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Dáil Éireann díospóireacht -
Wednesday, 8 Jun 2016

Vol. 912 No. 1

Priority Questions

Agriculture Industry

Charlie McConalogue

Ceist:

46. Deputy Charlie McConalogue asked the Minister for Agriculture, Food and the Marine the urgent measures he will take to tackle the crisis in farm incomes and severe market volatility across most sectors; and if he will make a statement on the matter. [14834/16]

As a small open economy which exports the vast bulk of its main agricultural commodities, Ireland will always feel the effects of volatility on world markets. However, there are some measures in place to help Irish farmers through these periods. Indeed, one of my highest priorities under the programme for Government is to develop an effective response to price volatility, including through initiatives with regard to access to finance and taxation.

I believe that moving up the value chain where possible, in terms of the type of products sold and how they are produced, is an important insulation against volatility. The Food Wise strategy for the sector contains detailed recommendations aimed at improving value added and productivity at farm and food industry level through a focus on sustainability, efficiency, knowledge transfer and innovation. I will chair the next meeting of the Food Wise high-level implementation group next week, focusing on the important topics of market development and access to finance.

Direct payments estimated by Teagasc at an average of more than €17,000 per farm in 2015 provide a valuable source of farm income support and act as a hedge against price volatility.

With regard to farm borrowings, I will meet the CEOs of the main banks this month, all of whom, I know, are aware of price volatility issues. I will be pressing them for details on how they are handling current difficulties and their plans for the medium to longer term when liquidity difficulties may become more evident. Another important topic for discussion will be the cost of credit for lending to farmers.

My Department has also engaged actively with other financial institutions with regard to the development of innovative new lending products for the sector and is preparing to procure an ex ante evaluation for the introduction of financial instruments under the rural development programme. The Department will continue to engage with the Department of Finance on key agri-taxation policy objectives, including responses to income and price volatility.

At EU level, I have met Commissioner Hogan on several occasions recently and have proposed a plan of action to him for an EU response to the current market difficulties, including increasing the percentage of the €1.2 billion in Irish direct payments that can be paid in advance; the introduction of a targeted aid package similar to that provided last September; the removal of customs tariffs and anti-dumping duties on the importation of fertilisers, which issue comes within the remit of the trade Commissioner, Mr. Moscovici; a substantial increase in the volume limit for fixed price intervention for skimmed milk powder, which the Commission has now agreed; and the renewal of efforts to resolve the veterinary issues that have blocked exports to Russia. I intend to remain in close contact with Commissioner Hogan on these proposals over the coming weeks.

I also plan to chair an early meeting of the dairy forum to progress a number of specific initiatives in that sector.

I congratulate Deputy Creed on his appointment as Minister for Agriculture, Food and the Marine and wish him well in that role. I also congratulate Deputy Andrew Doyle on his appointment as Minister of State at that Department. The Department of Agriculture, Food and the Marine is a crucial Department, dealing with a sector that is important to our economy and to many working families. I wish the Minister and Minister of State well in their endeavours. As Fianna Fáil spokesperson on agriculture, food and the marine, I look forward to working closely with them to try to ensure agricultural incomes are protected and the sector thrives.

The question deals with income volatility, decreasing prices and the expectation in too many farming sectors of producing at below the cost of production, which issues are the cause of growing concern for farmers. The Teagasc annual farm survey, which is valuable in the significant contribution it makes every year to the debate on the state of the farming sector, showed an average increase in farm income last year of 6%, albeit from a very low base. I know the Minister, Deputy Creed, and the Minister of State, Deputy Doyle, are aware of the difficulties facing the dairy, beef and tillage sectors, among others.

I welcome the Minister's statement that he proposes to meet the CEOs of the financial institutions. Will he comment on the proposed establishment of a national food ombudsman to ensure a mechanism is in place through which primary food producers can get a fair price for the food they produce? Will the Minister also comment on convening a joint meeting of the existing beef and dairy forums and other sector representatives to discuss solutions to the current farm income crisis?

I thank Deputy McConalogue for his kind remarks. I look forward to working with him and his colleagues during my tenure as Minister for Agriculture, Food and the Marine.

