Wednesday, 6 February 2019

Questions (1)

Charlie McConalogue


1. Deputy Charlie McConalogue asked the Minister for Agriculture, Food and the Marine the contingencies being operationalised and the supports that will be in place to safeguard farmers and the agrifood sector here in all scenarios, including a no-deal, hard Brexit by 29 March 2019; and if he will make a statement on the matter. [5798/19]

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Oral answers (7 contributions) (Question to Agriculture)

In light of Brexit being only six weeks away, what contingencies and supports are being put in place by the Department of Agriculture, Food and the Marine to safeguard farmers and the agrifood sector in all scenarios including, and in particular, a hard Brexit?

I have been addressing the immediate Brexit challenges through a range of budgetary measures aimed at improving competitiveness and developing market and product diversification.  These measures include a €150 million low-cost loan scheme in 2017 to help reduce farm gate business costs and a dedicated €50 million Brexit package in budget 2018, which included further additional funding to Bord Bia and Teagasc, as well as a contribution to a €300 million Brexit loan scheme, at least 40% of which is available to food businesses. In budget 2019, I announced a €78 million Brexit package for farmers, fishermen and food SMEs to cover additional costs related to Brexit. My colleague, the Minister for Finance, Deputy Donohoe, also announced the future growth loan scheme, which will be rolled out in 2019 and for which I had made provision of €25 million in 2018. The scheme will provide long-term unsecured investment finance for farmers and small-scale companies in the food and seafood sectors.

On market and product diversification, the additional funding I have provided to Bord Bia has been used, inter alia, to provide targeted advice to individual companies, as well as to conduct a market prioritisation exercise that is now informing our approach to market diversification activities, including the choice of destinations for trade missions. Product diversification also has 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. 

I, and my officials, have been working hard for some time to sensitise other member states and the European Commission to the potentially highly severe impacts of Brexit on the Irish agrifood and fisheries sectors and to the likelihood of specific supports being required to deal with these impacts. Most recently, I held a bilateral meeting with Commissioner Hogan last week to discuss the potential impact of a disorderly Brexit on the Irish agrifood and fisheries sectors. Commissioner Hogan reiterated the EU's readiness to respond and support Ireland and we will remain in contact on these issues as the situation evolves. 

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 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 agrifood products coming from the UK. These requirements are significant and arise in respect of 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: Dublin Port, Rosslare Port and Dublin Airport.

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.

Most of the Minister's response to my question is old news in the sense that it is the same response we have been getting for two years, particularly with regard to market diversification and the loan schemes that have been put in place but which, in many ways, have not been delivered up until now. The response does not give any sense of the urgency associated with the fact that we are six weeks away from a potential hard Brexit or set out the measures being taken to ensure that the agrifood and farming sectors are protected in the event of a hard Brexit. As things stand, businesses do not know what the arrangements will be in six weeks' time. They are being left to try to prepare as best they can but without clarity from the Minister or his Department in regard to the financial supports that might be available. In the beef sector, for example, €750 million worth of tariffs could potentially be placed on our beef exports to the UK, which would amount to, on average, €400 of tariffs per animal. That is a scary vista for the agrifood sector. We need clarity from the Minister on what preparations are being made and what we can expect in six weeks if no deal is reached in the interim period.

Our endeavours to date have been to build resilience within the sector. We have invested in measures such as the environmental efficiency programme in the beef sector announced this week and restoring cuts to the areas of natural constraints scheme while working with the industry on the food innovation hub, the prepared consumer foods initiative, the meat technology centre and low-interest loans. That is building resilience within the sector here.

The premise of the Deputy's question seems to be that preparedness can mitigate all of the impacts of a hard Brexit; it cannot. The situation will change irreversibly once the UK leaves the EU. We hope that it leaves with a transition agreement and future trading relationship in place. However, even if we get to that optimum position for its departure, the situation will never be as good as it currently is. In addition to building resilience inside and outside the farm gate, we have engaged with all of our EU partners to create awareness of our exposure, which is unique in terms of its extent relative to other member states, and to prepare them to respond.

The Deputy mentioned the issue of tariffs. Unfortunately, we do not currently know what the response of the UK will be - tariffs, no tariffs or something in between - and that limits our ability to protect the value of the market. Until that becomes clear, it will not be possible to respond in a meaningful way. I am satisfied that we have prepared the groundwork in terms of latitude to the State and EU awareness in terms of the common organisation of the markets regulation and exceptional aid measures in order to be able to respond as needed.

Of course, preparedness cannot mitigate all of the massive disturbances that Brexit will bring but that is no excuse for not being fully prepared. Unfortunately, it seems that although the national message has been that we must prepare for the worst but hope for the best, the approach of the Government over the past two years has been to spend far more time hoping for the best than preparing for what might happen in six weeks' time. There has been minimal engagement by the Government with the agrifood sector in terms of giving any clarity on what to expect in six weeks' time in the event of a hard Brexit. That has simply been absent from the Government's preparations on this issue.

Last September, following a Cabinet meeting in County Kerry, the Minister and the Taoiseach announced that 300 sanitary and phytosanitary inspectors would be employed in order to be prepared for Brexit. That was later downgraded by the Minister to 116. As of today, we do not know how many will be in place by the end of March. That is another reflection of the fact that we are not particularly prepared for Brexit. Over the coming days, we need absolute clarity on what the agrifood sector is facing and how it will operate in terms of revenue and standards after 29 March in the case of a hard Brexit. We also need a clear plan on how we will respond in terms of market supports and maintaining our trade to the UK market in the event of a hard Brexit.

The accusation that there has been no engagement with the industry is entirely wrong. I understand why the Deputy might make that charge but it is entirely wrong and the industry would not support such a contention. There has been extensive and ongoing engagement and consultation on an almost daily basis with various aspects of the industry. The Deputy is seeking clarity in respect of what the impact will be but, unfortunately, no such clarity exists. It entirely depends on how the UK responds when it leaves the EU. We have prepared insofar as we can for all eventualities, including action on exceptional aid measures, State aid flexibility etc.

On contingency planning and preparedness, if the UK leaves without a deal we will be in a position to meet all our obligations in terms of treating the UK as a third country and how we deal with imports from there. One must bear in mind that we are the biggest trading partner of the UK agrifood industry. All of the staffing arrangements needed to meet our obligations in regard to the necessary portal inspections for agrifood products, animal products and by-products of plant and animal origin, including portal inspectors, veterinary supervision and so on, will be in place by the required date at the aforementioned locations of Rosslare, Dublin Port and Dublin Airport.

It took almost nine minutes to deal with that question. Even for Priority Questions, six and a half minutes is the maximum allowed. As Brexit is a very serious issue, I was reluctant to intervene. However, I appeal to Members to stick to the time limit of six and a half minutes.