Presentation by IFA President John Bryan

Presentation by IFA President John Bryan,

to the Joint Oireachtas Committee on Foreign Affairs and Trade

2nd October 2013

Chairman and members of the Oireachtas, I want to thank you for providing the IFA with the opportunity to make this presentation.

I wish to focus mainly on the opportunities and challenges that are facing the agri-food sector in the international market place, as the sector prepares to expand.

Irish agriculture in 2013

The economic downturn has clearly shown, that as a small open economy, Ireland’s recovery is being driven by the exporting sectors, with the agri-food sector a key player.

The agri-food sector accounts for over 60% of our Irish owned exports and provides enough food for 30 million people, is underpinned by the production at farm level.

Farming, the food industry and the services industries depending on agriculture support an estimated 300,000 jobs across all regions of the country.

Since 2009, Irish agri-food and drink exports have grown by €2b. In 2012 despite the farming community facing severe weather conditions and the resulting foddercrisis, exports reached a record level of over €9b for the first time. The value of exports in the first six months of 2013 have shown a further 8% growth. This comes at a time when Ireland is experiencing a general fall in manufacturing exports. Ireland’s agricultural exports are mainly driven by our beef and dairy sectors, where we export over 80% of output. In additionsheep, pig meatand horticulture exports are also very important and contribute significantly to Gross Agriculture Output (GAO).

Under the strategy for the agri-food sector - Food Harvest 2020 – an export target of €12b has been set. This ambitious target is underpinned by growth in output and value of primary production as well as strong growth in value-added food products. The progress and growth of the last three years demonstrates that we are on course to achieve these targets.

Opportunities – New markets and Market access

According to UN projections, World population will grow to 9.6billion by 2050. To meet food demand, the FAO are projecting production would need to increase by more than 60% over this period. This massive growth will undoubtedly create major new market opportunities across the word for a food exporting country like Ireland.

The end of milk quotas in 2015 will provide a great opportunity for our low cost grass based producers to expand production.

Sustainability

With our grass-based production systems agriculture in Ireland is more sustainable than many other exporting countries. As consumers and policymakers become more conscious of where food comes from and how it has been produced, this is an advantage we can further capitalise on into the future.

A number of initiatives have been developed to capitalise on our green image and in particular the sustainability of our high quality food and drink exports. Bord Bia has developed a sustainability charter - Origin Green – to help Irish food and drink suppliers drive their exports. Ireland is a country well suited to sustainability with one of the lowest carbon footprints per kilo of beef or litre of milk produced. A key challenge for the Government is that the proposed climate change legislation does not stifle the opportunity for sustainable growth.

In addition to the growth in food exports associated businesses in agri-engineering are also expanding rapidly.

Trade missions abroad

Just last year, I participated in the agri-food trade mission to China, led by Minister for Agriculture, Simon Coveney.

Irish agri-food and related exports to China have grown in value from €167m in 2010 to €323m in 2012, an increase of 93%.

With a growing and increasingly urbanised population, I saw at first hand the opportunities that are emerging in new markets like China for higher-value protein-based products.

During the Trade Mission, a Memorandum of Understanding on Agriculture and Fisheries cooperation between the Ministry of Agriculture of the People’s Republic of China and the Department of Agriculture Food and the Marine was signed. This provides a framework for the strengthening of the bilateral relationship between Ireland and China in the area of agriculture and fisheries.

A Role for our Irish Embassies, Ambassadors and Agriculture Attachés abroad

Our Ambassadors, Embassies and Agriculture Attachés have a hugely important role to play in terms of trade promotion and market access for our agriculture export products.It is critical that the positive image of Irish agriculture and Irish food production is re-enforced at every opportunity. By doing this, familiarity with and knowledge of the Irish food sector will grow and we will have a head start on capturing new markets.

Agricultural attachés have a particularly important role to play by working directly with importers and agricultural departments abroad to establish market access for Irish produce. Our 7 Agricultural attachés, who have an in-depth knowledge and understanding of the agri-food sector, are particularly important in dealing with complex issues such as market access and veterinary certificates for both existing and emerging foreign export markets. They also have an important support role to play to ambassadors in trade promotion and information briefing.

The Embassy structure is very important in facilitating access to customers for our commercial food companies

Bord Bia

Bord Bia, The Irish Food Board plays a vitally important role in the promotion and marketing of Irish food and drink across the globe. With 7 overseas offices, strategically located in London, Paris, Milan, Dusseldorf, Madrid, Stockholm, Shanghai, Moscow and New York, Bord Bia work hand in hand with our Ambassadors and Embassies.

