Joint Committee on Agriculture, Food and the Marine díospóireacht -
Wednesday, 29 Nov 2023

Brexit Adjustment Reserve Fund: Discussion

An Cathaoirleach

The good news is that we will not have to go for any more votes, so at least we will have a clean run now.

Before we begin, I remind members and witnesses to turn off their mobile phones. Witnesses giving evidence within the parliamentary precincts are protected by absolute privilege in respect of the evidence they give to the committee. This means a witness has a full defence in any defamation action of anything said at a committee meeting. However, witnesses are expected not to abuse this privilege and may be directed to cease giving evidence on an issue at the Chair's direction. Witnesses should follow the direction of the Chair in this regard and are reminded of the long-standing parliamentary practice, to the effect that, as is reasonable, no adverse commentary should be made against an identifiable third person or entity.

Witnesses who give evidence from outside the parliamentary precincts are asked to note that they may not benefit from the same level of immunity from legal proceedings as those who give evidence from within the parliamentary precincts and may consider it appropriate to take legal advice on this matter. Privilege against defamation does not apply to publication by witnesses, outside the proceedings held by the committee, of any matters arising from the proceedings.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against either a person outside the House or an official, either by name or in such a way as to make him or her identifiable. Parliamentary privilege is considered to apply to utterances of members participating online line in a committee when they are participating from within the parliamentary precincts. Members may not participate online in the public meeting from outside the parliamentary precincts and any attempt to do so will result in the member having their online access removed.

The purpose of the first session this evening is the examination of access to the Brexit Adjustment Reserve, BAR, fund. The committee will hear from officials from the Department of Agriculture, Food and the Marine: Mr. Gordon Conroy, chief financial officer; Mr. Damien Flynn, head of the Brexit unit; Ms Maria Dunne, head of meat and milk policy; Ms Deirdre Fay, head of horticulture and plant health division; and Ms Rebecca Chapman, finance officer.

You are welcome to this evening's meeting. Your opening statement has been circulated to members. I will allow five minutes for you to read this and then we will proceed with a question and answer session.

Mr. Gordon Conroy

I thank the committee for the invitation to provide an update on the activities in the Department of Agriculture, Food and the Marine on the BAR. I am joined by my colleagues, Mr. Damien Flynn, Ms Maria Dunne, Ms Rebecca Chapman and Ms Deirdre Fay. As the committee is aware, the BAR aims to provide substantial financial support to the most affected member states, regions and sectors to deal with the adverse consequences of the UK's withdrawal from the European Union.

The regulation came into force in October 2021 and requires that any application for funding must set out the negative impacts of the withdrawal of the United Kingdom from the European Union and how the measures carried out under the fund would alleviate the adverse consequences. The total fund is €5.5 billion at EU level and Ireland received just over 20% of the entire reserve with an allocation €1.015 billion. This Department was allocated almost €300 million specifically for BAR funding through the budgetary processes in 2021, 2022 and 2023. Significant initial additional expenditure and staffing costs have been incurred separately, and will likely be included in the final claim for BAR which will be submitted next year.

The fund is managed by the Department of Public Expenditure, NDP Delivery and Reform as the designated body for BAR expenditure in Ireland. That Department issued a number of communication to Departments, including the Department of Agriculture, Food and the Marine outlining the eligibility criteria and requesting the submission of proposals that will meet these criteria.

Eligibility, as advised by the Department of Public Expenditure, NDP Delivery and Reform, is determined as follows: proposers must identify a direct link to the negative impacts of Brexit and must also directly address the negative impact identified and the expenditure must meet genuine EU funding requirements, including state aid rules. The Department of Public Expenditure, NDP Delivery and Reform also outlined that the BAR regulation sets out two concrete points in time in relation to eligibility and reporting.

As such, my colleagues and I will be referencing funding which has been spent with the intention of it being claimed from the BAR next year. However, whether or not it is ultimately included in Ireland's claim is a matter for the Department of Public Expenditure, NDP Delivery and Reform.

Regarding the identification and submission of funding proposals, the Department consulted extensively with all stakeholders to identify potential measures for inclusion under the BAR. In this regard, the Minister for Agriculture, Food and the Marine, Deputy McConalogue, regularly requested agrifood stakeholders in direct engagement with them, including at the Brexit consultative committee, to submit proposals for BAR schemes. Alongside this, the Department's Brexit division consulted on an ongoing basis with divisions across the Department to highlight the availability of BAR funding and to explore possibilities for eligible schemes.

Policy divisions across the Department responsible for various sectors engaged with specific proposals made by sector stakeholders and measures which they identified from their analysis to address Brexit impacts on the various sectors. This included development of proposals which met BAR eligibility provisions, sanction requirements from the Department of Public Expenditure, NDP Delivery and Reform for funding, EU state aid approval requirements and the development of application and scheme delivery mechanisms for measures.

