We have received apologies from Deputies Barry Ward and John Lahart. I welcome an eminent member of the European Parliament and chairperson of the development committee, Barry Andrews MEP. It is nice to have you here today.

This is the first part of our public session, with the second part scheduled to take place at 4.30 p.m. Unfortunately, we will probably run on a little longer. Today I am very pleased to welcome representatives of IBEC to the committee. The purpose of the meeting is to discuss the planning for the EU Presidency and the priorities of key sectors in the Irish economy. This engagement will help to inform the committee's consideration of how Ireland can shape the EU's agenda across a range of issues during its six-month Presidency. These include, strengthening Europe's competitiveness, supporting rural communities and farmers, and ensuring the EU remains outward looking and resilient.

Representing IBEC are Dr. Pat Ivory, director of EU and international affairs and Mr. Ger Brady, head of national policy and chief economist. The role of business is likely to be central to the Presidency as there is now renewed focus on the issue of competitiveness and the need to support initiatives, as well as the EU's work in pursuing proactive and rules-based international trade policy. Gentlemen, you are very welcome to the committee today.

Before we begin I will read a note on privilege and some housekeeping matters. Witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity they will directed to discontinue their remarks and it is imperative that any such direction is complied with.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. I remind members of the constitutional requirement that they must be physically present within the confines of the Leinster House complex in order to participate in the public meeting. I will not permit a member to participate where they are not adhering to this constitutional requirement. Therefore, any member who attempts to participate from outside the precincts of Leinster House will be asked to leave the meeting. In this regard, I ask any members partaking via MS Teams that, prior to making their contribution to the meeting, they confirm that they are on the grounds of the Leinster House campus.

I now call Dr. Ivory to make his opening statement.

I thank the Chairman. It is good to be here. I welcome the opportunity to discuss the priorities of Irish business for Ireland's upcoming EU Presidency. The Irish Presidency of the Council of the EU will take place at a pivotal time for Ireland and Europe. A decade defined by disruption has shown that competitiveness and resilience are now inseparable. Europe's resilience continues to be tested by war on its borders, energy and migration pressures, and growing geopolitical fragmentation.

The Letta and Draghi reports have garnered much needed political recognition of the challenges faced by the EU and helped push them to the top of the political agenda. IBEC contributed to the consultation process on these reports at national and EU level. These reports mapped the challenges well and set a course for enhancing Europe's competitiveness and productivity, but a year and a half on, these challenges persist. The rhetoric and political priorities have changed, but tangible progress is slow and must be accelerated.

At the midpoint in this EU institutional cycle, consequential decisions will be made on how to react to these challenges and take swift actions in the coming years. The Irish Presidency will be at the centre of this. This is a unique opportunity to strengthen the EU for business and citizens and ensure that it meets the needs of small and large member states alike. To bolster competitiveness in this new context, Europe must think in systems: open markets, secure supply chains, adaptive regulation, and an innovation ecosystem that can withstand shocks while driving growth. This will determine our ability to grow and prosper, trade internationally, attract investment, provide job opportunities and raise living standards. Competitive business is essential to a more sustainable and digital economy that generates the resources needed to improve public services and infrastructure, and enhance resilience.

The vision of Irish business for a successful EU Presidency is one that drives forward an EU that is more competitive, resilient, innovative, simplified, focused, ambitious and outward-looking. IBEC's campaign, entitled Making a Resilient, Competitive EU a Reality, which was launched in 2025, sets out the business ambition for Ireland's EU Presidency in six key priority areas. Detailed policy papers on each of these priorities are available on our website. We encourage members of the committee to have a look at the detail we have put behind these important policy positions for business.

First, on the Single Market and simplification, we are calling for ambition to be turned into action. IBEC calls on Ireland's EU Presidency to find ways to urgently deepen the Single Market, including a new savings and investment union completing the capital markets union. We also need regulatory simplification and reduced administrative burden on businesses by applying better regulatory principles and ensuring the Commission delivers on the promised omnibus packages to reduce the burden of regulation on business.

On trade and investment, we need to strengthen relationships and maximise opportunity. In a transformed global context, increasing levels of protectionism and escalating trade tensions have created an uncertain environment for businesses to operate in. In the face of this, IBEC calls on Ireland's EU Presidency to champion proactive, outward-looking and rules-based trade and investment policies. This must include close co-operation with key trading partners such as the US and the UK and support for market diversification through new trade agreements.

The voice of outward-looking, open economies such as Ireland has never been more important. The EU's growth and prosperity are intrinsically linked to its ability to trade with third countries and attract investment. Policies such as the so-called European preference run the risk of cutting ourselves off from future levers of growth without any guarantees of benefits for the European economy. Of course Europe must strengthen its industrial base and production capacity to reduce exposure to risks and strengthen economic resilience. However, this must be done carefully and intelligently.

Greater economic intervention from governments worldwide has led to a reconsideration of the EU's approach to industrial policy. We call on Ireland's EU Presidency to contribute to creating the conditions for competitiveness to support enterprise and bolster our economy and the economies right across the EU. This means simplifying and quickening planning and permitting and addressing energy costs and security. The previous EU mandate saw a wave of legislation introduced that directly impacts employers. IBEC calls for Ireland's EU Presidency to prioritise ensuring that the scale and complexity of meeting the challenges of this new legislation are understood and, where possible, simplified. The EU should support member states where they are better placed to act, including promoting upskilling and training as key enablers of competitiveness.

To deliver digital and artificial intelligence, AI, competitiveness, IBEC calls on Ireland's EU Presidency to focus on supporting innovation through the simplification of the EU digital rule book and by supporting the adoption of key digital technologies and AI.

Resilience must be viewed as an essential foundation for long-term competitiveness and sustainability, with security and defence as key pillars. IBEC is calling for resilience to be established as a key defining theme of Ireland's EU Presidency.

I thank the committee members for their attention. We are more than happy to take any questions.

I thank Dr. Ivory. I really appreciate that. Due to our time constraints, I am going to take three members at a time. The members can let us have their queries and we will let Dr. Ivory and Mr. Brady reply.

I thank Dr. Ivory for his presentation. I will focus particularly on the digital and AI competitiveness. I have seen some of the calls from IBEC for getting rid of the triple compliance and only having one level where you sign off on one and it means you have signed off on everything else. That makes a lot of sense, but I have a concern in terms of delaying the EU's high-risk AI legislation because that will affect education, healthcare and any kind of oversight by real people. Given that the tech bros have shown absolute contempt for these Houses in their interactions on topics such as nudification, regulation of age verification, etc., and these are similar or sometimes the same companies, there is no guarantee if you allow the market free-reign, as the US Administration might be trying to push us towards, that they will actually regulate and that gives them time to gather a lot of data or information that could be sold on the open market at some stage, leaked and put in the wrong hands. I might be overegging it here but some people have said that certain types of AI use represent an existential threat to humanity. In that context, surely the European Union, as one of the largest trading blocs in the world, should be leading the way in terms of the regulation of digital technologies and AI. Where does IBEC think the balance can be realistically struck? In terms of what Ireland's EU Presidency could push, is IBEC saying Ireland should be pushing for less regulation or the streamlining of regulation?

I welcome Mr. Brady and Dr. Ivory. It is important that we have this opportunity for engagement coming up to Ireland's EU Presidency.

There are there main areas I would like to ask them about. Dr. Ivory talks about the wave of legislation introduced under the previous EU mandate that directly impacts employers and that IBEC wants Ireland's EU Presidency "to prioritise ensuring that the scale and complexity of meeting the challenges ... are understood and, where possible, simplified". I completely agree with Dr. Ivory. We all have to be concerned about the growth and development of businesses in our cities, towns and communities. Dr. Ivory might expand on that.

The second area is linked. Will Dr. Ivory outline the main regulatory or administrative burdens currently affecting Irish businesses at EU level and how Ireland can use the EU Presidency to advance the simplification, not forgetting about regulation but ensuring that we can do it in a better way?

I note that in IBEC's November 2025 report on the Single Market, concerns were expressed regarding the unintended consequences of the medical device regulation and in vitro diagnostics regulation. What specifically is IBEC thinking about in relation to Irish medtech and what would it like to see Ireland do to reform those regulation areas, which is important during Ireland's EU Presidency, obviously, but also before and after that.

The sentence, "To deliver digital and artificial intelligence, AI, competitiveness, IBEC calls on Ireland's EU Presidency to focus on supporting innovation through the simplification of the EU digital rule book and by supporting the adoption of key digital technologies and AI", jarred with me, as it did with Deputy Gogarty. Has IBEC any concerns about the EU AI Act? I hear what Dr. Ivory is saying, but with all the concerns there are, abandoning safeguards for innovation in a field that has not yet proven itself to be the world-changing hype seems dangerous. It is still a fledgling industry and the guardrails that guide safe and responsible development are key in this area. Would the witnesses not agree that a risk-based approach seems justified considering the unacceptable AI practices that we have seen? In these Houses, we are looking at legislation specifically against the generation of intimate images.

