New €100m scheme won't help farmers short term - IFA

The IFA President Tim Cullinan cautioned that the Government’s €100m funding, announced this week, would not be of immediate help to farmers to address the potential impact of Brexit.

The new scheme for the food processing sector was established in recognition of the sector’s unique exposure to the impact of Brexit.

The funding was announced in light of the Brexit agreement struck between the EU and UK negotiators on Christmas Eve.

“While the Christmas Eve agreement will avoid immediate tariffs and quotas there are still uncertainties for farmers about the potential impact of Brexit-related disruption to markets,” said Mr Cullinan.

He said the announcement “will not help farmers in the short-term.

“The Minister must be ready to provide immediate support to farmers if markets are disrupted in the coming days and weeks,” he said. He added that he had stressed this point with Minister Charlie McConalogue in a conversation in light of the announcement of the scheme.

The funding, with the unwieldy title of 'Capital Investment Scheme for the Processing and Marketing of Agricultural Products' will open for applications in January and will be administered by Enterprise Ireland over the next five years.

It will take the form of a competitive call. It is open to large, medium or small enterprises, engaged in the processing and marketing of primary meat and dairy products to apply.

Successful projects will be focused on the production of new and/or improved higher value add products, and/or production processes, required for new markets, and not principally focused on the processing of increased volumes of raw materials.

Applicants will need to demonstrate that the investment underpins sustainable food production, at both farm and processor level, and contribute to balanced, sustainable regional development. All investments under the scheme will comply with national and EU legislative and regulatory environmental requirements and standards.

Eligible projects must have total eligible capital expenditure of at least €1 million, up to a maximum of €25 million. The maximum aid intensity will be up to 30% of the eligible investment costs, up to a maximum direct grant of €5 million.

Worrying time

In announcing the scheme, the Tánaiste Leo Varadkar was eager to stress that the Government's help for the agri-food sector extends beyond the new scheme, and includes the provision of low cost loan schemes, direct aid schemes for farmers, and additional resources for Bord Bia’s work.

“We know that Ireland’s agri-food sector is particularly exposed to the negative impact of Brexit,” said the Tánaiste. “More than 173,000 people work in the agri-food industry here. Not only do we want to protect those existing jobs as we weather the Brexit storm, but we also want to grow them. This funding is to allow businesses invest in new technology and new products, making the sector stronger and more resilient.

“I know it’s a really worrying time for those working in our agri-food sector. The Government is here to help. This scheme is on top of the existing grants, low cost loans and training resources that are available.”

Minister Charlie McConalogue noted that the Irish agri-food sector is the largest indigenous sector in the Republic with an export value of €14.5 billion last year.

“In the context of Brexit, the need for productive investment in the food processing sector has taken on added significance.

“This €100m support scheme will assist our food processors to diversify their product ranges and markets in order to best support their export activity and our country’s primary producers.

“Working with my colleague, Minister-of-State Martin Heydon TD, who has specific responsibility for new market development, we have a particular focus in 2021 to advance market access for Irish food exports to key international markets, in collaboration with Bord Bia and our Embassy network," Minister McConalogue said.

Julie Sinnamon, CEO of Enterprise Ireland said: “This fund will allow the primary food processing sector to make the necessary capital expenditure to increase their global diversification in response to Brexit.”

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