Brexit and beef sector
Deputy Calleary warned that no-deal Brexit plans and tariff-rate quotas could further damage rural communities and the beef sector. The Tánaiste stressed the Government’s awareness of the risk, its engagement with the Commission and other EU states, and the need to protect agrifood interests.
As of today, we have 36 days to go before the Brexit deadline. As if that was not enough worry for many of our farming and rural communities, this morning they woke up to a story on the front page of the Irish Independent suggesting that rural communities and the beef sector in particular, will become the latest pawn in this Brexit debacle. The Irish Independent has reported that the British Government is suggesting the introduction of a range of what it terms are tariff rate quotas to allow produce into the UK without tariffs in the event of a no-deal Brexit. The suggestion being picked up from a speech made by the Secretary of State, Michael Gove, is that those tariff rate quotas will be particularly attractive to countries like Brazil, with which we are in intense competition in the British market. While we all know and accept there is no comparison between the quality of our beef and beef from countries such as Brazil, that will not make any difference on the supermarket shelves of Britain if their produce comes in on a tariff-free basis compared with ours.
The Tánaiste does not need to be told about the importance of the beef industry in Ireland. Each year, €2.5 billion worth of beef is exported, 52% of which goes to the UK. That is €1.25 billion worth of our economy currently in peril and awaiting clarity over the course of the next 36 days. Leaving Brexit aside, the beef sector is under enormous pressure, and beef farmers are hugely angry and frustrated at what they see as inaction on the part of the Government to resolve the pressure they are under.
Teagasc suggests that average incomes on cattle-rearing farms in 2018 is just over €10,000 per annum. Cattle prices are down in the beef sector by up to €200 per head, year on year. Thousands of farmers are turning out across the country in the hope of getting some sort of knowledge or indication from the Government that it understands where they are at, the pressure they are under and the importance of their sector to the Irish economy but they are not getting any signals of that understanding. All they are seeing is a Government and a Minister that take the attitude that it will be all right on the night and will be fine but no practical measures are being taken to support them. To add to that frustration, the remarks of the Taoiseach about cutting back on beef consumption did not help their case or situation.
I ask the Tánaiste to comment on that story in the first instance. Has he any knowledge, through his interactions on the Brexit issue, of Michael Gove's plans post 29 March? What plans has the Government in place now to assist the Irish beef sector and to assist Irish farmers in the coming days and weeks to get extra supports from Europe to get through this particular challenge? What work is being undertaken to deal with this threat to our sector?
Comment on this
First, I thank the Deputy for raising this hugely serious issue. As a former Minister for Agriculture, Food and the Marine, I assure the Deputy that I and Deputy Creed and the Cabinet as a whole are more than aware of the potential threats to the agrifood industry and the beef sector in particular.
There are about 130,000 farm families in Ireland and about 100,000 of these get income from beef. Some 60,000 to 70,000 get all of their farm income from beef. When it comes to Irish agriculture in terms of numbers, beef is the most important issue and we are aware of that. That is why the Department of Agriculture, Food and Marine has done a detailed assessment of what the impact a no-deal scenario could be in a worst-case scenario. That is not a report that shies away from outlining the stress and pressure that this sector could be put under if it is not supported and managed by the Government and by the EU in that worst-case scenario. As result, we have been speaking to the European Commission very directly and to the European Commissioner, Phil Hogan. We have made it clear, and the Commission has made it clear that it will support us, that we can, if it comes to it, support and protect a sector to ensure it survives through a Brexit transition period.
We are, of course, all working to ensure that no-deal Brexit does not happen. We have heard various rumours at different stages coming out of the UK. At one point, I was being informed that the UK Government was going to look at having no tariffs at all. Then we saw Michael Gove making announcements that he intends applying WTO tariffs on agrifood products. On top of that, we are being told that within certain sectors like beef, they may look at tariff-free quotas for certain volumes of beef. If they were to do that under WTO rules, they would not be able to apply a different tariff system or quota system to Ireland or to the EU, as they would to other parts of the world. The only thing that would then differentiate Irish beef from beef from other parts of the world would be quality restrictions, which of course are a factor. In of themselves, however, this will not be reassuring to Irish farmers, as we indeed see in the editorial of the Irish Farmers' Journal today.
The one thing I want to say on behalf of the Government, the Taoiseach and the Minister for Agriculture, Food and the Marine, Deputy Creed, is that we have been aware for many months of the vulnerability of agriculture. That is why in the last budget, the beef sector was targeted in a positive way for more supports. If it comes to it, the Government will not be found wanting to support and work with this sector through a very difficult period, should a no-deal Brexit materialise. That will involve a significant amount of money and a relaxation of the state aid rules that would allow us to be able to support the vulnerable sectors through the consequences of a no-deal Brexit.
Comment on this
The concept of the sector being under potential stress and pressure is ridiculous. They are under stress and pressure as it is. This statement from Mr. Gove this morning is adding to this stress and that pressure. What has the Government done in the last number of years to get access to other markets to reduce our dependence on the UK market? I put a question to the Minister, Deputy Creed, on lairage in Cherbourg and I got an answer back from him on Tuesday evening more or less shrugging his shoulders and stating that while there is an issue, it can be resolved privately.
There needs to be a lot more proactivity and involvement on the part of the Government in dealing with blockages in the system. There needs to be a lot more proactivity on the Government's part in standing up to factories that are not paying decent prices. We have the lowest cattle prices in the EU, far lower than in the UK, and meanwhile the Government is just shrugging its shoulders and hoping it will be all right on the night.
President Juncker has said this morning that he is not very optimistic about a deal at the moment. I am sure the Tánaiste has seen those remarks. The Government needs to give certainty and clarity to farming families and not speak about stress and pressure as something that might happen in the event of a no-deal Brexit. It is happening and is real. If he wants to understand frustration I advise him to look at the minutes of the Oireachtas joint committee meeting on agriculture last Tuesday. He should read the presentation that was given by the Department of Agriculture, Food and the Marine on beef and examine the reaction of members, including those from his own party, to the poorness of that presentation and the complete lack of understanding of the pressure the sector is under and, frankly, the lack of any plan to deal with it.
Comment on this
I can assure the Deputy that the Government understands only too well the pressures that the sector is under. It has been a difficult year for beef on many levels.
Regardless of the question marks and frustrations that some people may have concerning factories, their interactions with farmers and so on - that is an ongoing and testing relationship, as it should be - something much more fundamental needs to be dealt with in the context of Brexit, and that is the issue on which we are focusing. This is a Government that has always prioritised agriculture and farming and always will while my party is a part of it. Given that we realised and focused on the vulnerabilities of the agriculture and farming sector at an early stage in the Brexit discussions, we will be prepared if necessary in the context of there being no deal.
The Deputy asked for certainty and clarity, but one cannot provide absolute certainty if the other partner in the decision making - the UK - cannot provide it either. We have always approached Brexit by necessity, having to adapt to decisions that are being made in Westminster. That is what we will continue to have to do, but we have a close and ongoing co-operation, discussion and partnership-----