The Deputy referred to the recent Teagasc farm survey, which is a useful barometer but is somewhat behind the curve in so far as it deals with farm incomes for 2015. We are all aware that incomes in 2016 will be substantially different.

It may not be widely understood outside the farming community that average farm incomes are still substantially below the average industrial wage. That should be borne in mind in the context of the broader debate on the economy. The Deputy said that the primary producer receives very little, and raised the prospect of a food ombudsman to address that issue. In the dying months of the last Administration the Government introduced a series of initiatives through the Department of Jobs, Enterprise and Innovation which brought greater clarity to the treatment of food producers by the multiples with regard to the inclusion of everything in the contract. We wait to see how effective that will be. It will require ongoing vigilance.

The Deputy may also be aware of an EU initiative under which Commissioner Phil Hogan expects a report before the end of the year on the supply chain and measures to improve the position of the primary producer. While I am open-minded about a food ombudsman, it would be useful to have information that is current and up to date to feed into a process before we make any commitments on that. I will be convening meetings this month of the dairy forum and, I hope, the beef forum to discuss the income crisis.

The Minister pointed out that the average farm wage is a good bit lower than the average industrial wage of €27,000 a year; it is €10,000 less, particularly in the beef and sheep sectors. The average income is approximately €16,000 per annum for sheep and €13,000 per annum for beef, which means that many farm families are struggling to make a real income from farming. A total of 40% of all farms in the country have an annual income of less than €10,000. Direct payments last year were down 10%. That is a particular difficulty facing those farms because of the reduced CAP pot, which impinges significantly on them as well.

Would the Minister meet the dairy forum and beef forum together and bring other actors and interests in the agricultural sector, such as those in industry and the financial sector, together at one meeting? That would be very useful and would reflect the fact that the Government understands the crisis facing farming, if indeed it does. It would also provide reassurance that it will look for solutions.

Since my appointment I have been actively engaged in meeting all stakeholders in agriculture, primarily those inside the farm gate. I have met with the Irish Farmers' Association, IFA, the Irish Creamery Milk Suppliers' Association, ICMSA, and the Irish Cattle and Sheep Farmers' Association, ICSA, and I propose to meet soon with the Irish Natura and Hill Farmers' Association, INHFA. I am acutely aware of the income crisis inside the farm gate and the fact that in many respects it is out of kilter with what is happening for those employed in the food industry generally, where returns are still quite handsome and profitable. I do not propose to convene a joint meeting. I do not see a useful purpose in meeting the dairy forum and the beef forum jointly, because the way they are constituted is to represent the issues in each of those sectors, which in many instances are separate and different issues. I propose to have a meeting of those forums very early this month.

The Deputy rightly identifies the sheep and beef sectors as being at the lower end of the farm survey by Teagasc. The Government is rolling out and hopes to finalise a submission on a €25 million sheep scheme to the European Commission. I would welcome the Deputy’s input and that of other interested parties in the ongoing consultation.

Mortgage Book Sales

Martin Kenny

Ceist:

47. Deputy Martin Kenny asked the Minister for Agriculture, Food and the Marine the consequences for Irish farming of the sale by a bank (details supplied) of €100 million of agricultural loans to vulture funds, thereby removing this land from the control of Irish farmers; if he has met the bank to discuss this situation; and if he will make a statement on the matter. [14833/16]

Primary responsibility for banking policy lies with the Department of Finance. Officials from that Department have been in contact with the bank in question with regard to the details of the loan sale. The Minister for Finance has stated that the sale of a loan from one entity to another does not change the terms of the contract or the borrower's rights and obligations under the original contract.

Active engagement by indebted borrowers with their lender is key to achieving a sustainable resolution, and I would urge borrowers in arrears who have not already done so to take that first step by contacting their lender directly or contacting the Money Advice and Budgeting Service, MABS, for an independent assessment of their situation and advice on available resolution options.

In regard to the consequences for agriculture, my predecessor, Deputy Coveney, wrote to the bank in early April to express his concerns. The bank replied that a low number of agricultural customers were potentially affected by the sale and that it has proactively engaged and worked with such customers. It also stated that any potential sale of non-performing SME loans would only be done after the completion of an extensive review of each customer's individual circumstances. The bank gave assurances that throughout this process it remains fully committed to supporting all of its customers, including those in the agriculture and food sectors.