Even aside from that, there is a very real threat of harmful AI-based manipulation and deception that we, as lawmakers, must be conscious of. We have come to that conclusion. IBEC seems to be pushing the other way and wants more simplification of it. Is there any worry among businesses in other areas? Flagrant breaches of intellectual property protections are the basis of how AI is built and operates. Those sentences I quoted were what jumped out at me. I thought there was consensus on the concerns around this area. Rather than simplifying the rule book, we need to look more clearly at guardrails for this whole area.

I thank the Deputy. I have one query about the proposed new legislation on the right to work from home. I am curious to get the witnesses' thoughts or a flavour of their opinions. I am sure we will hear a bit about that. There is a good bit of crossover with diversity in the same sentence. If Dr. Ivory or Mr. Brady could help, we would appreciate it.

I thank the Leas-Chathaoirleach. Perhaps I will take the two questions on AI and digital together. IBEC is not at all suggesting we should allow the market free rein. We support the implementation and design of effective and good regulation in the digital space. We have worked with our members, the Irish Government and our partners across Europe, including the business nine group, on digital to try to ensure that the regulation which is designed is fit for purpose and effective. It is not a question of not agreeing with the regulation of the digital sector. It is a question of how those regulations are designed and implemented. What we are saying is that we need to enable a simpler EU digital rule book that works with, and not against, our shared digital ambitions and competitiveness.

It is clear from any analysis, including the analysis that Mario Draghi did in his competitiveness report for the Commission, that Europe has slipped behind in competitiveness in the digital space. I chair the business at the OECD trade committee and have sat at OECD trade committee meetings and listened to presentations by the OECD that show that Europe's ability to innovate is way behind its international partners in the United States and China. In that context, it is important that the digital regulation we have designed supports and enables digital innovation to take place here in Europe. That is the context in which we are talking about the simplification of regulation and reducing the regulatory burden.

I accept that the emerging area of AI is throwing up new challenges in our societies and we have to address those challenges and arrive at sensible solutions that support our citizens and society as well as enabling our businesses to innovate and compete. Those would be my thoughts on the issues. Mr. Brady might like to add to those.

I will come in on the broader question of legislation. On the medical device regulation, MDR, we can revert to the committee. I must confess that I am not an expert on the intricacies of the MDR. Our medical device sector has expertise and we can revert to the committee with detail.

On the broader question of regulation and what is coming down the line in the Irish Presidency of the EU, probably the biggest single omnibus which will be expected to be delivered by the Irish Presidency is the tax omnibus. That is going to come in the second half of this year. It will be introduced in quarter 2. The Irish Presidency will be expected to deliver it. That is the feedback we have got from our discussions in Brussels. That will be about the simplification of tax rules. We have had agreements at the OECD and in Brussels looking at similar aims for corporate tax, in particular, in recent years. We have ended up with two regimes that are trying to do the same thing in different ways. The Irish Presidency will be expected to look at those issues. There are some very simple wins, which I think everyone, including the Commission, now accepts are there in areas where there are rules overlaps between the OECD agreements and the European Commission's Pillar 2 directive, particularly around controlled foreign company rules and some of the rules on interest. That kind of tax omnibus will be the biggest piece of legislation we will be expected to work on during our Presidency. I am happy to share more detail on our views on that issue with the committee.

I will address the Single Market. It is one of the greatest assets of the European Union, but the Letta report highlighted that it is currently underachieving. There is a huge amount of development that can take place within it. On the good side, it is quite developed but, nevertheless, the way Single Market regulations are applied across the European Union is not even and is not the same in different jurisdictions. That is a matter we need to address to ensure there is better enforcement of Single Market rules across the European Union. We also need to extend the Single Market to the services area to ensure it is truly a Single Market where people can move across the different areas of Europe and provide different services.

Some of the issues and the terrible ten barriers that have been mentioned and identified in these reports include a lack of common standards, which are technical and quality requirements. They differ from country to country. If you are trying to trade across the European Union, you need to make sure that those standards are more harmonised and implemented in a fair way.

The limited recognition of professional qualifications means that workers cannot move easily across different countries. Perhaps their diplomas or degrees are not recognised. We have a lot of work to do but there is considerable potential within the Single Market to reduce those barriers. Particularly in a geopolitically fragmented world, we can face new barriers that are imposed upon us. We must also address and reduce the barriers we have created within our own Single Market. This is even more important for SMEs than it is for larger enterprises. SMEs do not have the resources to address overcoming barriers. It will support business competitiveness and our societies at a regional level as well as at the international corporate level.

I also asked about the proposed new legislation regarding working from home.

We are living in a different world than we were five or six years ago. We have a responsibility to design working practices that work for people on a societal level as well as for the ambitions and objectives of businesses. The hybrid model, a mix of working in the office and working from home, will stay, into the future.

However, it is also clear that from a competitiveness and from a development of workers point of view, particularly young workers, there is a great deal to be gained from working in the office, coming to the office and working with colleagues and teams. There is a social aspect to working as well. It is very much a combination of working from home and working in the office. There is a definite need for people to consider how that balance works best for businesses and society. IBEC's position is that it is a mixed hybrid model with, undoubtedly, the need for people to also work in the office as well as work from home.

I appreciate that. I thank Dr. Ivory very much. He has been quite frank. I will take three more speakers now, our Member of the European Parliament, Barry Andrews, Deputy Michael Murphy and Deputy Paula Butterly.

I thank the Chair. Very quickly because I am conscious of time, I have a comment on the Letta report for Dr. Ivory. As we go into the detail of what Single Market fragmentation really means and we start to examine it against specific industries, we begin to see resistance. For example, in Ireland the Irish funds industry is very reluctant about the centralisation of Single Market powers. EirGrid is reluctant about the centralisation of revenue sharing, for example. When the rubber hits the road, while we talk about the rhetoric of the Single Market it does not fulfil its potential when we get into the detail. When we examine the constituent parts of IBEC there is resistance there. It is not just IBEC, it is BusinessEurope and it is across all member states. That is by way of comment and Dr. Ivory might like to respond.

I have a question on the defence and security area. Competitiveness is the big thing in Europe at the moment but defence and security is the other main priority. For Ireland, it is obviously a very sensitive issue. Billions and billions of euro, however, are being spent by individual member states on increased defence and security. Every single member state has increased its expenditure on security and defence and this has potential for Irish industry and companies that work in what might be described as dual-use areas. I want to hear from Dr. Ivory about where IBEC stands on that. What changes need to be made in Ireland in order to promote opportunities for Irish industry in defence and security, given the massive increase in expenditure?

I thank the Chair. I welcome Dr. Ivory and Mr. Brady of IBEC. The upcoming Presidency is a real opportunity for Ireland but there will be significant challenges as well. There obviously will be significant challenges around the negotiation of the next multi-annual financial framework. There are so many competing sectors, particularly CAP, defence, security and many other areas such as migration, notwithstanding the accelerated green and digital agenda that was at the heart of the previous multi-annual financial framework and Next Generation EU. Something that concerns me - although Mr. Andrews may know a lot more about this - is that the current level of debt at European level is fast approaching €1 trillion and there is the level of debt of member states as well in countries such as Greece, Spain, Italy and France. I have a number of questions following from the opening statements. To some extent I will not touch on the Single Market as that has already been addressed. Is there a particular file or legislative area where simplification would deliver the biggest gain for Irish businesses and for IBEC's members?

The opening statement alluded to the extent to which Ireland is exposed, if that is the right word, but our biggest markets are the UK and the US. As for the opportunities presented by the many free trade agreements, FTAs, we have entered into at European level - I think it is touching 40, with 60 or 70 different countries - I always wonder to what extent businesses at the local or regional level are aware of the opportunities presented by those FTAs. Can we better promote the opportunities and how do we go about doing that?

On energy and zoning on permit delays, the Government is taking a number of steps in that regard. Energy costs were also alluded to in the opening statement. Is there a particular concrete initiative that we could take during the Presidency where we could advance in this particular space? I am conscious we import 100% of our oil and 80% of our gas. Gas is so important in the context of electricity generation. Will the witnesses identify a particular initiative that could be part of our Presidency?

