Speech at Foodwise 2025 Conference, Croke Park Dublin – 4th December 2017
Ministers, elected representatives, ladies and gentlemen,
Thank you for inviting me to this conference. As a Kilkennyman I’m of course very familiar with Croke Park, though we prefer to make our big appearances in September rather than December.
Foodwise 2025 is an exciting and ambitious initiative which should serve this country well, particularly when it comes to the critically important task of creating high quality jobs in Irish rural areas.
As a former member of the Government which steered this country from the verge of bankruptcy back to a solid economic footing, I am fully aware of the immense contribution of our agri-food sector to that recovery. Having served as a member of the Oireachtas for over 30 years, representing a largely rural constituency, which has a significant reliance on the agri-food sector, I appreciate the value of the sector as a social and economic driver.
Our farmers and food operators are dynamic, outward-looking entrepreneurs with a keen eye for new business opportunities. As policymakers, our role is to support them and give them every chance to succeed; we should be the wind beneath their wings.
Today I hope to provide a perspective on how Foodwise 2025 can complement the CAP post-2020, and of course this conference is very well-timed in that regard. As you know, just last Wednesday the European Commission published a Communication on the future of EU food and farming, which outlines my vision for a simplified, modernised CAP truly fit for the challenges of the 21st century.
The Common Agricultural Policy has been one of the great success stories of the European Union and has served Ireland well in its nearly 45 years of membership.
Last week’s Communication reflects a policy that is evolving to meet the demands and challenges of today. Our public consultation earlier this year showed a clear majority of citizens and stakeholders in favour of farmers receiving direct income support for their work, which guarantees European food security. But a majority of citizens, farmers and stakeholders also believe that the CAP should do more, particularly in terms of the environment and climate challenge.
While there is a lot that we are changing, there are important elements that we are maintaining. These are elements that have worked well. For example, we are maintaining the existing two pillar structure, with direct support to farmers in order to guarantee income support, and a strong rural development pillar helping to ensure the vitality of rural areas. This provides a level of certainty and security to producers, and will therefore provide a solid foundation for Foodwise to succeed.
Food Wise 2025 projects that Irish agri-food exports have the potential to grow to €19 billion per annum in value by 2025, a figure that would represent an 85 per cent increase from the current three-year average. This export growth would be driven primarily by expansion in dairy, beef, seafood and consumer food and drinks. Coincidentally, international trade now means that the EU has turned a negative trade position into a €19 billion surplus.
I will continue harnessing trade to bolster farmer incomes, because good food, sustainably produced, means good business and I know that, in this endeavour, I will have the full support of the Department and its agencies and the wider agri-food community.
Global demand for high-quality, high-value, highly nutritious products will grow in tandem with the ever-increasing global middle class, and Ireland is certainly well placed to meet that demand. Global consumption of dairy products, to give just one example, is expected to increase at an annual rate of 1.8 per cent, with the highest growth expected in Asian countries.
This is why I have been travelling the world to find new markets for our agri-food products, most recently to Saudi Arabia and Iran. I was particularly pleased to be joined on that mission by over 40 European agri-food companies, including a number from Ireland. I know too that Minister Michael Creed has just returned from a trade mission to Japan and South Korea. This type of diplomatic offensive is critical in a competitive environment where we have to fight for shelf space.
However, we must also strike a cautionary note. While the level of ambition set out in your strategy is impressive and indeed challenging, we must also ensure that supply and demand are in balance if we want to make the most of a policy that is built on strong market orientation.
True balance can only be achieved when operators make their business decisions based on market signals. Foodwise 2025 should make this principle a baseline for its growth ambitions.
EU milk deliveries increased by 440 000 tonnes in September 2017, with growth particularly notable in Ireland, France and Germany. This appears to be the opposite of heeding market signals.
I made this point strongly two weeks ago when I addressed a large gathering of dairy operators in Punchestown. I pointed out that in the Netherlands, Friesland Campina has written to suppliers calling for restraint. I believe it is very important that industry acts in concert across all EU member States to manage the supply side. Policymakers have a responsibility in this regard.
In a similar way, when it comes to the issue of SMP stocks, we have to manage public intervention from two angles: first, how to realistically proceed with the release of existing stocks; and second, how to prevent any further build up next year.
In relation to SMP stocks, the product has to be sold. We also need to avoid buying-in under public intervention next year without due market justification. The European Union does not exist just to provide an outlet for product for which a commercial market cannot be found.
We are entering the key negotiation period for the next European budget, and the CAP is going to come under pressure as never before. You all understand the implications of Brexit, which is blowing a huge hole in the overall budget. The Commission’s Communication acknowledges that there are a number of new challenges for which the EU budget must do more in the future. In this context, all spending policies, including the CAP, will come under intense scrutiny.
If I am to be in the strongest possible position to defend the CAP, which currently amounts to €59 billion annually, I cannot enter the negotiations with 500 thousand tonnes of SMP in storage.
Instead, I need all stakeholders to understand and strongly support the narrative I am constructing for the policy, which is that a smart, sustainable, market-oriented agri-food sector can contribute to multiple political commitments of the Juncker Commission, in such areas as
- boosting quality employment, growth and investment;
- harnessing the potential of the Energy Union, the circular economy and the bioeconomy;
- bringing research and innovation onto our farms;
- and fully connecting farmers and rural communities to the digital economy;
If Ireland commits to meeting these priorities, it will hugely accelerate your ability to implement the Foodwise targets.
(Environment incl. Afforestation)
The Communication on the future CAP makes no bones about the clear need for the European agri-food sector to do more when it comes to meeting the Union’s ambitious environment and climate agenda.
