I thank the Chair. It is good to join the committee members today and I thank them for this opportunity. We had a good session the last day and I hope we can complete the work today. We have dealt with programmes A and B so programmes C and D are outstanding. I will confine my opening remarks to dealing with programmes C and D.
The budget last autumn was set in unique circumstances with the challenges of Brexit and Covid, and in the transition between the current and new Common Agricultural Policies. The agriculture Vote for 2021 provides my Department with the resources to deal with the current challenges and opportunities in the various sectors in agriculture, food development, marine and forestry.
My priority was to ensure the CAP transition did not result in any gap in funding for farmers and I wanted to maintain supports for vulnerable sectors without losing focus on the strategic development of agriculture and food. I also wanted to lay the foundations for a major new agri-environment scheme to support farm incomes and incentivise future climate and environmental action. These objectives have been achieved while providing significantly increased support for sectors such as horticulture and organics and in areas such as strategic research and innovation, marketing and promotion, and investment in the sea fisheries sector.
It is important to say that with the Covid-19 pandemic we have found ourselves in an unprecedented situation and decisions and actions must be led, and have been led, by public health advice last year and into this year. The agrifood sector, which is critical to maintaining food supply chains, from farm inputs to retail distribution, has very much demonstrated its resilience over this period. While there were undoubtedly some disruptions in the food supply chain due to issues such as labour shortages, transport and logistical difficulties, these were generally short term in nature, thankfully, and the food system overall proved remarkably resilient.
The delivery of essential services to farmers, fishers and the food and forestry sectors has been prioritised by the Department and its agencies throughout the course of the pandemic. The necessary steps have been taken to ensure that producers and processors can continue to operate effectively and keep supply lines open and that the Department and agencies can operate as effectively as possible.
The resilience of the sector over that period was certainly demonstrated by the fact that total agrifood exports for 2020 are down only 3% in value compared to the previous year, from €14.6 billion to €14.2 billion. I will ensure the Department and its agencies, in consultation with stakeholders, will continue to monitor the impacts on the agrifood sector as the situation evolves. We are all grateful to be in a much stronger position with regard to the pandemic and the roll-out of the vaccination programme. This is certainly very welcome for the agrifood sector as it is for every other aspect of the economy and very important for society.
For 2021, the total Exchequer contribution to the Vote of the Department amounts to €1.826 billion. This comprises €1.526 billion in current expenditure and €299 million in capital expenditure. There was an additional carry-over of €31.6 million in capital from 2020. This figure represents a gross increase of approximately 4%, or €69 million, on the 2020 allocation. When appropriations-in-aid are considered, the 2021 net Vote is estimated at €1.46 billion.
The agriculture Vote is subdivided into four expenditure programmes corresponding to the four key strategic objectives set out in the current statement of strategy. I will confine my remarks to programmes C and D, which we did not get to deal with at our previous meeting. The total allocation for programme C in 2021 is €398 million. Many of the programme C allocations reflect the comprehensive approach to Brexit responsiveness and how this links with the continuing implementation of the FoodWise strategy.
The agrifood sector has been well served over the past 20 years by having a series of ten-year strategies such as FoodWise 2025 to guide its development and we have committed in the programme for Government that this should continue with the preparation and development of a new strategy to 2030. While the sector faces significant challenges, it has also many opportunities to develop further and prosper. We have a strong international reputation as a supplier of safe, nutritious and sustainably produced food. International consumers seek out our food and beverage products in what is a very competitive international market. We should be proud of this and work to build and enhance this reputation for the benefit of our farmers, fishers and all other stakeholders within the sector.
A committee of sector stakeholders has been working since late 2019 on this new strategy and has taken a food systems approach to the 2030 strategy, importantly encompassing environmental, economic and social dimensions. In addition, the committee is adopting a food systems approach which involves considering the connections of the food system with nutrition, health and the environment.
The pursuit and development of new markets for Irish agrifood exports is an ongoing and central component of the strategic development of the agrifood sector as set out in the FoodWise 2025 strategy. In recent times, it has gained particular relevance given the need to diversify our markets in the advent of Brexit and in response to the circumstances created by the current pandemic. Over recent budgets, increased funding has been provided to Bord Bia in order to strengthen its understanding of consumer priorities and preferences in Ireland and in distant markets, and to communicate these insights to Irish food companies for use in product promotion, development, branding and marketing. The Bord Bia grant has increased by more than €4 million to €52 million in the 2021 Estimate.