I will now outline some specific sector supports. In the beef sector, two BAR-funded schemes were introduced in 2023 to mitigate Brexit risks - the national beef welfare scheme, with a budget of €23 million, and the national dairy beef welfare scheme, with a budget of €5 million. In addition, the bovine genotyping programme, which will operate for five years and represents a significant step towards genotyping of the national herd, was introduced.

Given that approximately 80% of Irish mushrooms are exported to the UK, the mushroom sector was a particular focus for BAR funding. Support has been provided in two ways which we can elaborate on in our discussion. The potato sector was also directly impacted by Brexit measures. Here, steps were taken to support seed potato producers towards the capital cost of equipment and facilities for the production, storage and marketing of seed potatoes.

Regarding fisheries, the Minister established a seafood task force in March 2021 to examine the impact of the trade and co-operation agreement on our fishing sector and coastal communities and to recommend mitigation measures. The task force delivered its final report in October 2021 and made 16 recommendations. It recommended that these initiatives be funded through the 100% EU BAR and Ireland's forthcoming EU co-funded seafood development programme under the European maritime fisheries and agriculture fund.

There are a number of other measures which we can discuss later. In addition to the various financial supports already outlined, the Department also invested heavily in helping the sector prepare for the changes in the new trading environment with the UK. This included investment in IT systems, recruitment of additional veterinary and technical resources, significant investment in physical infrastructure and direct trading for businesses on new systems and processes. All of this investment has ensured that any disruption to Irish trade with the UK has been minimised. This has been a key priority of the Government in its approach to meeting the challenges associated with Brexit.

While the process for accepting and considering new proposals under the reserve has now finished, the work in preparing Ireland's claim is ongoing, with the final claim to be submitted in September 2024, with an extended period of audit checks to be completed thereafter. Officials from this Department will be engaging with the Department of Public Expenditure, NDP Delivery and Reform to ensure the maximum utilisation of available funds. The Department of Public Expenditure, NDP Delivery and Reform is the designated body for managing and deciding on the reserve in Ireland and it also co-ordinates Ireland's overall position so there may be some questions which we will refer back to that Department.

I thank the committee for its time. My colleagues and I will be happy to answer questions.

An Cathaoirleach

From listening to your opening statement, I would say you are fairly confident that all of the available money will be utilised.

Mr. Gordon Conroy

That is a good point. An extensive process of engagement with various stakeholders through the Brexit consultative committee and the seafood task force identified a number of measures. We are very confident that each of the measures we have in place will be delivered in time by the end of the year, so the answer is, yes, all the money will be utilised. The extensive process has ensured that any possible proposals that will be eligible under BAR were identified and will be delivered.

Senator Paul Daly

As Mr. Conroy said, the Department of Public Expenditure, NDP Delivery and Reform is administering this. That was my first question. How much of the €1.015 will actually be spent? We all hope that no money is sent back given that it is available and needed.

We have had many meetings with representatives from the sheep sector. They made strong arguments on how Brexit had affected the sector.

Yet we were told it did not qualify for the BAR fund. Will Mr. Conroy give the committee an explanation as to why? All the arguments, or any evidence the committee received, were very convincing that the sheep sector was one that was very dependent on the UK market. With the UK market opening up to New Zealand and Australia, a clear correlation can be seen as to how Brexit would affect the sheep trade going forward and yet it did not qualify. Mr. Conroy might give the committee an explanation on that one.

The initial impact of Brexit and sterling affected the mushroom sector. It got a dig-out at the time which got it back up and running. While there might be some ongoing funding and payments there, it is not an ongoing scheme. It was to get it over the initial hump or speed ramp. The beef schemes mentioned are now accepted as a necessity in terms of the income of beef or suckler farmers. When this the BAR funding is signed, sealed and delivered and there is no more and we move on, is there provision for those schemes to be funded and carry on or will those beef farmers face a cliff edge? It would be similar in fisheries. The potato one was more for plant and machinery, which is there now. It was not an ongoing payment.

I would be very fearful for the beef sector. If the schemes mentioned are funded by the BAR fund at the moment, is there provision going forward so that they will be able to continue? Will they be funded by the Exchequer or are those schemes and those farmers who are recipients of that money facing a cliff edge once they finish? Sin é for now.

Mr. Gordon Conroy

I will deal with the sheep question first in terms of support for that sector. The simple answer is that the exposure of the sheep sector to the UK market was not the same as that of the other sectors. While we felt we could make a compelling case for support for the beef, fisheries and the horticulture sectors, some of which the Senator referred to, the same compelling rationale did not exist in the sheep sector within the strict criteria set out by the Department of Public Expenditure, NDP Delivery and Reform regarding BAR eligibility. I understand there was a lot of discussion on that but that is the position. It was important for us to stick to the strict criteria of BAR eligibility.

