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Minister Creed's speech at the INHFA AGM, 07 June 2018

Irish Natura and Hill Farmers Association AGM

Thursday 07 June 2018

At the outset I would like to thank President Colm O’Donnell for extending the invitation to me to speak to you today at your AGM.  I do so at a time of great challenges and opportunities for the agri-food sector. I am confident however, that with joint co-operation across the various stakeholders we can deal with these challenges together and take advantage of the opportunities.

CAP Proposals

The new legislative proposals for the next Common Agriculture Policy 2021-27 were launched last Friday by Commissioner Hogan. 

These proposals, which have a strong focus on environmental issues, present a new set of challenges for Ireland’s agri-food sector.

The budgetary pressures resulting from the departure of the UK from the EU are real and will have an impact on how the Union spends its money.

I think an adequate budget is the essential criteria to demonstrate how serious we are about what we expect the CAP and our farmers to achieve.  I’ve made that very clear recently in discussions with my Ministerial colleagues in Europe.

We have seen the Common Agriculture Policy develop and adapt to new circumstances throughout the years.  It has become a more market oriented policy. 

It has responded to changing consumer and environmental demands.  It has played a central role in delivering the smart, sustainable and inclusive growth sought under the Europe 2020 strategy.

Our farm families have shown extraordinary adaptability and flexibility in the face of these changes.  Today, they compete on a global market place while at the same time producing food to the highest possible environmental and animal welfare standards.

Under the new CAP, there is an increased focus on encouraging bio-diversity, protecting water quality and mitigating climate change. 

I note these ideals are reflected in the INHFA’s submission to my Department on the CAP post 2020. You are seeking to see the next CAP program doing more in relation to protecting the family farm, protecting habitats and ensuring that climate change and environmental issues are prioritised.

These are ideals to which I can also subscribe.  More will be asked of our food producers to deliver on these ideals in the next CAP.  But if our farmers are asked to deliver more and more public goods we have to acknowledge this.  Farmers have to be recognised and supported for their efforts.

At this stage it is important to remember the proposal is just that, a proposal.  

We are still analysing the full impact the legislative proposals on the CAP will have for farmers.

There are many months of negotiation ahead of us and I want to assure you that I will fight tooth and nail to secure as strong a budget as possible for the next CAP.

I will be holding a CAP consultative conference with farming organisations, agencies in the coming weeks.  Details of the conference will be announced in the coming days. 

I look forward to having the opportunity to further discuss the CAP legislative proposals with you.

Brexit

I turn now to the issue of Brexit which has the potential to have a significant impact across all areas of the Irish agri-food sector.

The sector is of critical importance to the Irish economy. Its regional spread means it underpins the socio-economic development of rural Ireland in particular.

The UK is the largest export market for Irish agri-food products and Ireland is the largest export market for UK products.

It is for this reason that my key ‘asks’ from the EU/UK negotiations are:

  • Continued free access to the UK market, without tariffs and with minimal additional customs and administrative procedures;
  • Minimisation of the risk from UK trade agreements with third countries; and
  • 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. 

The EU/UK negotiations are now at a crucial stage, with the main focus resting on finding solutions that will provide for the avoidance of a hard border on the island of Ireland.  We hope to make substantial progress on this issue the European Council at the end of June.

In the meantime, I and my Department are continuing our work at assessing the impacts of Brexit, consulting with stakeholders and engaging with EU colleagues with a view to mitigating the potential impacts.

In order to help mitigate against this and other impacts, and to assist in reducing costs and improving competitiveness, I introduced a range of measures in the two most recent Budgets. These were aimed principally at helping reduce farm gate and business costs. 

The measures cover the introduction of low-cost loan schemes for farmers and SMEs, as well as new agri-taxation measures and increased funding under the Rural Development and Seafood Development Programmes.

I am of the view that a further effective way of mitigating the Brexit impacts is to expand our international trade opportunities, thereby reducing our exposure to the UK market.

I have just returned from a Trade Mission to China and Hong Kong to develop our relationship further given that the Chinese beef market is now open to exports from Ireland.

This Mission follows on from successful earlier trade missions to Canada and the USA in February 2018, Japan and Korea in November 2017, the USA and Mexico in June 2017, and Saudi Arabia and the United Arab Emirates in February/March 2017.