I thank the Chair. I largely concur with what Mr. Barry Andrews said. In terms of defence I will take another angle. There is a call, be it from Draghi and also from Letta if I recall correctly, stating we have to look at a more centralised, cohesive approach when it comes to our defence. That is a very touchy subject in Ireland because people tend to confuse neutrality with defence, whereas I see them as two very separate topics. Considering IT and the advances in technology, we would need to invest significantly from an Irish and European perspective in cybersecurity. What are the witnesses' comments on that? While we are looking outwards and looking to do more trade deals at an international level, we also have to be very conscious of the fact we are possibly under threat of an attack from an unknown source at any given moment. That comes with a cost, possibly a significant one, because I believe some European countries are talking about it being as much as 4% of their budgets. What are the witnesses' opinions on that?

I will speak to the first question on the Letta report and implementation of it. There are very big gaps within the Single Market. The International Monetary Fund, IMF, study, which has often been quoted, that the tariff equivalent of rules or divergence within the Single Market on goods is 45% and on services is 110% that we impose on ourselves with ourselves. Of course, when you bring down barriers there are lots of people who have resistance to or concerns about change. IBEC has been supportive of the savings and investments union, SIU, which has been mentioned, at European level and has met the Commission to discuss. It is an area our financial services sector has been supportive of as well. Its representatives met the Tánaiste in his role as Minister for Finance last week to discuss its new strategy. The SIU is the key area in that strategy. The coherence of insolvency legislation across Europe is a big part of that where a lot of people have concerns but we support it because it has to happen, even though it may be difficult. Effectively, we have too many platforms across Europe in terms of trading and post-trading and that will face resistance from a lot of places but it is something IBEC supports. IBEC supports the co-ordination of withholding taxes across Europe. In regard to the single rulebook, there is resistance in Ireland towards having a single regulator in Europe with overarching power. If we had a single rulebook, as we have on tax and climate, and a regulator with an overarching way of imposing that rulebook, national regulators could still hold a lot of the power at national level. SIU is something IBEC is very supportive of but I take the point completely.

If the challenges to reducing the barriers to the Single Market were easy, we would have done it already. There is a new reason to do it.

Something our members recognise is that because globally there are more barriers externally to us going up, we will have to work a lot harder to bring down the internal barriers in the Single Market. It is something we as a trade association confront every day, as do BusinessEurope and others in Europe with their own memberships. In general, the business community understands that the ultimate prize in terms of building scale in the Single Market and the savings and investment union means the benefits to the broader business community are much larger than any of the smaller issues which we are capable of getting over.

We are coming a lot closer than we have in the past 20 years to addressing some of the issues that have been going on for a long time. We are making some progress and it is important that Ireland does not end up outside of that progress if there is enhanced co-operation on some of these areas in Europe. We do not want to end up with a two-speed Europe. Ireland has problems in some areas and other countries have problems in other areas. We will need to get over some of our hang-ups and move on with the integration of the Single Market if we are to deal with the external factors, as Dr. Ivory said, where barriers are going up around us.

I will deal with the question of our relationship with key trading partners, namely, the UK, US and the FTAs. I will then address questions around defence and security.

On the FTA side, it is imperative that the European Union continues to work hard to complete FTAs and implement FTAs that have been signed and agreed. We know that in the past 18 months or so, we have been challenged in terms of the imposition of new tariffs on trading. That impacts our businesses. One of the strategies which has been identified by business and government, including the Irish Government, is the need for market diversification. It is through FTAs that market diversification can take place.

The recent agreement of an FTA between the EU and India is very welcome. It is narrower than traditional FTAs have been and does not include agriculture and food products but it does include real effective opportunities. One of the areas where it will reduce tariffs is in the whiskey and spirits industry. The Indian market is a huge one for whiskey and spirits consumption. That will help.

The EU-Mercosur FTA has gone through a full process through the European Council. It has been agreed by the European Council and signed by the President of the Commission. It has run into some difficulties in the Parliament and has been referred to the European Court of Justice for review in the Parliament. Our position in IBEC is that we would like to see the provisional application of the Mercosur FTA as soon as possible. Before the FTA was signed by the European Council, we worked hard to address the concerns of our meat members. In that regard, we sought the strengthening of safeguard measures. I was in Brussels last week and met the head of cabinet of Commissioner Maroš Šefčovič. I was pleased to be able to discuss with him the vote in the European Parliament last Tuesday, which approved the new and enhanced safeguard measures. Now, if there is a surge in imports of over 5% or if the price of product offered is less than 5% of the community product, there is a mechanism whereby a safeguard measure can be triggered. The original proposal was 10% in such cases. There has therefore been significant progress in terms of what was sought in order to mitigate the impact of the regulation. We were very happy to work with the European Commission and our members when Commissioner Šefčovič visited Ireland last October. We examined how those issues could be addressed. Our position is that we would like to see provisional application of that FTA, in the same way as we supported a provisional application of the Canada trade and economic agreements with the European Union.

On some of the existing FTAs, there is a modernisation of the EU's FTA with Mexico going through at present. There are negotiations and discussions with Indonesia and Malaysia. There is a big programme of work to be done in that area. I would like to highlight that the EU-UK Trade and Cooperation Agreement, TCA, comes up for review in the second half of 2026, during the Irish Presidency of the EU. We would like a significant reset of the relationship between the EU and the UK. We have spoken about a reset for some time, but we would like some genuine review of the EU-UK TCA and how we can improve on it and address some barriers that exist. That is a key opportunity. A tremendous amount can be done.

I do not want to cut across and I appreciate the overview. How do we make a small business in Tipperary or across the south-east of Ireland aware of these opportunities? Is the responsibility on the Government, organisations like IBEC, Chambers Ireland or Enterprise Ireland? I feel there is a lack of awareness at a local level in terms of the opportunities presented. That was my real question.

A lot of work has been done to try to highlight the opportunities. IBEC has worked with State agencies, Enterprise Ireland and the Department of Enterprise, Tourism and Employment to highlight the benefits of FTAs. Of course, it will always be more challenging for SMEs to take advantage of FTAs, in particular if they are located in regions far from Ireland. It is a question of targeting where SMEs can gain advantage from FTAs. There is a need to raise awareness. The opportunities will be greater for many SMEs through the development of the Single Market, which is closer to hand and doing more trade within Europe, where there are no customs procedures or the burden of international trade in that sense.

To add very briefly, for many SMEs the challenge they face is that much larger companies are able to manage the risk of trading at great distances. We are one of the only, if not the only, country in Europe without export credit insurance for SMEs that are trying to trade abroad. It would give them confidence and insurance if they are trading abroad when things do not work out. That is a major risk for a lot of SMEs. We have lobbied on this for a number of years. It is something that the Department of Enterprise, Tourism and Employment is reviewing as part of the competitiveness and productivity action plan from last year. Export credit insurance would make a big difference, in particular in sectors such as food, engineering and others, where SMEs trade abroad but once they get beyond Europe are concerned about losses and risk. Export credit insurance is available to pretty much every other SME in Europe bar our own.

Defence and security is a new area for us to consider. I agree with Deputy Butterly that there is a big difference between neutrality and defence. We need to separate the two issues when we consider how Ireland can participate in EU defence policy. The Deputy mentioned cybersecurity. Cybersecurity is an issue for Government, businesses and citizens. We need to improve our understanding of cybersecurity and build mechanisms to guard against cybersecurity attacks. In this regard, we have established a new cybersecurity working task force as part of our digital and AI committee. We are working with our members, universities and the Government to enhance and build cybersecurity capacity in Ireland. We have particular assets we need to protect. We have subsea cables bringing data from the United States into Ireland and Europe that run through our waters. We need to ensure they are adequately protected. We need to give international businesses the confidence to say they can continue investing in Ireland and that their investment will be secure here.

We have a vote coming up. Unfortunately, some members will have to go for the vote. Deputies O'Donoghue and Ó Murchú and Senator Lynch have indicated. I have a commitment for half an hour so we have to elect a temporary Chair to keep the wheels in motion.

Will the witnesses speak to the benefits for Ireland of the proposed pan-European payments system under the European payments initiative and the digital euro, which will help phase out American card payment systems and increase European autonomy?

Given my party's Bill that is before the Dáil today, I note that a better integrated EU Single Market is likely to require more remote work. Would the witnesses be in favour of enshrining in law at European level a right to remote working in professions where it is possible, with caveats around youth workers where appropriate?

I have to go to the vote so I will come back and talk to the witnesses afterwards.

I will not get into it but I have an issue with the provisional application of Mercosur before the Court of Justice of the European Union has made a determination. Even if it was positive for Mercosur, there should still be a vote of MEPs to make a determination.

The witnesses have spoken of digital transformation. We know the issues of competitiveness, a changed world, strategic autonomy and delivering that. From an Irish perspective, it is about the benefits of artificial intelligence alongside protections for cybersecurity or whatever else, while also dealing with the necessity of regulation. It is very hard to get that balance and the regime in America does not help in that way. What is the issue with export trade insurance and why do we not have it? I assume it is because, as with similar issues, we do not have enough players in the market.

