Dáil Éireann debate -
Wednesday, 3 Apr 2019

Vol. 981 No. 4

Agrifood Market Priorities post Brexit: Statements

Minister for Agriculture, Food and the Marine (Deputy Michael Creed)

The Government is conscious of the vital role played by the agrifood sector in sustaining the rural economy and rural communities across Ireland. There is no doubt that the agrifood sector faces considerable challenges arising from Brexit. The Government is doing everything it can, however, to ameliorate the potential impacts. In addition to the range of measures I have deployed over the last three budgets, including low-cost loan schemes and supports for product and market diversification, I and my officials have been in ongoing discussions with the European Commission in relation to the potential supports that may be required for the agrifood sector in the event of a no-deal Brexit. Most recently, I met with Commissioner Hogan in the margins of last month's Agriculture and Fisheries Council in Brussels to discuss the potential impact a no-deal Brexit could have on the agrifood sector and the Commission's readiness to deploy support measures to help mitigate the potential impacts on farmers, fishermen and businesses in the sector. Contacts are ongoing in this regard.

Irish agrifood exports have proven their ability to compete on European Union and international markets, with the value of total agrifood exports having increased by 78% in value between 2009 and 2018, from €7.8 billion to €13.9 billion according to the Central Statistics Office. This growth has been driven by the strong reputation Irish product has in meeting the highest standards of food safety and animal welfare, quality and nutrition. Third country markets also form an increasing proportion of total agrifood exports. In 2018, approximately 27% of our agrifood exports were to non-EU markets. This represents a marked increase from 2009, when they accounted for 20% of the value of exports. Half of our export growth since 2010 has come from markets outside Europe, led by a sixfold increase in exports to China, a doubling to the rest of Asia and North America and a rise of 40% in trade to the Middle East and Africa.

Developing new markets and growing existing markets, based on market insights, is one of the five themes of Food Wise 2025, the ten-year strategy for the agrifood sector. Market development and diversification is also a key response to the challenges which Brexit poses for the agrifood, in particular, the beef sector. In April 2017, I launched a seven-point action plan on market access, which is being implemented through a variety of actions. These include a market prioritisation exercise for meat, dairy, prepared consumer foods, beverages and seafood, as well as subsequent detailed studies carried out by Bord Bia on behalf of the Department of Agriculture, Food and the Marine. A market access web portal was also launched in May 2018. It is available on the Department's website and provides a wide range of valuable information to exporters. In 2018 a number of additional markets were opened by the Department, including the Chinese beef market, following years of sustained effort. There has also been an enhanced programme of Government agrifood trade missions to key new markets.

In respect of meat, the market prioritisation exercise identified the top five countries selected as priority markets as Japan, Malaysia, Mexico, South Korea and Vietnam. A very similar list of countries emerged in respect of dairy but with the inclusion of Indonesia instead of Mexico.

New priority markets have also been identified for beverages, prepared consumer foods and seafood. China was not considered for the deep dive analysis as it was believed that a very significant level of market intelligence and information on the market was already available. Nonetheless it remains a priority market for the meat and dairy sectors in particular.

Along with beef, seafood is another sector which is hugely exposed to the potential consequences of Brexit both in terms of access to resources and to destination markets. My Department has provided an additional €2 million in funding in 2019, matching what was received in 2018 under the European maritime fisheries fund operational programme. The actions funded have already helped to inform how we target markets abroad.

Live exports are part of the overall export dynamic and provide a critically important alternative market for Irish farmers. In 2018, the volume of live exports increased by some 30%. Just last month, I visited Turkey to make it clear that Ireland can continue to supply quality livestock for the Turkish market.

Trade missions play an important role in market development and I have been very active on this front in recent years as we strive to gain, and then develop, a presence in as many global markets as possible. Trade missions have an important role and will become even more important for market development, particularly post Brexit. I have led very successful missions to the Gulf region, the United States, Mexico, Japan and Korea in 2017, and to the US, Canada, China, Indonesia and Malaysia in 2018. These missions included participants from across the agrifood sector and featured extensive trade contacts as well as high-level political discussions. Taking all of this into account, this year in addition to the trade mission I already led to Turkey, I will lead trade missions to China in May, Japan and South Korea in June and Algeria and Egypt in November

My Department currently has agriculture attachés based in London, Brussels, Paris, Rome, Geneva, Washington, Beijing and Abu Dhabi. These officers play a significant role in developing our relationships with governments and official agencies in these countries. Those placed in countries outside of the EU are essential in acquiring key intelligence on agrifood issues and progressing through the various systems to achieve market access for a variety of agrifood products. In the context of the Global Ireland 2025 initiative we are creating four new agriculture attaché positions in Berlin, Tokyo, Seoul and Mexico city.

The decision to place an attaché in Berlin is informed by the need to diversify our export markets from the UK. Berlin will provide a basis to support further trade development work not only in Germany, but also in eastern Europe. The positions in Tokyo, Seoul and Mexico city are to assist in the process of gaining access for Irish agriculture products given that free trade agreements have recently been agreed by Japan, Korea and Mexico with the European Union. They also reflect the outcome of Bord Bia’s market prioritisation report, which has identified these countries among the priority markets for the Irish agrifood and fisheries sectors over the coming years.

In addition to establishing attaché posts in a number of new locations, we have also stated our intention to take on local hires in certain locations in order to provide, for example, local knowledge and specialist expertise in supporting our market access and trade development work. This is all part of our work in market diversification in line with the Food Wise strategy and our seven-point market access plan announced in the wake of the Brexit decision.

Deputy Charlie McConalogue

I welcome the opportunity to discuss the threat posed by Brexit to our agrifood sector. We are having this debate against the backdrop of the continuing chaos at Westminster, where it is still no clearer what might unfold or what the final landing place will be in respect of the UK's decision to leave the European Union. Whether it is a case of a hard Brexit or a soft Brexit, the decision will have as significant an impact on our country as it will on the UK, with regard to the agrifood sector in particular. While the total share of our national exports sent to Britain is 17%, the figure has varied between 36% and 40% for agrifood exports over the last few years. That shows how exposed agrifood is to any disruption to east-west trade and the absolute importance of taking the necessary steps to prepare for and mitigate against any such disruption caused by either a soft Brexit or a hard Brexit, although there is a particular urgency to preparing for a hard Brexit.

As the Minister well knows, some of our sectors are particularly exposed. The beef sector in particular is in the eye of the storm. We saw the impact on the horticulture sector 18 months ago when Brexit was first decided upon. The resulting turmoil in the sterling exchange rate wiped out some of our mushroom sector and put massive pressure on the horticulture sector as a whole. That is nothing compared to the pressure the sector will be under in the case of a hard Brexit. When horticulture was feeling this pressure 18 months ago the Government did not step in to support the sector. Some businesses went to the wall. We cannot, under any circumstances, see a repeat of that in respect of the wider agrifood sector. It was unfortunate and unacceptable that the sector was left to fend for itself at that stage. There were job losses as a result of the lack of sufficient support to get the sector through its time of need which, thankfully, did ease as sterling stabilised.

The response to Brexit of the Government and of the Minister has not been what it needs to be. There is still a lack of clarity about what measures will be in place in the event of a hard Brexit. I have said this to the Minister on a number of occasions in the Dáil. Whenever we have previously sought clarity from the Minister on the Government's Brexit response his big-ticket item in respect of the provision of assistance has been the introduction of a Brexit loan scheme. That scheme was announced in October 2017 and funding was provided for it in budget 2018. Despite the Minister selling it as one of his key Brexit measures throughout that period, that loan scheme did not materialise until it was announced last Wednesday, just a few days ago, as a means to deal with the threat posed by a hard Brexit. It was certainly not the type of product the Minister initially marketed it as, which was a measure to prepare the State for Brexit.

