at which it is being dealt with given its significance and importance.

The most difficult job anybody in the Government has is working on a cross-departmental basis and trying to co-ordinate a specific issue. This issue is so big it embraces all sectors of the Irish economy. That why it is being dealt with by the Government and the Department of the Taoiseach.

Agencies are doing good work, in particular in helping smaller food companies. Large companies can hedge and manage better than small companies. It is the job of bodies such as Bord Bia and Enterprise Ireland to hold their clients hands and assist them in innovative ways in order to mitigate the worst excesses. It is a very challenging situation and we are providing more resources to the agencies for next year.

The Minister has but I am not the one who is shouting the loudest for a Minister for Brexit. I am looking for a full Government response and a full acceptance and understanding of how serious the situation is. In the limited amount of time I have to speak, I will ask specifically about Tipperary where the mushroom industry is the largest, outside of Monaghan. The producers there are being wiped out. They were struggling with the competition from Poland and other countries. Those mushroom producers could not make ends meet or make any reasonable modicum of profit. Some have been completely wiped out. We have lost two already quite close to me in south Tipperary and many more are unable to hold on. Reference was made to recruiting extra staff in the agencies. That will not solve this because when would they be recruited and with what expertise? We need swift and dedicated action to save the very valuable mushroom industry that was built up over the last 25 years, along with the other industries in the agriculture sector. I am not saying that we need just one Minister to deal with it but we need a full, holistic Government response to pay attention to this across many sectors. The budget paid scant regard to Brexit and what might come down the line when and if the UK decides to press the button. The uncertainty is very hard for all sectors, the people who are dealing with farmers in the agri-industry, the machinery producers and other producers. They are all being affected by the negativity, they are threatened with unemployment and above all it is creating stress and trauma in an already very difficult situation. I am very concerned that the Government is not getting it and does not understand how serious the impact will be.

A whole-of-Government approach is being taken to the matter and if the Deputy parses and analyses the budget in detail, he will find that is the case. I was in the UK last Tuesday and I met with the chief executive of one of the big multiples there who does in excess of €155 million worth of trade with Irish agrifood sectors. I impressed on him that Ireland is still open for business and that although these are difficult times, we are anxious to deepen and forge stronger relationships with the UK multiples in the teeth of this very difficult crisis. I appreciate the difficulties being experienced by the mushroom sector and I know of the cases in Tipperary, which the Deputy spoke of. I know that the Minister of State with responsibility for food, forestry and horticulture, Deputy Andrew Doyle, has been involved in this. The quest for new markets is relevant. The UK is the most convenient and cost effective market we have had but we have to explore new market opportunities. While different circumstances apply, our biggest competitor in the UK is Polish imports. If they can bring mushrooms - with their short shelf life - all the way from Poland, then we can also go to continental Europe. We have to be open to all options in trying to ensure this industry, at which we are very good, has a future. That is what we are about and why we have the capital grant scheme so the mushroom producer organisations can get financial support. That is why they have access to the low cost finance and why the agencies will assist them in every way to access new markets. It requires a whole-of-Government approach and that is the approach of this Government.

I thank the Minister. We will move on to the final Priority Question from Deputy Eamon Ryan. I remind Members to please be cognisant of time. The more they speak the fewer questions we will get through. Out of respect for their colleagues, I ask Members to adhere to their time.

Environmental Regulations

Eamon Ryan

Question:

5. Deputy Eamon Ryan asked the Minister for Agriculture, Food and the Marine the reason the Government opposed a proposed ban on the use of pesticides in ecological focus areas which was discussed at the recent European Council Agriculture Ministers' meeting. [32510/16]

On a day when the Zoological Society in London has estimated that we have lost 58% of global wildlife since 1970, why did the Minister oppose the Commission proposal at the recent European Council meeting for the introduction on restrictions on the use of herbicides and pesticides within ecological focus areas on large arable farms? Surely that runs completely contrary to our whole positioning of Ireland as an Origin Green country and weakens and damages Irish wildlife, which is an important part of the whole natural and agricultural system.

The EU Commission is currently engaged in a review of certain regulations pertaining to the basic payment and greening schemes.  This process was commenced to try to reduce the complexity of regulations for farmers and to make schemes less bureaucratic and more streamlined to administer.

As part of this process the Commission has introduced a proposal to ban the use of plant protection products on ecological focus areas, EFAs. In Ireland this proposed ban would relate to land lying fallow, catch crops and nitrogen-fixing crops.  This ban was opposed by Ireland along with 17 other member states.

For my Department, the main concern relates to nitrogen-fixing crops and specifically beans. In effect, the proposed ban would make it more difficult for growers to produce an economically viable crop of beans. In addition, a situation would arise where farmers growing beans but not using beans as part of their EFA would not be subject to this proposed ban.  Potentially we would therefore have two standards for growing the crop within the State, with attendant issues relating to scheme controls.