On remote working, we may have an issue in relation to how much someone should have a right to it. There is a particular cross-Border issue that would need to be dealt with. It blew up in my constituency around PayPal and the fact you cannot work remotely North and South. That is just a fact. That situation would need to be dealt with across the European Union and beyond but we could probably do with starting it in the Irish set-up.

I will go before I miss this vote.

I thank the witnesses for being with us today. Many issues around the bureaucratic burdens and red tape for businesses have been discussed. How could we use our hosting of the EU Presidency to advance simplification? As much as we talk of bureaucracy, competitiveness is another buzzword to the point where it has almost lost meaning, but how do we ensure a competitiveness check on all new EU legislation, with a specific SME test that would result in a net reduction in reporting burdens? That could be very effective. What is the best way to progress it?

The savings and investment union was mentioned. It is not being given enough scope or discussion but it has been in progress for some time. We are all aware of its benefits in terms of improving access to finance and the free movement of capital. All of this money is lying there and cannot be utilised. It would provide great assistance to start-ups and innovation generally. How do we progress this? We can use the Presidency as a mechanism with which to do so. I would like to hear the witnesses' thoughts on that.

More generally, which legislative initiatives from the EU will have the greatest impact on business? How can we use this to strengthen the competitiveness of our national companies and the way in which they interact?

Digital transformation and AI have been touched on. How can we support AI innovation while ensuring an ethical standard for our citizens? In the context of the AI Act and the work being done in that regard, AI is advancing at a rapid pace and legislation is continuously becoming out of date. How do we deal with that?

I did not completely follow Deputy O'Donoghue's initial comment but his second comment was on a European law on the right to work from home. It is very important to recognise the principles of subsidiarity and proportionality. The EU needs to recognise the different labour markets across member states and the different frameworks there. We have a voluntarist system in Ireland. There is a need to design regulation around employment at the member state level. It is important we recognise the role of member states in managing their own labour markets and the different conditions in different labour markets.

I think the first question was on the digital euro. It is something that is going to happen. There are already alternative State-owned payments systems in many European countries - the Netherlands, some of the Nordics and others - because of the growth of some products, particularly stablecoins.

That is effectively a bitcoin or a type of digital currency that is backed by dollars. The euro will need a digital euro to counterbalance that or else we will see the growth of alternative uses of currency and it will impact on the ability of central banks to conduct monetary policy effectively. The digital euro is something that is going to happen and is there in other European countries without being a major impact on the functioning of the economy. It is something we are watching and see as inevitable.

Regarding Deputy Ó Murchú's question on tax on cross-border workers, the ability of cross-border workers to work remotely is tied to tax agreements and the way tax on cross-border workers functions. We have been working at the OECD and at European level to try to get pan-European or OECD fixes to that. A significant amount of work on the taxation of mobile workers is happening at the OECD and there is recent new guidance on it. Ultimately, in our view, for workers in the Border region this is a really major issue. The solution it needs is an agreement between the Treasury in the UK and the Department of Finance here on how those workers are best taxed because it is a major issue for lots of our companies on both sides of the Border. They cannot offer remote working or even hybrid working to their workers because of the way the taxation of those workers functions. It was resolved during the Covid-19 pandemic for a temporary period and then reverted to normal. That has created significant problems but it is an issue that we have worked on in this Parliament, in Stormont and in London to try to find a solution to.

Regarding the questions from Senator Lynch on advancing simplification, a good example is the sustainability area. The first omnibus package on sustainability reduced very significantly the reporting requirements for businesses. It took a lot of smaller SMEs out of that reporting requirement. That is the kind of change we need to see. It is important when regulation is introduced that it does not impose an unreasonable reporting environment on any businesses but particularly on SMEs because they just do not have the capability to do it. It will just drive businesses out of certain areas if we do not address that issue. The digital omnibus package will be a key one for Ireland in terms of competitiveness. We were asked what packages will be particularly important. I think a digital omnibus package will be very important for Ireland because of our strength in the digital and AI industry.

Regarding the advancement of AI, I take the point completely that this is a new and emerging area. We can all do work to train our employees in the use of AI. IBEC is doing that and we have produced a guide for our members to look at how businesses might use AI in a responsible and effective way. Within society, too, it is important that we train people how to use AI safely and not run the risk of bad actors coming in to have an impact.

On behalf of the committee I thank both witnesses for their engagement this afternoon. It has been a very informative discussion, which we we will have the opportunity to discuss further and engage on with the relevant Ministers.

I propose we suspend for a few moments to allow for the changeover of witnesses. Is that agreed? Agreed.

I am pleased to welcome representatives of the Irish Farmers' Association, IFA, to the committee. The purpose of the meeting is to discuss the planning of the EU Presidency and the priorities of key sectors to the economy. I welcome Ms Alice Doyle, deputy president; Mr. Liam MacHale, director of European affairs; and Dr. Shane Whelan, senior policy executive. They are accompanied by Elaine Farrell. I note the apologies from Francie O'Gorman, president, and Damian McDonald, the general secretary. Of particular interest to our discussion is the new Common Agricultural Policy, CAP, and where it fits within the overall multi-annual financial framework, MFF, also known as the EU budget. The committee is well aware of the importance of the agricultural sector to the EU economy and in our own Presidency planning.

I will read the note on privilege and address some housekeeping matters. Witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable, or other otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative they comply with such direction.

Members are reminded of the long-standing parliamentary practice to the effect they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable. I would like to remind members of the constitutional requirements that members must be physically present within the confines of the Leinster House complex in order to participate in public meetings such as this. I will not permit a member to participate where they are not adhering to this constitutional requirement. Therefore, any member who attempts to participate from out the precincts will be asked to leave the meeting. In this regard, I ask any member partaking via Microsoft Teams that prior to making their contribution to the meeting, they confirm they are on the grounds of the Leinster House campus.

Ms Doyle has five minutes to make her opening statement. After this, we will then open the floor to questions from members. I note that we had the opportunity to read the opening statement beforehand so I thank her for supplying us with that.

I give apologies from our president who unfortunately could not be here. He was delayed at a meeting at Bord Bia so I am deputising.

I thank the committee for giving the IFA the opportunity to contribute to this important discussion. I am joined by our policy executive for rural development, Dr. Shane Whelan, and our European affairs director, Mr. Liam MacHale, from our IFA office in Brussels.

The IFA welcomes the engagement on Ireland’s priorities for the forthcoming European Presidency. The IFA remains deeply involved in European affairs and is the only Irish farming organisation to maintain a full-time office in Brussels for engagement with European affairs and institutions. Agricultural priorities must be central to the Irish Presidency, given their pivotal role in sustaining rural communities, food security and environmental stewardship. Priority number one is securing tangible CAP support, through the budget and multi-annual financial framework post 2027. Ireland’s Presidency coincides with crucial negotiations on the next multi-annual financial framework and the Common Agricultural Policy. Securing a properly funded and farmer-focused CAP, for existing and new generation farmers, must be at the centre of Ireland’s Presidency priorities.

Initial proposals for the MFF and CAP have generated significant concern, particularly its revolutionary changes to structure, governance and funding, which risks dismantling the traditional two-pillar structure; the commonality approach applied and the integrity of the Single Market. The farmer's voice is being diluted. Most severely, in the context of an increasing overall MFF budget, is that EU agriculture risks a 20% cut in funding, at a time when the challenges facing Irish agriculture both persist and are escalating. Any cut to the CAP budget is unacceptable. The priority must be aiming towards securing an adequate ring-fenced CAP budget. Potential funding sources outside the €293.7 billion ring-fenced for CAP income supports are hypothetical supports until guaranteed, much like the EU Commission's 10% rural target and the €45 billion front-loaded proposals in the absence of legal text.

We urgently need all relevant articles from the national-regional partnership plan, NRPP, to move to the CAP regulation for greater coherency for farmers. National plans must reward active farming, support evidence-based environmental measures that complement output and efficiency and that recognise sustainability as a tool for long-term resilience. They should protect commercial farming and rural communities across Europe. Obligations under the nature restoration law, NRL, must not be funded through CAP, directly or indirectly. Any funding for the NRL must be new money. The requirement to include a young farmer starter pack within the future CAP framework is positive. Attractive supports, together with a strong budget and a series of broader national interventions, is needed to reverse declining trends. The IFA rejects proposals to exclude those in receipt of pension income from key farm supports.

Driven by regulatory changes and geopolitical events, the costs of production on farms, especially for land, fertiliser and energy, have escalated considerably, leaving family farm incomes exposed. Progression of the fertiliser action plan will be important to help rebalance the market for farmers, which has been highly impacted by geopolitical events and increased regulation. Ireland is also well-placed to contribute to the EU livestock strategy, a strategy that should more greatly promote livestock farming, recognising that no one size fits all when it comes to livestock production.