In his recent responses the Minister has been telling us that the additional funding provided for the areas of natural constraint and beef schemes is part of his response to Brexit. Again, I do not accept that. It is part of the normal course of events and a necessary development within the agrifood sector rather than something that is specific to Brexit.

We need more clarity as to what the situation will be in the event of a hard Brexit. Of course enveloping all of this at all stages has to be the national priority of ensuring that a hard Brexit does not happen. If it were to happen - it could happen in as little as a week and a half at this stage in the event of the withdrawal agreement not being agreed and no extension being granted - we still do not have any clarity as to what exactly the Government or the European Commission would do to support our agrifood sector. The stakeholders in the sector have made it clear that what will be needed in that event is support to mitigate any disruption arising from the imposition of tariffs. The traditional tools such as aid to private storage or intervention would not be appropriate because, as the Minister has accepted, they would lead to displacement from British shelves and a loss of market space which would be very difficult to recover. We would have to ensure that we keep our product moving into Britain in the short term. The best way to do that would be emergency initial aid. With less than two weeks to go, there should be a lot more clarity from the Minister and the European Commission with regard to what is on the table.

We also have to accept that Brexit has already been having an impact on the beef sector in particular over recent months. Prices are as low as they have been for many years.

Beef farmers have been losing their shirts on the prices for finished cattle in recent months. The Minister needs to respond via immediate emergency aid that recognises that the beef market is being undermined by poor prices and the backdrop of Brexit. Support from the Minister needs to be forthcoming immediately. There is capacity for this, given the permitted increase in de minimis state aid from €15,000 to €25,000. In particular, the Minister should work with the European Commission to ensure immediate support for our beef sector, which is already suffering.

We have not seen the type of recruitment of veterinary and sanitary and phytosanitary, SPS, officials that was mooted by the Government last summer. Unlike the Netherlands, which has recruited more than 1,000 customs and veterinary officials, or Northern Ireland, which I am informed has recruited specific officials, we have not seen the same happening in the Republic. Capacity has not been put in place to meet the challenge. Without it, redeployment will be required, resulting in a drain on other resources.

What arrangements will be in place as regards our all-island animal health status and approach, our standards and our North-South trade? This is linked to the wider issue of a Border plan. Will the Minister work with the EU, Northern Ireland and Britain to ensure that there is either no disruption or as little disruption as possible in the event of a hard Brexit happening soon? Businesses in the agrifood sector are in the dark about what would happen in that eventuality. There is no clarity around the Government's plans and there is a lack of faith in whether the Government has a handle on the steps that need to be taken.

All of our national efforts in the coming days must be aimed towards avoiding a hard Brexit while preparing for the worst. We must work with our European partners on accommodating any extension that is necessary to give the British side space and time and we must avoid doing anything that would assist in them accidentally crashing out as a result of the chaotic politics we are witnessing in Britain day after day. That must be our key objective. Avoiding any type of Brexit, particularly the hardest one, is undoubtedly in our national interest and essential for the future sustainability of our agrifood sector.

Acting Chairman (Deputy Alan Farrell)

Next is Deputy Martin Kenny, who I understand is sharing time with Deputy Ó Caoláin.

Deputy Martin Kenny

Yes, at five minutes each.

I have been reading through the Minister's comments on the agrifood sector and Brexit. We are at a critical point. Many in our rural economy are waiting on a knife edge to find out what their futures will be. In the Border counties and the west in particular, where farming income levels are probably the lowest, people have been waiting a long time. There are especially serious concerns in the beef sector. I read with interest the Minister's comments in that regard. While more than 50% of Irish beef is exported to Britain, that poses a major problem, given the introduction of the tariffs that were mentioned. The Minister stated that many of our other markets had expanded, for example, in the Middle East, China and elsewhere in the Far East. Some markets had increased to 27% while others in Asia and elsewhere had increased by 40%. What percentage of our overall agrifood exports do those markets represent? The increases could be starting from a low level. We export much of our product into Britain and other countries in Europe. In percentage terms, the increases elsewhere look good on paper. In real terms, though, we are moving low levels of food into those markets.

The EU will have to come on board and support Ireland through this critical time. It is imperative that a scheme be put in place to compensate for the tariffs that Britain will charge. This is the only way to ensure that Irish beef continues to be put on shelves in Britain and holds on to its market share. That is vital for the future.

The question of exporting food across the British landbridge has still not been resolved satisfactorily. Most people recognise that transport mechanisms that take our foodstuffs around Britain to reach Europe will take much longer and be more expensive and difficult.

The issue of live exports has been mentioned. While the percentage of live exports has increased, this has only happened in a certain sector, namely, dairy calves. Live exports of finished cattle should not be, and are not, the answer. We need to find markets for our finished food products.

I have heard increasing talk of something in recent days. Processors in Ireland have meat processing facilities across the water in Britain, and I understand they are considering the possibility of moving their operations there, bringing live cattle across and killing and processing them there instead of here. That would have a negative impact on the prices farmers get at Irish marts and on the sector as a whole, including employment therein. There are also serious concerns in our beverage industry about how this situation will be resolved in the long term.

Regardless of whether there is a crash or a deal, Britain will leave the EU. No matter the mechanisms or agreements that are put in place afterwards, the following period - it will probably be five to ten years - will be difficult for the agrifood sector. While the dairy industry is somewhat stronger than the beef industry and has more flexibility, the latter is already in crisis. We need to consider how to market our product better in other places. In order to do that, we must recognise that we are probably going to have to contract. We will have to produce less for a certain period and get a higher price for it by marketing it properly, with specific reference to the unique qualities that Irish food has, for example, grass-fed beef, family farms, traceability, etc. All of these models need to be emphasised more and more and we need to find markets for our product. Its scarcity will be a factor, as we will not be producing as much. I have come to the view that we are producing too much beef to be sustainable, and that is even before Brexit. When Brexit kicks in, the danger will increase.

The Government must do what it can to prepare for Brexit. Ultimately, however, Brexit is a problem between the EU and Britain, and the EU must recognise that Ireland will be a severe casualty. It will have to step in with the funding necessary to protect our vital industries, in particular the agrifood sector.

Deputy Caoimhghín Ó Caoláin

As the chaos continues in Britain regarding Brexit with still no idea of how it will finish up, be it with a hard border, a soft border or, preferably from my point of view, no border at all, it is only right and proper that we are again discussing agrifood market concerns and priorities post Brexit. As I have said time and again, the number one priority should be and needs to be that, post Brexit, there would be no physical border on the island of Ireland. The agrifood sector is the sector that will suffer the greatest damage in the event of a crash-out Brexit.

Regardless of what type of Brexit occurs, this sector, which is vitally important to my Border constituency will be impacted. Within my Cavan-Monaghan constituency, we have producers of high quality beef, poultry, pigs, milk and mushrooms and long-established, highly respected processing plants. This entire sector must be protected, both pre and post Brexit. This involves securing the livelihoods of the farming community, ensuring a continuing top quality level of produce and keeping all existing markets open while identifying new markets.

This must involve support from Europe. We never asked for this Brexit mess to be foisted upon us. We have had our own homegrown difficulties arising from the banking crisis. We believe that real and tangible support to help build a bulwark against the worst effects of Brexit must now be forthcoming from the European Union. Similarly our Government, in preparation for the hit that our economy is going to take regardless of what type of Brexit presents, must sponsor an injection of investment to help steady the ship in the short to medium term until these sectors level out and can identify new opportunities for growth.

A strong CAP budget post Brexit is also vital to protect the agricultural sector across Europe over the period ahead. This is a must and the Government must make strong representations on this and must approach it on an island-of-Ireland basis if at all possible. The nature of the sector North-South shows deeply developed integration with the inter-trading of live and processed produce and unprocessed produce for finishing. This happens currently in a co-operative manner with few barriers, yet in a stringent and well regulated market.

