Vol. 959 No. 6
32. Deputy Charlie McConalogue asked the Minister for Agriculture, Food and the Marine the position on the programme for Government commitment to increase areas of natural constraint, ANC, scheme funding by €25 million in 2018; and if payments will reflect the constraint of land type. [41891/17]
As priority questions had to be submitted by the middle of last week in advance of news breaking that the European Commission planned to offer up to 70,000 tonnes of beef in the South American trade negotiations as part of the Mercosur deal, it was not possible to table a question on that matter to be dealt with today. Therefore, I raised the matter with the Taoiseach earlier. That is why it is not on the agenda in this context today. I certainly hope every effort will be made by the Minister to ensure the proposal will be blocked and that we will not see such a massive threat pursued to the beef industry.
Priority Question No. 32 relates to areas of natural constraint and the commitment in the programme for Government to provide €25 million for them. Will the Minister give an update on whether that funding commitment will be followed through in the forthcoming budget? Will he also ensure the allocation of that funding will reflect the various constraints of land type under the scheme?
For the Deputy's information, there is a later question tabled on the Mercosur trade negotiations, Question No. 45; therefore, we may have an opportunity to discuss the matter, which is of critical importance.
The areas of natural constraint, ANC, scheme is a very important source of financial support for farmers across the country, under which over €200 million is paid each year to over 95,000 farmers. A Programme for a Partnership Government provides for a commitment of a €25 million increase in funding for the scheme in 2018. This falls for consideration in the context of discussions on budget 2018.
There are a number of options in relation to how any additional funding could be allocated under the ANC scheme. The options range from allocating the funds as a flat increase across the current payable rates to various forms of targeting higher payment rates for particular categories of farmer. Any change would require formal agreement with the European Commission via a formal amendment to the rural development programme, 2014 to 2020.
The 2017 ANC scheme payments commenced on 19 September and, to date, more than €171 million has been paid to almost 80,000 farmers. Payments are continuing on a rolling basis as more farmers satisfy eligibility and stocking rate requirements. I am pleased to note that payments are ahead of where they were this time last year.
I thank the Minister for his response, which seems to indicate that the following through on the €25 million commitment in the programme for Government in 2018 is optional and up for discussion rather than non-negotiable. I would have thought that if there was a commitment in the programme for Government, it would have been sealed and done and dusted. It should not be up for discussion at this late stage as to whether the €25 million will be available. Will the Minister comment further on the matter because in his initial response he raised a question mark against whether the €25 million would be available? I want to make it absolutely clear that I believe it must be delivered as it is very important for the agricultural community.
On the various land types and the way funding is distributed, as the Minister is aware, the difference between the payment rates for the three types of land - mountain land, more severely handicapped lowlands and less severely handicapped lowlands - is approximately €14 between the top rate and the lower rate, but there is a massive difference in the types of land involved. I put it to him that in distributing the €25 million which needs to be provided in the budget we should start the process of allocating higher payments to farmers with more severely handicapped land who should receive the largest portion of the funding.
I thank the Deputy for his support. As he will be aware, total payments of approximately €250 million were made to eligible farmers under the ANC scheme in 2008. That sum was cut substantially by the Fianna Fáil Government at the time. We are attempting to make up some of the ground lost in budget 2018. Obviously, until the budget is announced, there will be no certainty in that regard, but it is my earnest wish that that will be the case. I appreciate the support of the Deputy in that regard. As to how the money would be spent if it were to be delivered in the budget, there is a range of options available, but my overwhelming objective at this stage is to secure the funding. Until the budget is announced, there can be no certainty in that regard. I am aware of the various views, particularly the different and competing views, on how the money should be allocated, but until such time as the €25 million is delivered, there is little point in exercising ourselves about the matter, but I am aware of all the options being canvassed.
I am disappointed that this issue has not been nailed down at this stage. For what does the commitment in the programme for Government stand? I remind the Minister that it is his party's programme for Government. If it commits to the provision of an additional €25 million in ANC funding for 2018, it is a poor reflection on the priority attached to agriculture that a week prior to the announcement of the budget, the matter is still under discussion and the Minister cannot made a clear commitment that the money will be forthcoming. The programme for Government stipulates that it will be provided. It is not exactly a big issue on which to have a fight; that fight would have been fought a year and half ago when the programme for Government was put in place. Will the funding, which clearly must be provided and is non-negotiable, be additional to what was included in the rural development programme and the overall Common Agricultural Policy, CAP, envelope in 2014, or will it simply be a rejigging of the spend, with farmers ending up no better off and the Government robbing Peter to pay Paul within the overall CAP envelope to provide the €25 million in funding?