In addition to this correspondence, my officials have been in contact with the bank in question on a regular basis with regard to sale of these loans. I will meet the CEO of the bank later this month and this issue will be one of the topics on the agenda.

I thank the Minister, and I congratulate him and the Minister of State on their appointments. This issue cuts across many of the things that affect people the length and breadth of rural Ireland. Many people are in significant debt, aside from those in the agricultural sector. A lot of this debt, which may put large amounts of farmland under the hammer and allow it to fall into the hands of vulture capitalists, was generated not on farms but elsewhere. Unfortunately, in many cases farms were put up as collateral and are now falling foul of such agreements.

While I welcome the Minister's proposal to meet the CEO of the bank concerned, I urge him, prior to the meeting, to write to the CEO and implore him not to proceed with any sale of land. Many of the people affected are seriously concerned that this agricultural land, which is valued at up to €100 million, will go out of the hands of people living in the State and be bought by vulture capitalists from other countries.

It is vital that the Minister take a hands-on approach. Agricultural land that belongs to the people of Ireland should remain in Ireland. Everything should be done to ensure that the land is kept in the hands of the people who currently own it. I call on the Minister to implore the bank to ensure that whatever can be done is done.

I thank Deputy Kenny for his good wishes and look forward to working with him during my time as Minister. As I said in my response, I have arranged a meeting on 29 June with the new CEO of the bank in question, Mr. Mallon. I will raise all of the issues that affect farmers, including credit and the sale of loans. It is not a question of the bank selling land; rather, it is selling distressed loans. I take the Deputy's point. In many respects, these bad debts arise from off-farm investments rather than investments involving matters inside farm gates. That is a specific issue which I will raise with the CEO.

As I mentioned in my response, the previous Minister was in contact with the bank in April. I have already been in contact with it and have arranged a meeting. Officials in my Department are in continuous contact. It is important to emphasise that the sale of loans does not have an adverse impact on the rights contained in the original contracts between borrowers and lenders. A critical factor to note is that the same protections exist legally for borrowers in respect of the sale of loans to third parties.

I thank the Minister. I am glad to hear that, but many farmers are concerned that when loans are sold to entities outside the State they may not come under the same control and regulation as pertains to banks registered in the State.

The Minister is quite correct that many loans were generated from off-farm activities. I am aware of a farmer who had some money in his local bank during the boom, when everything was going well. He was called in to meet the bank manager, who told the farmer that he should invest money in something. He said that the bank had a particular set of investments available, and it would top up the farmer's savings by lending him money. It was through the encouragement of the banks that people got into so much debt. The bubble burst and the gravy train that banks set up for people at the end of their retirement or whatever all went wrong. People were left with significant debts and they are now under a threat in that their loans may be sold to vulture funds. Naturally, most people are very fearful that such funds would have no compassion for farmers living in rural Ireland and would sell their property. Many such difficulties have arisen in a particular set of circumstances, in many cases where banks were the key players in creating the debt in the first place.

I am reminded of the words of Shakespeare, "Neither a borrower nor a lender be". Perhaps it would be good advice in respect of the parties involved. However, I take the point the Deputy raised. I do not think there is much difference between the approaches we take to the matter. My approach will be to assist, in so far as we practically can, farmers who are in that situation. We will impress on the financial institutions a requirement for forbearance. We do not know whomever the purchaser of the loans will be, whether it is a fund outside of the State or within it. The loan book has not yet been disposed of, but in the context of the overall loan sale there is a small proportion of vulture funds, and I accept that is a worrying development for any individual farmer who is in that situation. For that reason I wish to reassure those individual farmers that their legal entitlement in respect of the sale of those loans to a third party is not impacted in any adverse way and remains unchanged. As Minister for Agriculture, Food and the Marine I will work to try to ensure there is a satisfactory outcome through the forbearance we can extract from the bank involved.