The British market is, of course, hugely important to our agrifood sector. While we want to see that retained in the event of a hard, crash-out Brexit, we will be forced to look to new pastures. In the event of punitive tariffs and trade duties, we must get serious support from Europe to get our agrifood produce into new markets as soon as possible and at sustainable, rewarding prices. With pressures already showing on the horizon regarding climate change and sustainability of the agri sector, the last thing we need is tonnes of food rotting in processing facilities and warehouses or held up in delays at customs posts and ports on this island, in Britain, or on mainland Europe.

We must do all we can to maintain our food standards. There can be no acceptance of low quality processed food being allowed into Ireland post Brexit through either the front or the back door. We have the best standards of quality food production in Europe, if not the world, so let us do all we can to preserve those standards and to help ensure not only the sustainability of the agrifood sector across this land but its development and that it will thrive in the years before us.

Acting Chairman (Deputy Alan Farrell)

I call Deputy Wallace. Pardon me, I call on Deputy Penrose first.

Deputy Willie Penrose

That is typical of Fine Gael. Fine Gael wants to get rid of the Labour Party altogether.

Deputy Michael Creed

What did the Deputy say?

Deputy Willie Penrose

That is typical of Fine Gael.

I have had a long-held view, expressed almost three years ago, that while Brexit will take place in some shape or form, nevertheless, in 2026, ten years after Britain passed the referendum, we will still be talking about the process, ramifications and consequences for Europe, the UK and Ireland. I am more convinced now than when I first expressed that view that I will be broadly right.

The only certainty, after two years and ten months, remains the uncertainty attached to this whole process. It is our bounden duty to establish possible market priorities post Brexit and this debate is focused on that. Insofar as one can engage in such a cause or pursuit, our best efforts must be made to avoid a hard border at all costs. There will, nonetheless, be some ramifications and consequences for us.

We are all aware of the significant trade exposure of various sectors of the Irish economy in a European context and, in particular, the centrality of our trading relationship with the UK. Ireland's food and live animal sectors are substantially more exposed to the UK than those of any other EU member state so market diversification has to be a major priority. This must include product diversification and the development of new products which I know is part of the Minister's focus.

It is worth reviewing the statistics to get a focused view of the exposure of the Irish economy to Brexit. Irish exports to the UK were 37% of our food exports in 2018. Statistics on the exposure of the main sectors show 51% of beef exports, 56% of pigmeat exports, 79% poultry exports, 25% of all dairy exports but 50% of our cheese exports, 62% of prepared consumer food exports and 26% of our beverage exports are to the United Kingdom.

Copenhagen Economics estimates a 40% increase in trade costs in a free trade agreement scenario due to customs impact and regulatory divergence.

Some 850,000 trucks travel by ferry between Ireland and the UK each year, 45% of which contain perishable food and drink. The majority of Ireland's €4.5 billion food and drink exports to the EU 26 use the UK land bridge and the amounts of Irish meat exports are even larger. For fresh food and drink produce, the shortest crossing is critical. Ireland to Calais by the land bridge is a journey of approximately ten and a half hours but, if one has to travel to Cherbourg, the journey is approximately 20 hours.

Our priority must be to get an ambitious EU-UK future trade agreement which avoids tariffs, tariff rate quotas, TRQs, regulatory divergence and all that. We must avoid a hard border with Northern Ireland as part of the imperatives of the Good Friday Agreement. We must have state aid for stabilisation, competitiveness and some diversification to remedy what will be a serious disturbance in the economy due to the fracture in the Single Market and I will refer to that later. There will be an impact even if it is a soft border, particularly on exchange rates.

Custom burdens and regulatory checks, especially with animals, must be part of any future trade agreement. There will have to be mutual recognition of standards and custom codes. There will have to be collaboration in relation to veterinary and phytosanitary certification.

The transiting of goods across the UK land bridge is critical. How that is achieved will be very important and our input will have to be critical to a future trade arrangement taking into account the all-Ireland dimensions in relation to recognition of technical applications and the seamless system that is there.

There is a significant amount of work to be done. I realise that 25% of our exports are now going to non-EU countries and that is a significant increase over the past decade. It is all the result of a drive and necessity to develop new markets but they must be profitable. I note the number of trade missions that the Minister is going to embark upon this year in seeking to establish us in new and hopefully profitable global markets.

We are talking about agriculture and agrifood, a highly export-orientated sector. We are trying to sell the produce of about 140,000 family farms across the country, predominantly grass-based enterprises. It is important to try and cultivate that and secure a competitive advantage over other grass-based enterprises. An average farm size is 32.5 hectares. The farms are much bigger down the south and the east coast. The Minister would probably not see many farms of that size but 32.5 hectares would be a big farm in the midlands, the north and the west.

There are almost 200,000 jobs supported by the agrifood sector, which includes food and drink firms, food manufacturing, wood processing, agriculture, forestry and fishing. We saw the immediate impact on the mushroom industry, that Deputy Ó Caoláin referred to, when the exchange rates started fluctuating after the vote in June 2016. We are concerned about future tariff and non-tariff barriers to trade and we have not said much about the impact of Brexit on the EU budget. This will, of course, be a major factor in the ongoing CAP negotiations. If €10 billion, €11 billion or €12 billion is taken out and 40% of all EU spending is on agriculture, there will be some hole in the bucket which somebody is going to have to try and fill.

The last thing we want is a Brexit which sees the EU and UK aligned by WTO rules. We wish to see a soft Brexit with the UK staying in the Customs Union and Single Market, or at least a soft to medium Brexit whereby the UK might leave the Single Market and customs union but has a free trade agreement with the EU with no tariffs applying.

In that situation, the UK would be able to do some trade deals but we would love the UK to stay in the customs union and Single Market. Brexit has the potential to cause us a loss of our preferential market access to the UK. It is clear that Irish exports to the UK would decline, as would EU exports. Our exports to less profitable markets in the EU will have to grow considerably and we will have to sell our products somewhere if we are to maintain the same level of production. Competing on EU markets, which are not elastic to the point of consuming everything produced, will immediately result in a reduction in prices at EU market level. Ultimately, there will be a collapse in Irish farm incomes.

To use Disraeli's maxim, I am prepared for the worst but hope for the best. This is what we have to do. We must budget for the least worst outcome. There is a clear need for the implementation of exceptional mitigation measures because of our particular situation and unique circumstances. Tariffs are a tax on trade and commerce. These impositions will effectively destroy a significant volume of our agrifood exports to the UK. Tariffs are taxes. They are collected and go into central funds, be they Exchequer or EU. Clearly they have to be made available to defray the damage to exports and job losses. That fund should be available.

Paul Kelly of IBEC's food and drink sector is an excellent analyst in this area. He has done tremendous work. Some time ago, he argued there is a need for an adjustment fund of up to 5% of the current annual export sales to the UK. This level of funding will be required for three years to help Irish companies deal with Brexit and innovate, as the Minister said, and diversify into new markets. Further refined measures have to be brought forward to ensure landbridge access to continental Europe and the provision of sufficient capacity on direct sea routes. These are critical issues that I am sure the Minister and the Department are looking into.

It will only be in the event of an agreed Brexit or approval of the withdrawal agreement that the discussion to shape the future relationship between the EU and the UK will begin. Our priority will be to try to secure trade free of tariffs and quotas; the reduction to the minimum, if at all, of any regulatory divergence pertaining to food standards and phytosanitary controls; seamless alignment, particularly on an all-Ireland basis; mutual recognition of various agreements and authorities, particularly with regard to food safety; and minimising trade barriers and hurdles. This is the optimum objective.

Cushioning against sterling exchange rate fluctuations will be a top priority. In a no-deal Brexit scenario, one can anticipate a sharp fall or depreciation in the value of sterling, and this could be in the order of 10% to 25%. Sterling could be up to £1.10 against €1. A broad agreement along the lines of the withdrawal agreement being negotiated would see sterling depreciate by between 2% and 5%, or about £0.90 to €1. This is critical. There is a lot of work to be done. All we can do is pray that some sense prevails over there.

