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Minister Creed's address at EU Heads of Mission meeting, RDS, 27 September 2018

OPENING REMARKS

Good afternoon, ambassadors, ladies and gentlemen. I am delighted to have been able to accept the invitation from Ambassador Almeida e Sousa to address your monthly meeting.

It is indeed a time of many challenges for the Irish and European agriculture and fisheries sectors, and my comments today will focus on what I think are the most significant of these from an Irish perspective. I will set my comments against the backdrop of what is an increasingly unpredictable world trading environment before dealing with perhaps the greatest challenge to confront the agri-food and fisheries sectors in particular, namely, the decision of the UK to leave the EU. I will also talk a little a little bit about the considerable challenge of agreeing the shape of the Common Agricultural Policy post-2020, which will in turn provide the framework within which all of these challenges will be addressed.

INTERNATIONAL TRADE

Agri-food sector in Ireland

But first I think it is important to note the ongoing and vital contribution that the agri-food sector makes to the Irish economy – and particularly the rural economy – as well as the important role that the international trading environment plays in sustaining this contribution. 

The sector accounted for 7.8% of Modified Gross National Income and 7.9% of employment in 2017.

It employs 173,000 people – including those involved in primary production and processing, and in the food and beverages sector.

It is very heavily export-oriented - total Irish agri-food exports came to almost €13.6 billion in 2017, which represents just over 11% of total Irish goods exports. It also represents an increase of 74% compared to 2009.

These figures include growth in exports to the UK of over 40%, and to the rest of the EU of over 68%.

However, the most significant growth took place to non-EU destinations. These exports increased by more than 160% over the period, driven by growth in exports to Asia of 280%, and to the Americas of over 150%.

International Trade - Opportunities and Challenges

As the world population grows and in many areas becomes more prosperous, global demand for the highest quality food will also grow.

The Irish agri-food sector is well-placed to satisfy this demand, and we have ambitious plans to grow the sector over the next number of years in accordance with Food Wise 2025, which projects an increase in exports of 85%, to €19 billion, by 2025.

There are many opportunities out there, and we need a stable international trading environment to take advantage of these.

As a small open economy, Ireland supports trade liberalisation. We recognise in particular the benefits of EU trade agreements with third countries which can potentially give rise to increased exports and job creation.

However, such agreements must be balanced, and must serve both our offensive and defensive interests. In keeping with this principle, I will continue to advocate in favour of agreements such as those reached by the EU with Japan and Canada which provide opportunities for growth, while strongly defending, for example, the interests of the Irish and European beef sector in the face of the kind of threat presented by the EU-Mercosur negotiations.

I think that the Irish agri food sector would also have much to gain from a balanced EU-US trade deal, and I look forward to the resumption at some stage in the near future of talks on a TTIP deal.

I will also continue to apply the most up-to-date market analysis provided by agencies such as Bord Bia when prioritising my Department’s activities in relation to market development, for example through Trade Missions. I have engaged in an extensive programme of Trade Missions in recent years, to destinations in Asia, North Africa, the Gulf Region and the Americas, in keeping with the strategic priorities set out in Food Wise 2025. This work will continue apace, with, for example, further missions planned to Indonesia, Malaysia and China before the end of this year.

I will also continue my focus on resolving market access issues wherever they arise, as evidenced by the ongoing implementation of the seven-point market access plan that I announced in 2017. This includes the establishment of a high-level market access committee within my Department, the allocation of additional resources within the Department, and the launch of an online international market access tool.

BREXIT

Of course the biggest trade-related challenge we face comes in the form of Brexit. I have said on many occasions that very few policy, business or financial decisions will be made over the coming months and years that will not be affected by Brexit in some way, either directly or indirectly.

For obvious reasons, my concerns revolve around the agri-food and fisheries sectors, where it is universally accepted that there will be significant impacts if a hard or ‘no deal’ Brexit ensues.  Many research studies, including the exercise carried out by Copenhagen Economics earlier this year, confirm this.

The reason Brexit will have such a negative impact on our agri-food sector is because of the highly integrated nature of trade in agri-food products between Ireland and the UK. This trade, built up over many decades, is based on a common language, a similarity of tastes, high levels of trust and confidence in each other’s processes, and the ease of access to each other’s markets.

This integrated trade is evidenced by the fact that the UK is Ireland’s largest export destination for agri food products, with exports valued at approximately €5.2 billion in 2017; while Ireland is the UK’s largest export destination, valued at €4.1 billion. 

All of this trade is facilitated by, and takes place within, an orderly, friction-free agri-food trading system, underpinned by the EU’s Customs Union and Single Market of approximately 500 million of the most affluent consumers in the world.

However, it is also clear that the EU’s and Ireland’s trading relationship with the UK cannot be the same if the UK leaves the Single Market and the Customs Union, and that any final arrangement outside of these structures will involve friction and additional costs along the supply chain.

It is clear, therefore, that the best interests of the agri-food sectors in both countries lie in a trading arrangement post-Brexit that is as close as possible to that prevailing currently. That is what Ireland wants from the negotiations, and it is also what the EU wants.

