We will now discuss the Department of Agriculture, Food and the Marine’s six-monthly report on developments in the EU. I welcome Mr. Aidan O'Driscoll, Secretary General, Ms Bríd Cannon, assistant secretary general, and Mr. Paul Savage, principal officer, and thank them for coming before the committee to update us. I advise witnesses that they are protected by absolute privilege in respect of their evidence to the committee. If, however, they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity outside the House by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.
Report on EU Developments: Department of Agriculture, Food and the Marine
Mr. Aidan O'Driscoll
Before I start, I wish to make a small correction to our six-monthly report. On page 4 of the report, in section 2.1, it says that Russia announced an extension of the ban by a further six months to the end of January 2016. That should say that the ban was extended by one year, to 6 August 2016. I apologise for that error.
Members have before them the six-monthly report on developments in the EU for the period from January to June 2015. The report outlines progress on EU agriculture issues under the Latvian Presidency, and I propose to provide the committee with an overview of the work carried out by the Department during this time.
Simplification of the Common Agricultural Policy was one of the main topics discussed during the first six months of the year, with Council conclusions agreed in May. The main thrust of the conclusions was to identify those areas of the CAP most in need of simplification and to put pressure on the Commission to come up with simplification initiatives to address these areas. The Commission progressed its simplification agenda by adopting two regulations: an implementing regulation which extended the date for applications under the basic payment scheme, and a delegated regulation which amended the rules for direct payments, allowing for more flexibility in the animal identification rules for coupled supports.
More recently, at the November meeting of the Council of Ministers for agriculture, Commissioner Hogan announced a package of measures to be addressed in the coming months. These included a reduction in the rate of on-the-spot inspections in certain circumstances, changes to the definitions of young farmers and active farmers and changes to the number of annual amendments allowed in respect of rural development programmes. The Commissioner also announced that a second package of modifications pertaining to greening was planned for mid-2016, with the relevant changes coming into effect from claim year 2017.
While we still await details of the proposed changes, we have generally welcomed the Commission’s initiative, as it deals with many of the issues we have consistently raised. We note the timeline proposed by the Commission to implement these measures, and have requested that this take place as soon as possible.
As regards amendments to the rural development programmes, we are of the view that the current provision for one amendment per year is too restrictive, and we have welcomed the Commissioner’s readiness to expand the number of possible amendments to three per year. At the November Council of Ministers, Ireland's Minister for Agriculture, Food and the Marine, Deputy Coveney, also called on the Commission to introduce a fast-track mechanism for member states to deal with minor amendments to their rural development programme measures, and we hope to see further progress in this area in the near future.
A number of member states have called for the simplification exercise to be extended to the CAP basic Acts. The Commission’s focus has been on simplifying the delegated and implementing Acts, but Commissioner Hogan has recently signalled an open mind on reviewing the basic Acts also.
Ireland has not sought a reopening of the basic Acts at such an early stage of the implementation process. We believe that much can be achieved from changes to the implementing and delegated Acts, together with a more reasonable and flexible approach from the Commission to its interpretation of the existing regulations. It is an issue on which we will continue to work with the Commission and other member states in the coming months.
The Latvian Presidency also continued to monitor market developments across the EU, including the effects of the Russian ban on the importation of EU agricultural products. Discussions in the first half of this year centred around the impact on the dairy sector, as well as the future of the EU sugar sector following the end of the quota regime in September 2017. In the dairy sector, attention initially focused on the abolition of milk quotas from 1 April and how member states, including Ireland, would manage the repayment of the super levy bill, amounting to over €71 million in Ireland. The Commission introduced an implementing regulation which enabled member states to facilitate a phased repayment of super levy liabilities in respect of the 2014-15 milk year over three separate annual instalments, without interest. The Department, following discussions with the relevant stakeholders, subsequently introduced the super levy instalment scheme. Under this scheme, the Department of Agriculture, Food and the Marine will raise a debt against the milk producer for the outstanding amount of the super levy bill, upon receipt of a formal application, and facilitate payment over three equal instalments. Some 3,700 producers have availed of this facility. That is just over half of those paying the super levy.
More recently, however, the deteriorating market situation has dominated the agenda. As the committee will be aware, a number of member states, including Ireland, called on the Commission to introduce further market measures to assist farmers in difficulties in the dairy and pigmeat sectors in particular. In preparation for the extraordinary Council in September, Ireland put forward a six-point plan for consideration by the Commission. Our proposals included an increase in the advance payment payable under the basic payment scheme, strengthened market supports through an increase in intervention prices and enhanced private storage schemes for cheese and pigmeat, and additional promotional measures for the dairy and pigmeat sectors, especially on third country markets. In September, the Commission unveiled its €500 million aid package. This addressed the majority of our proposals - five out of the six. A sum of €13.73 million in direct aid was allocated to Ireland, with the possibility of a further national top-up of up to 100%. The committee heard about that earlier from the Minister under the Supplementary Estimate. The Minister has been consulting with stakeholders in the interim as to how these funds should be utilised and he hopes to be in a position to make an announcement in this regard shortly.