I get annoyed listening to people speak about what we can do. We can do our best. We have been caught up as innocent bystanders in a battle we did not cause. Very often, people state we could do this or do that. Everything is only speculation. The youngest child in a school has a better idea about what might happen than some of us here.

Deputy Mick Wallace

I agree with Deputy Penrose's final sentiment. If Brexit turns out to be much nicer than we think, I will not give the Government the credit for it but if it turns out to be a disaster, I will not blame it either because we are in the hands of the Brits and they do not even know what they want themselves. It will not be our fault or credit.

The Minister said developing new markets and growing existing markets based on market insights is one of the themes of Food Wise 2025. We had a little debate about food exports to Iran in the House last week and the Minister intimated Iran buys cheaper from Brazil, Australia and New Zealand, which it does, but it wants beef of a higher quality, which Ireland has. We should be looking to export to Iran. We should also get over ourselves and get out of the nonsense of sanctions against Russia, get back on good terms and sell beef and lamb there.

Even if Brexit were not happening, as I have pointed out here over recent years, there are massive challenges facing the way we farm in this country. Our overdependence on dairy and cattle is problematic in a number of ways, not just environmentally. It can also be problematic because of the knock-on effect on exports. Global warming will bring more unfavourable and unpredictable weather in the future and we have seen repeated fodder shortages. This is all the more reason we should control the numbers in dairy and beef and we should not have allowed the numbers to go so high. The numbers will need to be reduced in the long term.

The Department repeatedly makes the claim that we do beef and dairy better so it is irresponsible to allow other producers to fill the space we occupy in the market. Not only are these claims unsupported by evidence but a number of recent reports have highlighted how we are nowhere near being the most emission efficient producers in the field. Professor Alan Matthews of Trinity College pointed out recently that a UN Food and Agricultural Organization study found Irish greenhouse gas emissions per kg of milk are the fourth highest in the EU, exceeded only by Poland, Estonia and Bulgaria.

There are advantages to be won as this can be seen as an opportunity. We cannot continue the way we are going because it is not sustainable. What we have seen regarding beef prices is a perfect example of the fact that we need to have a better handle on how we do things. We also have to reduce the size of herds. Global warming can be seen as an opportunity. Parts of Ireland could be suitable for growing different produce that may not have been a runner previously. Some people are starting to grow wine and hemp and these are perfect examples.

Organic farming should be a priority for the Department and it has many positive effects. People such as the Llewellyns and McNallys in north Dublin and the Dennisons in Waterford are good examples of how well things can be done. Much of the agricultural land in Ireland has been depleted through intensive farming over the years and organic farming can address this. The insect population is in free fall and organic farming can also address this. There are increased CAP payments for smaller herd numbers if they are raised organically, meaning there are supports from Europe to make the transition. The land can be protected, the herd can be reduced and space can be freed up to diversify what farmers produce. Farmers can look for a premium for a better, healthier and more climate friendly product.

Currently, only 1% of farmers grow vegetables, the lowest in the EU, and we have only 2% organic produce from the agricultural sector. We are food insecure. We even import two thirds of our animal feed from abroad, more than any other EU country. With regard to vegetables, I believe in protecting Irish farmers and the price they get for their vegetables. We should stop the bags of carrots coming in for 45 cent. The Minister should go around Italy and see whether he sees a HiAce van. Italy ignores the EU rules on it and protects Fiat. It would not let HiAces in and it never has. We would not see one there because Italy protects Fiat.

Deputy Michael Creed

We would be in right trouble if we were locked out of markets when we export 90%.

Deputy Mick Wallace

The Italians would give the Minister a few lessons on handling the EU fellows. A sizeable sector of the farming community wants to do things differently.

Acting Chairman (Deputy Alan Farrell)

Is the Deputy sharing time?

Deputy Mick Wallace

I am. I will let Deputy Pringle in shortly.

This sector is being forced to do it without the Department and sometimes it involves conflict for them with the Government, the big farmers, the big processors and the retailers. The Talamh Beo group set up in Galway recently is a perfect example. It sees what is at stake and what needs to change. A member of the group, Fergal Anderson, stated:

People want good food, a good natural environment, the same things farmers want; they want farmers to make a living and take care of the land. Farmers at the moment have to maximise everything, and be good business people rather than good farmers.

We’ve people involved with different ways of managing – micro dairy, direct marketing beef, rebuilding local markets, rebuilding soil.

The industry has its representation – what we don’t have is someone battling from the other corner. We say – the dominant model of production is too hard on the land, on the environment. The beef market is flooded with dairy calves. What you do doesn’t happen in isolation, it has an impact. Why aren't more feeds grown in Ireland rather than imported? We can develop hemp growing, looking at different investment models, there hasn’t been long term investment in processing industries – where does the wool, the hardwood timber, the hemp get processed?

It is time for a change.

Deputy Thomas Pringle

As is the case with everything when it come to Brexit, the issue of agriculture is up in the air and nobody knows where it will land. As other Members stated, Brexit leaves the Government in a difficult position because it does not know in what way it should prepare for change. It could go down the road of preparing for a no-deal Brexit only to find that a deal is struck and all its preparations would be thrown out the window and wasted. There is no doubt that preparing for Brexit is very difficult. It is difficult to wade one's way through it. It amazes me that we have no control over it and no real say in what happens, but we do some amount of talking about it. It is amazing how much discussion Brexit has generated in the House and throughout the country. We may not be sufficiently discussing or focusing on things which we could deal with and tackle, although that may be a discussion for another day.

Beef exports to the UK make up approximately 51% of production while dairy exports to the UK account for approximately 21% of current production. A no-deal Brexit would have a very significant impact on our exports to the UK. North-South trade would also be severely impacted. That would have a significant impact across the board and all the way down to individual farmers. It is very difficult to see how it could be offset. Teagasc estimated that the tariff on meat from Ireland into the UK would be approximately 60%. Although there would still be a market there, under the 60% tariff, beef would be 60% more expensive. It would be very difficult for us to offset that and to consider how trade with that market would continue.

On building up other markets outside Ireland, it took four years of negotiations, from November 2014 to November 2018, to get the Chinese market opened for Ireland. Similar will happen in trying to open markets in other countries. What must also be considered is the distance the beef must travel to the market and how that cost would be met. That cost may be equivalent or close to the tariffs that will be put on the trade in the UK. That will have to be dealt with over time and through discussions. There is a lot of work to be done by the Department, and I acknowledge it is being done, to see exactly how we can offset some of the losses that will occur over the coming years, particularly in the case of a no-deal Brexit.

Several Members have referred to the impact that Brexit will have on the EU budget. What will have the biggest impact on the EU budget, however, is the militarisation of the EU which is under way. It will have a far bigger impact on the farming and agriculture budget than Brexit will ever have. That must be remembered as we run headlong into the militarisation of the EU because Brexit will be unfairly blamed for the diminished EU budget. That is very important to note.

A significant amount of work remains to be done in building relationships with third countries. I agree with Deputy Wallace regarding the need to open up trade with Iran. Dealing with Iran is no worse than dealing with Saudi Arabia. Ireland was quite happy to go to Saudi Arabia and open up trade with it. We should be looking at those markets and developing them and ensuring they are there for the benefit of us all. The next couple of years will bring turmoil, as the Minister is aware. We do not know how Brexit will work out or what will happen. We will have to wait and see.

Deputy Mattie McGrath

I too am pleased to have the opportunity to speak on the very important matter of agrifood market priorities post Brexit. As other Members stated, there has been so much talk about Brexit that we have nearly talked ourselves out of existence. There is a definite imponderable. We do not know what will happen. Brexit is causing untold damage and uncertainty within the agricultural sector.