The Senator spoke about currency fluctuations. We looked at that as well in terms of eligibility under BAR and the criteria there regarding price or currency fluctuations. The issues around them are quite complex and multifaceted and there is no direct link to Brexit as a result of those. Again, while support was given to the horticulture in that particular space, it would not come under the BAR eligibility criteria.

As for beef schemes, there are a number of measures that will continue as part of budget 2024 to support the beef sector. I might ask Ms Chapman to go into that in more detail and, if it is okay, to touch on issues around the Department of Public Expenditure, NDP Delivery and Reform in terms of the overall allocation of the fund. I am aware it has requested the Commission to transfer €150 million of the fund to REPowerEU which would be available to Ireland as a country and as a member state.

Ms Rebecca Chapman

On the totality of the spend, that is obviously a matter for the Department of Public Expenditure, NDP Delivery and Reform so I cannot speak to that. I can speak to the Department of Agriculture, Food and the Marine's share in that. In budgets 2021, 2022 and 2023, the Department got specific allocations for BAR. In 2021 it was €19 million, in 2022 it was €40 million and in 2023 it was €238 million, which brings it to a total of nearly €300 million over those three years. Separate from that, the Department incurred expenditure on infrastructure costs through the OPW, which will add to that total.

The Senator may be aware we appeared before the select committee last Wednesday with a Supplementary Estimate for a further BAR spend. A further expenditure of €80 million for 2023 was approved at that committee meeting which we were grateful for. That will bring the 2023 allocation for the Department up even further. That shows that every effort is being made to maximise the Department's spending on this fund. Our colleagues in the Department of Public Expenditure, NDP Delivery and Reform have helped us with that at every stage and we have been engaging with them throughout.

On the matter of BAR beef schemes continuing into next year, the eligibility period for BAR is very clear. It must finish at the end of this year, on 31 December, so any beef supports that happen after this date will be from national measures. It will be subject to each annual budgetary process, so that is something we will have to watch. The one we do know about so far is the genotyping scheme because that scheme started this year. However, we will have a slight continuation into 2024 and 2025 but that will be met from national resources. There is a provision in budget 2024 for the tail of that scheme.

Senator Paul Daly

Is there a definitive D-day as in a closing day for drawing down the BAR funding.

Ms Rebecca Chapman

It must leave the Department's Vote by 31 December 2023 and that is absolutely finite.

Senator Paul Daly

Basically, if the national beef welfare scheme, the national dairy welfare scheme and the bovine genotyping programme are existence next year, they will have to be funded by the Exchequer.

Ms Rebecca Chapman

That is correct.

An Cathaoirleach

What is being contributed to the genotyping programme this year from the BAR funding?

Ms Rebecca Chapman

I will turn to Ms Dunne to answer that.

Ms Maria Dunne

The allocation is €23 million for this year and then subsequently it will be a three-way cost-sharing format between the State, the processors and farmers for the subsequent five years.

An Cathaoirleach

Would that get all the adult herd genotyped?

Ms Maria Dunne

It will not get all the adult herd genotyped because it is a voluntary scheme. Both dairy and beef herds can apply to it but it is a voluntary scheme. It is not mandatory, so it will not get every animal.

An Cathaoirleach

What about anybody who applies for the cost of the cow herd?

Ms Maria Dunne

Everyone who applies for it will have their cows and replacements genotyped with the total cost carried by the State in the first year.

An Cathaoirleach

Okay.

Senator Paul Daly

I know the officials do not know and cannot tell me but I asked about the sheep sector. We had a lot of representation from the sheep sector and without becoming an enemy of all sheep farmers out there, I accept what the officials said, that it did not qualify. However, I will find it very hard to go back and face them if it is revealed in 2024 that some of this fund was not used.

Deputy Claire Kerrane

I thank the witnesses for coming in and for their detailed opening statement. I have a couple of questions about the money allocated and the money spent to date, just so we are absolutely clear. The allocation of the reserve fund to Ireland of €1.015 billion was significant. In its totality, of the more than €1 billion that was allocated to the Department of Public Expenditure, NDP Delivery and Reform and which it managed, precisely how much of that went to the Department with responsibility for agriculture? Precisely, what of that amount has been allocated and spent to date? What is left over?

Of the €150 million that is to be returned to Europe and go in under the REPowerEU fund - and that deal is done - is that €150 million coming from the overall fund of more than €1 billion or is it coming from an allocation given to the Department with responsibility for agriculture? I ask for an answer to that question about the figures first.

