I have chosen to speak on a different subject even though yesterday we had a very lengthy meeting of the Joint Committee on Health on the issue of cervical screening which revealed some very valuable information.

The European Commission yesterday stated that the Common Agricultural Policy, CAP, budget is to be reduced by 5% and payments to farm families may be reduced by up to 4%. This bad news for Ireland was outlined yesterday at the unveiling of the multi-annual financial framework, which will run from 2021 to 2027. Does the Tánaiste share my concerns about these potentially disastrous proposals for Irish agriculture, in particular for small to medium-sized farms? This will be the first budget after the exit of the United Kingdom from the European Union, which departure will leave a gap of €12 billion in the European budget.

The Government must come clean on the future of Irish farming supports. There are serious issues coming down the line which will impact on Irish farm families. Farmers have been worried for some time and now have more reason to be worried that the CAP reduction will kick in from 2021. It is clear that the Commission does not believe that the remaining 27 members of the EU will make up the budget shortfall after the United Kingdom leaves the European Union. Member states are being asked to increase their contribution by a very modest amount, but we do not know if they will do so. Commissioner Oettinger expects the cuts to be between 5% and 10%.

The proposed budget cuts have been well flagged. In response to a parliamentary question I submitted, the Minister for Agriculture, Food and the Marine, Deputy Creed, stated that there are many challenges facing the CAP and the budget after 2020 but he hopes they will be addressed and farm supports maintained. That was clarified in no uncertain terms by the European Commissioner, Phil Hogan, who recently stated in Kilkenny that there will be a €12 billion deficit in the EU budget. He could not have been clearer in stating to farmers in Kilkenny that there will be a cut to the budget if member states do not contribute more money. Addressing the European Commission in January 2018, the Taoiseach indicated that Ireland will only make an enlarged contribution to the budget if the spend is on policies that contribute to the advancement of European ideals.

The only upside is that it will be two years before the budget is renegotiated, which gives the Government, MEPs and the Commissioner for Agriculture time to sort out this problem. That might be an impossible task. One of the biggest criticisms of CAP is that 80% of the budget goes to 20% of the farmers, so I welcome the commitment to supports for smaller farmers. In spite of that, we face a situation whereby farmers will have to move from expecting more to doing with less, which is a frightening challenge. Nevertheless, we must know how the Government proposes to manage this crisis.

I suspect we will debate the CAP budget issue on many occasions in the House between now and the decisions being finalised. The Commission has set out its opening position, which recognises that in the absence of member states being willing to increase their contributions, there will be a €12 billion reduction in the EU budget because of Brexit.

In that context, the priority is the Common Agricultural Policy, CAP, through which approximately 80% of EU funds come into Ireland. It is a huge support across rural Ireland, with which people will be more than familiar. This round of CAP funding will deliver approximately €12 billion of EU funds into the rural economy. I am familiar with the preparations for the CAP negotiations because when the last round of CAP funding was finalised, I was Minister for Agriculture, Food and the Marine. Ireland chaired the Council of Ministers at the time. Therefore, I know that the Commission's proposal is just the start of the process.

I recognise the work Commissioner Phil Hogan has done in this area. Many were predicting a much higher initial proposed reduction under the CAP. Commissioner Hogan has done a very good job in limiting the initial damage, but there is a lot of work for us still to do to ensure there will be no reductions in supports available to Irish farmers in the future. However, much of what he said yesterday was welcome, apart from the actual funding that may be available. He focused on small to medium-sized farmers. That will continue the work that has begun on the equalisation process of payments that began in the current round of CAP funding. He also talked about facilitating a new crisis reserve fund, which would be hugely welcome. He talked about an increased focus on the environment and the climate and building on the greening of the CAP which is very much under way.

There are positives in what was announced yesterday, but there is work to be done to ensure member states will examine ways in which they can contribute increased amounts to the overall EU budget to compensate for the fact that, without Britain, we will have a smaller amount of money to spend in all areas at a time when the demand for expenditure from EU budgets is increasing in a number of new areas, from migration to security and so on.

From an Irish perspective, I want to be very clear. The CAP is a huge priority for us in the context of the multiannual financial framework, MFF. The support of Irish farmers will always be a big priority in the context of a future MFF. We will work with Commissioner Hogan who I believe has done a very good job in the context of the starting point of the negotiations to ensure we will protect the incomes of farmers.

I thank the Tánaiste. In addition to the difficulties a reduced CAP budget would present for Irish farmers, we have other issues coming down the line, including Brexit, for instance. We know that the Brexit negotiations are pretty much deadlocked. That will have a huge impact on farming if they are not successful and if there is to be a hard Brexit. Not only would it reduce farmers' incomes but it would also reduce their capacity to move between the North and the South with their farm produce and from east to west in bringing their products to continental Europe with reference to the tariffs that would be imposed on them. Also, Mercosur is a huge threat to Irish farmers in that if the deal goes ahead, cheap beef will come in from South America into the European market and impact on the price of Irish beef for Irish farmers. Vulture funds are beginning to circle over Irish farms. Banks are selling loans of Irish farms to vulture funds. It will have a huge impact on farming if these loans are sold to vulture funds. The Irish Farmers' Association needs to step up to the mark and support farmers on that issue.

I thank the Deputy who has referred to a number of threats to Irish farmers, but there is also a good news story for Irish agriculture. We are seeing Irish beef entering the Chinese market after years of laying the foundations. We have seen a series of new trade deals signed up to by the European Union that are very positive for Irish agriculture. For example, the opportunities for the dairy industry in Mexico are significant. The opportunities in Canada and Japan are also significant. The Chinese market will play a significant and increasing role for the Irish beef industry in seeking new markets. Many good things are happening, but, as always in agriculture which is such a huge part of the economy, there are threats to which we need to respond as a Government in a comprehensive way.

On Brexit, agriculture and the agrifood industry are big parts of our bilateral discussions with the United Kingdom - I am travelling to London this afternoon - and also our work through the Barnier task force. Mr. Barnier was in Ireland on Monday and Northern Ireland on Tuesday. Much of his focus was on agrifood in the context of maintaining and supporting a functioning all-island economy, as well as a future close relationship between Ireland and the United Kingdom, particularly in sensitive sectors such as agriculture.