As the Minister, Deputy Creed, and the Minister of State, Deputy Doyle, who are present, know well, both being in the farming business, the agricultural sector extends far beyond the farm gate. It is of huge significance in rural Ireland, and urban Ireland if I only cared to listen. When agriculture does well, Ireland does well. Indeed, it was the farming sector that brought us out of the previous three recessions. Farmers spend money when they are making it. They employ local, buy local and support local.

Obviously, this issue will require sustained interdepartmental co-operation. I have question marks regarding many Departments, how adept they are at managing change and how lethargic they are in many areas. That is why I raised the need to maintain the continued availability of favourable terms for investment in primary agricultural processing and marketing under the Strategic Banking Corporation of Ireland, SBCI, for example. That is badly needed because farmers cannot get cash. The banks are not supporting farmers who want to invest and they have not done so since the recession. They may say they are, but they are not. They are looking for huge amounts of collateral. They nearly want the farm, the farmer's partner and their children as collateral. It is ridiculous. The Government knows that, but it is not tackling the banks because it is afraid of them. The banks are controlling the Government.

I acknowledge that the SBCI offers a Brexit loan scheme. Its website states that the loan scheme is offered "in partnership with the Department of Business Enterprise and Innovation, the Department of Agriculture Food and the Marine and is supported by the InnovFin SME Guarantee Facility, with the financial backing of the European Union under Horizon 2020 Financial Instruments". That quote tells us what we need to know. There are many agencies involved and the process is very bureaucratic for a farmer or agribusiness which wishes to avail of it. That said, the conditions do not make it readily accessible to many farmers, even though to apply one must have fewer than 250 employees and a turnover of €50 million or less. Only very large operations or agricultural industries would have that many employees or that much turnover. It caters for businesses with turnover of €50 million or less.

Deputy Michael Creed

Or less.

Deputy Mattie McGrath

Or less, yes.

Deputy Michael Creed

It is available to small businesses.

Deputy Andrew Doyle

That is the maximum.

Deputy Mattie McGrath

I said that. Very few small business have a turnover of up to €50 million.

Deputy Michael Creed

No, it is less than €50 million.

Deputy Mattie McGrath

I know that. I accept that.

Deputy Michael Creed

The turnover could be €2 million or €200,000.

Deputy Mattie McGrath

I accept that, but they will not have that number of employees or anything like it.

Deputy Michael Creed

They do not have to have 250 employees. It states that it can be fewer than 250 employees.

Deputy Mattie McGrath

I know that it states "or less". I hope the Minister will be able to answer the questions I intend to ask him. I have asked him those questions before but he did not answer them and he will not answer them tonight either. He will be singing dumb. May I be allowed to carry on without the smirks and jeers from the two farmers on the other side of the House?

Deputy Andrew Doyle

I did not say anything.

Deputy Mattie McGrath

The one farmer. I apologise to the Minister of State. I should be blaming the Minister who is invisible when there is a crisis in agriculture, the Minister who cannot be found to tell us what is going on.

We know from Teagasc that the agrifood sector in Ireland in 2016 generated 7% of gross value added, a sum of €13.9 billion, 9.8% of Ireland's merchandise exports, and provided 8.5% of national employment. Those are good figures provided by Teagasc. One must recognise the importance of the agrifood sector demonstrated by those figures and support it. When employment in inputs, processing and marketing is included, the agrifood sector accounts for almost 10% of total employment, which is a significant amount. On the contribution of the agrifood sector to the national economy, Teagasc research indicates that the agrifood sector is one of Ireland's most important indigenous manufacturing sectors, accounting for employment of approximately 167,500 people. That is massive. As a Parliament and a country, we are underselling the importance of the sector. Our schools may also have moved away from a recognition of its importance. We must send the message that farming is vitally important and a significant employer with large spin-off industries. Our agricultural exports and foreign trade are vital. The agrifood sector includes almost 700 food and drink firms throughout the country which export food, including seafood, to more than 160 countries worldwide. I compliment all those involved, such as Bord Bia and the various other enterprise agencies that went abroad and created those markets. We now need to up our game because we are under pressure.

Economic activity in the agrifood sector produces a far greater return than equivalent activity in other trading sectors of the economy. This fact is not stated enough. Agriculture is our primary industry and there is traceability from field to fork, which is important. We do not have such traceability in many other areas. We have it because agrifood companies secure 74% of raw materials and services from Irish suppliers by comparison with 43% for all other manufacturing companies. That is also a significant statistic. These are important figures and we cannot shout them loudly enough. All of this demonstrates the clear necessity of maintaining a firm financial commitment to the sector through all available State bodies, particularly because of the uncertainty associated with Brexit.

I wish to raise a specific issue with the Minister, Deputy Creed, related to the operation of the Brexit loan scheme. In February this year I asked him, through a parliamentary question, for the number of applications received under the scheme and the numbers approved and rejected. I also asked about the number and value of loans provided. These were very straightforward questions, to which I was expecting to receive straightforward answers. The Minister informed me that the €300 million Brexit loan scheme had opened for applications on 28 March 2018, something I knew already, and would remain open until 31 March 2020, something we also knew. The guidelines for the scheme are quite clear in that regard. A separate issue that needs to be examined is the very narrow timeframe, but I am concerned about the fact that the Minister informed me that on 22 February 2019, 462 eligible applications had been received, of which 413 had been approved and ten were ineligible. The total number of loans progressed to sanction at bank level was only 81, with a total value of €17.3 million. Thirteen were related to food businesses, with a value of €4.2 million. What is the delay in processing the loans at bank level? The Minister might answer that question. My problem again relates to the banks. They are crippling the economy, not lending, repossessing and harassing farmers and ordinary householders every day of the week. There is intimidation. If approval has been given and the applications are eligible, what is the reason for the delay in approving at bank level? It just does not add up to me or anybody else. Perhaps the Minister might address this issue.

Many issues arise. As has been said, Brexit is beyond our control and we can talk all we like about what is happening across the pond. When the United Kingdom first voted in favour of Brexit, the talk from the European Union was too strong. There was talk from the Taoiseach; the Minister, Deputy Creed, and others about there being no question of having a hard border. I asked Mr. Michel Barnier about a hard border when he addressed this House. I travel once a year to Bosnia and Herzegovina and when I do, I go through a massive checkpoint on leaving Croatia. When I asked the Taoiseach at a private meeting about six or seven weeks ago what would be different in Ireland, he told me to be careful as the border could be in Rotterdam or Calais. What is going on? There is uncertainty.

The Border community, which I know intimately because my wife is from a Border county, is very concerned about the possibility of there being a hard border. The statements from the Taoiseach ranged from comments on there being no hard border to soldiers at the border. Depending on what the day of the week it was, he got up and said something different. He should be reined in as he is being reckless. In fairness to the Tánaiste and Minister for Foreign Affairs and Trade, Deputy Coveney, he has done his best and kept the ship steady, but there are many questions. I hope there will be a conclusion on Brexit one way or another very soon, but I do not know what will happen then. It will be like the leaves falling off the trees in the autumn. I do not know what will happen to Fine Gael's erstwhile colleagues in government, Fianna Fáil. They will have nothing to hide behind after Brexit.

Deputy Eugene Murphy

We are not in government.

Deputy Mattie McGrath

It might as well be in government. It is supporting the Government. The leader of Fianna Fáil was attacking the Minister for Health, Deputy Harris, again today, even though he had voted to express confidence in him five or six weeks ago. Fianna Fáil cannot have its cake and eat it. Its members voted again to allow the reckless spending on the national children's hospital to go ahead. Today Deputy Micheál Martin was standing up, in fake horror-----

Acting Chairman (Deputy Alan Farrell)

These are statements on agriculture.

Deputy Mattie McGrath

Yes, I know, but I am just asking what Fianna Fáil Members are going to hide behind when Brexit occurs.