Ms Rebecca Chapman

I can take that question. The allocation to the Department has been set in the budgets for the last three years. Nearly €300 million has been allocated to the Department in 2021, 2022 and 2023. Separately from that, through Supplementary Estimates, the Department has had top-ups to that, most recently last week when we got an additional €86 million approved in a top-up for that allocation. The wider use of that fund and the use of any surpluses is a matter for our colleagues in the Department of Public Expenditure, NDP Delivery and Reform.

In terms of how much has been spent to date, as the Deputy will appreciate from the supplementary allocation last week, we are spending actively at the moment and will be spending very actively until the end of this year with a view to maximising the outturn. We will not know the final outturn until early January. We propose to use everything we have been allocated this year and obviously the supplementary allocation as well, so that will bring the allocation for this year to over €300 million alone. That is our plan for this year.

Deputy Claire Kerrane

Is the €150 million in the deal to be returned from the overall figure of more than €1 billion and not from the agriculture allocation?

Ms Rebecca Chapman

Exactly, and that is a matter for the Department of Public Expenditure, NDP Delivery and Reform.

Deputy Claire Kerrane

That is clear It is important to clarify that.

With regard to the opening statement, Mr. Conroy cited the significant additional infrastructure and staffing costs that have been incurred. Will he elaborate on that?

Mr. Gordon Conroy

Ms Chapman might respond on staffing costs and how making a claim works. I can touch on Rosslare. A significant portion of the additional resources was in respect of the requirements to work on Dublin Airport. Some was for Rosslare to ensure we can meet, and continue to meet, the EU customs code requirements, sanitary and phytosanitary, SPS, checks, and, of course, official control checks. As Ms Chapman said, we got €64 million in a Supplementary Estimate this year for Rosslare, in particular. Ms Chapman will respond to the other aspect of the question.

Ms Rebecca Chapman

The Deputy will appreciate that much of the work of the Department pivoted towards Brexit once the referendum result was known. One could make the argument that a lot of HR resources were redirected towards that. What we can claim for under the Brexit adjustment reserve, BAR, regulation, is strictly defined. We are still working on that calculation with our colleagues in the Department of public expenditure and reform, with a view to ascertaining how much can be claimed back for the State from those staff costs. That will be an ongoing process. The first claim for the BAR will go from our colleagues in the Department of public expenditure and reform in September next year so we will be working on this for the next year to ensure it stands up to all the audit scrutiny it will be subjected to over the coming years.

Deputy Claire Kerrane

On the question of what the BAR was spent on in the Department, Mr. Conroy said in his opening statement that divisions within the Department explored possibilities for schemes that were eligible for the BAR. The Minister made regular calls for requests from stakeholders to come with ideas. Could our guests give us any examples of a proposal that was explored or looked at either in the divisions within the Department or suggestions made by stakeholders where it was not found to be possible? Are there examples of possibilities the Department actively looked into, did a bit of work and found could not be applied for under the BAR?

Mr. Damien Flynn

All divisions received a circular about the availability of the BAR. The criteria were set out and those divisions were asked to engage with stakeholders in that regard. We would have got proposals from certain stakeholders proposing expenditure for schemes that were outside the window of eligibility for the BAR. In some cases, no Brexit impact could be identified or isolated to justify access to the BAR and no measure to address the impact was available. For example, some stakeholders suggested things around currency and exchange rate fluctuations, additional costs and impact costs. When we analysed those claims, it was not clear they were directly related to Brexit. An analysis was done of how eligible they would be for the BAR, for which there are strict criteria. There were challenges around other issues that were going on in the markets generally. The Covid-19 pandemic also affected certain things, as did the war in Ukraine. There were many multifaceted issues in that regard. Isolating the Brexit concern and then identifying the specific action to address it was the challenge. That was the type of analysis done in respect of different stakeholders as they submitted ideas or potential areas where they felt there was a direct Brexit impact. When we analysed some of those claims, the direct Brexit impact was hard to isolate and identify.

Deputy Claire Kerrane

I thank Mr. Flynn. As has been mentioned, access to the BAR was widely sought by sheep farmers in the first instance, and by the organisations that represent them. As has been said, those representative groups were before the committee. Was the sheep sector looked at specifically by the Department?

Ms Maria Dunne

The difficulty for us in respect of the utilisation of funding under the BAR was that the sheep sector is notably less dependent on the UK market than some other agrifood commodities, such as beef. According to the Central Statistics Office, CSO, the UK accounted for 43% of total beef exports by value and volume in 2022, whereas sheep meat exports account for only 13% in value and 16% in volume. It was much more difficult for us to make a link between anything happening in the sheep sector and Brexit. There were various requests for measures. For example, one of the requests was for a payment for sheering sheep, which would not fit within the criteria for the BAR.

Deputy Claire Kerrane

A reply I received to a parliamentary question also included that figure of 16% and stated that exports to Britain account for 16% of the sheep meat market. A level of 16% is still 16%. Was a certain percentage required and 16% was not enough?

