Agri-food is Ireland’s largest indigenous sector, supporting 230,000 jobs with exports reaching €11.15 billion in 2016. The sector’s continuing ambition is reflected in the €19 billion export target contained in Food Wise 2025, the policy strategy document for the sector to 2025. However, Ireland’s food and drink industry faces an extremely challenging trading climate, in both domestic and export markets.
The uncertainty arising from the Brexit process and the weakening of sterling has presented Irish food and drink companies with a massive challenge to retain our position within the UK food supply chain. Retaining and growing market share for Irish food and drink is our key priority. Other priorities include market access, climate change, competitiveness and the future of the Common Agricultural Policy (CAP).
With one in eight jobs in the economy linked to agri-food, failure to deliver on our key priorities will be damaging to the wider economy and not just the food and drink industry.
Business Priorities and Solutions
1. An Ambitious Brexit Response
Ireland’s largest manufacturing sector is facing a set of unprecedented challenges following the UK vote to leave the EU. Over the longer term the entire basis of our trading relationship with our most important export market will be renegotiated. Immediately however, we face a currency shock that is structural rather than cyclical.
How? The Minister should ensure efficient and open markets domestically and internationally, through:
- an ambitious and balanced agreement between the EU27 and the UK, to include a frictionless north-south border on the island of Ireland
- clear transitional arrangements to support existing supply chains between the EU27 and the UK
- minimal regulatory divergence between the two regions
- exceptional state-aid support for stabilisation, competitiveness and diversification to remedy a serious disturbance in the Irish economy
- direct support for farmers through CAP market support or other measures to be made available in the event of further sterling depreciation
- the re-introduction of the Employment Subsidy Scheme and the Enterprise Stabilisation measures, or similar, which were last applied during the financial crisis in 2009-2011
- €25 million in funding for market diversification and product innovation measures by Bord Bia and Enterprise Ireland
- trade support measures including export trade financing and export credit guarantees to support the continued development of international export markets
- specific transit arrangements to facilitate the continued use of Britain as a land-bridge to continental Europe
- increased resourcing of the international market access unit of the Department of Agriculture, Food and the Marine, and rapid implementation of the new resources
- taking account of the offensive and defensive interests of the agri-food sector in free trade agreements
- a finance package that includes sustainable financing via funding from the Irish Strategic Investment Fund and the Strategic Banking Corporation of Ireland
2. Focus on Cost Competitiveness
A competitive food and drink sector is essential to underpin existing jobs, support future growth and help offset challenges such as Brexit.
How? The Minister should support and accelerate growth and cost competitiveness by:
- improving access to finance funding to support investments in enabling technology, plant renewal and expansion, refinancing, market development and innovation
- continuing to provide budgetary supports and agri-taxation measures to enhance primary production competitiveness and expansion
- reducing industrial energy costs to the EU average, and significantly reducing other utility and local authority charges
- conducting a full impact assessment before any further legislative change impacting on labour costs and tackle the spiralling cost of liability insurance and injury claims
- addressing the cost impact of new legislation on the agri-food sector through regulatory impact assessments
- expanding and repositioning tax relief measures for investment in the agri-food sector to incentivise expansion of existing businesses and investments in start-ups.
3. High Standards for Safety and Reputation
Meeting the needs of consumers and wider society is at the heart of every food business. Our reputation as food producers and exporters is underpinned by our food safety standards. Industry also seeks to continue to engage in a constructive way with government on societal challenges such as obesity.
How? The Minister should:
- maintain a world class food safety regime
- ensure supply chain integrity and identification/management of emerging risks and threats
- ensure support by Government for voluntary industry efforts on health, nutrition and responsible consumption
- ensure an evidence-based approach to public health policy making including full engagement with industry
- avoid discriminatory taxes and other measures on food and beverages
4. Sustainable Food Production
Irish agri-food is committed to a sustainable food supply chain.
How? The Minister should:
- support climate change policies that recognise the sustainable grass-based food production system in Ireland
- support the EU’s 2030 Climate and Energy Framework, and champion a fair effort sharing commitment for Ireland
- ensure the review of the EU ETS does not exclude Irish agri-food installations from carbon leakage provisions.
5. Investing in Innovation, Skills and Human capital
Food Wise 2025 identifies a number of priority policy areas that impact across the entire food and drink sector.
How? The Minister should:
- ensure a strong focus on national research, skills development and apprenticeships in the agri-food sector
- ensure a taxation environment which encourages increased investment in innovation
- continue investment in industry-led applied and fundamental research, in particular in Technology Centre initiatives and support increased access to Horizon 2020 funding
- continue budgetary support for technology transfer and adoption at primary production level
- streamline and simplify the application processes for access to innovation supports, particularly for SMEs
- ensure the skills base of the agri-food industry reflects not just the current business demands but the challenges of future growth in existing and new markets
- increase funding supports for enterprise led training initiatives including Skillnets and industrial apprenticeships
- continue to build on the Food Marketing Graduate Programme to deliver high quality talent to the industry.
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