In the shorter term, the priority is to agree the conditions for withdrawal, including the text necessary to give legal expression to last December’s agreement that there would be no border on this island and that the Good Friday Agreement would be protected.

On the backstop, our position remains clear.  While our preference is for an overall EU-UK relationship that would resolve all issues, it remains essential that a backstop is agreed which provides certainty that a hard border will be avoided in any circumstances.

I am encouraged by the fact that formal talks between the EU and UK have recently resumed in Brussels, and that both sets of negotiators have intensified talks in recent weeks. I share Michel Barnier’s belief that progress can be made, but it needs to be made quickly.

In the meantime, contingency planning by my Department at home is well advanced, and contingency planning across Government has been the subject of Government decisions in July, and again as recently as last week. While the need for such measures will depend on the outcome of the negotiations, the Government has, for example, asked departments to make the necessary preparations for customs formalities and import control requirements that may be required following a transition period.

My Department officials have been very active in this regard for some time, and have been working with other Departments and agencies to ensure that they are prepared to fulfil their legal obligations as efficiently as possible in any scenario. We are also advancing our contingency planning for a disorderly Brexit.

You may also be aware that the Government recently launched a new “Getting Ireland Brexit Ready public awareness campaign this week which will provide information on the latest preparedness and support measures being taken by Government. This will include a series of outreach events across the country throughout October.

 

I think it is fair to say that we still believe that it’s possible to achieve a negotiated withdrawal, and we are working towards that. While we would all hope that a ‘no deal’ outcome does not happen, we are planning for all scenarios. I think you would all join with me in wishing the negotiators well as we enter this critical phase.

FUTURE OF CAP

The framework within which we frame our response to these challenges is provided by the Common Agricultural Policy, which has been the mainstay of European agricultural policy for more than 50 years.

We have seen the policy reinvent itself over the years, changing its priorities and focus to meet with growing market, consumer and environmental demands.

Today the policy is about:-

  • strengthening the competitiveness of the agriculture sector;
  • promoting innovation;
  • supporting jobs and growth in rural areas; and
  • seeking to combat climate change.

We are now facing into yet another reform of the CAP.  This time it’s about modernising and simplifying the policy, reducing the administrative burden for farmers and administrations.   It’s about supporting the sustainable growth of food produced within the EU.  It’s about encouraging generational renewal and attracting young people into a sector that is becoming more technologically and scientifically advanced.

In particular, it is about increasing the environmental ambition of the CAP.

Up to now, we have seen the increasing importance being placed on the role farmers have in delivering public goods.   Farmers are being told they are the custodians of the landscape.  Their actions, supported by the CAP, have contributed to:-

  • promoting biodiversity;
  • improving water-quality;
  • preserving open spaces; and
  • maintaining our traditional landscape that carries cultural significance.

The CAP post 2020 will see a greater focus on the role the CAP will have in contributing to climate change mitigation, through encouraging more sustainable farming.

We have already seen how scientific advances have helped the agriculture sector to contribute to more sustainable farming and to climate change mitigation:-

  • The Beef Data and Genomics Programme is a good example of how DNA sampling is working towards breeding more resource efficient cows, thereby lowering the intensity of Greenhouse Gas Emissions;
  • Bord Bia’s carbon navigator provides farmers the carbon footprint of their produce, and identifies ways to reduce that footprint.

Farmers will be asked to deliver more in terms of their delivery of public goods and to farm in as environmentally friendly and efficient way as is possible:- 

  • 40% of their direct payments will be based on their contribution to climate mainstreaming;
  • 30% of payments under the rural development programme must be focussed on biodiversity, the environment, and climate related measures.

The Commission recognises that a “one size fits all” approach does not work.  Their CAP post 2020 proposals give Member States the flexibility to design measures that are best suited to our own individual circumstances and needs.  This is to be welcomed. 

We will be able to draw up our own CAP Strategic Plans, designing eco-schemes for the climate and the environment under Pillar 1, and, agri-environmental climate measures under Pillar 2.   These measures will be specifically targeted to address how best Ireland’s agricultural sector can contribute to climate change mitigation.

However, there are challenges ahead as to how we are going to achieve this. In particular, how to monitor and assess the efficiency of these eco-schemes and agri-environmental climate measures. They will need to be targeted and under-pinned by scientific research.  At the same time, we will need to monitor outcomes to ensure they have real impact.

CLOSING REMARKS

So I think it is clear that the road ahead remains an uncertain one. There are many challenges, yes, but I believe that there are also many opportunities. Our efforts to deal with these challenges and avail of the opportunities will continue to be underpinned by our membership of the European Union. Working together has proven to be very effective in the past as the European Project has grown and developed. Co-operation in the interests of mutual advancement socially, economically and politically has been at the heart of what we do. And it is through continued adherence to these principles that we will deal with Brexit and whatever other challenges come our way.     

Again, I want to thank your colleague Miguel de Almeida e Sousa, Ambassador of Portugal to Ireland, for inviting me to speak here today.

ENDS