Tuesday, 26 March 2019

Questions (59)

Mick Wallace

Question:

59. Deputy Mick Wallace asked the Minister for Agriculture, Food and the Marine if he or his officials have had discussions with the Department of Foreign Affairs and Trade or with Iranian officials regarding the possible resumption of exports of beef and lamb to Iran; and if he will make a statement on the matter. [13956/19]

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Oral answers (7 contributions) (Question to Agriculture)

Have the Minister or his officials had any discussions with the Department of Foreign Affairs and Trade or spoken to Iranian representatives with a view to reopening markets for beef and lamb sales? As has been discussed here at length, there is more beef in cold storage plants currently than we would like and not selling it to the likes of the Iranians does not make a great deal of sense.

In February 2019, officials from my Department met the Iranian ambassador to Ireland, H.E. Dr. Masoud Eslami, accompanied by his economic counsellor. A range of subjects, including agrifood exports to Iran, were addressed at the meeting. I also met the ambassador personally on 21 September 2017. Total Irish agrifood exports to Iran in 2017 were approximately €11.5 million, the majority of which, or €10.25 million, was accounted for by dairy exports. According to the CSO, 26 tonnes of beef were exported to Iran in 2017, but there have been no exports of sheepmeat to date. The role of my Department is to open up markets for the industry and it is then up to the industry, with the support of my Department and Bord Bia, to avail of these opportunities. However, the actual levels of exports will depend on a range of factors, including global supply and demand dynamics, currency fluctuations and individual customer requirements.

A veterinary health certificate for the export of beef from Ireland to Iran was agreed in March 2013 and officials from my Department participated in a successful trade mission to Iran and Turkey in April 2016. While the trade mission was primarily dairy-focused, officials had the opportunity to meet with their Iranian counterparts in order to progress and ultimately agree sheepmeat access to the Iranian market and to explore other common areas of interest. Access for sheepmeat was officially announced in October 2016. Therefore, these markets are open at present but the resumption of exports is a matter for the industry. Limited or no exports to Iran can be explained by a combination of unfavourable trading conditions, cheaper supplies of beef from Brazil and of lamb from Australia to the Iranian market and financial barriers. Work is ongoing within the EU to devise measures to overcome financial barriers to trade between the EU and Iran.

I realise that Iran is buying a great deal of meat from Australia, New Zealand and Brazil, as well as from Romania. It is buying a lot of meat from Romania. Only recently, the Iranians purchased 50,000 lamb carcasses. In 2018, they imported 160,000 tonnes of meat. It is a huge market which would like to trade with us. They have made it very obvious that they want to do business with us. Other countries are doing business with them and the Europeans are getting around the so-called US sanctions to sell all kinds of stuff. There is no logic to us not doing it. Surely, given the current situation, it would be a great boost to the agriculture sector if we developed a better relationship with Iran. It would be helpful to open the embassy in Tehran. I acknowledge that is a foreign affairs matter and not the Minister's responsibility but he should push for it. All the western European states that left, except Luxembourg, have put their embassies back in Iran. Lately, we have opened new embassies elsewhere and it is mad that we have not done so in Tehran.

We are very anxious to have trade there. From recollection, it is a market of 80 million people and quite an affluent, middle-class one. It is also a gateway to a market of perhaps 250 million people through neighbouring countries. As such, it is significant. I have spoken to people in industry here directly and I have met the ambassador, who was very anxious that we would have trade. We open markets and engage on the terms and conditions under which trade can happen.

My conversations indicate that there are issues, other than regulatory ones, which are a hindrance to doing trade. The function of the Department is to open and facilitate trade. We have been on trade missions there with regard to the terms and conditions on which it can happen, but we cannot compel the industry to trade with the people concerned. One issue is how rewarding is that market relative to others. Another issue I encountered in conversations I had with agribusinesses previously was how easy was it to get payments out of the country. Issues aside from regulation and the wish to trade still present a difficulty. As I mentioned, there are negotiations taking place at EU level also to facilitate greater trade and interaction.

The US sanctions on financial transactions are an issue, but one can get around them. Between March 2018 and March 2019 we sold them approximately €140 million worth of goods. How was it managed? It can be done and if there is a will, there is a way. It is not just down to the regulations either. The Department of Foreign Affairs and Trade has an issue in that it does not want to upset the US sanctions. However, the Europeans are getting around them and doing a great deal of business with Iran, but we are not. Consider the example of when we ran into problems in selling aluminium to the Russians because the United States had it on its list. There were many jobs at risk in Ireland and, rightly, we protected them. We got around the sanctions and reopened the sale of aluminium to Russia, despite the fact that it was on the US sanctions list. Where there is a will, there is a way. The State must facilitate the industry in selling to the Iranians. The blockage is not being caused by the Minister but is at foreign affairs level. The Minister should play a stronger hand to resolve the issue.

I am glad to hear the Minister's strong statement that this is a significant market, one that he would like to open. That must be said. However, he appears to be suggesting the problem lies with the farming organisations. Is it not the case that they, too, are very keen to ensure the important Iranian market is seen as part of the solution to the problem of overproduction here? The situation has moved on. Most European countries are trading substantially with Iran, but, unlike us, they have embassies there. I presume that in the Minister's meetings with the ambassador the ambassador would have made it clear that this was an important issue for Iran too. One can understand this, given that every other country in Europe has an embassy there. When one has the information on the ground, it is much more verifiable and open when it comes to trade. Has the Minister had discussions with the IFA on the practical steps we could take to facilitate what he says he wants - I believe he does want it - the opening of this market? In addition, has he had discussions with the Department of Foreign Affairs and Trade on the need to open an embassy in Iran, given that it is a key part of this issue? The previous Taoiseach, Deputy Enda Kenny, said a number of years ago that he was willing to consider it. Every other country in Europe has an embassy there. Unless we do the same, we will lose important markets for farmers.

It is not a question of opening the market. It is open. In 2017 we exported €11.5 million worth of goods to it. It is open for our main dairy products - beef and sheepmeat. It is a question of what it delivers in terms of profitability relative to any other market. If it is more profitable to be in another market, it is not in the interests of primary producers or the agriculture sector to send products there just for the sake of it. This is about ensuring whatever markets we are operating in are delivering maximum profitability and returns for the agriculture sector in general.

The opening of an embassy is an obvious issue. We are increasing our global footprint and I have spoken previously to the Department of Foreign Affairs and Trade about the issue because we see it not just as a market but also as a gateway to a significant region that has potential. However, that market is being supplied with beef from South America and sheepmeat substantially from Australia and at a price, particularly in the case of South American beef, with which we cannot compete. The point we make in the context of these markets is that it is not wise to have all of one's eggs in one basket in having a diverse range of suppliers. We are anxious to explore the possibility of supplying more to that market, but it must be on the basis that it is more rewarding than being in other markets. Ultimately, that is a call for businesses to make.

As I mentioned, there are other factors that make it difficult to trade there which are not related to regulations imposed by the State.