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Minister Creed Opening Address at Bord Bia Performance & Prospects 2017/2018 10 January 2018

Good morning. Thank you all for showing up so early. I hope you all had a restful Christmas break and I would like to take this opportunity to wish you all a very Happy New Year for 2018.

I am pleased to be here to launch Bord Bia Export Performance and Prospects Report 2017/2018 and to see such a strong media interest in our food, drink and horticulture sectors, our largest indigenous manufacturing industry, contributing €26 billion to our economy and exporting to over 180 countries.


Welcoming the positive results

At the start of 2017, we faced into  very uncertain times, the threat  of Brexit and  increased protectionism , proposed  changes in trade and taxation policies in the US  and  uncertainty in the  EU economy,  coupled with the very real challenges related to  exchange rate  volatility .

It is in this context that I am very pleased to announce that last year marked the 8th successive year of value growth for total Irish agri-food exports, to reach a record of €13.5 billion, when non-edible products such as forestry are included.  Bord Bia’s report this morning will provide valuable insights into the sectors and markets behind the 13% increase in the value of food and drinks exports to €12.6 billion.

This growth in value could only have been achieved with a coherent national shared vision and strategy for the sector to address these challenges, which all of us, from producers to processors, exporters, policy makers and agencies have signed up to. Today’s positive results  show us that we are on our way to reaching the challenging projections set out in our sector’s strategic 10 year plan - Food Wise 2025, including:

  • growing the value of agri-food exports by 85% to €19billion:
  • and creating 23,000 direct and indirect jobs all along the supply chain.

I am conscious that without all of the Irish food and drink exporters here present – this would not be possible. This is your success - it belongs to all of you from our Irish food and drinks companies – it is thanks to your promotion, marketing and sales efforts in the marketplace and in your R&D, innovation bases and production lines day in day out over the last year that we have achieved such solid results.

Tara will go into more in detail on the specifics of our export achievements in 2017, however I would just like to note some key

headline results:

  • Exports to the UK rose by an estimated 7 percent to some €4.4billion despite the ongoing weakness of sterling.
  • Exports to other EU countries have risen to over €4billion accelerating last year’s growth rate.
  • The value of our exports to international markets has hit a high of €4 billion for the first time, showing success of our focus on these international markets.

Market access /diversification

At Government level, we have put in place very practical supports to address the challenges facing the sector, particularly in relation to Brexit. The additional resources to Bord Bia have enabled it to develop a comprehensive route to market network, by providing consumer led insight and market focussed research together with their informed presence on the ground. In addition, their report on market prioritisation, commissioned by my Department, helps us to sharpen our focus on market access prioritisation. My Department continues to deepen its relationship with authorities in other countries to facilitate the opening of markets for the sector.]

The industry’s drive to broaden export reach to destinations outside of the EU is paying dividends with strong growth now seen in emerging and international markets.

The detailed market access work carried out by my Department, and facilitated through trade missions, has significantly increased the number of markets open to Irish agri-food exports. At the end of the day, however, we can only open the markets. It is the food industry which seeks out, secures the opportunities, makes the contracts and then services them.  This is an industry that works together and we can see the results.  Today, for me, this shows the Irish agri-food and drinks industry in action.

Trade Missions

 From my part I am proud to have supported the Irish food and drink industry in their endeavours in international markets during 2017 – by leading 3 trade missions to countries and emerging markets such as the Gulf States taking in Saudi Arabia and the UAE.  In June I led a trade mission to the USA and Mexico, and most recently Japan and the Republic of Korea.

I and my Department will continue to support Irish food and drink exporters in 2018, through a programme of Ministerial led trade missions, supported by technical and official trade meetings. I have already announced my intention to visit Canada and the USA in late February/early March, with the support of Bord Bia and the agri-food and drink companies.

Through the market prioritisation exercise, recently published by Bord Bia and funded by my Department, we will together identify and target other suitable new international markets for Irish food and drink in a sector specific fashion to which I will lead missions later in the year.  I envisage that these will include China and Indonesia/Malaysia.  While these markets will in some cases be slow burners, it is an important part of widening our reach and sourcing new markets in a post-Brexit scenario. Irish agri-food has an excellent name on international markets and it is important that this work continues to find new markets for a growing industry.

The close working relationships between my Department, the development agencies, producers and industry as we see in action on these missions are a key strength of the Irish food, drinks and horticulture sectors.

The new resources for Bord Bia

 I was very pleased to make additional funds available to Bord Bia in 2016, 2017 and 2018 as a key part of our Brexit response.  In particular, the extra funding in 2018 will allow Bord Bia to employ around 30 additional staff, 10 of whom will be based abroad. This is in line with the Taoiseach’s Global Footprint initiative to double the Team Ireland footprint on the international stage by 2025.