On the distribution of the additional funding provided, I am aware that there is a delay in the discussions at EU level in ensuring the constraint of land type is reflected in payments, but there is no reason the Minister could not begin that process and ensure farmers would be compensated in accordance with the level of difficulty they encounter in farming the land.
As I am not in the business of counting chickens before they are hatched, I am not going to engage in speculation about how money that has not been secured in budget 2018 may be spent. That is a debate I am sure we will have on another day should we succeed in securing the funding. I appreciate the Deputy's anxiety and support to make up some of the funding cut by Fianna Fáil in 2008.
By using some of the funding not spent in the Minister's Department.
As we have said ad nauseam in this Chamber, there will not be one penny left behind under the rural development programme.
There will be plenty of pennies left behind this year as a result of the underspend-----
The Deputy understands the position on the rural development programme.
We have had this before-----
The most underspending Department in the whole of Government. That is this year's figures.
The rural development programme is a rolling programme. When farmers present for payment in certain schemes, we are obliged to meet that obligation. In respect of the Deputy's support for this particular proposal on the rural development programme, it is the subject of the negotiations within Government for 2018.
33. Deputy Martin Kenny asked the Minister for Agriculture, Food and the Marine his plans for a fodder aid package to assist farmers in difficulty in view of the heavy rain in recent weeks. [41621/17]
As the Minister is aware, we have had extremely bad weather since the middle of August and all through September. We have a huge problem in many parts of the country. In the north west, where we have very high levels of rainfall every year anyway, a particular crisis is developing at the moment and many farmers, certainly those in my constituency of Sligo-Leitrim as well as those in counties Donegal, Cavan and all that area, find that they cannot get their second cut of silage. As they cannot get the second cut of silage they cannot get their slurry out, which is another issue that I know has been brought to the Minister's attention and needs to be dealt with as well. This issue concerns fodder. There is the potential for a fodder crisis. As this is an ongoing problem every year, can a proper scheme be put in place to ensure it is dealt with?
I accept that weather conditions in recent weeks have been challenging and this has created difficulties for farmers. My Department has been monitoring grass growth rates, weather conditions and feed supplies across the country. Grass growth rates are currently substantially ahead of recent years but there are difficulties in utilising grass in some regions due to above average rainfall levels.
The European Commission has recently agreed to my request for an advance payment of the 2017 basic payment scheme. This has been prompted by the protracted inclement weather conditions and also market difficulties caused by currency fluctuations. This means an increase from 50% to 70% in the rate for the basic payment scheme to those applicants whose applications are confirmed fully clear with effect from 16 October, with balancing payments being made with effect from 1 December. There will also be an increase permitted to the advance for Pillar 2 rural development schemes.
These payments and the payments under the areas of natural constraints scheme, which commenced recently, will inject up to €800 million into the Irish rural economy in the coming weeks and will provide a very welcome boost for Irish farm families, and also funding for fodder purchase where required.
Taking account of this, there are no plans at this time to establish a fodder aid scheme. I understand fodder supplies remain available nationally and my Department will continue to monitor the situation.
I am aware of the advances in the basic payment scheme. However, farmers would have been getting that anyway. They know that money is coming and they have already budgeted for it. The farming supplement of the Irish Independent today reports that prices are plummeting in the cattle trade because of the bad weather. Many farmers realise that they cannot keep their cattle as they will not have the fodder for them and they cannot put them out on the grass because the land is too wet. This is an annual crisis. Last year we had a similar situation. It did not develop into as bad a situation as farmers had feared. Some, however, were left in a dicey situation and found it hard to get enough fodder to get through the winter.
Many parts of the country are currently waterlogged and farmers cannot get their cattle out. They have housed them. They have not got the fodder and they cannot do anything about it. It is time to look slightly differently at this issue. I appreciate that the Minister said last year he would deal with it on a case by case basis but it will need something a little more focused on this occasion to ensure it is sorted out. We need to see a fodder aid scheme put in place for farmers where there is clear evidence they have what could turn into an animal welfare crisis, which we do not want to see happen. It is quite appropriate for the State to step in to ensure an animal welfare crisis of this nature does not develop.