Ms Maria Dunne

No, but I would say that other sectors were much more exposed.

Deputy Claire Kerrane

The sheep sector was, however, impacted. Did the Department actively look to provide funding to the sheep sector, given that 16% figure?

Ms Maria Dunne

We did not feel that any of the proposals that came in would have justified or fit the criteria for the BAR.

Deputy Claire Kerrane

Sheep farmers are sheep farmers and we are not all experts on the ins and outs of these matters. Eligibility for the fund was a matter for the Department. Our guests and others from the Department were the ones to work it out. I am still not clear. Regardless of what people on the outside said and the parameters that were set, did the Department actively seek to get funding through the BAR for sheep farmers?

Ms Maria Dunne

What we actively looked at was the market situation this year for the sheep sector. Sheep prices were lower than previous years at the start of the year. However, over the course of the year, they balanced out and are now largely tracking 2022 prices, to the extent they are only 2% lower for the year to date. It must be acknowledged that those 2022 prices were significantly higher than those of previous years. Costs were an issue earlier in the year but have since moderated. As the issue for the sector was not specifically attributable to Brexit, we looked at the situation and dealt with the issue in the normal budgetary cycle by the allocation of additional one-off funding of €15 million for 2024. That was the analysis of the sheep sector that was done this year.

Deputy Claire Kerrane

The Department analysed the sector. That is fine. It is important that was done.

It was essential for a direct link to Brexit to be shown to get money via the BAR. Funding was provided via the BAR to Bord Bia for the promotion of organics. Is that correct?

Ms Rebecca Chapman

That is correct.

Deputy Claire Kerrane

How did promotion by Bord Bia link in with Brexit?

Ms Rebecca Chapman

I understand it was for market diversification and to look for markets beyond the UK.

Deputy Claire Kerrane

I thank Ms Chapman.

Senator Victor Boyhan

I will be brief because I have to attend another meeting. The officials from the Department are welcome. They have given in their presentation an overview to the committee, and that is noted. I want to double check one or two things. We are talking about the BAR eligibility provisions. To be clear, expenditure needs to be incurred and paid by public authorities by 31 December 2023 with no exceptions. Is that correct?

Ms Rebecca Chapman

No. The expenditure must leave the Department's Vote by 31 December 2023. There is very limited flexibility.

Senator Victor Boyhan

In its submission, the Department stated that expenditure "needs to be incurred and paid by public authorities by 31 December 2023". Is that correct?

Ms Rebecca Chapman

It needs to be paid by the Department by 31 December 2023.

Senator Victor Boyhan

What is meant by "public authorities"?

Ms Rebecca Chapman

The regulation states it must leave the Department's Vote by 31 December 2023.

Senator Victor Boyhan

What other public authorities would the Department have in mind? The statement from the Department refers to "public authorities".

Mr. Gordon Conroy

We would be talking about, for example, Bord Iascaigh Mhara, BIM, and fisheries expenditure. That would be an example. Expenditure could be given to BIM in advance of 31 December and it could incur-----

Senator Victor Boyhan

It could incur it later.

Mr. Gordon Conroy

In the early part of next year.

Senator Victor Boyhan

There is some room for drawing down money after that date.

Mr. Gordon Conroy

There is very limited flexibility in that regard.

Senator Victor Boyhan

There is flexibility, however.

Mr. Gordon Conroy

There is.

Senator Victor Boyhan

Will Mr. Conroy tell us where that flexibility is? Give me three examples.

Mr. Gordon Conroy

I can talk about fisheries projects.

Senator Victor Boyhan

BIM is one such example. That is enough. What other agencies or authorities are we talking about?

Mr. Gordon Conroy

It relates, by and large, to the fisheries sector and the Brexit adjustment local authority marine infrastructure, BALAMI, fund to try to encourage and facilitate the completion of these projects across the country.

In this regard, some expenditure was moved from the Department for projects that had already been approved. Because of planning difficulties and other issues around the completion of projects, in relation to procurement, for example, we paid moneys out to BIM, for a very limited time, where we have confidence that these projects would be completed in the first quarter of next year and then be eligible to put into our claim for 30 September.

Senator Victor Boyhan

Okay. That is somewhat different from my initial misreading of this here. BIM is one of them. This funding is sent over to BIM, but it may still be with that organisation for three months, and into next year. This is possible. I do not want to get into any specifics, I just want to get an idea of how this works. I ask this because it is not a clear cut-off date. The axe does not come down on the last day of this year.

Ms Rebecca Chapman

If I may, this is a more appropriate subject for the Department of Public Expenditure, National Development Plan Delivery and Reform to comment on because its representatives have been in negotiations with the Commission on it. It has negotiated very limited flexibility and we are trying to work within that. It is still being finalised now.