Acting Chairman (Deputy Alan Farrell)

The Deputy should take his seat. His time has expired.

Deputy Mattie McGrath

They will have no place to run and hide. The people have not been fooled. It is a coalition under another name-----

(Interruptions).

Deputy Mattie McGrath

There are post offices being closed and the health service is in disarray.

Acting Chairman (Deputy Alan Farrell)

The Deputy should sit down.

Deputy Mattie McGrath

Fianna Fáil Members are like nodding donkeys in support of the Government, no matter what it does and how their leader insults it at the Ard Fheis or a party meeting. They come back the day after. They had a mock raid. It is shadow boxing. They had a chance to vote no confidence in the Minister and doing so would not have caused a general election.

(Interruptions).

Acting Chairman (Deputy Alan Farrell)

You should take your seat now. You are done.

Deputy Mattie McGrath

Excuse me, but that is not parliamentary language.

Acting Chairman (Deputy Alan Farrell)

If you do not take your seat, I will suspend the sitting.

Deputy Mattie McGrath

I do not want the sitting to be suspended at all.

Acting Chairman (Deputy Alan Farrell)

You are done. Take your seat.

Deputy Mattie McGrath

It is not parliamentary language to say I am done. I am not.

Acting Chairman (Deputy Alan Farrell)

Take your seat or I will suspend the sitting.

Deputy Mattie McGrath

I am-----

Acting Chairman (Deputy Alan Farrell)

You are over time.

Deputy Mattie McGrath

I am just making a point. I am making a mockery of the party beside me.

Acting Chairman (Deputy Alan Farrell)

The sitting is suspended for ten minutes.

Sitting suspended at 8.45 p.m. and resumed at 8.55 p.m.

Acting Chairman (Deputy Alan Farrell)

As Deputy Mattie McGrath's time has expired, we will move on to Deputy Jackie Cahill.

Deputy Jackie Cahill

Before I start to talk about Brexit, I would like to respond to some of the comments that came from my left before the suspension of the sitting. Fianna Fáil will never shirk its responsibilities. We are not running away from anything.

Acting Chairman (Deputy Alan Farrell)

I do not want any antagonism in the House. It might be better if the Deputy debates the issue.

Deputy Jackie Cahill

It might be better, but it is-----

Acting Chairman (Deputy Alan Farrell)

I understand and respect the Deputy's perspective, but it might be better if he sticks to the issue at hand.

Deputy Jackie Cahill

-----very hard to ignore the kind of scurrilous comments made by the Deputy. He was very quick to run for the hills, but we will not do that.

Acting Chairman (Deputy Alan Farrell)

Absolutely. Perhaps the point is made.

Deputy Jackie Cahill

We will not shirk our responsibilities.

All of us are out knocking on doors at the moment in support of our fellow politicians who are running in the European and local elections. At virtually every door, we are asked what is going to happen with Brexit and what impact Brexit will have. None of us has a crystal ball that shows us what Westminster will do. If one wants to get depressed at the moment, all one has to do is turn on the BBC news to hear about the chaos in Westminster. There is a lack of forward planning and cohesion over there. The only thing that is certain is that Brexit has no positives for the agrifood sector. There will not be any argument on that.

Deputy Penrose referred to the exchange rate. The mushroom industry, which depends significantly on the British market, descended into chaos very quickly after the UK voted to leave the EU in June 2016. This shows how vulnerable we are to fluctuations in exchange rates. When I read an article in the farming press during the week, I was interested to note that fluctuations in exchange rates at the moment are having a beneficial effect on Irish meat processors. Unfortunately, none of that is being passed back to primary producers.

There has not been enough of a focus on the impact that Brexit will have on the Netherlands and Denmark, which send a serious volume of produce into the UK market. The pig sector, which has been under great pressure in our economy for the past 18 months, will be strongly affected by Brexit if Danish pigmeat, in particular, has to find other markets. This sector cannot afford any more hits. I am worried about what will happen to it if Brexit means it has to compete with the Danish pig sector to try to find new markets.

The Minister has stated on a few occasions that he has confidence in the Commission and that financial aid will be provided to protect primary producers in the event of a hard or soft Brexit. Farmers on the ground do not share his confidence. I suppose the budget is the first issue. CAP negotiations are taking place. Some 38% of the entire EU budget is spent on agriculture at the moment. If the British take their money with them when they withdraw from the EU, there will be a €4 billion shortfall. The very least the Commission could do is say that this shortfall will be made up by the other 27 member states. That would give some credibility to the suggestion that the Commission will step in with proper financial aid. The CAP budget has been shrinking over time as a percentage of the EU budget. In real terms, farmers are getting an awful lot less. The food security that European farmers are providing to the people of Europe is being undervalued in each passing year.

I have spoken previously about the changes in the skimmed milk powder regulations. The concessions that have been given by the Commission in the Mercosur deal are also affecting the confidence of farmers. The Commission has agreed to these concessions in full knowledge of the damage that Brexit might do to our beef industry.

From media reports, Mercosur could lead to another 100,000 tonnes of beef from South America being allowed into the EU. With a British exit, the EU would be more than 116% self-sufficient in beef. Farmers and primary producers cannot have confidence that the European Commission will step up to the plate to make up for the shortfalls in income in the event of a hard Brexit.

Last week Fianna Fáil put down a Private Members’ motion on beef. Beef farmers, suckler farmers, finishers and store producers are on their knees. It is a case of those who are losing the least in the beef industry. Nobody except the processors are making money. A no-deal Brexit will, unfortunately, make that situation far worse.

The Minister announced many new markets around the world with Irish beef now having access to 170 countries, along with markets for live exports into many locations. Unfortunately, the volume of beef going to those markets is extremely small. While we have provided extra resources for Bord Bia, until serious amounts of product begin moving to other countries, it is hard to see how we can survive without access to the UK market. Getting market share in any country is not easy. It is a slow process. I sat on Bord Bia for six years. I am not criticising the agency. It is doing its best to establish new markets. Several years ago, it was announced that access had been secured for Irish beef to the United States market. It was claimed it would take a significant amount of Irish beef. However, only €20 million worth of beef has gone to that market since it was opened. Unfortunately, that will not have any significant impact in the context of a Brexit situation.

Some people believe the dairy sector could be bombproofed for a Brexit situation. However, our cheddar cheese market is completely dependent on the UK. To change from producing cheddar to mozzarella cheese or other soft cheese products will take time, along with a significant amount of investment and research. To get markets established in different countries will take much time too.

I am concerned that a hard Brexit will leave a bitter taste in the mouth, resulting in the British trying to source products elsewhere on the dairy side. Ornua has invested significantly in the UK market. Any difficulties in operating in that market are a concern.

How will agrifood standards operate with the Border? Our quality assurance scheme is a bonus for selling our products worldwide. A significant amount of the milk processed by Lakelands, Glanbia and other co-ops along the Border, comes from Northern Ireland. Over time, standards will deviate. How can we operate a quality assurance scheme for a third country which the UK would become? That will create problems for marketing our products across the globe. Different standards would apply to animal health. In the past with brucellosis, there were different standards in Northern Ireland and the South. In turn this created difficulties for us and significantly delayed the eradication of brucellosis in the South. We will have no control in a hard Brexit situation over what the UK will do with animal health restrictions.

The problems that could be created are endless. Several weeks ago, Deputy McConalogue and I listened to food exporters about the problems they saw emerging. The time and costs to get products to the Continent will increase with, for example, delays at the crossings at Dover. We will not realise these problems until Brexit occurs.

The biggest crib is that the European Commission claims it will not let farmers down but we have no financial information forthcoming from the EU. The Commission talks about attracting young farmers into the industry but it still has a cap on incentives for young farmers entering farming. It is little wonder that farmers are nervous and worried that the Commission will not step up to the plate with the financial aids necessary in the event of a hard Brexit.