I concur with the Deputy that the last thing any of us wants to see is any welfare issue arising on Irish farms, and we will take all steps necessary to avoid it. That has always been the position of the Department, and remains so. We have a dedicated animal welfare line in respect of farmers who may be facing individual problems. Individual holdings may have a problem and I appreciate the weather has been difficult. Ground conditions are not what we would like them to be at this time of the year. That gives rise to a whole range of issues, not least in terms of those who are trying to cut second-cut silage. However, we are in the first week of October and it is premature at this stage to speak of a fodder crisis. My Department continues to remain vigilant on the matter. Avenues are available to individual farmers and the Department will help where there are fodder and animal welfare issues combining to give rise to specific circumstances requiring the intervention of the Department. However, to speak at this stage about the need for a uniform, nationwide fodder crisis scheme is premature.
With respect, I disagree. We spoke about this last year. Last year we said that we would deal with it on a case by case basis. When we speak about this issue, we are speaking about certain areas of the country. The Minister says "nationwide", but I am sure that in many parts of the country there is not the same level of crisis. Every year, we have a huge level of rainfall in the north west compared to, say, the south east or other regions of the country. The reality is that this is about the timing of that rainfall for many farmers. We have had an awful lot of rain in recent weeks and, in fact, in the past two months. It has led to a situation where farmers are not able to get their second-cut silage. I know the Minister is saying the weather may improve, but when we are talking about taking second-cut silage in the last weeks of October, it is of poor quality. That is the reality facing farmers.
We need to ensure that a scheme is put in place so that farmers will know with confidence that they will not be let down. They cannot be required to go with a begging bowl, one by one, asking, "What can you do for me, please, Sir?" That is not appropriate. The farming community needs to have something proper put in place. The farming organisations are recognising it. I am sure some of them also will be lobbying the Minister on the issue. We saw the situation in County Donegal with the deluge of rain and the damage it did to the agriculture sector. We need to ensure that there is a full and proper scheme put in place to deal with this every year, if and when it occurs.
The Deputy made the point that we were in this position this time last year. However, we did not have a fodder scheme subsequently. The responses that were available from my Department in terms of animal welfare issues were adequate to deal with any issues that arose. The Deputy is making this point in the first week of October. While I appreciate that we have had a difficult year and that ground conditions are difficult, there is no evidence of a fodder crisis at this stage. As I said, my Department remains vigilant in terms of the matter and we will continue to monitor the situation. Notwithstanding the fact that there are individual farmers who have had cattle in, some full-time, some in by night, because of ground conditions, there is no fodder crisis.
Some farmers are selling them because they cannot keep them.
At the moment, however, there is no evidence of a fodder crisis or an animal welfare crisis.
34. Deputy Charlie McConalogue asked the Minister for Agriculture, Food and the Marine if the Government formally submitted an application to the European Commission for EU state aid to help the agricultural sector and farmers following Brexit related currency changes or applied for CAP market disturbance funding following the UK referendum to leave the EU. [41892/17]
As the Minister will know, the countries most affected by Brexit currency exchanges have been recently invited by the European Commissioner, Mr. Phil Hogan, to apply for EU state aid to help the agricultural sector. Has the Government formally submitted an application to the European Commission for EU state aid to help the agricultural sector and farmers following Brexit related currency changes or applied for CAP market disturbance funding following the UK referendum decision to leave the EU?
It is important to clarify from the outset that state aid is aid funded by member states and not by the European Commission. Such aid is subject to common EU rules designed to avoid distortion of competition within the European Union.
It is already possible to provide aid for farmers subject to a cumulative maximum limit of €15,000 per farmer over three years. Such aid is called de minimis aid and is designed to permit member states to provide assistance to primary producers at a level which does not distort competition across the union. Ireland already provides such aid to farmers under a number of headings in addition to the aid it provides under its rural development programme, which is subject to a separate legal basis to that of state aid. Some of the things which receive de minimis state aid from us include protein crops, tillage compensation scheme, dairy compensation package etc.
In addition, the common market organisation regulation of the CAP provides for a number of market support mechanisms, for example, intervention when beef falls to threshold levels which are well below current market prices or for butter and skimmed milk powder between the months of March and September. More flexible measures against market disturbance can be made available when the conditions warrant it. These are not measures that will be deployed regularly and in practice their deployment is very exceptional and requires the support of member states.
Regarding CAP market disturbance funding, emergency measures were introduced by the Commission in accordance with articles 219 and 220 of Regulation No. 1308/2013 in recent years in direct response to the market difficulties being experienced by farmers and producers during this time.