UK Referendum on EU Membership

Willie Penrose

Ceist:

48. Deputy Willie Penrose asked the Minister for Agriculture, Food and the Marine if he has assessed the effects of a British exit from the European Union on the food and agriculture industry, his progress in developing potential trade arrangements and minimising the disruption and negative impact on Irish producers and consumers; and the options for agriculture and the agrifood sector, given the extensive trade links between the two economies and the role of the European Union’s Common Agricultural Policy. [14854/16]

The UK is by far our largest single trading partner. According to CSO figures, in 2015 we exported almost €5.1 billion worth of agricultural products and imports from the UK were worth €3.8 billion. The prospect of a UK vote to leave the EU therefore has serious implications for the agrifood sector. That is borne out in the reports that have been produced in recent months on the potential impact of Brexit on Ireland. An ESRI report last year estimated that the potential reduction in bilateral trade flows could be as high as 20%, with an even higher impact on agriculture, food and beverages. Teagasc, at the request of my Department, carried out a deeper analysis on the Irish agrifood sector. It found that, depending on the assumptions made, the minimum impact could be a reduction of 1.4% or €150 million per annum in the value of Irish agrifood exports, with a possible worst-case scenario involving a reduction of more than 7%, or €800 million, per annum. However, it is important to note that there would be no dramatic change straight away and that the actual impact of Brexit would depend on the post-exit relationship that will have to be negotiated between the EU and the UK, should the UK decide to leave. The Treaty on European Union provides for a period of two years of negotiations, with extensions possible where agreement is not reached in the initial period.

My Department has been considering the likely arrangements to be made in the event of an exit vote. There are four main areas from an agrifood perspective, namely, tariffs and trade arrangements, the EU budget, standards and customs controls. Potential differences in tariffs after a UK exit could restrict trade in both directions and affect traditional supply practices, particularly for raw materials. Once the exit negotiations have been completed, the UK would be free to negotiate free trade agreements with other third countries. That is particularly relevant in relation to meat imports from South America.

The UK is a net contributor to the budget and a UK exit could result in a loss of the UK contribution of between 5% and 10%. Given that the Common Agricultural Policy, CAP, accounts for some 37% of the EU budget, we could expect additional pressure for further contraction in CAP funding in the years ahead. Currently, the EU operates a common regulatory regime and the rules of the Single Market allow free movement of goods between member states. While the EU and the UK may wish to keep such arrangements in place for as long as possible, deviations between UK and EU standards could give rise to trading difficulties and additional costs.

I congratulate both the Minister, Deputy Creed, and the Minister of State, Deputy Doyle, who are both excellent and well deserved appointments. Both Ministers have served long apprenticeships and I have worked with them on the agriculture committees in recent years. As Labour Party spokesperson on rural affairs and agriculture, I look forward to working constructively with them.

Is it not clear that the impact of Brexit will be significant? As the Minister said, the ESRI report referred to a reduction in trade of 20%. Greenland is the only country to leave the Union under an Article 50 procedure and it took more than three years. I have no doubt discussions following Brexit would take us into 2020. The negotiations would take longer than two years so we would have such a period of negotiation. Is it not the case that following Brexit, if the UK were outside the EU, tariffs could be imposed on Irish imports which would lead Irish food producers to seek out other markets for exports? That would likely result in reduced prices, which in turn would lead to downward pressure on prices paid to farmers for beef. That would be very significant. A total of 50% of beef exports currently go to Britain, worth €1.1 billion. Dairy exports, which are almost one third of our exports are worth almost €1 billion.

Moreover, as Deputy O'Keeffe will be aware, 60%, or €330 million worth, of Ireland's pig production goes to the United Kingdom, so that would have a huge impact. Is it not the position that there is no current provision for negotiating a special deal between Ireland and the United Kingdom in the event of a Brexit? Would this be important? As the Minister noted, the potential for the United Kingdom to negotiate external trade agreements with third countries would be a huge risk for Ireland. Would this not lead to displacement of Irish products on the UK market and have a significant negative impact on the Irish food industry?

I thank Deputy Penrose for his remarks. Agriculture always has been close to his heart, and I look forward to working with him.

Brexit is an issue of enormous concern for the agriculture sector in particular and is exercising the minds of the whole of Government. While people ask themselves what they can do without being seen to meddle, there are 140,000 people in the State who are entitled to vote in that referendum, and many of us know people in those communities and should reach out to them. When the Mercosur trade agreement did not have an initial offer on beef, people breathed a sigh of relief. However, that achievement would pale into insignificance were the UK to leave the EU and be in a position to negotiate bilateral trade agreements with South America. This is possibly one of the first things the United Kingdom would attempt to do, and the Deputy rightly points out that slightly less than 50% of Ireland's beef exports are on supermarket shelves in the United Kingdom. This encapsulates the scale of the potential crisis we face.

