Thursday, 9 May 2019

Questions (5)

Bernard Durkan


5. Deputy Bernard J. Durkan asked the Minister for Agriculture, Food and the Marine the extent to which his Department can access particular European Union funding or other sources to address the issues for Irish agriculture arising in the context of Brexit and future uncertainty as a result; the steps he can take in the short term to address the issues drawn to his attention by the farming community recently on this issue; and if he will make a statement on the matter. [20113/19]

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Oral answers (6 contributions) (Question to Agriculture)

This question seeks to ascertain the extent to which his Department can assist the agrifood sector now and in the long term, having particular regard to the impact of Brexit and the destabilisation of markets as a result of the ongoing and drawn-out discussions on Brexit.

The agrifood sector is critical to the Irish economy and its regional spread means it underpins the socio-economic development of rural areas in particular. Brexit has the potential to have a very significant impact on the sector given its unique exposure to the UK market, which accounted for €5.2 billion of agrifood exports last year. There are ongoing discussions with the Commission regarding the difficulties that would face Ireland in the event of a no-deal Brexit and the assistance that might be required for its agriculture, food and fishery sectors. Avoiding a no-deal Brexit continues to be the Government’s overriding policy priority.

I have held a number of discussions with Commissioner Phil Hogan regarding the potential impact of a disorderly Brexit on the sector. I have stressed the need for the Commission to be ready to deploy a range of measures to mitigate the potential impacts on agrifood and fisheries, including through traditional market supports and exceptional aid under the Common Agricultural Policy's Single Common Market Organisation, CMO, regulation, as well as increased flexibility under state aid regulations. However, it is also important to acknowledge that the past few months have been very difficult for beef farmers in particular following a difficult year in 2018 due to weather conditions. There has been a prolonged and exceptional period of depressed prices since last autumn with the ongoing uncertainty surrounding the outcome of Brexit, among other factors, contributing to this market disturbance. In light of the ongoing depressed market prices I have, in discussions with Commissioner Hogan and my European Union counterparts, said that I believe that the deployment of exceptional measures under the CMO regulation to provide targeted aid to farm families who have suffered a sustained reduction in returns from the market is now merited. I made an intervention to this effect at the April meeting of the Council of Agriculture Ministers, and my officials are pursuing that matter with the Commission.

One of the unique strengths of the Irish agrifood sector has been the shared vision for the sustainable development of the sector in Food Wise 2025. It is crucial that we all continue to work together. I have highlighted the need for stakeholders to recognise their interdependency and to increase the strength of all links in the supply chain, including the development of beef producer organisations. I am deeply committed to fully supporting and developing Ireland’s beef sector. I am strongly of the view that the existing range of supports available to beef farmers under the rural development programme, together with ensuring access to as many markets as possible, both for live animals and beef exports, are appropriate for the continued development of the sector.

I thank the Minister for his comprehensive reply. In light of the ongoing and drawn-out discussions on Brexit, is there scope for an intervention with interim measures that may offset the negative impact and potential instability arising in the market, particularly in the beef area? Does the Minister believe it may be possible to move forward a plan in this context in the near future?

The Deputy will appreciate that the substantial emphasis up to relatively recently has been on dealing with the supports that would be necessary if the United Kingdom crashed out of the European Union. Fortunately, that scenario has been avoided to date and the deadline has been moved down the road substantially. The issue has not gone away but we have some respite from it in the immediate future.

The difficult market conditions are partially related to market sentiment arising from Brexit, sterling differentials and high costs associated with last year because of weather difficulties. There was static consumption at a time when there was an increased beef kill because of that bad weather. We have made the case to the Commission that there is reason for an interim support package not related to Brexit at all. It is a view that has some traction from other member states as well. I have been engaged with the Commission since we raised the matter in April and I await its response in that regard.

I thank the Minister and he has very correctly assessed the position. It is also important to recognise that as time drags on and there is continued indecision with respect to the outcome of Brexit, there will always be a potentially destabilising factor for the markets. In light of this, will the European Union institutions and colleagues in the Union be sufficiently alert to and aware of the vulnerability of the agrifood sector in this country and the absolute necessity to ensure its viability in the medium and long term?

Damage can be done in the short term as well.

There is no doubt about that level of awareness in the European Union. One of the Brexit strategies we deployed was increasing awareness of our unique exposure to the UK market and this is clearly understood. There is less understanding of the immediate difficulties we face because Brexit has not happened yet and the consequences cannot be felt. However, the reality is there is a market sentiment associated with Brexit and sterling which is currently having an impact. We are prosecuting the case with officials from the Commission. We have been doing other things such as on areas of natural constraints and with the beef environmental efficiency producer organisations to build resilience within the sector in terms of what we can do ourselves. It is a comprehensive response but a significant part of the strategy is a response from the Commission to our proposals and we await that.