Such measures included exceptional adjustment aid to milk producers and farmers in other livestock sectors, with €350 million in emergency funding allocated to member states. Ireland's allocation of €11.1 million from this fund, topped up by national funding, was used to leverage a greater fund of €150 million to provide low-cost loans to the livestock and tillage sectors.
Currently in Ireland, dairy prices are strong, year to date average pigmeat and sheepmeat prices are close to the European Union average and whereas beef prices dropped back significantly since they peaked in June, they appear to have stabilised and are currently running at 97% of EU 15 average prices. Nonetheless Brexit poses a very significant risk and its impact is already being felt in some sectors through the prism of currency fluctuations. Sterling values dropped considerably in recent weeks, but have rallied somewhat since reaching a trough of 92p per euro.
Additional information not given on the floor of the House
I am concerned about the potential impact of sterling volatility and Brexit more generally on the Irish agrifood sectors. It is clearly a significant risk and I have been in regular contact with the Commission and with counterparts in other member states to sensitise them to the threat posed by Brexit, including the more immediate risk associated with currency volatility, and to indicate that there may be a need for a community response at the appropriate time. I intend to raise these matters again at the Council of Ministers this month.
As the Minister knows, Bord Bia has published estimates for the impact of the underlying weakness of sterling on exports for 2016, which demonstrates a fall in the value of trade as result totalling €570 million, with exports to the UK dropping by 8%. IBEC estimates this equates to up to 5,000 jobs. The Irish Farmers Association, IFA, has been very clear as well in outlining how the current weakness of sterling is leading to Irish farmers losing out to the tune of €2 million per week or 15 cent per kilo as a result of the fact that sterling is lower.
I asked specifically if the Government has applied to the EU for aid relating to the impact of Brexit or market disturbance. Commissioner Hogan in the past few weeks has issued an invitation to states most affected by sterling disturbances to make applications for aid and assistance. Has the Government applied for that or will it do so? Will the Minister give a clear answer on that?
As I tried to convey in my opening response, the two elements of the Deputy's question deal with CAP market disturbance funding and the state aid de minimis process. We have delivered to the agrifood sector under both headings. For example, the €150 million loan fund was partially under the de minimis process at sectors that were not covered under the CAP market disturbance funding. Sectors such as the mushroom and tillage sector were included in that de minimis aid process. Dairy and other livestock sectors were included in the CAP market disturbance funding. We have benefitted under both.
I appreciate where the Deputy is coming from in respect of trying to get the best possible deal in the Brexit context. We are particularly anxious to avoid a position where Irish agrifood or even the Irish economy in general are dealt with in a cheque book fashion with regard to concerns over Brexit. In other words, lasting structural difficulties for us as a trading economy, North-South as well as east-west with the UK, could be seen as open to resolution through the writing of a cheque of compensation. We are anxious to secure a solution that is long term, viable and allows us to maintain our current trading relationship with the UK as it exits the European Union.
I thank the Minister.
We have availed of the latitude that exists under the de minimis and CAP market disturbance funding processes. We continue to engage with the Commission. We do not want to send a signal that our problems can be resolved simply by pulling out the cheque book.
I thank the Minister.
We want a structural outcome from negotiations that would resolve Brexit matters in a lasting way rather than a compensatory manner.
I point out to the Minister and Deputies that there is an allotted time for Priority Questions. The way we are going now, at least one or two Members will lose out. I ask everybody to abide by the rules. There are 30 seconds for introducing a question, the Minister has two minutes for a reply, and then there are alternating periods of one minute for asking a question and replying. Unless I am very strong in enforcing these rules, people will lose out and we do not want that.
I was well aware of the schemes funded under the de minimis rules. The Minister pointed them out in his first and second replies. I have specifically asked about Commissioner Hogan's comments and invitation to countries most affected by Brexit-related currency changes. Has the Minister made an application in this respect or will he do so? I still have not received an answer on that. An answer would be appropriate. Perhaps the answer is "No" and the Minister might just say it.
The Minister knows as much as I and everybody else here of the danger posed by Brexit. It is not very far away and it will happen in early 2019. There is a structural element and getting a good deal is our utmost objective. We also must prepare for it and this may require EU state aid flexibility in advance of Brexit. Assistance from the EU may be required in the mean time to prepare, whether this relates to supply chain, new markets or price disturbance as a result of sterling changes. Will the Minister make an application or reply to Commissioner Hogan's invitation?