As I stated, this issue is exercising the whole of Government. My Department is feeding into a group within the Department of the Taoiseach that is assessing risks and strategies to deal with this issue. As Deputy McConalogue would be aware, a lot of milk is gathered in Northern Ireland to be brought south of the Border for processing. Given that this milk would now be crossing the border between the UK and the European Union, were Brexit to take place, issues would arise regarding border controls and so on. The Deputy raises an issue of enormous economic concern, a matter of which the Department is acutely aware.

Another potential impact is divergence of animal health and phytosanitary regulations, which are very important in terms of co-ordination and co-operation on animal health between Ireland and Northern Ireland and between Ireland and the European Union.

I ask the Minister also to consider the subject of energy supply. The cost of energy would loom large in the event of Brexit because Ireland imports 89% of its oil and 93% of its gas requirements from the United Kingdom, and in Ireland the agriculture sector spends approximately €500 million per year on energy. Would this not inevitably lead to increased production costs, which in turn would reduce our competitiveness? This would be a huge issue.

In the event of Brexit, Ireland would also lose an important ally in the European context for arguing its case. The Minister is correct in stating that 37% of the budget is devoted to the Common Agricultural Policy, CAP. As Britain is a net contributor, this is likely to have a significant negative impact on future spending on the CAP, particularly from 2021 onwards. This will be the kernel of the issue that people may not realise.

There is absolutely no upside for this economy of a Brexit, and the Deputy has listed a series of risks, including the issue of energy supply. There are existing cross-Border interconnectors and so on, and all of these arrangements would come under the microscope in the new dispensation that would apply. I refer to the uncertainty that would follow in the context of two years of negotiations, which would halt investment and damage confidence and would lead to fluctuations and currency movements that would create greater disadvantages for products from Ireland. I will take up with my Cabinet colleagues the issue of energy supply in particular.

The Deputy also raised the issue of animal and plant health regulations and standards. It would obviously be open to the United Kingdom to change the standards.

While there is an expectation that they may remain the same for some time, there will at least be a once-off requirement for veterinary certification if there is a change. These are all additional costs that will place Ireland's products at a disadvantage relative to other similar products on supermarket shelves in the United Kingdom. As I stated, there is no upside to a Brexit, and I implore all parties in this House that share the view that Ireland's interests are best served by the UK remaining in the European Union to reach out to those communities that are entitled to vote in the referendum.

Greenhouse Gas Emissions

Charlie McConalogue

Ceist:

49. Deputy Charlie McConalogue asked the Minister for Agriculture, Food and the Marine the steps he will take to ensure that Ireland's grass-based agriculture, forestry and boglands are taken into account as methods of carbon sequestration in upcoming European Union discussions on 2030 emissions targets; and if he will make a statement on the matter. [14835/16]

Ireland has adopted a whole-of-Government approach to developing climate policy. The Government has engaged in intensive discussions with the European Commission for some time now to highlight the importance of ensuring a coherent approach to the twin challenges of food security and climate change.

As part of our ongoing engagement at EU level, my colleague, the Minister of State, Deputy Naughten, and I met recently with Commissioner Miguel Arias Cañete, the European Commissioner for Climate Action and Energy, to discuss proposals on the EU’s effort-sharing decision and on land use, land-use change, and forestry, LULUCF.

The meeting provided me with an opportunity to restate the commitment of the Irish agriculture sector to improving efficiency and driving down emissions, and to re-emphasise the importance of reflecting the 2014 European Council conclusions in the proposed effort-sharing decision, particularly in terms of their recognition of the low mitigation potential of the sector and their reference to the inclusion of afforestation and LULUCF as part of future climate and energy policy.

Afforestation, the creation of new forests, is included as a specific mitigation measure in paragraph 2.14 of the Council conclusions. This is important for Ireland as afforestation is the main cost-effective land-based climate mitigation tool available to us.  Climate change mitigation by forests, forest fuels and wood products is one of the principal drivers of the policy to expand forest cover out to mid-century.

