Agri-Food and Fisheries

December 2018

Agri-Food and Fisheries

A key priority in this area is to minimise disruption to Irish exports and  imports to and from the UK and to ensure the current ease of access to the Single Market is maintained.

As part of the Department of Agriculture, Food and the Marine’s contingency  planning, it continues to explore the pressure points that industry might encounter and looking at mitigation options in the event of a hard Brexit. Extensive work is ongoing concerned with the implications of Brexit for agrifood and fisheries trade with the UK across different sectors in the short and long term. Areas covered include supply chain analysis, transport/logistical arrangements, possible import control and export  certification requirements, use of the UK landbridge, and integration with customs arrangements.

A critical issue for the fisheries sector in Ireland, and a number of other EU Member States, is the maintenance of reciprocal access to fisheries waters and resources.

Given Ireland’s geographic location, work in this areas has focused particularly on the continued effective use of the UK landbridge. This includes minimising the impact of additional checks and controls that will be required on an East-West basis at ports and airports in a no deal scenario.

As with connectivity more generally, a crucial element in the Government’s approach to the agri-food sector is therefore to effectively manage the new requirements for checks and controls on imports from the UK as a third country for agri-food products coming through our ports.The Government is therefore committed to providing necessary supports for the agri-food and fisheries sectors to mitigate these and other impacts of Brexit and has already introduced a range of such supports through budgetary measures covering competitiveness and market/productdiversification.

The Department of Agriculture, Food and the Marine has taken effective steps to mitigate the immediate impacts of Brexit and to intensify market  market. Increased funding to Bord Bia under the last three budgets – a total of €19.549million since 2016, representing a 60% increase in funding for marketing  and promotion of our food offering since 2014 – has been key in this regard.

Bord Bia has used this funding to support companies directly in their efforts to diversify markets, as well as undertaking a market prioritisation exercise which identifies the markets of greatest potential for increasing agri-food and fisheries exports over the coming period.

There has also been very extensive and practical complementary action taken by the Minister for Agriculture Food and the Marine, who has led very successful Trade Missions to the Gulf Region, China, Canada, the United States of America, Mexico, Japan, Korea, Malaysia and Indonesia. This has been complemented by other actions, as in the case of DAFM’s seven-point Market Access Plan, which includes the allocation of more departmental resources to market access work, an online portal through which essential information across a wide range of markets can be centrally accessed, and the oversight of market access work by a High Level Committee chaired by an Assistant Secretary General.

Budgetary

By way of budgetary provision, measures were introduced in Budgets 2017  and 2018, and in Budget 2019, the Minister introduced a €78m Brexit package for farmers, fishermen, food SMEs and to cover additional costs related to Brexit, as follows:
 €44m in direct aid to farmers through increased spending on areas of natural constraint, the introduction of a Beef Environmental Efficiency Pilot Scheme and additional funding (increased to €6 million) for the horticulture sector.

 €27 million for capital funding for the food industry comprising:
o €13 million in supports for food industry competitiveness andinnovation;
o €3 million for Artisan and Micro food and beverage programmes through the Leader Programme and for LEAN manufacturing initiatives designed to improve competitiveness;
o an additional €5 million for Bord Bia, bringing the total Grant in Aid to €46.6 million. This is a 60% increase in funding for marketing and promotion of our food offering since 2014; and
o €6m in funding to progress an €8 million Food Innovation Hub in Teagasc Moorepark, of which €2 million was provided in 2018

o €7m for the recruitment of additional staff and the provision of ICT hardware and software to carry out the greatly increased volumes of import controls and export certification arising from Brexit.

he Department of Agriculture, Food and the Marine has established a  number of stakeholder vonsultation fora on Brexit as follows:Stakeholder Consultative Committee.  The Department’s Consultative Committee of Stakeholders was established in the wake of the UK Referendum in order to ensure a full exchange of information between the Department and the range of agri-food and fisheries stakeholders as the negotiation process unfolded.

The meetings have proved extremely useful and productive, both in terms ofkeeping stakeholders informed of developments and in identifying issues that need to be addressed in the Department’s preparedness planning, which is in turn feeding into the Whole-of-Government response that is being
co-ordinated by the Department of Foreign Affairs and Trade. The first meeting of the Stakeholder Consultative Committee was held in early July 2016, and ten meetings have taken place to date, most recently on 8 November 2018. Some 31 different stakeholder groups have been represented at these meetings.

All Island Civic Dialogue

Stakeholder consultation has also taken place in the context of the All-Island Civic Dialogue, which commenced in November 2016. Six sectoral meetings for the agri-food and fisheries sectors took place
between December 2016 and June 2017 – these essentially replaced the Stakeholder Consultative Committee meetings over this period.

Sectoral Focus Groups

In the first half of 2018 the Department organised a series of more focused Brexit stakeholder engagements with specific businesses who have strong trading relationships with the UK, or who use the UK as a land bridge to Europe.

The purpose of the meetings was to elicit the potential impacts of Brexit along production and distribution chains in the event of either a no deal Brexit or a negotiated outcome. Issues covered included customs and SPS controls, tariffs and other practical aspects associated with agri-food imports and exports.

