Dáil Éireann Debate, Tuesday - 15 October 2019
56. Deputy Jackie Cahill asked the Minister for Agriculture, Food and the Marine the contingencies being operationalised and the supports that will be in place to safeguard farmers and the agricultural sector from a no-deal hard Brexit; the details of the €110 million for agriculture announced in budget 2020 for a no-deal scenario; and if he will make a statement on the matter. [42248/19]
Amharc ar fhreagraWill the Minister give an overview of the contingencies being operationalised and the supports that will be in place to safeguard Irish farmers and the agricultural sector from a no-deal hard Brexit? Will he also give a detailed breakdown of the €110 million for agriculture announced in budget 2020 for a no-deal scenario?
I have introduced a number of supports to assist farmers and the agrifood sector in preparing to address the challenges posed by Brexit. These include, most recently, the €300 million Brexit loan scheme for Brexit-impacted SMEs and mid-cap businesses whose funding arrangements ensure that at least 40% of the fund is available to food businesses. Up to 4 October 2019, 754 loans had been approved, of which 199, to the value of €44.1 million, had been sanctioned. Thirty-six of these, to the value of €9.29 million, related to food businesses and the Department of Agriculture, Food and the Marine and the Department of Business, Enterprise and Innovation future growth loan scheme, which will make up to €300 million of long-term strategic investment loans available to eligible Irish businesses, including farmers and the agrifood and seafood sectors. Businesses have been able to apply for loan eligibility through the Strategic Banking Corporation of Ireland since 17 April. Up to 4 October 2019, 1,364 loans had been approved, including 530 to farmers and 163 to food companies. The total number of loans progressed to sanction at bank level is 296, to the value of €50.1 million.
In budget 2020 the Government announced that it will provide a no-deal contingency fund to support our most vulnerable sectors, with up to €650 million available overall, to be activated in tranches as the full impacts of Brexit emerge. A sum of €110 million will be made available for the agrifood sector in the first tranche, to be supplemented by any exceptional aid provided by the European Union.
The provision of immediate supports for our beef sector will be a first priority, as will support for our fishing fleet. We also want to support food companies to reorientate towards new products and markets and to support other sectors to improve their competitiveness.
While supports cannot fully address the negative effects of a no-deal Brexit for the agrifood and fisheries sectors, this first tranche of supports will be used to ameliorate the immediate impact on farmers and fishermen as the full impact of a no-deal Brexit crystallises and to make some of the adjustments needed to improve businesses' resilience in the face of new market realities.
As we know, a no-deal Brexit is the biggest threat to our economy in living memory. Our agrifood industry is particularly exposed, with 35% of all Irish food exports going to the UK. There are grave concerns about a no-deal scenario and our readiness for it. While the €110 million in the budget is welcome, there has been a clear lack of measures to address the farm crisis. As Deputy McConalogue alluded to, the farmers who have suffered losses since May have not been catered for and no fund has been put aside for them. As we speak, serious losses are being incurred by store producers, who are selling cattle at very low prices. Will the Minister clarify how much of the €110 million will be ring-fenced for farmers?
Will the Minister outline the exact mix of grant aid, equity or loans contained in the fund? The Minister spoke about the Brexit loan schemes but there has been a very disappointing take-up of those schemes. Farmers and companies feel there is far too much red tape involved.
I should clarify that the €110 million is the first tranche of a €650 million fund available in the event of a no-deal Brexit. I hope we never have to spend that as I hope we can avoid a no-deal Brexit. It is a first tranche and it is appropriate for the funding to be released in tranches as it will enable us to react to what emerges from Brexit. We have prepared as well as possible but this is an event without precedent. It is therefore appropriate for us to hold some of our firepower in reserve and see how a no-deal Brexit crystallises. Of the €650 million total, we are getting €110 million in the first tranche and so is the Department of Business, Enterprise and Innovation, and the Department of Transport, Tourism and Sport is getting €40 million. This leaves a very substantial pot of funding available to react to the granular detail as it emerges of a no-deal Brexit and to respond accordingly.
The Deputy asked how much of the €110 million is available for the farming sector. We have identified €85 million as being necessary for the beef sector and particularly for beef finishers. This will be the sector immediately in the firing line. There will be some insulation from a no-deal Brexit by virtue of a tariff-rate quota, TRQ, in the United Kingdom for beef, of which we will get a sizable amount. However, that sector will feel the immediate brunt of a no-deal Brexit. There will be €14 million for the fisheries sector, €6 million for other livestock farmers and the mushroom sector, with €5 million available for the food and drinks processing industry.
As I mentioned, there is one element of beef farming, namely store producers, that has not been earmarked for any compensation. I was in a mart yesterday in my hometown so I know the price of store cattle has dropped very significantly. These farmers have not had the opportunity to get any of the €100 million previously earmarked. Unfortunately, not all of that money was spent. Their economic losses must be addressed. Has the Department formally made a request to the European Commission under Article 219 of the Common Market Organisation Regulations, relating to market disturbance?
As I stated in reply to previous speakers, I acknowledge that the beef sector is in a difficult space, whether the farmer is a finisher, a producer of weanlings from a suckler herd or rearing calves to beef and selling store cattle. It is not easy for anybody involved. However, the difficulties in the market now and what could happen with a no-deal Brexit - which I hope can be avoided - are very different. Notwithstanding a TRQ for beef, in light of our level of exposure to the United Kingdom market, particularly in beef exports, we could face a tariff rate of 37% on exports to the United Kingdom as a third country. It would immediately have the worst impact on finishers and reflect immediately in the price paid to them. It is important that we maintain our market share while getting out the other side of this. Therefore, the first tranche would be targeted at those beef finishers.