Senator Victor Boyhan

Okay, but this is the Joint Committee on Agriculture, Food and the Marine and I am talking about an issue that the witnesses raised in the statement submitted to us. It is, therefore, within their competence. They have come here and presented this document and I am now asking them questions on this material. I want clarity from them as to what was meant by what was stated. This information was shared with me and I was told there were limited exemptions. Another body was referred to, but its representatives are not here. I cannot ask them about this matter today, but I will take it up with them tomorrow. In relation to this issue, however, I have now learned from my engagement with the witnesses that funds have been or will be transferred to BIM before the end of this year, and may still sit with that organisation for up to two to three months. Without going into the detail, is my interpretation of this correct? I just wish to try to understand this aspect.

Mr. Gordon Conroy

Can I confer for just one second just to confirm-----

An Cathaoirleach

Yes.

Mr. Gordon Conroy

In relation to that, that is the position. What I want to do, however, is very limited in terms of flexibility. Regarding where this has happened and how it has happened, I will get a note in relation to the extent of this practice and consult further with the Department of Public Expenditure, National Development Plan Delivery and Reform in relation to it.

Senator Victor Boyhan

That is grand. I am asking the questions and I just want to fully understand. I will be asking my own questions of the representatives from BIM tomorrow, independent of anything from here. There is, therefore, this limited flexibility. There is a situation, which we have learned about at this meeting, where there is limited flexibility. The Department is anxious to get all the projects over the line, but there are some exemptions. My question, though, has only been prompted by what I am reading in front of me. My understanding is the Department is going to provide the committee with a written note explaining all the exemptions or possible exemptions.

Mr. Gordon Conroy

That is exactly it.

Senator Victor Boyhan

The witnesses do realise this is a public meeting.

Mr. Gordon Conroy

Yes.

Senator Victor Boyhan

This is where we do our business and where we elicit information from, and I look forward to hearing from the Department. Would it be possible to make this happen pretty quickly, given we are within one month of the end of the year? We will certainly have other opportunities through parliamentary questions and commencement matters to flush this issue out with the Minister. I will also make my own inquiries tomorrow.

Mr. Gordon Conroy

In terms of the flexibility, we will have a note for the committee tomorrow.

Senator Victor Boyhan

That is great and I appreciate it. The witnesses have a job to do and I have a job to do. I thank them.

Moving on, I thank Ms Fay, who facilitated us and was with us during our visit to the mushroom facilities in County Monaghan. It was very interesting and informative, and I thank her for that. Those of us who were on that visit very much value having had her present with us on that visit, which was a real eye-opener. A of lot work is going on there, and it is an ongoing project. I just want to acknowledge Ms Fay's presence here today and thank her for that facilitation.

We know that 80% of our mushrooms, and perhaps even a little bit more, are exported to the UK, so clearly the BAR fund kicked in there because of the implications of Brexit. Again, I presume all that BAR funding will dry up at the end of December. Will it?

Ms Deirdre Fay

Yes, that is correct. As Mr. Conroy alluded to in the opening statement, there were two avenues for funding for the mushroom sector under BAR. Since 2021, total BAR funding of €1.8 million has been provided to promote mushroom consumption in the UK and sustain Irish market share. Irish mushrooms comprise 50% of the UK market share and Irish growers have the capacity to increase their production in this regard. These promotions were organised by An Bord Bia on behalf of the Mushroom Bureau.

Additionally, the Department also launched two mushroom efficiency schemes: the 2023 scheme of investment aid for energy, efficiency, automation and processing for commercial mushroom producers and the 2023 scheme of investment aid for commercial, non-primary producers in the mushroom sector and for peat replacement by commercial mushroom producers. Both these schemes were designed to accelerate investment in the mushroom sector to reduce inefficiencies caused by Brexit. The Senator is correct, though, that the funding for these schemes, in respect of applicants who have been approved for payment under them, will be paid out by the end of this year.

Senator Victor Boyhan

They will be paid and this will end the scheme.

Ms Deirdre Fay

That is correct.

Senator Victor Boyhan

Ms Fay referred to peat replacement. Can she share with us what that initiative was all about?

Ms Deirdre Fay

Examples under the peat replacement scheme include environmental-related investments to allow the mushroom sector to gear up to transition to peat alternatives.

Senator Victor Boyhan

Okay.

Ms Deirdre Fay

This transition is coming down the road, as the Senator and other members of the committee will have seen on their visit last week to the mushroom facilities in County Monaghan.

Senator Victor Boyhan

In terms of assessing and monitoring the value derived in this regard, what is the plan? I refer to the BAR funding in this context. Clearly, there was a substantial amount of money involved and the mushroom sector welcomed this funding. Does the Department, though, do an appraisal of this spending? Who files reports on all this?