Annual estimates of the current level of uptake of carbon dioxide by forests are provided by my Department to the Environmental Protection Agency. Projected levels of uptake in forests and storage in solid wood products out to 2020 have been provided to the European Commission under Decision 529/2013 on land use, land-use change and forestry.

We will continue to work closely with the Commission prior to the launch of proposals for an effort-sharing decision, which are expected later this summer. It should also be noted that Ireland is one of a small number of EU countries to have elected to report on cropland and grazing land management activities under the Kyoto Protocol. This would allow Ireland to take advantage of any sequestration benefits that may be allowed in the future from these activities.

I thank the Minister for his response. The EU's discussions on how we will meet our emissions targets for 2030 represent a big challenge for Irish agriculture. This represents a key issue for the Minister's Department in the coming years and for the Irish team negotiating with their European counterparts.

Outside New Zealand, Ireland has the largest proportion of emissions in the world coming from agriculture. One third of all Irish emissions are from agriculture, whereas the average figure across Europe is 10%. Any issues, therefore, concerning emissions targets for agriculture which are debated at European level are much more challenging for us than for anywhere else.

It is crucial for the Minister to note, and our negotiators must be strong on this point, that the production of agricultural produce in Ireland is much more energy and carbon efficient than elsewhere. On average, it is about one third less. A key point in these negotiations is to ensure that when it comes to setting technical targets for methane and ammonia, a false economy is not brought into play by setting high targets. That would mean that other countries would end up producing more agriculture which is less carbon efficient, while the pressure is on Ireland.

I ask the Minister to comment further on what he expects and how confident he is that agriculture will be protected in these negotiations.

I confess that I did not quite grasp the level of achievement by the Irish agriculture sector until I was appointed as Minister. It is not widely understood that we are the most carbon-efficient producer of milk, bar none. In addition, through the beef data and genomics programme we are targeting the beef sector to lighten its carbon footprint.

Deputy McConalogue said that agriculture accounts for 30% of our carbon emissions, while the figure is 10% across the rest of the EU. That is factually correct but in a sense he is comparing apples with oranges, as I am sure he will appreciate. This is the message we must sell to the European Commission. We never had the industrial revolution here, so we do not have a history of heavy industry. However, we do have the most carbon-efficient industrial sector inside the farm gate. We are involved in measuring the carbon footprint of every individual farmer in the country. We have to sell that message and get it across forcibly.

I salute what has been achieved to date by the farming community. We are not seeking special exemptions because most of the required efforts are cost-reduction measures. The key is the Council conclusions which said that there is a limit to what agriculture can achieve in terms of reducing the burden of its carbon footprint.

However, we also must have sustainable food production practices. Given the growing population, there will be 9 billion people to feed by 2050. Is it not far better to have food produced in an intensive way here, with a low carbon footprint, rather than having carbon leakage from across the seas with beef coming in from South America, for example? These are the salient matters we must convey in that debate.

Fishing Licences

Pat the Cope Gallagher

Ceist:

50. Deputy Pat The Cope Gallagher asked the Minister for Agriculture, Food and the Marine when he will amend Statutory Instrument No. 125 of 2016 and introduce a system where no penalty points will be applied to an owner’s licence until the matter has been completed in the courts; and if he will make a statement on the matter. [14836/16]

The Deputy will be aware that Statutory Instrument No. 125 of 2016 - European Union (Common Fisheries Policy) (Point System) Regulations 2016 - implements the required EU points system which applies to the licence holder of a sea-fishing boat when a serious infringement of the Common Fisheries Policy is detected within the exclusive fishery limits of the State or for an Irish vessel, wherever it may be.

The concerns of the fishing industry on this matter are reflected in the programme for partnership Government which provides that, "Subject to legal advice and review, the penalty points statutory instrument will be amended to reflect the concerns raised with regard to the assignment of points following the completion of the prosecution process, while ensuring that Ireland is fully in compliance with its obligations under EU law."

Upon taking office, I requested that the Attorney General consider, and advise me on meeting, this programme commitment.

I have now received this advice and have considered the issues arising. I am satisfied that I am in a position to move on the introduction of a system for the sequential application for EU points in conjunction with the prosecution process, thus fulfilling the ambition outlined in the partnership programme.

