Andrew Doyle (Wicklow, Fine Gael) | Oireachtas source

I have only been here for ten years, but I am still learning.

Food Wise 2025, the new ten-year strategy for the agrifood sector, was published in July 2015. It includes more than 400 specific recommendations, spread across the cross-cutting themes of sustainability, innovation, human capital, market development and competitiveness, as well as specific sectoral recommendations. The implementation process for any strategy is vital for its success. The Minister, Deputy Michael Creed, chairs the Food Wise high level implementation committee, with high level representatives from all the relevant Departments and State agencies. The committee reviews progress on detailed actions on a quarterly basis in order to identify and solve problems quickly. Stakeholders regularly present to the committee meetings on their priorities for particular themes or sectors. We will be publishing Steps to Success 2017, the second progress report, next month.

Any concerns on the impact on the agrifood sector are at the top of the Government’s Brexit agenda. Our ongoing consultation with stakeholders, together with our engagement with UK, Northern Ireland and EU counterparts, will be informed by the need to have the implications for the agrifood sector understood and taken account of as the negotiations unfold. In light of the UK vote to leave the EU, Brexit has been included as a standard item on the agenda of each meeting of the high level implementation committee. It is clear that driving the implementation of the Food Wise recommendations, in particular those related to market development, competitiveness and innovation, will assume even greater importance in light of the UK decision. My Department and State agencies are working together to ensure that the short-term and long-term impacts of Brexit are taken into consideration and that appropriate supports are in place to help the sector to respond and adapt to the new realities.

On farm incomes and volatility, Teagasc's national farm survey of 2016 showed average farm income of €24,000, a 9% decrease over 2015. Average farm income has been relatively stable over the last few years, fluctuating between €24,000 and €26,000.

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There are significant differences in farm income depending on the farming system and size of farm. It should also be borne in mind that over 60% of the farms represented by the national farm survey are classified as part-time, based on labour input required. On half of farms, either the holder or spouse or both have off-farm employment.

Ireland is a small, open economy which exports the vast bulk of its agricultural commodities and, therefore, will always feel the effects of volatility on world markets. However, there are measures in place to help Irish farmers through these periods. I believe that moving up the value chain where possible, in terms of the type of products sold and how they are produced, is an important insulation against volatility. The Food Wise strategy contains detailed recommendations aimed at improving value added and productivity at farm and food industry level through a focus on sustainability, efficiency, knowledge transfer and innovation.

It has been one of my priorities to address the impact of the change in the sterling exchange rate and lower commodity prices in some agriculture sectors. The agriculture cashflow support loan scheme was developed by my Department in co-operation with the Strategic Banking Corporation of Ireland, SBCI, making €150 million available to farmers at interest rates of 2.95%. The loan scheme, distributed and administered through the commercial banks, provides farmers with a low-cost, flexible source of working capital and will allow farmers to pay down more expensive forms of short-term debt, ensuring the ongoing financial sustainability of viable farming enterprises.

The scheme was launched on 31 January and, by the beginning of March, all of the participating banks had reported that their funds were committed. The SBCI reported that €60.2 million has been drawn down by farmers to the end of April. The average loan size is €32,000, with more than half the loans being advanced for terms of four years or more. I am pleased at the very positive reaction by farmers to the scheme, which has proven that significant demand exists for low-cost flexible finance. I have met with the chief executives of the participating banks to discuss this and other access to finance issues relating to the agrifood sector. I have asked the banks to respond positively to the demand that has been demonstrated by reducing interest rates and providing more flexible terms for cashflow loans in the future.

My Department will continue to engage with the Department of Finance on key agri-taxation policy objectives, including responses to income and price volatility. Risk management is one of the topics covered by knowledge transfer groups. Animal disease risks are covered by the targeted animal health and welfare advisory measure. Fixed price contracts are increasingly becoming a feature of the relationship between producers and processors in the dairy sector, with numerous milk purchasers offering such contracts, which provide producers with the opportunity to lock in prices over the medium term, taking costs of production into account. Such relationships are a welcome development in terms of their potential to mitigate volatility.

I am confident that my Department is taking every step to support measures which mitigate price volatility and improve competitiveness in the sector.

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