I propose to take Questions Nos. 194 and 195 together.
A considerable amount of research into the impacts of Brexit, particularly those on the agri-food sector, has been undertaken by a range of agencies and bodies. This includes research by Teagasc into, for example, the effects on the sector more widely as well as on farm incomes, by the ESRI, by the Department of Finance, by Copenhagen Economics and by Inter Trade Ireland, which looked at the potential impact of WTO tariffs on cross-border trade. All of the analyses undertaken to date show that Brexit will be unambiguously bad for the sector, particularly given the fact that the sector’s regional spread underpins the socio-economic development of rural areas in Ireland. The work is not based on a specific regional basis but analyses the overall sectoral impacts.
The most immediate challenge for industry has been the impact caused by the significant drop in the value of sterling against the euro. A considerable amount of work has also been put into intensifying our market diversification efforts in order to reduce our exposure to the UK market.
I have been addressing these challenges through a range of Budgetary measures aimed at improving competitiveness, and developing market and product diversification. These measures include a €150m low-cost loan scheme in 2017 to help reduce farm-gate business costs, and a dedicated €50m Brexit package in Budget 2018 which included further additional funding to Bord Bia and Teagasc as well as a contribution to a €300m (joint DAFM/DBEI) “Brexit Loan Scheme”, at least 40% of which is available to food businesses. In Budget 2019 I announced a €78m Brexit package for farmers, fishermen, food SMEs and to cover additional costs related to Brexit.
On market and product diversification, the additional funding that I have provided to Bord Bia has been used, inter alia, to conduct a market prioritisation exercise which is now informing our approach to market diversification activities, including the choice of destinations for Trade Missions. Product diversification has also been supported through additional funding of €8.8 million to Teagasc to develop its National Food Innovation Hub, and funding to support investment in the prepared consumer foods sector.
It has been clear from the beginning that a hard Brexit would be very damaging for the agri-food sector given the potential impact of WTO tariffs on trade. We have been working very hard for quite some time to sensitise other Member States and the European Commission to these potential impacts, and to the likelihood of specific supports being required for the sector. The institutions of the European Union are very well aware of the likelihood of a significant impact of a disorderly Brexit on Ireland’s economy because this has been part of the discussion from the beginning, and indeed this is explicitly recognised in the Commission’s own communication on contingency planning.
In the case of agriculture, there is of course a toolbox available to assist with severe market disruption in the Common Market Organisation Regulation put in place during Ireland’s Presidency in 2013, and this will be part of the discussion. I am in regular and on-going contact with Commissioner Hogan on these issues.
As regards contingency planning, my Department has been actively participating in the Whole-of-Government approach to preparedness and contingency planning. We have fed into the overall Government Contingency Action Plan which was published on 19 December, and we have been working very closely with colleagues in other Departments and agencies to address in particular the requirements that will arise in relation to the implementation at ports and airports of import controls on agri-food products coming from the UK.
These requirements are significant, and arise in relation to the carrying out of documentary, identity and physical checks on imports of animals, plants, and products of animal and plant origin, as set out in EU legislation.
Work in this regard has been focused on three key areas, namely, infrastructure, staffing and information technology, and in three key locations, that is Dublin Port, Rosslare Port and Dublin Airport.
On infrastructure, we have been engaging very closely with the Office of Public Works, the Department of Transport, the Department of Health and the Revenue Commissioners in relation to the physical facilities that will be required to carry out import controls at the three locations. This work had been proceeding in any event in the context of dealing with the central case scenario, and has been adapted in order to meet the requirements in the event of a disorderly Brexit.
On staffing, the Department is working very effectively with Customs and others to provide the resources needed to apply the necessary controls, and I am confident that the state will be in a position to apply controls at the appropriate time.
On information technology, my Department has established a project to coordinate the identification and delivery of ICT Infrastructure and systems to support the additional requirements of staff engaged in control processes in Dublin Port, Rosslare and Dublin Airport. The delivery timelines in the event of a disorderly Brexit are extremely challenging, but officials are working with the greatest urgency to ensure that the required ICT services are in place by 29 March 2019.
Throughout all of this work, the focus of the Department will continue to be on the need to discharge its legal responsibilities while ensuring the minimum possible disruption to trade.