Opportunities – existing markets

The EU and especially the UK is and will remain Ireland’s most important trading partner for the agri-food and drink sector. We must continue to focus on increasing our market presence, and the value of the food we export into the EU market.

As an example of this, the promotion by Bord Bia of Irish beef in the German market has led to an increase in the value of exports to this high-value market of €72 million or a fivefold increase since 2009.

The decline in food production across other member states in beef, sheep and pigmeat presents an opportunity for increasing Irish exports into high value markets. Trade promotion initiatives must continue to be strongly driven within the EU market.

Threats to expansion –TTIP and Canadian Bilateral Trade Deals

With the on-going failure to reach any conclusion to the WTO multilateral trade talks, the EU has pursued a policy of bilateral trade deals.

While these deals can provide opportunities for both parties, it is critical that trade agreements are not pursued which would undermine the competitiveness of Irish food production, with negative consequences both for producers and consumers.

In particular, IFA has major concerns over the damaging impact of potential EU Bilateral Trade Deals with the US, Canada and the Mercosur Trading Bloc.

EU Bilateral Trade Talks with Canada and the US (TTIP)

The IFA is extremely concerned that the EU Trade Commissioner Karel de Gucht will sacrifice the agriculture sector in countries like Ireland and France and use agriculture as a bargaining chip in both the TTIP (Transatlantic Trade and Investment Partnership) trade negotiations between the EU and the USA and bilateral negotiations between Canada and the EU.

In the EU Bilateral Trade Talks with Canada, Commissioner De Gucht appears ready to inflict severe damage on the Irish and European livestock sector with a substantial increase in beef imports from Canada.

There is a real fear that large concessions to Canada and the US on beef imports would severely damage Ireland's agri-food sector and threatens thousands of jobs. As the largest beef exporter within the European market, a deal involving a substantial increase in beef imports from the US and Canada would inflict severe damage on the Irish livestock sector.

Maintaining our high standards in Europe is a major issue in these trade negotiations. Standards on issues like food safety, traceability, environmental protection and animal welfare. European producers and consumers will not accept food imports from production systems where the use of hormones in beef, BST growth promoters in milk and the beta-agonist drug ractopamine in cattle and pigs – all banned in Europe – is common practice. Europe cannot agree to any imports which fail to meet EU standards on the critical issues of food safety, traceability, environmental protection and animal welfare.

The IFA has called on the Minister for Jobs Enterprise and Innovation Richard Bruton and the Agricultural Minister Simon Coveney, to intervene strongly at the highest level to prevent what is being flagged as a very bad deal for the Irish and European livestock farmers. I have also raised this important issue in meetings with the Taoiseach and the Tánaiste.

A recent IFA study of the importance of the Cattle and Sheep sectors to the Irish economy by Professor Alan Renwick from UCD shows that the €2.3bn output at farm gate level creates total output of €5.7bn. In addition the Irish cattle and sheep sectors support 100,000 farmers and over 50,000 jobs in the wider economy.

In view of the high sensitivity of the EU market for beef to imports, the EU must rule out any significant increase in imports in this sensitive product area. Any increase in beef imports into the European Union will have very damaging economic, environmental and social consequences across rural communities in Ireland and Western Europe that depend on livestock production for their livelihoods.

I am calling on the Committee to do everything in their power to see that issues concerning our strong performing export orientated Agriculture sector are brought to the fore and rigorously defended.

EU Mercosur

A major reduction or elimination of import tariffs and/or a significant increase in a tariff free quota (TRQ) for beef, as demanded by the Mercosur group, would significantly cut the EU import price for beef. This in turn would severely damage beef prices on the EU market, particularly for an export country like Ireland.

Reports from the EU Food & Veterinary Office (FVO) highlight the ongoing failure of Mercosur countries including Brazil to meet EU producer and consumer standards on the key issues of food safety, animal identification and traceability, animal health, environmental and disease control.

Conclusion

The value of Irish agri-food exports has continued to grow in 2013 and will be close on 10 billion euro for the year. The message is clear Irish agriculture is performing but is in need support if it is to maintain growth, drive exports, jobs and economic activity.

As Ireland’s largest indigenous sector, the growth of the agri-food sector has a hugely positive impact on the Irish economy, both at local and national level.

Together with the other key agriculture stakeholders the Ministry of Foreign Affairs has a hugely important role to play together in supporting the expansion of the Irish agri-food sector through the coordination of trade promotion in existing and new markets. In addition, Ireland must be strong in defending the interests of the sector against policies that would unfairly undermine its competitive position.

Thank you.

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