Ms Deirdre Fay

We are continuously engaged with the mushroom sector. The Senator would have heard very positive feedback from those involved in this area last week in terms of their engagement with the Department.

Senator Victor Boyhan

Yes.

Ms Deirdre Fay

We are, therefore, very much up-to-date concerning the work those producers are doing. Many of those in the mushroom sector are part of the producer organisation scheme, which is administered by the Department. As part of that endeavour, we know exactly what kind of work is going on and being done on the ground. Regarding the mushroom efficiency schemes, these were capital investment schemes to allow those involved in this area to invest in their businesses.

Senator Victor Boyhan

Generally, would this intervention be seen as a good and successful one? Would the BAR intervention be viewed as having been welcome, supportive and having achieved good outcomes? Would that be Ms Fay's general comment on it?

Ms Deirdre Fay

We certainly received very positive feedback from the mushroom sector in respect of the mushroom efficiency schemes.

Senator Victor Boyhan

I thank Ms Fay very much for that information.

Turning to the potato sector, which is critically important, we import many potatoes. I refer to the challenges in this area, particularly concerning the supply of seed potatoes, in the context of Brexit etc. This situation is evolving and changing, as Ms Fay well knows. Does she have anything to say about this context?

Ms Deirdre Fay

We are cognisant that as a result of the UK's decision to leave the EU the importation of seed potatoes from Great Britain into the EU is no longer possible. Support was required for the seed potato sector, as approximately 4,000 tonnes of seed potatoes previously supplied from Great Britain could no longer be imported into Ireland from 1 January 2021. This, obviously, posed a significant challenge for the potato sector as a whole. The aim of the scheme of investment aid for the seed potato sector was to provide grant aid support to assist it in dealing with the challenges associated with that development.

In 2022, the scheme of investment aid for the seed potato sector was launched and had a budget of €3 million over 2022 and 2023. There was €1.5 million available last year and €1.5 million available this year. In our initial submission to the Department of Public Expenditure, National Development Plan Delivery and Reform for this scheme, chipping potato growers were included. That Department, however, did not sanction their inclusion in the scheme for 2022. However, we later went back to that Department and the sanction for chipping potatoes was included in the scheme for 2023. Effectively, then, the budget was increased for 2023 by €1.6 billion. The scheme for 2023, therefore, included chipping as well as seed potatoes. The overall budget for that was €3.1 million.

The scheme itself was a capital investment scheme and it provided grant aid for capital investment, equipment and facilities for the production, storage and marketing of seed and chipping potatoes. Again, the feedback we got from the potato sector regarding these two schemes was very positive.

Senator Victor Boyhan

In terms of challenges in this area, clearly some are ongoing in relation to seed potatoes. What would Ms Fay consider the major challenges that will be coming forward in the next 12 months?

It is clearly still a concern. We need to build up our seed potato stock. Have the officials any concerns about that they wish to express?

Ms Deirdre Fay

The Department is mindful of the challenges for the sector. There is capacity for the potato sector to receive support under a number of different schemes. I will look for my notes on that, if the Senator will give me a moment.

Senator Victor Boyhan

I am grand. Ms Fay need not go to any more trouble. However, there are ongoing concerns. Does Ms Fay suggest that we need to be vigilant and we need to monitor that area?

Ms Deirdre Fay

There are ongoing challenges. I have found my notes; I thank the Senator for his patience. There are challenges around capital investment. There are schemes that facilitate investment for the potato sector, including tillage, organic and young farmers' capital investment schemes, which will help to support the potato sector through upscaling investments in that sector.

Senator Victor Boyhan

Thank you very much. I genuinely thank the officials for their engagement.

Deputy Michael Ring

I have just a few questions. One of the complaints most of the organisations have about the BAR schemes is that the application process to draw down funding is too difficult. It is something we need to look at.

I raised the matter of the seafood sector at last week's committee meeting, and the drawing down of European funding to support it, in the context of the present difficulty that sector has with Brexit and climate issues. I looked for figures for 2019 and 2020, when we had Covid and it was not possible for the sector to produce those kinds of figures. I ask the officials to look at some of these schemes again and not make it as difficult for those in the sector. They are in difficulty. Their raw material and goods are sourced from Britain and they are finding it very difficult at present. They need whatever support they can get. Will the officials look at that scheme again to see what can be done to support them?

Mr. Gordon Conroy

I point to the terms of the BAR and its eligibility criteria, which are quite high to ensure compliance. From our Department's perspective, it is very important to ensure that the financial management of schemes is appropriate. Unfortunately, that brings about a certain level of checks and a certain level of an administrative burden. However, I will certainly bring the Deputy's comment back to the people on the fisheries side in the Department.

Deputy Michael Ring

I would appreciate that. It is creating difficulties. I raised it at the committee previously and am raising it again.