Deputy Eugene Murphy

The Minister is probably hearing every minute of every day about the challenge the agrifood sector is facing. He is well aware of the fear in the agricultural community about Brexit. We are looking across the water virtually every hour of every day but we still do not know what is going to happen next. Three years ago, when we first heard the rumblings about Brexit, none of us ever thought it would occur. We thought there would be some way out. Now we begin to wonder whether there is a way out. We see different scenarios in the House of Commons and we begin to think it will happen. Then, all of a sudden, some part of the jigsaw does not fit into place and we are back to square one. There is such turmoil in the British political system that it will end up in a general election there.

Beef sector exports to England alone are worth in excess of €2.5 billion. In my part of the country, beef suckler schemes are important. The sector has been under enormous difficulty for quite some time. There is the beef plan movement. We have all gone to the meetings where hundreds of farmers have said that, without Brexit, they are already under pressure. We have to welcome the fact the beef scheme is up and running. Fianna Fáil pushed for it for some time. However, the €40 per head is not doing anything and it has to be upped to €200 if the sector is to have any chance of survival. Looking at the Irish Farmers' Journal and other farming publications, one will note the poor price for calves in many marts.

Deputy McConalogue referred to the horticulture sector which has not been spoken about much. I know a bit about it because I studied it in college. We need to have a discussion about this as it has suffered much in recent years. It is an area we should be trying to expand through new schemes. There was great talk some time ago about import substitution. It is an area which we should tackle with a view to increasing domestic and export production.

There has been a phenomenal rise in food exports. As the Minister said in his opening statement, between 2009 and 2018, it has increased from €7.8 billion to €13.9 billion. One has to acknowledge Bord Bia and others working in the sector. However, there is much more we can do. In that regard, it is good that almost 30% of agrifood exports go to non-EU countries. We are going to have to work harder on this, however. That is why I welcome the proposal of appointing agrifood attachés to countries to promote selling our products. One has to acknowledge the work done in the Chinese market. Every percent of trade one gains in such a large country with such a large population is worth a lot. However, there is still a long way to go.

We should give some credit to the former Minister for Agriculture, Fisheries and Food, Deputy Brendan Smith, for this. He and his officials brought forward Food Harvest 2020, which is where much of that planning started.

The Minister spoke of countries such as Mexico, South Korea, Vietnam, and Japan. At one stage, perhaps still, Japan took much of our pig meat. Deputy Cahill spoke about that sector. The pig meat producers in this country have been through very tough years. Will the Minister update me at some stage on markets and new markets in those countries because they will become very important, particularly if a no-deal Brexit occurs.

There is always a big brouhaha here about people going abroad for St. Patrick's Day for trade missions. It is a very important part of selling Ireland. No matter who is in power, politicians and officials, when they go to celebrate with the Irish in other parts of the world, many of the deputations take in trade missions. On many occasions they are very productive and open up new markets, maybe not immediately but in time.

The beef scheme is oversubscribed. Will the Minister assure me that all applicants will be looked after, because that is very important?

There is no doubt that our biggest trading partner in agribusiness is Britain. Recently I saw a figure of €6 billion, and there is €4 billion in imports. Someone said that compared with years ago, less material is exported to great Britain now but the agrisector is the important one for us here, and it is crucial for rural Ireland. That is why there is genuine worry throughout the country about the result of Brexit. Everyone here, regardless of what side of the House they sit on, hopes that there will not be a crash out, which I fear from the way things are going. UK tariffs will pose a €1.7 billion threat to the agrifood sector. That will be some challenge. We should also bear in mind that if that happens, the price of basic food items in this country such as bread, milk, cheese, and eggs will increase. That will cause serious inflation here. The fallout would be very bad and there is no doubt that the beef and agrisector would be decimated by a crash-out, no-deal Brexit. World Trade Organization, WTO, tariffs will cost the beef sector alone around €800 million. Thinking of that kind of money sends a shiver down the spine.

In my part of the country, taking the counties around me such as Roscommon, Galway, Longford, Leitrim, Cavan, Offaly and Clare, there has been a great development in the food business. There are food chains which employ between, say, five and 20 people. Their markets are Ireland, North and South, England, Wales and Scotland. They will be wiped out if we have a crash out. They will be destroyed and it will cost thousands of jobs. It is very important that we protect our very best in those businesses as they will be under severe pressure. Some of them are very good labels but their markets do not extend outside the British Isles. These are not big conglomerates such as Glanbia, Dairygold or the Kerry Group which have world markets. It is one thing when one has a world market but it is different for small processors. I refer specifically to the cheese and yoghurt businesses which have become huge. They will be very badly affected.

It is a worrying situation for us all, and I acknowledge that it is not simple for the Minister's side of the House either, because we do not know what is going to happen across the water, but we must have more preparation.

Deputy Michael Collins

We all know at this stage that Brexit will have many implications for Ireland, some we can predict and some we cannot, but one thing that is for sure is that there will be many challenges ahead and it is vital that we do everything in our power to protect Ireland and its industries and markets from any negative backlash as a result of Brexit. Ireland is very dependent on its agriculture exports sector. The food industry is the sector of our economy most exposed to Brexit, particularly subsectors such as processed foods, beef and dairy.

Ireland exports almost 70% of its agricultural produce to Britain. The UK is Ireland’s largest market for food and drink, with 40% of our food exports destined for the UK. A reduction in access to the UK market would have a very negative impact on the Irish beef sector and potentially on the overall EU beef market. The 270,000 tonnes of Irish beef exports to the UK represent almost 10% of the intra-EU beef trade. The displacement of these exports would have a serious effect on the overall EU market. The Irish farming and food sector has a higher dependence on the UK market when compared with other sectors in Ireland, making it the most exposed sector to any negative economic impact of the UK Brexit decision. Additional tariffs for the Irish agrifood sector as a whole on exports to the UK would add an estimated €1.7 billion in costs. This could reduce or potentially wipe out Irish exports of beef, dairy and pig meat to the UK market.

We already see that Brexit is causing great uncertainty across the board, such as the current chaos in the Irish agriculture industry. The uncertainty is being felt hard by our farmers and beef farmers are experiencing huge reductions in their incomes as a result. I am shocked and appalled at the lack of urgency and concern the Government has shown these beef farmers. Factories are cutting beef prices, which are down 25% to 40% per kg, or about €150 per head. This is a serious concern. Our beef farmers are losing money and many will not be able to stay in business. These price cuts are here before Brexit has hit us, and I am scared to think of the outcome when Brexit is here and the full reality is felt. Brexit is a great excuse for the factories to cut the prices of beef, and very few have been able to counteract that so far.

We need to look at our dairy industry. Ireland is the only significant exporter of cheddar cheese to the UK market and the UK market is the only market of significance for Irish cheddar. We export 78,000 tonnes of cheddar cheese, or 82% of all cheddar cheese imported by the UK. It is vital that we will have tariff-free access to the UK market. The Copenhagen Economics report for the Government estimates that the UK’s departure from the European Union will cause the value of output from these key parts of the agrifood sector to fall by between 10% and 20% by 2030. The sector employs 175,000 people with a great number of people employed directly in the wider rural areas in agrifood production.

Brexit will be felt right across rural Ireland. This could mean 17,000 fewer jobs or more than 30,000 fewer jobs in the case of a hard Brexit. The Government needs to support the agriculture industry by ensuring that a meaningful support package from the EU is put in place. There is no question that the Mercosur trade deal must be suspended. We need to see that live exports will be supported with more lairage and an increase in ferry capacity. The Government needs to acquire further markets for live exports of cattle. Furthermore, it is vital that the suckler cow support be at €200 per cow if farmers are to have any chance of survival. It cannot be €40 in very difficult times, a level which shocked many farmers after the previous budget. That is not how the Government shows that it wishes to protect the rural family farm.