Any changes to EU animal welfare regulations must also be cognisant of that and Ireland's Single Market access must be protected. A proposal on the revision of the unfair trading practices legislation is anticipated. Under this revision, greater powers should be given to the national competent authorities which enforce the rules on unfair trading practices.

Closer attention to price transmission across food supply chains should be examined aiming for the greatest levels of transparency and fairness along the chain to retail markets. It is essential that any simplification efforts reach farmers on the ground and not just the agencies they interact with for administrative management. It is important that the Irish Presidency advances every opportunity for greater simplification for the benefit of the EU and Irish farmers. The Commission is expected to conduct stress tests on both the nitrates and habitats directives in the coming months which are of immense significance to Irish agriculture. It is imperative that these reviews are not a talking shop but that actual proposals are brought forward to update these directives to account for food security and provide legal certainty for Irish farmers.

Trade deals such as those with Mercosur countries and Australia, which provide additional access to the EU market for beef and sheep meat, are a threat to Ireland’s most valued markets. The EU must not agree any trade deal which further compromises sensitive EU agriculture sectors or which creates double standards in the market on quality and standards of EU food. The IFA stands ready to work constructively with the Irish Government and European partners to ensure that Ireland’s Presidency of the European Union provides certainty and opportunity for current farmers and the next generation. The immediate and overriding priority must be to secure a strong, adequately funded and ring-fenced CAP that safeguards farm incomes, supports sustainable food production and sustains rural communities. EU support is most visible in rural Ireland with rural development projects in most communities and the impact of CAP visible in almost every farmyard nationwide. The Irish Presidency should be well-connected to rural Ireland and the agricultural diversity within it.

I will take three sets of questions before going to our witnesses. The first speaker is MEP, Barry Andrews.

I compliment the IFA's Brussels office, which does an incredible job. It is very clear and very effective and deserves full marks. The first issue is CAP, which is a critical national priority for Ireland and the IFA can be assured of the support of all 14 Irish MEPs in the discussions and negotiations ahead on the MFF. That goes without saying. There are going to be difficult details at the very end of the process towards December but the IFA can be assured of full support for Irish farming and for maintaining the maximum payments under the CAP.

The second point is on trade agreements. I do not necessarily fully agree with some of the positions taken by the IFA. There is dispute as to what the potential effect of Mercosur might be on the beef sector in Ireland. That is fine but when we look back at the CETA agreement, the Canada trade agreement, the IFA said that beef would be the big loser. The association said that we would be flooded with cheap Canadian beef. We were told there would be job losses, that it would be disastrous and that Canadians would target the high-value sector. In fact what has happened, and we heard evidence from the Canadian chargé d'affaires on this, is that beef exports to Canada rose by 700%. Irish goods exports to Canada increased dramatically. The trade surplus that the European Union has with Canada increased by a factor of three. I will not dispute the arguments on Mercosur but does the IFA accept that its worries about CETA, the Canada trade agreement, were misplaced and that in fact, it has been one of the best things to happen from an international trade point of view in the past while?

I thank all of the witnesses for being with us today. I commend Mr. McHale, who we met recently, on his office in Brussels and on the representation he provides for both the IFA and Irish farmers at a European level. I also thank Ms Doyle for her presentation. It was very comprehensive and she outlined all of the issues. When it comes to CAP the fundamental issue is the decrease in the budget. I do not know how we go about resolving that. Recently we had Commissioners Serafin and Hansen here and this afternoon the Seanad met with the Ireland South MEPs. In order to increase our budget here we need a bigger buy in from member states. We are already a net contributor. I am not sure how we can resolve it so I would like to hear the witnesses' opinions on that. Of course, I would be an advocate for an increased CAP budget. The decrease does not even allow for inflation and that is allowing for the question mark over the €45 billion front loading and all of those other issues. We may see an increased budget but even allowing for that, it will still be less than what we had in the existing CAP and it still will not in any way take account of inflation.

When we look at the MFF and the increased budget for security and defence, we cannot overstate the importance of food security. That feeds into my other point in terms of CAP and the way in which we can utilise the EU Presidency to our benefit. I invite the witnesses to give their opinion on what agricultural points we should be using the Presidency to progress. To revert back to food security, CAP, and the underinvestment in it, generational renewal is a serious problem. We talk about it all of the time, the IFA speaks about it, as do politicians and other agricultural groups but I am not sure that we are doing enough. There are some very good proposals within the current CAP but when we look at young farmers and at trying to keep them in the industry, access to land, finance and labour are issues. We see counter proposals within the current CAP, such as laying off the pension in terms of the single farm payment. While I do not agree with that, do we need to look at similar measures? We need to get more young people involved and we need to make farming sustainable for them. The committee here has published a report, as has Macra na Féirme and the European Commission and they are all full of great ideas but basically, they all need funding. This goes back to the original problem of the reversion of funding in CAP. How do we square that circle? I would like to hear the witnesses' opinions on that.

Mercosur was mentioned and we have had numerous conversations in the past few weeks in particular on traceability, sustainability and beef quality. How can we use the Presidency to improve transparency and compliance in agricultural supply chains within the EU? It is an incredibly important issue for us in Ireland, as a big producer of beef, but it is also an incredibly important issue within the EU generally. How can we utilise our hosting of the Presidency to improve transparency?

I am going to take the third slot myself because I will need to look for a temporary chair then. Again, I thank the witnesses for being here. Mention has been made already of Commissioners Hansen and Serafin being here on St. Brigid's weekend. We gave a clear message in relation to the importance of CAP to Ireland, not just to the farming community but to our rural communities more generally. The rural economy depends so much on the success of farming. We were also very clear about the strong reliance on CAP in Ireland because of the high compliance costs and issues around rural unemployment. We also made the point about family-run farms. Commissioner Hansen was very clear about his support for intergenerational farming and we felt that was positive. However, I totally take on board the comments that were made that we need to go a little bit further. There is no doubt that production costs are rising all the time and regulation is increasing, which is making farming more difficult. Ireland is in a very unique position and we did make that very clear.

I have three specific questions for the witnesses. First, in her opening statement Ms Doyle mentioned unfair trading practices. She spoke about a revision of the relevant legislation. What specific issues should the authorities be attentive to in that regard?

What are the main EU-level regulatory or environmental compliance issues that require clearer guidance or simplification during our Presidency? How can Ireland use its role to promote a more balanced policy approach between climate ambition and the economic viability of family farms? I will start with Ms Doyle and then if Mr. MacHale or Dr. Whelan wish to comment as well they can do so.

Yes, we can address different areas. Mr. MacHale can take Mr. Andrews's question because it is in his area.

I thank Mr. Andrews for his question. The work of the Irish MEPs and his work as chair of the development committee play a very important role for us as an agriculture representative group. Our 14 Irish MEPs play a very important role in all aspects of legislation and while he may not be directly involved in agriculture, we appreciate his defence and support of our sector. However, he is correct that on Mercosur we are perhaps on different sides of the fence. If we look at that the standards within Brazil specifically are our biggest issue. The comparison with CETA was mentioned. The concerns we raised were very appropriate for the period, whether it was the impact of Brexit, the cumulative effect of other trade deals, the level of the market and the market return at the time. Those risks were accurate and while they may not have been borne out, we have seen the progression of trade with Canada. Yes, it has increased but it has been from a low base and we will continue to highlight our concerns. We see the route that the UK has taken with very liberal trade quotas being given to its trading partners, so we see an impact on the market from that agreement and equally with Mercosur. While it has taken a number of years to get to where we are, we see now the risks and the threat to Irish agriculture are very real. We would continue to highlight this, even if the Canadian deal itself is of a very small quantity in comparison to the potential of Mercosur.

We see the job losses we referred to coming about from the structural impact within the sector. The sector is being impacted because despite high returns, we are seeing fewer farmers. One would think that this was a great opportunity for generational renewal and for young farmers to continue to drive the sector forward and trade deals are a very important part of that but, unfortunately, we are seeing our sector under threat. We will continue to fight in our opposition to Mercosur and specifically on the elements relating to different standards. We have seen that from visiting Brazil and the unfettered use of antibiotics with no registration or no prescription. We have seen it in the use of hormones, because there was a recall of beef initiated by the Commission itself. This is hormone beef that was banned 12 months ago and then subsequently found to have entered the market last autumn to 13 member states. The presence of a safeguard clause in the current agreement has addressed many of our concerns but it does not address the difference in standards and the cost and the impact of those that a European farmer must adhere to. It does not deliver what we believe is a level playing field. I will hand back to Ms Doyle.