Future challenges

As I have already stated,today’s positive results  show us that we are well on our way to reaching the goals set out in the agri-food industry’s strategic 10 year plan - Food Wise 2025.

While we can justifiably congratulate our selves here today on what has been achieved in terms of our record exports in what were very challenging circumstances in 2017, we continue to face further challenges into the future at a political level, in terms of future CAP reform, European Parliament elections and the creation of a new Commission, in addition to the unique challenges of Brexit and climate change.

Environmental sustainability

Environmental sustainability was one of the key issues identified at the recent Food Wise Conference organised by my Department.

The Bord Bia Origin Green programme to which 90% of all our agri food companies have signed up has achieved much in communicating the environmental credentials of Irish agriculture to both policymakers and Irish and EU consumers since it was launched in 2012.

Looking forward we need to expain to citizens  and  communicate and inform  the facts on climate change and on the Irish agri-food industry’s positive  contribution to sustainability, based on scientific research carried out by Teagasc and other bodies.

Equally however we need to ensure coherence in all our climate change policies and ensure validation of our claims. We need to use all available tools, including those in the new CAP reform to ensure we can meet our climate change and environmental obligations. If we expect farmers to deliver public goods they must be remunerated for doing so.

We must be clear and unequivocal about our shared commitment to sustainability. And we must ensure that the actions we take have real and verifiable impact and deliver confidence and value for our consumers and customers. I want to assure you that the Government and my Department is focussed on delivering on this commitment and will continue to facilitate and support the sector in achieving sustainable growth and enhancing Ireland’s credentials as a producer of high quality, and sustainable food products.

Brexit

So– Brexit. Our trading relationship with the UK in the agri-food sector can be summarised in one simple set of statistics - the UK is the largest external supplier of food and drink to Ireland, but more importantly from our point of view, we are the largest such supplier of food and drink to the UK.  With a population of 66million to feed, that is an important place to be.

Brexit will remain a major challenge in 2018 and coming years as we move our way forward through the rounds of complex negotiations. It is for this reason that I and my Department have stated from the very start that our key ‘asks’ from the negotiations should be (i) continued free access to the UK market, without tariffs and with minimal additional customs and administrative procedures; (ii) a minimisation of the risk from UK trade agreements with third countries; and (iii) on the fisheries side - the maintenance of current access to fishing grounds in the UK zone in the Irish Sea, Celtic Sea and north of Donegal and protection of Ireland’s quota share for joint fish stocks.

We all recognise the huge task involved in this but we also see the enormous opportunity present in UK markets. We intend to continue to demonstrate our commitment to the UK market and pursue those opportunities relentlessly.

We have no intention of stepping back from the UK market. On the contrary, we will redouble our efforts to build on our consumer reputation and strong relationships to maximise growth and supply high quality and innovative products to our neighbouring island.

To that end I have had meetings with many of the major UK food retailers over the last twelve months or so and I am convinced that the integration of the supply chains between Ireland and UK will be a key strength as we plot our way through the implications of Brexit.

And while there is a long way to go in the Brexit negotiations, I believe that December’s political agreement between the EU and the UK on island of Ireland issues, makes the prospect of a sensible withdrawal agreement, transition, and future trading relationship, much more likely.

Brexit Loan Scheme

Today I would like to advise you that I will shortly launch a new Brexit Loan Scheme which will provide affordable, flexible financing to Irish businesses that are either currently impacted by Brexit or who will be in the future. I will do this together with my colleague the Minister for Business, Enterprise and Innovation.

The Scheme will make up to €300 million of working capital finance available to SMEs and mid-cap businesses. Given their unique exposure to the UK market, my Department’s funding ensures that at least 40 percent of the fund will be available to food businesses.

The finance will be easier to access, more competitively priced (at a proposed interest rate of 4 percent), and at more favourable terms than current offerings. This will give Brexit-impacted businesses time and space to adapt and to grow into the future. The new Scheme will be delivered by the Strategic Banking Corporation of Ireland (SBCI) through commercial lenders and is expected to be in place by March of this year.

I have also secured funding of €25 million for my Department to facilitate the development of new Brexit response loan schemes during 2018 for farmers, fishermen and for longer-term capital financing for food businesses.

We all understand the unique exposure of the agri-food sector to Brexit impact. Uncertainty about the final outcome can make planning for the future difficult. But one thing we can be sure of is that both food businesses and farmers need to focus on competitiveness and innovation in order to survive these challenges and grow their business sustainably in the future. Supporting lower cost flexible finance is a key Government response to assist the sector in this process.

 

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