Our rural development programme, RDP, was finally adopted by the Commission in May following a series of intensive bilateral discussions with it. Prior to formal approval being granted, we received a letter of comfort from the Commission in April and this allowed us to progress with our plans to launch a number of measures contained in our rural development programme in line with the annual budgetary process. We have now launched measures worth up to €3.2 billion over the lifetime of the RDP, including the agri-environmental measures, areas of natural constraints, TAMS and, most recently, the organic farming scheme. As to the remainder of the €4 billion RDP fund, the ground work has been laid for commencement of our knowledge transfer schemes and these will start early in 2016, as will training for GLAS and beef genomics farmers. We will also make a start before the year end on animal health and welfare training for on-farm advisers, with the remainder to be rolled out in 2016. Next year will also see the launch of our locally-led schemes and our European innovation partnership, EIP, knowledge and productivity programmes.
On the international trade front, Ireland continues to support the Commission's efforts in progressing the trade agenda. As a trading country, we have a clear national interest in this area and we recognise the benefits for the agrifood sector, in particular, that can be derived from international trade negotiations. We favour a balanced approach, which acknowledges offensive interests as well as providing the means to deal effectively with defensive interests. As regards the main areas of activity, the World Trade Organisation, WTO, ministerial conference in Nairobi takes place next week. Attention here is focused on a potential mini-package incorporating agreement on export competition, support for least developed countries and transparency on rules. Ireland very much supports the EU position that any discussion relating to export competition should encompass all four pillars - export subsidies, export credits, food aid and state trading enterprises - and not just export subsidies. We look forward to progress being made in this area and we hope also for a consensus on the future direction of the Doha round post-Nairobi.
On the Transatlantic Trade and Investment Partnership, TTIP, we wish to see momentum being maintained in the negotiations. TTIP is of significant importance for Ireland and the EU. Again, we are taking a balanced approach, given that there are offensive interests, especially in dairy and also in beef, as well as defensive interests, especially in beef, to be progressed. We must also ensure, in light of the recent exchange of revised offers, that adequate attention is also paid to the dismantling of non-tariff barriers, which can often be of significant practical value.
I also wish to mention the prospect of a revival in the Mercosur negotiations, particularly following the recent election in Argentina. The point has been made many times that these negotiations have the potential to give rise to negative consequences for agriculture in the EU. They present a threat to the EU and to the Irish suckler beef sector in particular. We will, therefore, continue to exercise extreme caution, monitor developments very closely and consult our own Government colleagues, with other member states and with the European Commission, as to the appropriate response to any movement in the negotiations.
An area of particular importance for Ireland is the role of agriculture and forestry in the climate change debate. For Ireland, it is critically important that in the EU's climate and energy framework post-2020 we see recognition of the multiple objectives of the agriculture and land use sectors, with their lower mitigation potential, and the need to ensure coherence between the EU's food security and climate change objectives, as agreed in the European Council Conclusions of October 2014. In particular, securing recognition of the role that our forests play in carbon sequestration at EU level is critical. Both agriculture and land use, land use change and forestry, or LULUCF as it is known, should be included under the effort sharing decision which is expected next year. This would encourage positive actions such as afforestation across the EU, as well as encouraging a more coherent approach to agriculture and land use. The provisions relating to the accounting and reporting of emissions and removal of greenhouse gases from the agriculture and land use sector, including forestry, are of particular interest to Ireland as they have an important role to play in the transition to a safe, sustainable and low-carbon future. We strongly support an ambitious, legally-binding global agreement with broad participation as a core outcome of COP 21 in Paris, which will ensure that the EU's domestic transition to a low-carbon economy takes place in an agreed global context.
I will now turn to some of the legislative dossiers that were dealt with during the Latvian Presidency. Discussions on the organics proposal continued into 2015. The text of the proposal was revised substantially after it was re-examined at both political and technical level. The issues that caused the most difficulties for member states included how to deal with the presence of non-authorised substances in organic products, the frequency of controls - notably annual versus risk-based controls - and the import regime, whether it should be based on compliance or equivalence. The Latvian Presidency secured a general approach at the Council of Agriculture Ministers in June, with the first trilogue discussions taking place on 19 November. The Presidency is expected to provide an update on the progress of the organics dossier at the AGRIFISH Council next week and we look forward to hearing what it has to say.