The Deputy's question is specific and I have answered it specifically. We have benefitted under both state aid and market disturbance funding. We have already benefitted that way and it clearly answers the question.
That was in 2016.
We continue to engage with the Commission and at next Monday's Council meeting I will raise these matters again. We have already benefitted under both headings.
35. Deputy Mattie McGrath asked the Minister for Agriculture, Food and the Marine the schemes administered by his Department over the past two years that have been affected by payment delays; the length of these delays; the number of persons affected; and if he will make a statement on the matter. [41417/17]
I have been writing parliamentary questions and contacting the Department on behalf of farmers in Tipperary. There are many schemes in the Department but what is going on there? We are sick and tired of excuses. I am not here to bash the staff in the Department but I am here to stand up for the farmers in Tipperary who are rightly entitled to get their payments but are not getting them.
My Department administers a wide range of schemes that provide vital support to underpin the continued sustainability and growth of the agrifood sector. I am very aware of the importance of these supports for farmers and, accordingly, the issuing of payments under these schemes is a matter of priority for my Department. The main schemes are delivered under the framework of the EU Common Agricultural Policy, and each year approximately €1.5 billion issues under these schemes. My Department has a strong record in the efficient delivery of these payments, as evidenced by the fact that we perform very favourably compared to other EU member states in terms of both the dates on which payments are delivered and our ability to maximise the drawdown of available EU funding.
With regard to individual schemes, the main direct payment scheme is the basic payment scheme, BPS. Advance payments are due to commence again this year on 16 October, which is the first date permissible under the EU regulations. In 2016, advance payments also commenced on 16 October, with €714 million issuing to 109,000 farmers on that date. To date under the 2016 BPS, over €1.18 billion has been issued to over 124,000 farmers. The areas of natural constraint scheme commenced payment on schedule again this year in the week beginning 18 September, and to date over €168 million has issued to over 78,000 farmers. This represents a significant increase over the payment figures at this stage last year.
The current position regarding green low-carbon, agri-environment scheme, GLAS, payments for 2015 is there are a small number of GLAS 1 farmers representing 0.5% of all GLAS 1 participants where payment is outstanding. With regard to 2016 advance payments to GLAS 1 and 2 participants, payments have issued in over 98% of cases. To date this year, we have paid over €147 million to GLAS participants.
The online payment claim system for the targeted agricultural modernisation scheme, TAMS II, opened in July 2016. Payments for approved investments continue to issue on an ongoing basis with 2,300 payment claims received and 1,680 cases paid. Payments totalling over €23.65 million have issued to date and continue to issue at an average rate of over €1 million per week.
Additional information not given on the floor of the House
I urge all farmers who have completed TAMS-approved works to submit their payment claims to the online system as soon as possible so that payments can issue.
With the organic farming scheme, OFS, our target in the Rural Development Programme was to attract some 16,000 ha of new land into production and to support 46,000 ha of converted land. We have more than achieved these targets and because of the structures we are putting in place, we hope to secure this land under organic contract for at least the next five years. For the first time, this allows us to plan ahead with confidence in terms of an organic food market. OFS payments in 2015 and 2016 amounted to €8 million each year. Projected expenditure for 2017 is €13 million and the average payment is approximately €6,500. We are well advanced towards preparations for the 2016 balancing payments, which I expect will commence in October.
In addition to these existing schemes, the new sheep welfare scheme and the knowledge transfer programme are due to issue their first payments since they were introduced last year. In both cases, payments will commence issuing in the coming weeks. With all these EU-funded schemes, it is important to note that EU regulations stipulate payments can only issue when the required validation checks have been carried out and passed. I am very anxious to ensure my Department continues to issue these important payments to farmers in the most efficient and timely manner possible, and this remains a key priority for me.
We know all that money is paid and it is all very welcome but it is of little use or benefit to farmers who are struggling, who cannot get their payments or who are waiting. These people are contacting my office, as well as many other Deputies, and we are going back and forth to the Minister. The Department is blaming computer glitches and wrong information being inputted. That is unacceptable as these farmers must pay contractors and suppliers. There are many contractors and suppliers operating as a bank and that is little good to them. It is unacceptable in this day and age that this can be blamed on computer glitches.