With these uncertain times ahead, and especially with the chance of a no-deal Brexit on the cards, EU agrifood operators are begging for extra aid as the clock ticks down to the cliff edge of Brexit. There are big fears out there that the existing EU contingency measures will not prevent significant disruption of supply chains in the case of a no-deal. We will need contingency measures for the agrifood sector such as temporary fast-track customs procedures, mutual EU and UK recognition of food safety standards, a grace period on product labelling and a roll-over on haulier licences.

Brexit not only will affect the agrifood suppliers, but everyone in Ireland will pay the price for a no-deal Brexit. The Economic and Social Research Institute looked at 4,500 products imported from the UK and it found that a no-deal scenario could add 30% to the price of bread and cereals. Cheese and egg prices could rise by as much as 46%, while meat, sugar, confectionery, coffee and tea could see hikes of between 20% and 30%.

Not only do we need to protect our agrifood market, we also need to protect our fishermen. Coming from west Cork, I know only too well how much our fishermen have suffered in recent years. Last week, I was appalled by the manner in which the Sea-Fisheries (Amendment) Bill 2017 was rushed through this House. Does the Government realise the seriousness of the Sea-Fisheries (Amendment) Bill 2017? It allows fishing vessels registered in Northern Ireland to fish inside our six mile limit, but a loophole that is in the Bill could allow foreign vessels registered in Northern Ireland access to our most precious fishery waters. Local fishermen in west Cork feel that the industry has had a raw deal and does not trust Governments to deliver. It is vital that we protect our fishermen's livelihoods. I have called for a stand-alone Minister for the marine. This is not my first time calling for this stand-alone Minister, but surely now this House can see the importance of a stand-alone Minister for fisheries and the marine, especially with Brexit looming.

We cannot forget or ignore the fact that our agrifood market is also dependent on our ports. We need to look at our ports and the effect Brexit will have on them and the export market. In my constituency, we have wonderful ports such as Bantry, Castletownbere and Kinsale. Their futures need to be secured. I plead with the Government to support these ports through the uncertain times that lie ahead with Brexit on the horizon.

While we speak a lot about the worry of Brexit, and probably rightly so, we must not take our eye off the ball in this country. One such area where I am afraid that this is happening is oyster farms and mussel farms. These also need to be looked at. There are three planning applications at present in my constituency's area of west Cork for oyster and mussel farms, one off Kinsale Harbour, another between Union Hall and Castlehaven and also in Bantry. I have been approached by constituents living in these areas, the inshore fishermen and people in tourism sector who are all completely up in arms about the planning application for these oyster and mussel farms. We are seeing more of these types of fish-farm planning applications popping up everywhere. Imagine three in the past month in west Cork, covering vast areas of sea.

Has the Government even stopped to ask why there is an increase in applications? I will tell the Minister why. Most of these applications are from companies that are not even from this country which are exploiting our poor planning regulations because, by comparison, their own countries, such as France, have put in extremely strict regulation to make sure that oyster farms are not set up here, there and everywhere. We have left ourselves wide open in this country. I draw the Minister's attention to the fact that we need far stricter planning regulations around oyster and mussel farming. We are making ourselves an easy target for these foreign companies to come into our waters and farm our oysters and mussels. I completely agree with the anger of my constituents, the inshore fishermen and the tourism sector who are all opposed to allowing these fish farms in the most beautiful and scenic parts of the world, and mark my words it will cost us jobs in the long run. There is no gain in the local community. Most of the products are exported. They maybe employ one person. It begs the question as to how they are getting away with these planning applications, with three in the past month. I urge the Minister to put in place immediately stricter planning guidelines in order to protect our inshore fishermen, our tourism sector and our environment and the people living in these areas and I beg him not to stand idly by watching another catastrophe unfolding.

Overall, it is clear that the time ahead is uncertain and that Brexit will have huge effects on Ireland. I welcome the recent announcement of €5.75 million State funding to support the expansion of Carbery factory, a cheese producer in my constituency in Ballineen in west Cork. Carbery is a huge employer and is a company that has always shown great leadership in its industry. The staff and management at Carbery are a credit to this company. They have worked tirelessly with Brexit approaching and have looked for ways to not only survive, but to grow in these challenging times. The Government could learn a lot from the attitude of Carbery and its staff.

Minister of State at the Department of Agriculture, Food and the Marine (Deputy Andrew Doyle)

I thank all Members, those who are still here and those who spoke earlier, for their contributions on agrifood market priorities post Brexit. Somewhat unusually, we are all in agreement that Brexit poses serious challenges to the agri sector, that it is, as they say, somebody else's fault but it is mainly our problem and that we must address it as we see most appropriate.

Ireland currently exports to 180 markets globally, and with global population and income growth expected to continue to drive demand for food, the challenge for the Irish food and drink exporters is to identify markets that offer the best potential for growth over the medium term.

Last year was another strong one for agrifood trade, with overall value reaching almost €14 billion. In terms of the key sectors, beef exports came in at €2.4 billion, dairy produce at €4.6 billion and beverages at €1.4 billion. Pigmeat reached almost €800 million and fish exports over €600 million. Live exports reached just under €0.5 billion and poultry €300 million.

Market and trade insight suggest that global demand for Irish food and drink will remain positive in 2019. In line with Bord Bia market prioritisation work, growth in dairy, meats and beverages in particular will continue from emerging economies in Asia and elsewhere. A month ago, my colleague, the Minister, Deputy Creed, launched the Department's first Market Access Annual Report, which was an opportunity to reflect back on past achievements and to look to the future. In terms of the future, at the same time, the Minister also announced plans to promote trade and enhance market access in 2019.

This enhanced focus on market access and trade is a key part of the Department's response to the challenges posed by Brexit and is very much in line with the market development theme under Food Wise 2025. While the work predates the decision of the UK on Brexit, it has taken on an added urgency since then.

At the same time, it is important to note that opening up new third country markets to Irish food producers is a long-term strategy and that these new markets, whether in China, the Gulf states or elsewhere, will take time to develop and grow.

The Department's market access effort includes work at political, diplomatic and technical levels. We also work closely with industry in our pursuit of access to various countries and I acknowledge that valuable co-operation. The Department also has a dedicated trade team, comprised of the divisions within the Department dealing with different aspects of market access, trade and exports, together with Bord Bia and Sustainable Food Systems Ireland. This draws on the cross-divisional expertise and provides a stronger focus on our offensive market access interests in existing and new markets.

I pay tribute to the staff of my Department and our attaché in Beijing who won a Civil Service Excellence and Innovation Award in 2018 for their long-term collaborative project with Bord Bia, the Embassy in Beijing, the Chinese Embassy in Dublin and the meat industry, which ultimately gained market access for beef to China which amounted to some 1,400 tonnes last year.

The UK remains the most important market for Irish agrifood exports accounting for 40% of all exports with a value of €5.6 billion. There are sound economic, social and geographic reasons for this trade with our nearest neighbour, which is one of the most valuable grocery markets in the world.

The Minister, his officials and Bord Bia have devoted considerable time since the Brexit vote to meetings in the UK, specifically with counterparts in government and officials, as well as leaders in industry and retailers, including chief executive officers of many of our agrifood customers. We all hope for a Brexit outcome that will allow trade to continue as normal to the benefit of both countries.

We remain acutely aware of the threats posed by a disorderly Brexit. However, a comprehensive programme of work is in place to lessen potential impacts. Nevertheless, Brexit underlines the Food Wise 2025 theme of developing and diversifying our markets to avail of new growth opportunities. Our focus on market access work includes an enhanced programme of ministerial trade missions, an increase in the number of agricultural attachés serving overseas and detailed market prioritisation studies.

In conclusion, I am pleased the seven-point action plan has resulted in an increase in the number of markets to which we can export. My Department and Bord Bia will continue to work with partners to increase our global footprint.

The Dáil adjourned at 9.35 p.m. until 10.30 a.m. on Thursday, 4 April 2019.