To meet this challenge, we propose to radically overhaul the delivery model for the agri-food sector’s green contribution. We have concluded that a “one-size-fits-all” approach to implementation is not always appropriate for a Union of 500 million citizens, with significant differences in farm structures, production systems and climatic conditions. What works in the pastures of Kilkenny may not work in the olive groves of Catania. And what works on President Healy’s sheep farm in Greethill may not work for a goat farmer in Greece.
There is broad agreement among farmer and agri-food stakeholders that the current CAP “greening” system does not do what it says on the tin. Instead, we are taking a bold step to give Member States greater subsidiarity to decide on the most appropriate interventions that will deliver on EU-level objectives, while respecting local conditions and circumstances.
Member States will design CAP strategic plans to meet strict objectives and targets set in Brussels. The Commission will approve these plans thereby ensuring that MS will deliver the required result. The Commission will closely monitor progress towards achieving these results and step in where appropriate.
In the spirit of subsidiarity, this places greater responsibility and accountability closer to the point of delivery and closer to the farmer and agri-business. I’m sure that Michael Creed and Aidan O’Driscoll will meet this challenge with relish.
Measures which fit better to local conditions will deliver better environmental and climate results. The agricultural sector urgently needs to step up to the plate and deliver more when it comes to meeting the COP21 targets and SDGs. Clear and measurable targets will be built into the national CAP action plans, and failure to meet them will result in penalties.
Foodwise 2025 correctly recognises that a significant increase in food production cannot be considered in isolation from its environmental impact, particularly in relation to the depletion of natural resources and the potential impact on climate change.
But there is a gulf between this welcome rhetoric and the operational reality. The Environmental Protection Agency has warned that Ireland needs to adopt a much greater sense of urgency about reducing its dependence on fossil fuels after official figures showed a 3.5 per cent increase in greenhouse gas emissions last year.
Ireland is one of only four countries in the European area where greenhouse gas emissions are still above 1990 levels. A failure to tackle the issue could cost the country large sums of money in relation to carbon credits by 2020. And we are sleepwalking towards further EU fines under the renewable energy directive by our lack of investment in the energy grid.
The risks of failing to address the environmental challenge are not abstract – they are real, and they can be counted in hard currency.
If we take the example of the Netherlands as a cautionary tale: the Dutch dairy industry has been dealing with a phosphate problem for the past 12 months which resulted in the slaughter of 50, 000 cows.
They are currently negotiating their derogation under the Nitrates Directive – a derogation which is worth up to €1 billion to the Dutch dairy industry.
In recent weeks it has been revealed that controls need to be tightened, which places enormous pressure on the Dutch government.
Ireland needs to wake up, and fast, to the reality that we are part of a European Union that has assumed the role of global leader in the climate challenge. Donald Tusk said that in relation to Brexit, we are all in this together – ní neart go cur le chéile. That is equally true of the climate challenge.
Yet in the recently published Climate Change Performance Index, Ireland fell 28 places to 49th out of 56 countries. Of course, I accept that is not a reflection of any one sector, not least the agri-food sector. But, all economic sectors must play their part and policies, including those relating to the agri-food sector, need to play some serious catch-up to ensure that targets are met.
The most recent EPA are sobering, showing an increase in agricultural emissions last year by 2.7 per cent, following a 1.5 per cent increase in 2015. It’s little consolation that emissions are growing faster in the energy and transport sectors.
Improved environmental performance on-farm, notably through nutrient management and the enhanced use of precision agriculture, can make a real difference. The CAP will continue to incentivise farms to move in this direction.
And, in relation to carbon sequestration, Ireland needs to reboot its afforestation policies and start making real headway in this area.
Minister for State with responsibility for forestry, Andrew Doyle, addressed this issue recently, noting that there appears to be a stigma among farmers that planting their land with forestry is a failure.
In a Dail debate, he said that this ‘fear factor’ must be eliminated for landowners so that they can look at options for their land and assess its value.
Forestry represents a key sector in the transition towards a low-carbon and climate friendly economy, and it is critical that sustainable forestry strategies are developed hand in hand with sustainable food security solutions. Of course this is as true for the rest of Europe as it is for Ireland, but I am making the point at this conference to remind you that the day has gone where we can pay lip service to sustainability and climate action.
At the very minimum, it is essential that the afforestation targets set out in the Forestry Programme for the period 2014 – 2020 are fully met.
Before I finish, let me briefly mention Brexit. Today is obviously another very important day and I don’t propose to comment on the discussions that are going on in Brussels today.
However, you are all familiar with the huge challenge that Brexit poses to agri-food trade on this island, and I urge you to make contingency plans for every scenario. Market diversification should continue apace, to give our producers a broader base for their operations.
In conclusion, ladies and gentlemen, I want to reiterate that the European Commission recognises and commends Ireland’s ambitious plans for growth in the agri-food sector.
There are enormous opportunities, particularly in the new and emerging markets with rapidly rising population and growing middle classes who are demanding high-quality food products. The EU is the best address for high-quality food anywhere in the world and EU and Irish producers are, therefore, very well placed to meet that demand. And as trade relationships deepen, our partners will also benefit – with increased EU investment in our partner countries.
Ladies and gentlemen, through the Commission’s Communication and the Foodwise 2025 strategy, there is no lack of ambition for the agri-food sector either here in Ireland or, indeed, across the EU. My services and I are working daily to imbue the CAP with a similar sense of dynamism and ambition that Foodwise 2025 will do for the Irish industry. Our shared challenge to ensure undoubted potential for growth does not come at the expense of sustainability.
That challenge proves the value of the Origin Green programme with the goal of sustainable food production. This is not alone important for the environment and the world we live it, but it increasingly demanded from more discerning consumers.
Finally, may I reiterate my congratulations to all those associated with the production of the Foodwise 2025 strategy and assure you that my services and I are ready to work with you to realise its vision.