The guidelines are too strict or rigid. I am not blaming the staff or workers in the Department as they are not deliberately holding up matters. In many cases, delays in payments result from an excessively rigid application process, which is unacceptable. Farmers are at the coal face, as are many suppliers. These are proud, honest farmers who have never owed a penny to anybody. When payments are delayed, they do not get any interest but if it were the other way around, there would be penalties and interest coming from the Revenue Commissioners, banks and everybody else.
They are left in limbo and they will have to deal with this issue.
It has been the objective of anybody who has been in my position that these payments operate as efficiently as possible. By international comparison we do quite well in terms of how efficiently we pay people. We had an issue with GLAS. We have substantially worked that through, and 98% of people have now been paid. There is a cohort of 2% which has outstanding issues that are delaying payment. All the IT issues have been addressed, and we are awaiting information from farmers in those cases.
There is one issue I would like to flag, which is farmers who have not submitted their nutrient management plans. If the nutrient management plan is not submitted the farmers cannot get the balancing payment that is due. There are over 6,500 farmers who have not yet, under GLAS, submitted nutrient management plans. That is delaying the balancing payment and it will also delay the next round of GLAS payments for them. I would ask the Deputy to use his good offices to bring that particular issue to the attention of Teagasc, private advisers and indeed farmers. That might well be the issue that is delaying payments, because not alone is it holding up the balancing payment but it is also holding up the next round of payments.
The Minister is still a farmer. It is very frustrating that the blame is always put back on the farmer. The Minister is at it again today. If the Department gets it wrong it is a computer error, or an IT error.
The Deputy should move away from his script.
I am happy to move away from the script any day, and tell the Minister that, as a farmer, and without being flippant or smart, he should make sure that the farmers are paid and not blame computers. I can move away from the script any day. The Minister is reading out figures and quoting international best practice and telling us how highly we rank. That is little good to the farmers of north Cork who the Minister represents, to those in Tipperary who I represent, or to Deputy McConalogue's constituents in Donegal. The Minister knows that better than I do. Around 1,000 farmers came up here last year and protested. They wanted to be at home tending to their crops and their animals and not up here protesting. They are coming again tomorrow, not for fun, and at their own expense.
The Minister should not be so glib. He read out his script well. He should face up to the fact that farmers are not being paid but are being blamed. The Minister in his lecture asked Members to use their offices to tell the advisers and the farmers about this. It is too bureaucratic, and any little mistake is punished. Where is the yellow card promised in the programme for Government? The farmers are getting an immediate red card. The Department is holding on to the money and penalising the farmers, and the Minister has a smile on his face about scripts. Look after the farmers. They do not want scripts or fancy announcements. They want their pay so they can pay their suppliers.
I acknowledged that there were difficulties in the Department in respect of GLAS, but there are other issues that hold up payment, and I was making that point in the context of GLAS nutrient management plans.
The Minister is blaming the farmer again.
I am not blaming the farmer. It is part of the terms and conditions of the scheme that farmers have to submit a nutrient management plan.
It is too bureaucratic.
If the Deputy did not know that he knows it now.
Of course I know that.
There are 6,500 farmers whose payments the Department is ready and willing to issue if nutrient management plans were submitted.
That is not true.
It is true.
Rubbish.
I beg the Deputy's pardon. It is the only outstanding reason for balancing payments. Not only will the balancing payment be held up but it will also hold up the next round of GLAS payments. We need to acknowledge, as I do, where there are Department failings, but there are other issues which hold up payments as well. My ambition is to pay everybody as quickly as we possibly can.
36. Deputy Catherine Murphy asked the Minister for Agriculture, Food and the Marine his plans for targeted measures that will take account of the impact of sterling currency fluctuations on farm incomes; and if he will make a statement on the matter. [41939/17]
The Minister answered a very similar question a few minutes ago concerning sterling fluctuations. He said that he wants long-term viability. Long-term viability cannot be assured if there is no short-term security. I want to know what initiatives can be taken to establish different markets and what interventions can be made in the short term.
There is no doubt that Brexit poses enormous challenges for the agrifood sector which relies on the UK market. The most immediate challenge has been the impact caused by the significant drop in the value of sterling against the euro, and I fully understand and appreciate the impact this is having on the agrifood sector.
The sector is of critical importance to our economy given its regional spread and the fact that it underpins the socio-economic development of rural areas in particular. I am determined to safeguard its interests.
Ever since the UK voted to exit the EU I have been very focused on assessing the impact such an exit would have on the sector. I did this, inter alia, by consulting with all of the relevant stakeholders.