My other question, and this was raised by a previous speaker, relates to the sheep sector and people who apply. The officials said that they have to be affected directly, but sometimes people are affected indirectly but directly, if you know what I am saying. On the drawdown of funding, have the factories got much? Have they made many applications or drawn down much funding from the BAR scheme? If the officials do not have that information, they can send it on to me. I do not mind.

Ms Maria Dunne

I assume the Deputy is talking about the capital investment scheme.

Deputy Michael Ring

Yes.

Ms Maria Dunne

The capital investment scheme for the processing and marketing of agricultural products is co-financed between the Departments of Agriculture, Food and the Marine and Enterprise, Trade and Employment, and is administered by Enterprise Ireland. There was €100 million in funding for the scheme, which allows meat and dairy processing companies to continue to build resilience, become more competitive and so help to support the economic, environmental and social sustainability of the agriculture sector.

The initial drawdown was less than initially expected mainly due to the recent challenges facing the sector and the related uncertainty, which can affect decisions on large investments, such as those covered by the scheme. My understanding is the full €100 million was allocated by Enterprise Ireland to projects but there has not been a significant drawdown to date. However, the full amount of funding has been allocated-----

Deputy Michael Ring

It has been allocated but not drawn down.

Ms Maria Dunne

-----but not drawn down. That could be for a number of reasons, including that the application might be for an infrastructural development within the processing plant.

Deputy Michael Ring

That is fine. I was interested to know that. What is happening with a lot of the schemes is the funding has been announced and allocated but is not being drawn down. We again have another scheme where the funding is there but the money is not being drawn down. There may be reasons for that but, at the same time, it has developed over the past number of years and is something that needs to be looked at by the Department. If people are looking for funding, they should be able to draw it down. To be fair, if the funding relates to infrastructure projects, the infrastructure has to be put in place and that takes time to draw down.

On the cost of staffing and the extra staff that had to be got, will the officials explain what that was about, and the infrastructure that had to put in place, which will also be drawn down against this scheme?

Ms Rebecca Chapman

A lot of the infrastructure required in ports was delivered by the OPW. A cost apportionment was done in respect of that. The Department paid for a certain percentage of the infrastructure requirements. It was the same with our staffing costs. For staffing of ports, there will be a cost apportionment that has to go with that. That will be finalised over the coming months. We expect it to be included in the claim in September 2024.

Deputy Michael Ring

To come back to the sheep sector and the scheme, that sector did not get its fair share of the funding that was made available. Is there any way that can be looked at again, or a scheme put in place, to assist it? As I said, it is indirect but it affects those in the sector directly as regards markets. They have suffered over the past number of years. Even at present, they are finding it difficult. Small farmers in rural Ireland in particular are the ones we should be trying to target but, in fact, it is the bigger companies and bigger markets that are drawing down the bigger funds. Will the officials have a look at that scheme again?

Ms Maria Dunne

The BAR funding has to be drawn down by the end of the year, so it is not possible to do that under BAR. How and ever, when we looked at the situation in the sheep sector, it was dealt with within the normal budgetary cycle. The sector was allocated one-off funding of €15 million for 2024. Officials are currently considering the precise form of the measures by which the increased Exchequer funding can best be directed to sheep farmers in 2024. We will have a scheme for sheep farmers in 2024 of €15 million.

Deputy Michael Ring

That will be helpful. They need it.

An Cathaoirleach

Is there a funding application in for the infrastructure project that Tirlán is undergoing as regards the cheese plant in Belview, which is being built to reduce our dependence on the UK cheddar market?

Ms Maria Dunne

To the best of my knowledge, the list of plants is publicly available. To be more precise, the list of companies and plants that were allocated funding by Enterprise Ireland is publicly available. We will send it to the committee tomorrow. I do not have it to hand.

Senator Paul Daly

I propose that the committee, based on the information we received this evening, writes to the Minister seeking an update on the status of the schemes mentioned, including the national beef welfare scheme, the national dairy beef welfare scheme, and the genotype programme, based on the fact the BAR funding is now complete, and what their status is going forward.

An Cathaoirleach

And the infrastructure-----

Senator Paul Daly

Any of the others can be included, but the beef man is coming out in me in that I would like to know where those schemes stand.

An Cathaoirleach

We should include meat factories or whoever applied for an infrastructure grant so we can see what exactly is on the table.

I thank the officials for coming in. We appreciate that the Department is not the main body for this funding. We appreciate the briefing. As I said, if there were unspent money, it would leave us all very embarrassed. We appreciate the briefing, and the assurance as far as the officials can give it, that the money allocated to the Department will be fully used in 2023 and beyond.

I thank the officials from the Department. We will now suspend the meeting. When we return, we will resume our consideration of governance issues in the Irish Horseracing Regulatory Board.

Sitting suspended at 6.50 p.m. and resumed at 6.56 p.m.