Progress on merging the school fruit and school milk schemes was suspended at the end of the Italian Presidency following disagreement between member states and the Commission on three key aspects of the proposal, namely, the legal basis, the scope and the allocation criteria. The Commission undertook to evaluate the two schemes as part of the CAP simplification exercise and recommended that all work on the proposals be suspended pending the outcome of its evaluation. Consequently, no discussions took place on this dossier at Council during the Latvian Presidency. The dossier has progressed under the current Luxembourg Presidency, with three trilogue discussions taking place, most recently on 1 December. The Presidency is keen to secure agreement on this proposal but the European Parliament continues to demand greater flexibility from the Council regarding the legal basis for a number of provisions in the regulations, including the total amount of aid allocated under the scheme, the criteria for the allocation of national envelopes and the transfer of allocations between schemes. The Council has moved some way towards the European Parliament position and we look forward to hearing from the Presidency on the latest developments in this area next week.
There was some progress made on the so-called five-part animal and plant health package. Compromise text on the animal health dossier was agreed at its first reading at trilogues with the European Parliament in June and is expected to be adopted in early 2016. The plant reproductive material proposal, intended to consolidate and update the current 12 separate directives governing the sector, was withdrawn by the Commission in March following its rejection by the European Parliament in 2014. The Commission is not expected to table an alternative proposal before 2016 at the earliest. Work is continuing on the plant health and official controls dossiers. The first element dealing with expenditure was agreed at the end of 2013.
I will conclude with a reference to the upcoming Agriculture and Fisheries Council, the final Council presided over by the Luxembourg Presidency before The Netherlands assumes the Presidency on 1 January. It is customary for each Presidency to take stock of developments over the previous six months and this has been reflected in the agenda. Of course, fisheries will dominate the agenda and the Minister, Deputy Coveney, has spoken to the committee about that. The remaining agenda items include progress reports and states of play on the various dossiers covered during the Luxembourg Presidency as well as information points from the Presidency.
There is enough here to keep us going the whole session. We need a full debate on Common Agricultural Policy simplification, as we do on the rural development programme. We need two full debates on the international trade developments in Mercosur and the Transatlantic Trade and Investment Partnership, TTIP. We need a debate on climate change if we are interested in what happens five or seven years down the line. Organics are a big issue, especially in respect of why standards vary so much between fish and land products. We need a debate on school fruit and vegetables. I suggest we defer the debate on this. Is there any legal reason we cannot defer the debate, come back in January and go through this item by item in a proper debate? I apologise for being rude but I am watching the screen as I am to speak on the second Topical Issue matter, though there are ten of us on it. It is very unsatisfactory to try to deal with this subject this evening.
We have discussed each and every item and we have made reports on some of them, while we have made political contributions on others. We have made a draft contribution on TTIP, which we want debated in the House and accepted and endorsed by ourselves and two other committees before it is sent to the negotiation team. There is a huge amount of interest from this committee in CAP simplification, climate change and each of the other topics. We are time limited and it is easy to see where the next Government, Minister and committee will be focusing.
I have one comment on the GLAS scheme. Farmers are excluded on a practical level from entering GLAS in areas where there is no hen harrier but where there are forestry and wetlands, such as the Nagle Mountains where they are encroaching on productive wheat and grain lands. Will the witnesses look at this issue? The lands for which the designation has come into place has, for practical purposes, excluded these farmers from the scheme. I see that only three amendments are allowed per year but this should come under the minor amendments category as it is quite technical. Ironically, to preserve these birds these people will put in seven or eight acres of bird cover in these areas and there will be 0.4 acres of bird cover for every acre they have for them to qualify, which makes no commercial sense on our productive wheat lands.
Do the witnesses envisage a further opening of GLAS into 2016? I know we have another week or so to apply for the second tranche of GLAS but will it be opened up in spring 2016? One farmer started farming for the first time recently but the planner he used messed up his application for the basic payment scheme. Can he make an application for GLAS or is he ruled out because he had not sent in the correct basic payment scheme application?
There is substantial interest in TTIP, which affects beef and dairy, though beef would be crucial for me. The forestry sector and climate change are also very serious but we can deal with these at another time.
Mr. Aidan O'Driscoll
If GLAS is fully subscribed to by everybody in the hen harrier area, we will spend €23 million on this area alone, an extraordinary multiple of what we were previously spending on the hen harrier area. I appreciate the point that it may extend into other areas where specific issues arise in regard to cereals. I am willing to have a look in detail at whatever information members can give me on that.
I was asked if GLAS would be opened in 2016. We expect that there will be at least 35,000 and up to 40,000 in GLAS by the end of the current tranche and, as members know, we intend to get up to 50,000. Therefore, there will be further tranches of GLAS. If a person has a problem with his BPS, it will be difficult to get into GLAS, but if there is a problem in a specific case, the Senator might let us know as it would be interesting to know about the experience, particularly if the problem was with the adviser.