The allocation for development and promotion in the food sector has increased by 23% to €15 million, and the provision for research and development has also increased this year to €29.9 million. I have also provided for the establishment of a national food ombudsman, in accordance with the commitment in the programme for Government. Strengthening the position of farmers in the food supply chain is a priority of mine and the Government. The Department is drafting the legislation needed to establish a food ombudsman, and I am making an initial provision of €1 million to assist with start-up costs.
The allocation to the horse and greyhound racing fund has been increased to €97.5 million in total in 2021. This includes an allocation of €1.5 million for the Irish Equine Centre.
Access to finance is a crucial business need.
As well as liaising with the main banks on matters relating to the agrifood sector, my Department and I have been working very closely with the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Varadkar, and the Minister for Finance, Deputy Donohoe. Together we have put in place important schemes to support businesses and ensure they have access to finance and had such access during the pandemic and to help deal with the challenges brought about by the end of the Brexit transition period.
Finance is required as working capital to ensure the efficient functioning of businesses on a day-to-day basis and as investment capital to develop and evolve to meet future needs and challenges. I am working to ensure farmers, fishers and food businesses have access to appropriate supports, whether that be by private provision or with the help of State-backed schemes.
The Covid-19 credit guarantee scheme provides an important source of working capital finance and it is important that it continues to the end of this year in line with the recent extension of the EU temporary state aid framework, which facilitated this support. We are all hopeful that developments in 2021 will see the economy reopening fully and it is probably only then that we will see the full extent of the need for working capital support. The €2 billion facility put in place by the Government is a signal of our intent to do everything we can to ensure as many viable businesses as possible survive this crisis and it should continue for as long as it is required.
The future growth loan scheme has provided farmers, fishers and food businesses with a source of long-term, unsecured investment finance that was previously unavailable in the market here. There has been a high level of demand from the agrifood sector and I know there is now only limited capacity available. Together with colleagues, we will consider whether further support is required.
The Strategic Banking Corporation of Ireland, SBCI, working capital scheme, which comprises the Brexit loan scheme and SBCI Covid-19 working capital schemes was due to conclude on 31 March 2021. Extending the scheme to the end of December 2021 will provide certainty to businesses on their working capital needs, keeping viable businesses going and protecting jobs. Given the current uncertainties, it is difficult to forecast how demand will materialise and therefore it is prudent to adopt a flexible approach to emerging demand on the subschemes.
The renegotiation with the European Investment Fund on the guarantee arrangements for the SBCI working capital scheme, as well as making the full €200 million extension available, provides us with an opportunity to seek improvements to the scheme, including making it available to farmers and fishers.
I will move to programme D, which relates to the seafood sector. The provision for the Department’s seafood programme has been increased by 8% to a total of €167.7 million for the continued promotion of the environmentally sustainable development of fisheries, aquaculture and wider seafood industry. This sector supports approximately 16,000 direct and indirect jobs in the coastal communities. The provision will help fund vital investment in our fishery harbours, most particularly in Killybegs, Howth and Castletownbere. The 2021 provision will allow the Marine Institute to progress the construction of a new €25 million modern research vessel and this will provide critical national infrastructure to enable Ireland to address the considerable challenges of Brexit and the Common Fisheries Policy, as well as climate-induced effects on our oceans. The budget allocation for the Sea-Fisheries Protection Authority, SFPA, in 2021 will allow the authority to continue to meet its national and EU obligations as Ireland's competent authority for the enforcement of sea fisheries and seafood safety law and to meet challenges arising from Brexit.
The SFPA will be required to support additional activity in the certain areas as a result of Brexit, including import consignments, import direct landings, export consignments and export direct landings. I designated additional ports for third country landings in early 2021 in order to facilitate Northern Ireland-registered vessels landing into Ireland. Greencastle, Howth, Burtonport, Ros an Mhíl and Rathmullan have been added to the list of designated ports. The core areas of the SFPA include the costs associated with certifying seafood in food business premises throughout the country, providing 24-7 inspection services at the main fishery harbour centres and at numerous secondary ports around the coast.
With regard to the multi-annual financial framework negotiations concluded in July 2020, I am pleased to say that Ireland has retained a CAP EU funding package in excess of €10 billion for the 2021 to 2027 period. These funds are essential in supporting the farming sector through the years ahead. While this funding is not reflected in the Vote for 2020, there are significant preparations ongoing in my Department to meet the challenges of a new delivery model for CAP.
This is a brief overview of the range of measures that apply in the agrifood and marine sectors for 2021. These funding allocations will assist us in focusing on competitiveness, innovation, new market development and environmental sustainability, while responding to the uncertainty arising from Brexit and the Covid-19 pandemic. I look forward to the discussion and questions from committee members.