I will take the second question from Senator Lynch about the finances and funding of CAP. If we look back to 1973 when we went into the European Economic Community, EEC, there were only nine countries and we were a net user of that money. Now, there are 27 member states and we are now the fourth highest per capita net contributor, for a small country. There is less money going in and it is needed for more countries. We understand that there is only a finite amount going in there. How that money is used is particularly important. We are also very conscious of the fact that there is a demand for funding the area of defence. However, equally important, if not even more important is the fact that while we need an army to defend Europe, we must also feed Europe. Napoleon once said that an army marches is on its belly so we must remember that an army cannot function if does not have food. It is very important that food security is protected, as was mentioned earlier. Food security can only be protected if farmers are able to produce and supply the food.

Supporting active, productive farmers on the ground is intergenerational, as was mentioned. Farmers do not just pick up the culture today and run with it by setting up a new business today. It is intergenerational and it must be passed on. We learned the lesson from the Cooley Peninsula during the foot and mouth disease outbreak that when those sheep were culled, farmers could not put sheep on the Cooley Mountains for a very long time because they did not have that genetic carry-on. We have the same here when it comes to farming that we cannot get rid of farmers and then suddenly reinvent them and get them going. Food security is hugely important and to have it, funding must be put in place. Our issue with the current funding is that it is talking about the single fund, which does not guarantee that all the money will all go into food production and food security. That is the big issue, really. We are aware that there is a pressure on funding. As important as defence is, food production is equally, if not even more important. The money for that has to be ring-fenced and not put into a single fund that can be used in many different areas and can be diluted according to national governments. We have to remember that national governments all have different needs, different types of farming and different types of emphasis on farming. We are an agricultural country depending very much on agriculture. Some other countries do not have the same emphasis on it, so there is an imbalance within Europe if that happens. A single fund is not the answer. We need that protective, ring-fenced CAP that we have known to protect food production. That is where we have to go. That would protect generational renewal. If we protect the current farmers, we will have future farmers but no young farmer will go into farming if the current system is not viable. The funding has to come to the farmer who is producing food and that will guarantee that we will have future generations. How this is to be done has still to be decided within the detail of CAP, once we know the funding is there. Commissioner Hansen visited us in the IFA last year and our president met him only last week when he was here. There was a lengthy discussion about all of this. We are very conscious of all that and we agree with him that generational renewal, funding for CAP and his idea of family farms are really important. We are fully on board with that and the devil will be in the detail. The main thing is that the CAP must be ring-fenced for food production.

I will add a little more detail to what Ms Doyle said. The Senator is right that getting the budget to the required levels to adjust for inflationary pressure will prove very challenging, certainly in the short term. We need to take a staged approach to how we do it. First, we need to get what we got the previous time before we go expanding it. There are two proposals from the Commission from last November, in terms of the 10% rural target, with potentially €7.5 million allocated to it, and to front-load some of the medium-term review funding to 2028 and use it for agriculture and rural funding. There is in the region of €100 million that can be fought for in the short term to get that specifically ring-fenced, as Ms Doyle said, within the CAP income support pieces. That would certainly support what we have at the moment.

It will not be the solution but will certainly be a bit further on in where we need to get to.

The other point is on the generational renewal. It has to be acknowledged that there has been improvement in the generational renewal space in the current CAP relative to previous ones. It is important that this continues. We are in a unique situation in Ireland that we have nine times more farmers over 65 then we have under 35. The other point to note in this scenario is that Ireland is not unique in this regard. We need to learn what other member states are doing, such as Austria, etc., in that space. It might have a more favourable track record in that space than we have. The other key point we need to bear in mind in that context is that there is no silver bullet here. It is a collective requirement across the taxation sphere and by intervention through CAP to provide the necessary supports to make agriculture more attractive for the next generation. That can come through the form of financial supports but also through the form of actually making the regulatory environment and operational environment for existing farmers and the next generation somewhat more simplified than where we are today, It is very hard for a young farmer out there today thinking about where they are going to go with the next CAP when they do not know what the runway is at this time. It is very hard for them to plan their future. It is kind of a broad-brush approach, but if we can simplify the existing system, give a little bit more hope and provide a little bit more financial certainty for them, at least they would hit the ground in a somewhat more solid form.

In response to the query regarding the unfair trading practices and the revision, while well intentioned, we do not believe this directive and legislation is achieving the cut-through that is required to change behaviour. We see within the food chain, whether it is retailers, processors, distributors and those involved in the food supply chain, that workarounds are found to the legislation. While we have a certain number of UTP rules that are mandatory - the black - versus the grey, which are to be agreed between the two parties and which are voluntary, we believe they should all be black. We believe that, within Ireland, the food regulator requires additional powers to compel full transparency in the request for information from retailers. We see some, but not all, providing this information. In other member states, the directive on unfair trading practices, UTPs, is implemented through their competition authorities where they have full powers of inquiry. Because it is a directive, each member state is different. We believe that there are instances of retaliation continuing to occur. For example, this could be a retailer ceasing to place orders with its supplier. If that supplier has just one customer, the retailer, this has a huge impact on its business. How do we show and how do we prove that the action of the retailer is in retaliation, for example to a request for a price increase, which could be very justified? The retailer, with that imbalance of power, may not grant a price increase but, worse than that, may stop ordering. This puts the supplier in the position where they may not make a complaint as they have only one customer and there is no confidentiality agreement that would provide protection. There is the fear factor and there is retaliation and these continue to exist despite the presence of the unfair trading practices directive. We will continue to advocate for greater powers of inquiry.

At a European level there is cross-border enforcement. If there is an issue with a supplier or a buying group that is in a country outside of your own, you will have an opportunity to make a complaint or initiate an investigation. If we look at the overall numbers, however, I do not believe that this is the primary area where we will achieve success. If we have a couple of hundred instances where cases have been brought and successfully resolved, when we divide that out across 27 member states, it is not a whole lot of situations of cases for the number we believe exist. This imbalance of power is one we find not only within food retailers but also on the input side, whether it is the chemical company or with fertilisers. As part of the contribution to the fertiliser strategy, which the Commission will deliver before the summer, we would advocate not only within the Irish Farmers' Association but also within the Copa committee and with the European farmers that we should also include the likes of inputs and not just food within the food chain.

The second question related to environmental legislation and compliance. What we see at the moment is the drive towards simplification. We heard it in the previous session with IBEC outlining the situations within industry. Equally, environmental legislation for us is a critical area. We have seen too many cases where the regulation and case law have been used to prevent on-farm development, food production and infrastructure development under the guise of protection of the environment. We believe that some of the current legislation on the environment is outdated and the scope of some of it is too broad. Routine farm activity is being prevented. We believe the genuinely impactful operations that are really impacting the environment are the ones that should be under the focus, not day-to-day farm activities. We believe there is an overly precautionary approach. Today there is a meeting in Brussels on an implementation dialogue. The IFA is represented. This meeting is with Commissioner Christophe Hansen, the agriculture Commissioner, and Commissioner Jessika Roswall, the environment Commissioner. We are making our point about how the Commission should proceed with simplification and that there should be compensation made to farmers where economic loss is apparent as a result of delays or litigation that is brought about. Very often there can be a clear benefit to farming projects but it may be very difficult to justify under the framework of the current legislation, even if the benefits to society are quite clear. If there is anything that increases the delay for low-risk projects, then we need to amend the legislation in order to avoid that. These are some examples of where environmental legislation at European level is having a negative impact on agriculture. Not only are we seeing it in Ireland but also, in speaking to our farming colleagues from the Netherlands, Flanders and Belgium particularly, and going up as far as the Nordic countries and Scandinavia, we have a number of examples. These are the messages we are communicating to the European Commission.

To add a little to Mr. MacHale's comments by way of demonstration in terms of the shift, and going to that final point on balancing the climate and economic policy viability element, it is hard to underestimate or overstate the importance of CAP to Irish farmers on the ground, as the committee is well aware. When we consider that, in the two years of the existing CAP programme, 73% of the average farm income is derived from farm incomes, it is imperative that the economic viability is front and centre. It has shifted more recently. Look at the introduction of eco schemes. These have been hugely well taken up by farmers, which is an opposite trend across many other member states. The situation here is that there is a 97% uptake by Irish farmers, voluntarily, of the eco schemes. This shows the commitment of farmers on the ground, but it does need to be balanced. Given there is a core component of 25% of previous Pillar 1 supports that were directed for income support moving into the environmental space, it is important that the balance is retained.