I held the first meeting of my Department’s Brexit stakeholders consultative group on 7 July 2016, some two weeks after the vote. The work of this group was, and still is, complemented by frequent contact with representative organisations and companies on an ongoing basis, and it operates in parallel with the separate consultation structures under the all-island civic dialogue.
I have also held a series of bilateral meetings with my EU counterparts which are aimed at building alliances to ensure that agrifood and fisheries issues are at the top of the EU negotiation agenda. Building common ground with other member states is critically important in the context of the negotiations. In all these engagements I am making clear our demand for continued unfettered access to the UK market, without tariffs and with minimal additional customs and administrative procedures, as well as keeping the UK market viable for Irish producers by minimising the risk from UK trade agreements with third countries.
In the last budget my Department led the introduction of a €150 million low-cost loan scheme, new agri-taxation measures were introduced, and increased funding was provided under the rural and seafood development programmes. I am considering what further measures might be required to assist the sector. In the meantime I sought and received sanction from the European Commission to pay a higher percentage advance in respect of the basic payment and rural development programmes - 70% and 85%, respectively - to assist farmers with cashflow issues.
It is critical at this time to work towards reducing our dependence on UK markets for our agri-products, while at the same time retaining our market share in the UK. To give effect to this ambition I have supported Bord Bia’s marketing strategy by initially allocating €3.6 million in the last budget for market work in 2016 and 2017 and more recently by allocating a further €6.7 million to support a market prioritisation exercise and a range of strategic marketing and promotion activities.
I have also had engagement with our main retail partners in the United Kingdom and led a number of trade delegations to seek new market opportunities, which I believe is bearing fruit. It is a complex range of initiatives. The ambition is to ensure that the agrifood sector is not disadvantaged by the UK decision on Brexit.
Who takes the hit on the sterling differential? The might appears to be very much with the retailers which will be selling on the produce rather than the individual supplier. Obviously proximity in terms of fresh produce is a critical issue, and it is not easy in many cases to find alternative markets. It is quite interesting that Britain is not the only market being discussed. We heard today that Brazil and Argentina have a deal with the European Union on beef which may well pose some additional problems. Brexit is going to be uncertain all the way, and if a farmer is going to make a decision, for example, to grow a crop today, he or she needs to have some degree of certainty that the cost of growing it will be covered. That will not be done unless there is certainty that the farmer will get a little bit more than the cost of production. It is short-term thinking. I understand when the Minister talks about the chequebook, but the short-term consequences will be considered when those decisions are made. Are any short-term initiatives being looked at?
The Deputy raised a point about the relative position of the primary producer on the supply chain. It is the case, and it is of concern both here and across the European Union, that when there is a squeeze it is the primary producer, or the consumer, who is always most adversely affected, and those in the middle, the distributor and the retailer, seem to be immune. The Commission is seeking to take a number of initiatives on that. In 2015 the then Department of Jobs, Enterprise and Innovation commenced some new regulations in terms of addressing those disadvantages in retailing. It is important that we continue that.
Mercosur is not a done deal. We are extremely concerned about what appears to be happening in terms of EU negotiations with Mercosur. We are primarily concerned because 50% of our beef - some 250,000 tonnes - goes into the United Kingdom every year. We are looking at how we can secure that market. It is our nearest and best paying market and we are concerned about what will happen when the UK is conducting its own trade agreements and how we can protect ourselves from that post-Brexit.
We have also given substantial additional funding to An Bord Bia, almost €10 million since the Brexit referendum. That is primarily aimed at securing existing markets and looking for new market opportunities and it is bearing fruit. Our exports to countries outside the European Union increased by nearly 50% in the first six months of 2017.
The Minister is saying it is not a done deal at this stage. What intervention is he undertaking in respect of that?
On the Mercosur trade deal we have been extremely actively engaged with the Commission and other member states. In the past week or ten days we have been very active in building a coalition of 11 member states which share our concerns about a beef proposal in the Mercosur trade deal, particularly because of Brexit but also at a time when the EU market for beef consumption is static, and the Commission has researched the cumulative impact of existing trade deals, particularly identifying beef as a product sensitive to further trade development. We have been very active in the Commission and with other member states in building a coalition of member states which do not support the Mercosur trade deal. We are at a very early stage in those negotiations. The Taoiseach raised the matter on Thursday night last, or Friday, with Jean-Claude Juncker in the Commission. We have been extremely active in this area.