Fundamentally, the simplification process is not intended to place an increased burden on farmers and administrators.  My Department's view is that this proposal would lead to such an increased burden.

It is important to clarify that the current cross compliance rules that relate to the use of plant protection products ensure that such products are used correctly on all crops.  My Department ensures compliance with these regulations by means of regular notifications to farmers, such as the recently published Cross Compliance booklet, and by means of on-farm inspection.

As well as being concerned about the standardisation with regard to bean crops, we should also show concern about the loss of bird life, the loss of invertebrates and the loss of insect life in the State which has been happening continually over a long period of time. We should be concerned that we have one of the lowest levels of organic agriculture despite it being a very lucrative and growing market across the European Union. We should also concern ourselves with looking at the options for saving money, as this scheme does. It proposes setting aside 5% of areas where one would not have to provide so much input and the farmer would actually be able to save money. Instead of doing that, we are positioning Ireland, I admit, with other countries. Other countries, however, at least have large organic areas and large areas where they are not applying any of these pesticides and herbicides. For Ireland to continue with that is doing greater damage than any kind of variation that might exist between one bean grower and another. Not applying the measure in areas of other catch crops, other nitrogen fixing crops or other fallow lands is a missed opportunity. Here was an opportunity to be truly green in our agriculture process and we have missed it again. As a country, we need to restore our green reality and not just use it as a branding tool.

To put it into context, we are talking about approximately 1,000 tillage farmers, 700 of whom have their ecological focus areas and the hedgerows on their land. Within the specific area of concern and the issue we are discussing here, the numbers involve about 300 tillage farmers. It is a question of balance. I accept Deputy Ryan's points, up to a point, but if we are to force those 300 tillage farmers, by virtue of these regulations, out of bean growing, or pea growing as the alternative protein crop, we will be forcing them back into a straitjacket in the type of crops they would then be harvesting. We would lose the diversity of crops that we currently have. Beans and peas have a nitrogen fixing element to them so they are environmentally beneficial as well. In looking at the proposal in the round, it must be taken into account that beans and peas are probably the only protein crops that are grown in the Republic of Ireland. We are substantially dependent on imported protein sources for animal ruminant feed. If we make it so difficult for those farmers to continue to grow protein crops we would be more dependent, with a heavier carbon footprint, on imported protein sources. It is not that I do not recognise some merit in the Deputy's argument - seven out of ten tillage farmers are actually compliant with ecological focus areas - it is a question of where is the best ecological gain. We believe there is some ecological gain in having a diversity of planted crops, in having the nitrogen fixing associated with these protein crops and thereby minimising our dependence on imported protein which is essential for a balanced ruminant feed.

It is not just about the whole agricultural and food system, it is also about the consumer. I believe that the Irish consumer will start to say "Please, Minister can we have our peas without pesticide on top?", even if it is a fodder crop. My point is that we need to actually start preserving areas of Irish countryside and even if this is about 300 farms they are large farms that are very heavy users of pesticide and herbicides. It is not unimportant for us to start managing our rural system. It is not as if the whole farm would be disadvantaged since it is only 5% of the overall land area. In those key areas, it would be right and proper for us to be truly Origin Green, to live up to the €364 million that we are providing in green subsidy supports and to say we will not be one of the blocking countries, that we will be one of the promoting countries with regard to this simplified green measure.

Why is it that it always seems, when it comes to the European Commission and better green solutions, that we are seen to oppose them? That is what happened in this intance. Even if it is only for 300 farms, it is not an insignificant statement that we are not restricting the use of pesticides and herbicides in the way we could have done had we gone with the Commission's advice.

It is a question of finding a balance. I do not dismiss the points made by the Deputy, but it is important to say that, for it to be worthwhile, both economically and agronomically, for him or her to plant a protein crop, a farmer has to have the possibility that he or she will harvest a decent yield from the crop. Without access to herbicide and pesticide control, that may not be possible. The consumer of the crop is the bovine industry. If we do not have a crop, we will import more protein sources. There is also a cyclical element that we need to consider in the bigger picture. It is also true to say we have very restrictive controls in the application of herbicides and pesticides. All one need do is ask any tillage farmer. The controls are onerous, rightly so, because ultimately it is about the protection of consumer health. There is, however, a bigger picture. I will reflect on the points made by the Deputy, but he should also reflect on the fact that if we do not commercially grow protein crops here - this is in danger of putting 30% of protein crops growers out of business - the consequence will be greater reliance on imported proteins.

I do not disagree with the Minister, but I call to his mind the bigger picture, to which I referred at the very start, that we have seen something like a 60% reduction in wildlife. At some point, the bigger picture, the ecological truth, has to come in. If we keep killing nature it will come back and bite us.