One simple thing being proposed is for a more incentivised approach rather than purely the cost-incurred income being forgone. That, in and of itself, did not give the potential for any additional income security or incentive for farmers to undertake the potential investment that they could have done for environmental gain. As I said, 97% of them have done it. ACRES, which got off to a rocky start, has settled down. When we look at the figures for the tangible actions that farmers have taken on the ground, it is phenomenal. The incentivised approach is there. It is also important to state that CAP cannot be seen as the funding source for all environmental regulation. I am thinking, in particular, about the nature restoration law. There is an important onus here in terms of the design of the plan and I understand that it will be examined again during the EU Presidency term. There are practical interventions with tangible buy-in in terms of individual measures that farmers will voluntarily do, but CAP cannot be the funding source for that because fundamentally money is being taken from one pocket and put it in the other. We have a young generational challenge given the reliance on direct payments and average farm incomes well below the average industrial wage. We cannot make things worse rather than better in that scenario.

I invite nominations for Cathaoirleach Gníomhach. I have Deputy Scanlon down. Will a member come in and Chair because I need to go to another meeting which I am late for? Is it agreed that Deputy Butterly act as Cathaoirleach Gníomhach? Agreed. Go raibh maith agaibh.

In fairness, Dr. Whelan got it in one. He talked about viability and sustainability. From a farmer's point of view, you have to be able to wash your face. First and foremost, it is about CAP and the protection of CAP. The whole idea of CAP was to ensure that we had sustainable food of a particular quality. That was the entire reason behind it. Europe has made some adverse moves in relation to that. This discussion is about the IFA's trajectory and what it intends to do. There is a general agreement that we need to protect CAP as much as can be done but it is also about what else can be done to ensure that pressure is maintained.

I was taken by what Dr. Whelan said about the regulatory environment. We have all spoken for a long time about streamlining processes and whatever, but there is a wee bit to go even beyond that. I have attended IFA meetings where farmers had majored on environmental issues. At times, the complaints were that the schemes, particularly those regarding renewables, just were not where they should be from a farmer's point of view.

I get the idea of incentivisation because if we go back to dairy farming, a lot of farmers did not only get into dairy farming because of the incentives, at times they were also being called by the Department and Teagasc and whoever else. It is a matter of meeting farmers halfway. What that would look like is the big issue.

In relation to the unfair trading practices, there is need for more teeth to ensure that there is real competition. If there was one ask around that, what would it be? Everyone is happy that the nitrates derogation is there for a period, but is Dr. Whelan worried about it into the future? The big issue that is standing over us is Mercosur and while people talk about the benefits in relation to it as a trade deal, we all know the fear around Brazilian beef, in particular, which is not up to scratch. Some 100,000 tonnes of that beef with its banned hormones, antibiotics and what have you, as well as 180,000 tonnes of poultry will be allowed into the European market if it goes ahead. When we had Commissioners Hansen and Serafin over, the one comment they did make, which we already knew, was that there is an allowance for a provisional application. The IBEC representative said earlier that it would be quite happy to see that. I assume that the IFA would not. The IFA has to engage with the Government to make sure that all is being done to ensure that this does not happen as we await the work of the European Court of Justice. Whatever happens post that, no decision should be made before MEPs vote on it.

As someone who was in the beef business 40 years ago, Brazilian beef has been coming into Ireland for the past 35 years. I was opposed to it at the time because we could not compete when dealing with supermarkets, hotels and restaurants. It looks good and tastes good, but no one knows what is in it. That is the big problem. There is a lot of it still coming in and will continue to come in. Unfortunately, that is the sad reality.

A 22% or 24% cut in CAP - the figure depends of who you talk to - will no doubt very seriously affect the suckler farmer. That 22% could equate to 50% as CAP goes on into the future. We have to do everything we can to ensure this cut is eliminated. I take the point that CAP comes out of the same box as funding for defence and security, but it is crucial that we do everything we can as a Government to ensure that 22% cut does not happen. Even if it stays as it is, it will still be a cut when we take all of the costs, expenses and everything else into consideration over the next six or seven years. We should do everything we can as a Government to ensure that the cut is eliminated.

I welcome the witnesses. We discussed CETA and the challenges around that earlier. One of the big worries people had at that time was the investor court element of that trade deal. It is not involved in Mercosur, but there are concerns and the witnesses outlined them clearly. Europe and Ireland are producers of high-quality food and Ireland should be leading from the front to protect that.

One of the concerns people have with Brazilian beef is labelling. If Brazilian beef is part of a product, it is in tiny writing. If people have a choice, they would opt for Irish beef before they would go down the route of Brazilian beef. We have heard about the controversy in relation to that. Does the IFA have concerns about this? Should the Government, as part of its Presidency of the EU, push forward when it comes to the labelling of food, including the additives and everything else in it. If Brazilian beef floods the market, I am concerned that because it is seen as cheaper, poor people will be the worst affected by the side effects of steroids and whatever else is in it.

The IBEC representatives discussed the Mercosur deal, and we know that they are in favour of it.

We know the European Parliament has pushed it on to the Court of Justice. Commissioner Hansen was asked about the potential provisional application of it. Do the witnesses have any concerns on that? This is going off to the Court of Justice, and in the meantime, we will plough ahead with elements of this. Would the witnesses have any concerns about this?

As a committee, we have been asking about applicable countries and EU enlargement. Would the witnesses have concerns about that?

There is huge flooding right across the board in Ireland at the moment. Do the witnesses think that, as part of the Presidency, Ireland should be raising the idea that it is not just Ireland but right across Europe where flooding has and will have an impact on agriculture, farming and so on? It is also the element of cost and the impact this will have on people. Should the Irish Government, as part of that, be looking for additional funding for the flooding element? The country is currently awash with water. If you go outside the door, it is probably raining still. There are huge problems across Ireland. Do the witnesses have any views on that?

We will put ten minutes on the clock. The questions could not even be asked in ten minutes, so we will let ten minutes be put on the clock for answers. Is that agreed? Agreed.

I will start but, again, my two colleagues are very well informed on these areas, so I will let them take each question. We might split them up.

On Deputy Scanlon's comments about the suckler farmer and the impact this would have, the suckler farmer is very dependent, probably the most highly dependent, on the income from CAP. Just looking at some of the statistics we have here, the cost of doing business for a suckler farmer has gone up 22% in the past nine years, which is a huge amount. We have discovered and are being told that CAP is being reduced, and these have been reduced already under convergence in the last CAP, so it will come down further again. If the suckler farmer is not supported, he will go out of business. We already know the numbers in that area have reduced dramatically in the past three or four years, and this is putting pressure on the beef finisher now, who is finding it hard to get the suckler to them. We are finding factories here in Ireland that are cutting lines because they cannot get the finished cattle. We have ABP doing it for them during the week, and in Waterford they have closed a line because they cannot get the animal they want. It is very important both suckler farmer and cattle finisher, of which I am one, are supported down the line. We believe that funding has to come from CAP to support this. That is part of rural Ireland as well, because many of those suckler farmers come from a part of Ireland where it is embedded in the area. Much of the poorer land, where they cannot do dairy or tillage, is used by suckler farmers. It is very important that sector is supported in the coming CAP.

I am going to jump a little bit over to Deputy Crowe. As regards the flooding, coming from Wexford, I can absolutely vouch for the fact we need to do something about it. It is across Europe. If we look at Spain or France in the past couple of months, we have seen exceptional rainfall and that is part of climate change. We accept climate change is happening. It has to be part of where we are going forward. However, putting funding in place is one thing, but the regulation around the spending of that funding is very important, and we see that. I will use the example of Enniscorthy, my neighbouring town, where the funding has been in place for the past ten years and cannot be spent because of regulation and the protection of a species in the river. This is no disrespect to the species in the river, but is a human or a fish species more important? We have to look at that. It is probably partly the same across Europe, that regulation has to be looked at with regard to what is preventing the spending of money. Providing the money will be important, but the spending of it, how it can be spent and allowing for the regulation to be either removed or changed to allow for that spending, from an agricultural point of view, is huge. We are seeing a lot more flooding on farms and much of that is coming from regulation that does not allow you to dredge your river or clean it out for the flow of water. It is also to do with building, building plans and where people have built on flood plains, so we now have flooding. Much of that is to do with regulation which can and should be looked at. Again, we talk about simplification, which is supposed to make regulation more simple in order to allow us to be productive and to do what we have to do. That is important.

I will hand over to my two colleagues to take up some of the other points that were made.

I thank Deputy Ó Murchú, whose questions I might address first. He asked about the CAP and what can be done. Essentially, we have to protect the budget. That is the primary objective, and that is a political decision that goes up to the highest political level. We are engaging within Brussels with the Directorate General Budget, but once the MFF was published last July, this has begun to move up the political ladder. We see the pressure coming from other requirements on the budget. At €2 trillion, it is already the largest budget, and this has to be agreed. If it is not agreed and is lowered, then we are dealing with an additional cut on top of the 20% to 22% for the agriculture sector.

