The agri-food sector is of critical importance to the Irish economy, and its regional spread means it underpins the socio-economic development of rural areas in particular. As such, Brexit has the potential to have a very significant impact on farmers and on the agri-food sector throughout Ireland, and the extent of this potential impact has been highlighted by studies carried out by agencies such as Teagasc, the Department of Finance, the Economic and Social Research Institute, Inter Trade Ireland and Copenhagen Economics.
The most immediate challenge for industry has been to deal with 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. My colleague, Minister for Finance Paschal Donohoe, also announced the Future Growth Loan Scheme, which will be rolled out in 2019 and for which I had made provision of €25m 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 that 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 which is now informing our approach to market diversification activities, including the choice of destinations for Trade Missions. Trade Missions play an important role in this regard, 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. I have led very successful missions to the Gulf Region, the US, Mexico, Japan and Korea in 2017, and to the US, Canada, China, Indonesia and Malaysia 2018. These missions included participants from across the agri-food sector and featured extensive trade contacts as well as high-level political discussions. These and the other missions that my Department has under consideration for 2019 will serve to enhance and improve our existing levels of market access in these destinations. Indeed, since the UK referendum I have increased Bord Bia’s funding by a total of €19.5 million, including a further €5 million allocated in Budget 2019
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.
I and my officials have also been working very hard for quite some time to sensitise other Member States and the European Commission to the potentially very severe impacts of Brexit on the Irish agri-food and fisheries sectors, and to the likelihood of specific supports being required in order to deal with these impacts. 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.
Most recently, I held a bilateral meeting with Commissioner Hogan last week to discuss the potential impact of a disorderly Brexit on the Irish agri-food and fisheries sectors. We discussed the unique exposure of these sectors to the threat of a disorderly Brexit, and the challenges that it could present. I stressed the need to be ready to deploy a range of measures to mitigate the potential impacts on farmers and processors, including through traditional market supports and exceptional aid under the CAP's Single Common Market Organisation regulation, and increased flexibility under State Aid regulations. 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 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.