The meetings were also useful in providing logistical and other volumetric data around trade movements, which has fed into the Department of Agriculture, Food and the Marine’s data and workflow analysis aimed at estimating Brexit infrastructure and staffing requirements.

The full range of agri-food and fisheries sub-sectors was covered by these meetings, and further ad-hoc contacts are ongoing.

Recent collaborations

The Department of Agriculture, Food and the Marine has joined forces with the Revenue Commissioners in a series of public seminars aimed at providing information to hauliers, logistics operators and large economic operators in relation to Brexit preparedness, covering customs controls and SPS requirements. Two seminars have been held to date (Dublin on 3 December and Cork on 10 December), and a further six are planned frommid-January to mid-February 2019.

The Department of Agriculture, Food and the Marine and its agencies have also participated in the recent Getting Ireland Brexit Ready events organised by the Department of Foreign Affairs and Trade, highlighting the Brexit supports available to businesses.

July 2019

Agri-Food and Fisheries

The agri-food sector is uniquely exposed to a no deal Brexit for a number of reasons including:
 The agri-food and fisheries sector is Ireland’s largest indigenous industry, contributing 7.7 % of Ireland’s GNI* (modified gross national income) and acts as a primary driver of the rural economy;

 Exposure to the UK market, which accounts for 40% of export value overall, with a higher exposure for key products such as beef, cheddar cheese and mushrooms;

 WTO tariffs and duties on agri-food products make this sector the most exposed to tariff impacts;

 On 13 March, the UK published its proposed schedule of tariff rates and duties to apply in a no deal Brexit. The proposed UK tariff regime would significantly impact on the competitiveness of the Irish agriculture sector and is extremely damaging for Irish agri-food exports to the UK, and most particularly for the beef and dairy sectors which would be the most severely affected;

 In addition to tariffs and duties, non-tariff barriers such as completing custom formalities, complying with SPS requirements – e.g., obtaining certificates for exports to the UK and potentially labelling goods in accordance with UK requirements all increase the cost of trading with the UK;

 Most Irish agri-food exporters to the EU use the UK as a landbridge;

 Low margin, high-volume business food processors are vulnerable to exchange rate volatility and additional costs arising from tariffs and non-tariff barriers;

 Goods from the UK requiring SPS controls will be subject to a minimum 24 hour notification period;  Over one third of all Irish fish landings come from the UK EEZ and the UK has indicated that in a no deal scenario it will take back control of its 200-mile zone; there would be serious impacts on the fishing and fish processing sectors, while delays in transport of fresh seafood via the landbridge will be critical.

Supports

The Government has put in place a range of supports for the agri-food industry including:

 Budget 2019 included €78 million Brexit package for farmers, fishermen, food SMEs and to cover additional costs related to Brexit;  The Future Growth Loan Scheme via SBCI for farmers, seafood sector and food SMEs;  Specific supports for food businesses through EI and LEADER food programme;  Technology and innovation hubs;  Additional funding to Bord Bia;  Trade missions and market access activity.

Recently the European Commission has announced a €50 million exceptional aid fund for the beef sector to address price difficulties caused in part by the ongoing uncertainty in relation to Brexit.

Fisheries

On 23 January 2019, the Commission announced two measures aimed at supporting the Irish and EU fishing industry. These allow fishermen and operators from EU Member States to receive compensation for the temporary cessation of fishing activities, and amends EU regulations to ensure that the EU is in a position to grant UK vessels access to EU waters until the end of 2019, on a reciprocal basis.

We are actively working with fellow Member States and the EU to identify alternative options for the period from 2020 onwards. There is a risk that in a no deal scenario the EU fleet would no longer have access to UK waters, which could doubly impact Irish operators given the potential for displacement of activity into EU waters subject to Irish control.

In its June 2019 Contingency Communication, the Commission outlined that it is working with Member States so that resources under the European Maritime and Fisheries Fund can be used for temporary cessation if needed.

State Aid

The Department of Business, Enterprise and Innovation (DBEI) and DAFM have explored State aid options through the Technical Working Group on State aid. Options available through the Agriculture Guidelines are being developed to support large food companies.

In March 2019, the EU approved an increase in the Rescue and Restructuring and Temporary Liquidity schemes, from €20 million to €200 million. This will allow the Government to put in place a fund, if required, to be available to businesses in all sectors that meet EU criteria, with a focus on SMEs of scale.

DAFM has also led engagement with the European Commission, in collaboration with DBEI and Enterprise Ireland, on the State aid application for a new investment scheme for the food sector, which would allow grant aid capital investments in large food processing businesses in all regions.

Next Steps

 There will be further extensive engagement with the sectors through DAFM’s Stakeholder Consultative Committee, the All-Island Civic Dialogue process and through ongoing bilateral contacts.
 The Government will continue to engage constructively with the European Commission to explore the full range of State aid flexibilities and supports for sectors in the event of a no deal Brexit.
 Ireland will work with the EU and fellow Member States to identify options for the fishing industry from 2020 onwards including a common framework to manage potential tying-up of boats, the possible displacement into EU waters under the control of Ireland of fleets from other Member States, and funding for the sector.