We probably do not have time to go into TTIP because, as the Deputy said, it deserves a good airing. TTIP is a more complex issue for our sector than for others. We see very significant benefits for the agrifood sector in TTIP and there is a growing recognition of this throughout the sector. It is most obviously the case in dairy and there are benefits from a deal in TTIP in a range of dairy products, both by lowering tariffs and removing non-tariff barriers that restrict or hinder our dairy exports into the US, which have very significant potential. There is also potential in other areas such as consumer foods.
On the beef side, the issue with TTIP has become more balanced and nuanced. Two or three years ago or more people would have exclusively seen the negatives on it but now they see that there are both positives and negatives and one has to weigh these up. We hope to get access to the US market for manufacturing beef, which is a significant prize because the Americans eat a lot of manufactured beef and grind an enormous amount - some 80% - of their beef. Their prices for manufacturing beef tend to be higher than European prices so there could be a very valuable market for manufacturing beef in the US. There could also, paradoxically, be a market at the top end - the so-called white tablecloth restaurants - for Irish grass-fed steaks along the east coast of the US, which carries a big premium. On the other hand, we would face competition from imports of general steak cuts into this country from the US. The detail will be crucial, such as how high the quotas would be, assuming a tariff rate quota would apply. How big a quota would the Americans get and what would be the structure of that quota? How big a quota would we get in the US? This is a very important point which people have not sufficiently understood. When we have access to the US market, we are caught inside a 55,000 tonne quota that extends to a whole heap of countries and is mainly filled by Latin Americans. We could very easily bump up against the quota limits there. I assume we would get an exclusive EU quota under a TTIP arrangement. It is a bit more complicated on the beef side than it was in the past and there are pluses and minuses. Overall, we see significant benefits for the agrifood sector from TTIP.
How long does the Chairman want me to speak for?
Senator Comiskey has a question.
What about the risk of hormones in American beef?
We have a draft paper which the Senator will not have seen yet.
We are still awaiting confirmation from the Whips of whether we will be allowed to have the contents of that paper considered and put as a motion on the floor of the Houses so that they can be approved before they go to Europe. We have described various issues, including tariffs, imports and genetically modified organisms, as red-line issues. All of the red-line issues we see in relation to beef concern hormone beef in particular. We have focused on a couple of things, such as the need for an equal playing pitch when it comes to standards. I think this has been the general position of the Government anyway, but we are trying to reiterate it. That is the point.
Things are occurring with regard to the issue of climate change. We covered all the points that are being made in a report we published a year ago. Some of the media coverage of this topic has been simplistic and, for whatever agenda, has not been in Ireland's best interests. We need to stay on message regarding what we are trying to achieve here. Our message needs to be based on facts. This has been summarised as a global effort, as opposed to a national or EU effort. A global effort is needed in the long run. Is everyone happy enough with that? We would have preferred to have been able to make our contribution on TTIP available. That would have been ideal, but unfortunately it was not possible. The members of this committee decided to wait until this committee and two other committees might get an opportunity to table a motion on the document in question for approval by the two Houses. It is still a draft.
Mr. Aidan O'Driscoll
I look forward to seeing that.
I think the officials will be reasonably pleased with it. I hope they will. Regardless of what else happens, I think it is important for this committee to put forward a submission. That is my personal opinion. I think it would be a big mistake to fail to do so, given that agriculture is our biggest indigenous industry and is such an important part of our economy.
Mr. Aidan O'Driscoll
Absolutely. In recent years, we have made a big effort to encourage agriculture Ministries throughout Europe, the European Parliament's agriculture committee and the agriculture Directorate General to get more involved in the climate debate. I am glad to say that is now happening. We are seeing much greater engagement by agriculture and food interests in the whole debate within Europe. It is certainly appropriate for this committee to engage in it too. I agree with what the Chairman said about the variable treatment of this issue in the media. We recently invited a range of people from the media into the Department for a briefing on climate change to try to get them to understand the facts. There is a great deal of misinformation out there, unfortunately. Some of this stuff is a bit complicated. I think those who came to the briefing were quite impressed by it. We will continue to try to get people in the media to understand the facts - I should not use the word "educate" - before they write articles about climate change. As the Chairman said, the Government has a clear position on hormone beef. It is completely opposed to any question of allowing imports of hormone beef. The Commission is pursuing that line. It is constantly reassuring us that it will hold that line. We will certainly be policing that very strongly in the negotiations on TTIP.
I thank Mr. O'Driscoll, Ms Cannon and Mr. Savage for attending today's meeting. It seems that much of the stuff that was dealt with up to the end of the Latvian Presidency is still relevant. It is interesting to see how much or how little has happened in some areas. I think progress was made in the organics area under the Italian Presidency. I thank the witnesses. Their colleagues are waiting to come in for the next part of this meeting.