On the discussion around own resources, the money that would be generated at a member state level will be used for the payback of the €70 billion per year of the Next Generation EU fund borrowed. We are already facing a huge debt there that has to be taken into consideration. It is important during the Presidency that we have the opportunity to show our colleagues and political leaders from across Europe just how important the agriculture sector is to our economy. We are hoping the arguments in favour of food security and a strong CAP will be prioritised during the six months. As chair during the EU Presidency, obviously, we will be taking a more neutral position. That is the work going on now and we are continuing to work very closely. Tomorrow morning, we will engage with about ten other farming organisations from across Europe, specifically on CAP, to look for common ground so that we come with a unified voice.

Regarding UTPs and what the ask is, it is to create more teeth. It is to have fines made to force behaviour to change. We are seeing progress with the retailers, but if you go down the chain to smaller wholesalers and processors, that is where there are still abuses of the unfair trading practices continuing to take place. We see from across Europe that you need significant resources of personnel and funding to make that directive work.

On the nitrates derogation and if we are worried into the future, the answer is "Yes." It is a three-year derogation. This does not align with farmer investment periods or with any requirements a bank may ask of a farmer with a repayment loan. Speaking on generation renewal and succession, we had farmers out in Brussels in the autumn before the decision was made by the European Commission, with two generations, and things were on hold at a farm level while waiting on this decision. What will three years do for us? It will push us a little bit down the road. We have to make any future decision easier for the Directorate General Environment and for the Commission by providing the water quality level at a technical level that will ensure we are in the strongest negotiating position going forward.

With Mercosur, the volumes the Deputy identified are huge and it is not just within the beef sector. It is also looking across poultry. The Deputy mentioned due process and the European Court of Justice, and Deputy Crowe also referred to this. We would hope the due process will be followed, but we have seen from the European Commission the desire to conclude trade deals.

We have seen most recently in India that the sensitive agricultural products were removed from the trade deal, and there was very little resistance to that going forward. We are now in a situation where the EU is negotiating with Australia, and that is potentially very close to a conclusion. On the last occasion, the talks broke down with the European Commission. Australia walked away because it was not happy with the deal on the table. What we do not want to see is increased beef quota being given out to conclude the deal because we have seen too often that it is the sensitive sectors within agriculture that are made the final concluding piece of these trade deals.

I will move on to the question from Deputy Crowe about labelling. Labelling is a very sensitive topic. Origin labelling is under discussion at the moment. We have seen that it is the likes of countries like Italy, which have a lot of protected geographical indication, PGI, high-value products, that are at most risk of imitation. We have seen the difficulty up to now on nutrition labelling in getting an agreed format at an EU level. We have seen, for example, in the meat sector that the biggest threat is the use of products that are below standard within the food service sector. At retail, the labelling on beef products is at a very high level. Even if the font size on the back of the pack may be a little bit difficult to read, the information is there. For products that are not added value and that are unprocessed, unfortunately, the level of labelling reduces after that. However, this ties in with the current EU promotional campaign for people to buy European food and the funding it is putting in. It has recognised the importance of addressing the consumers and educating consumers not only around origin but, equally, around nutrition. We know that very often, it comes down to price. In those situations, perhaps people make decisions less based on quality and more in relation to price. That is always a threat. Within food service, that is the key area that would help improve transparency and people understanding the true origin of the products they are eating. Unfortunately, because it is a significant volume that goes through that, there is an opportunity for lower quality products from third-country markets to compete within the EU against our high-quality meat products.

EU enlargement was mentioned. There are concerns around that. When the initial study was done regarding Ukraine, we were talking about how the financial impact was over €90 billion under the current structures. Obviously, from an agriculture perspective, if direct payments were to be distributed under the same format as currently, the EU would not be able to afford it. Therefore, how are we going to recognise the increase or the expansion, particularly when political talks now are talking of a fast-track process of enlargement where a country may actually become a member of the EU without all of the privileges, and it would not have to achieve each of the requirements from day one? This potentially may be a solution going forward. We have seen from the issue we had with product coming from Ukraine as a result of the Russia-Ukraine invasion that there was a negative impact on the importation to the EU of huge amounts of product from Ukraine. There were safeguards put in place. There were quotas restricting the import of products that had not found a market outside the EU. I think we have learned from that the impact of large volumes coming in. In a situation of enlargement and there are other countries that are seeking membership, whether it is the likes of Albania or Moldova and even the likes of Türkiye, even though talks may not have progressed there, financially, we would be very concerned that special provisions would have to be made to protect EU farmers in that situation.

This is to add to what Mr. MacHale suggested could be done on the CAP side. He has articulated very well what can be done at a European level. It is important not to take the eye off the ball in terms of what can be done here nationally as well because, fundamentally, in terms of our national regional partnership fund, it will be designed locally. There is a significant pot of money there within the non-ring-fenced CAP support and we will be advocating the need for a significant pot of that to be allocated to farmers to support on-farm activity.

As Deputy Scanlon said, the suckler farmers would be one of the sectors that would be impacted, but it would be wrong just to isolate the suckler sector. I think all sectors will be hit. We have to look at the tillage sector, which traditionally would be one of the more financially attractive sectors in recent years. Certainly, in the last two years, there has been a greater reliance on the direct payments to be able to sustain activity on that. Even on the 2024 figures on the tillage sector, on average, 84% of their income was derived from direct payments. It is imperative, certainly within these walls, that the importance of the CAP and the need for an adequate budget cannot be overstated. On our side, in fairness, we have the mechanisms through the CAP consultative committee, etc., to put those important points to the table to increase and ensure and try to get as strong a CAP as we can. Budgetary constraints aside, that needs to be workable for farmers, with food and food production put back in a more central position than what it has been in previously.

We must ensure all sectors are looked after. Mr. Whelan mentioned the tillage sector. The tillage sector could face extinction if things go very wrong, and we do not want that to happen in this country. It has to be looked after. We do not want to happen what happened to the suckler sector. I am always saying this; over 200,000 suckler cows have gone out of this country because people could not make money out of them. They were great stock men; it was not that they were afraid to stay up all night calving. It was nothing to do with that. The bottom line was that they could not make a living out of it, and the same goes for the people who were involved in growing vegetables. They were all forced out of the market, and it is not nice and not good.

Looking forward to Ireland's term in the EU Presidency, the CAP is going to be the real issue and ensuring we have an adequate budget there. The proposal to see that large cut is something that has put a lot of fear into farmers who depend so much on it. One of the things we want to make sure we have is an adequate CAP budget as we move forward and that it is a CAP that is workable for farmers. We have seen proposals in it, especially for when farmers retire and the possibility that they will not get pensions and all these sorts of things. We need to be standing really firm on that. Of course, Mercosur is the other big issue we have at present. Certainly, however, as we move into the term of the Presidency, if we are looking at a situation where Ireland is going to be key in the negotiation of the next CAP and bringing that to fruition, we need to be ensuring that we have an adequate budget to keep CAP to the fore, because without it, we can talk about security, but food security is the big issue in any country and certainly across the European Union.

We expect and hope that CAP funding would be at least maintained, if not increased, that it would be confined within the CAP framework and not a single fund, and that it would be safeguarded within that. I think members can gather from both my colleagues and ourselves that the IFA will not be found wanting when it comes to the European Presidency and in our contribution to assisting the Department in everything we can do to make sure that funding is secured and, when secured, is spent very well in Ireland to make sure that agriculture and farming is well promoted here and there is a future for our young generation coming forward.

I thank Ms Doyle very much. I thank members for such a constructive line of questioning. I thank our witnesses very much for coming in, for their contributions and for such detailed answers.

It was important, following the Commissioner's visit last week, to follow up with the witnesses, enhance that and go into a little more depth in that regard. Everybody here has, in the past hour or hour and a half, outlined the fact that we tend to be in agreement about the single fund not being sufficient. We talk about food security but also need to talk about innovation. We are going to have flour mills. We are going to launch that. We rightly need to protect the tillage sector, as Deputy Aird said, but we must look at all sectors and where we can protect but also innovate. All of those things need money. Commissioner Hansen talks about eliminating peaks and troughs and allowing sustainable incomes for farmers, but it is hard to see how that is compatible with a single fund.

I thank the witnesses. They will be by our side during the EU Presidency. We always welcome feedback.

May I make one short interjection in the context of developing the plan nationally? Going from the experience of what was involved in the previous CAP, the plan may not have landed exactly on time. We are going to be in a more complex scenario and it is important that there are provisions to provide financial security for farmers under existing schemes if the negotiations extend for longer than expected. That security may never be used but it is important that it is there in the background, if needed. I wanted to add that.

I thank Dr. Whelan again. We are going to suspend for a few moments.

I will come in very quickly. There are worries in respect of provision applications in the context of Mercosur. Are the witnesses reasonably happy that enough is being done?

That question was asked and answered.

It was not.

I have concluded. That is enough now. I propose that we suspend for a few moments. Is that agreed? Agreed.