In addition, I have recently commenced a further series of bilateral engagements with my EU counterparts, meeting the French, German, Austrian, Danish, Dutch, Romanian and Belgian Ministers since early April.

ANC Scheme

The Areas of Natural Constraint Scheme continues to be a very important financial support for many hill farmers, and in excess of €203m has now been paid under the 2017 Scheme.  In light with the commitment in the Programme for Government, an additional €25m has been allocated to this scheme in 2018. 

I have decided to concentrate the funding on those farmers who farm land with the highest level of constraint. 

In keeping with this objective, new rates have been proposed to the EU Commission which will see an additional €13m allocated to the ‘mountain type land category’, €9m allocated to the ‘more severely handicapped’ category and €3m to the ‘less severely handicapped’ category.

Sheep Welfare Scheme

For the first time Sheep farmers will have received payments, under the new Sheep Welfare Scheme with a total of over €18m issuing to date to more than 20,000 sheep farmers. 

Year Two of the scheme is now underway and will continue to be an important financial support for the sheep sector in Ireland. 

In fact, the recent National Farm Survey noted the positive impact that payments under the Scheme had on Family Farm Income in the sector.

Sheep Identification Scheme

I recently announced changes to the current national sheep identification system (NSIS) which has been in place since 2010.  I have had useful engagement with the INHFA on this matter outlining the many benefits around reduced labour, increased traceability which is important as I continue to expand our network of international markets.

I am aware that the new rules will impose a higher tagging cost on farmers.  Therefore, I announced a one-off scheme whereby my Department will refund up to a maximum of €50 on the first order of electronic tags made by farmers.

Furthermore, I included electronic tag readers as eligible investments under the TAMS Scheme which will assist farmers in flock management.

Illegal Burning

It is essential that my Department continues to implement a range of verification checks including land eligibility checks to underpin the payment of some €1.6bn annually under the various CAP schemes.

Under the Terms and Conditions of the Basic Payment Scheme, where land has been burned, it is not eligible, except where controlled burning is carried out.

All things being equal, the lands burnt illegally in 2017 are likely to be eligible in 2018. My Department has informed those affected accordingly and the updated eligible areas were provided at the time of application to on-line BPS applicants.

My officials and I have held discussions with farmer representative bodies to further ensure clarity of message around this important issue.

I am glad to say that there is little evidence this year of the illegal burning of land since the 01 March.

We all must be mindful of the risks and damage that burning can cause to human life and the environment and must take appropriate care.

Access to Finance

One of my priorities is to improve access to finance for the agri-food sector. Food Wise 2025 identifies competiveness as a key theme and includes a recommendation that stakeholders work to “improve access to finance for agriculture, forestry and seafood producers and agri-food companies”.

I launched a new “Brexit Loan Scheme” on the 28th March in cooperation with the Minister for Business, Enterprise and Innovation and the Minister for Finance, which will provide up to €300 million of affordable, flexible working capital finance to Irish businesses that are either currently impacted by Brexit or who will be in the future.

This scheme was modelled on the Agriculture Cash Flow Loan Support Scheme which I made available to farmers in 2017. This scheme made €145 million of working capital finance available to farmers throughout Ireland at low-cost interest rates of 2.95% in order to mitigate the effects of lower commodity prices in some agriculture sectors in 2016 and 2017. It provided farmers with a low-cost, flexible source of working capital, allowing them to pay down more expensive forms of short-term debt, ensuring the ongoing financial sustainability of viable farming enterprises.

I announced in Budget 2018, that my Department is considering the development of potential Brexit response loan schemes for farmers, fishermen and for longer-term capital financing for food businesses. These schemes are developed and delivered in cooperation with the SBCI and take time to develop and operationalise. Consideration and discussions are ongoing in this regard and I will announce further details on this as they become available.

While continuing to explore additional funding mechanisms, I also liaise with the main banks on issues relating to the agri-food sector, all of whom have specialised agriculture products available and have expressed a commitment to servicing the future financing needs of the sector. 

In conclusion, I would like to thank you again for your invitation and wish you continued success going forward.