I also met with representatives of the fishing industry last week to discuss a wide range of issues, including their concerns about the implementation of the EU points system and have updated them on this matter.

This new arrangement is subject to addressing some important legal and administrative issues in order to ensure compliance with EU law.  I intend to report back to the Oireachtas as soon as I have finalised a way forward in the context of dealing with the relevant legal and administrative matters. However, I am confident that these matters can be dealt with in a collaborative and constructive manner with all stakeholders.

In the meantime, it is important that the 2016 statutory instrument remain in force so that Ireland remains in compliance with the legal requirement to implement the EU points system. Accordingly, I do not propose to revoke the statutory instrument until a revised system can be put in place. The Deputy will be aware that the European Commission is empowered to commence infringement proceedings against member states that are not implementing EU law. A negative judgment from the European Court of Justice in this context could cost the State significantly in lump sum and ongoing fines. There would also be serious potential implications with regard to the release of funding for the fishing industry under the European Maritime and Fisheries Fund, EMFF.

I am pleased that the Minister was able to meet the industry and respond to the views of Members from various parties on this side of the House. However, I am somewhat disturbed to learn that the Minister is not prepared to revoke the statutory instrument. Had we known that, we could have made the Minister's job simpler. We could have secured a majority in this House to revoke it because a majority oppose it. If it was not legal then, it is not legal now. Perhaps the Minister would clarify and deal with this as quickly as possible.

For the information of those Members who do not understand, penalty points for any infringements are put on one's licence and the highest court in the land cannot change that. I am pleased the Minister is changing it, but I still believe he should consider revoking it and put in place the template that is acceptable to the European Union, which is the one in the UK. Finally, although it might be too early to respond to this, does the Minister expect to do this by way of primary legislation or another statutory instrument? To be fair, the Minister acted very quickly and we are pleased with that. However, we are a little concerned that he has not revoked it.

I thank Deputy Gallagher for his comments on this issue. I appreciate that it is a matter of concern for Deputies representing all coastal areas from Malin Head to Mizen Head and, indeed, on the eastern seaboard. I could not revoke the existing statutory instrument without being in a position to replace it immediately with something else because that would have attracted the attention of the European Commission to the fact that we did not have an effective dissuasive legal instrument in place. I am committed to acting to address that anomaly at the earliest possible date.

In my initial response I referred to legal and administrative issues. The legal issue is to determine, as the Deputy mentioned, whether it will be done by way of an amendment to the existing statutory instrument, a new statutory instrument or by primary legislation.

I am awaiting final clarification from the Attorney General on that point.

In respect of administrative issues, it aims to ensure that whatever we put in place to replace the existing statutory instrument meets the EU administrative requirement because a substantial amount of EU funding is riding on this issue under the EMFF. The funding is €240 million, some of which has already been committed in projects in the Deputy's constituency and elsewhere. I am anxious to ensure I move effectively in a manner that, in the interim, does not have a cost impact for the Exchequer.

It is not intentional on the part of the Minister but for him to say that €240 million is riding on the back of this is almost scaremongering. I am quite sure he did not intend it that way. The UK and the Republic of Ireland are in the same Union and, hopefully, this will remain the case after the referendum. What is acceptable in the UK when there are millions riding on it does not seem to be acceptable here. If the Minister comes back with primary legislation, we will have an opportunity to discuss it. If it is done by way of statutory instrument, will the Minister provide us with an opportunity to discuss it with him in advance?

In respect of the latter issue, I will come back and consult with the House. Under the EU requirements, the system must be effective and dissuasive. That is the lingo that is used at EU level. The difficulty in terms of the legal process here versus the legal process in the UK, to which the Deputy alluded and which has points consequential on conviction, is that there can be a long delay in this jurisdiction between the detection of an offence and bringing it to court. The only part of that process that is within my jurisdiction in the Department is the Sea-Fisheries Protection Authority. I will ensure that it is in a position to fulfil its part of that process as efficiently and effectively as possible. I will also be in contact with the Minister for Justice and Equality in respect of the other matters. I am committed to points consequential on court conviction and that is a commitment I have given to the principal officers with whom I have met. I acknowledge the contributions of other Members of the House, including Deputy Gallagher who raised this matter repeatedly.

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