Hogan: 'The system must always err on the side of the farmer, where possible'

The Russian ban locked out €5.2bn of EU farm produce. I tried last year to replace that lost market, with some success. We had a year-on-year increase of €6.8bn in food exports from the EU, which I believe was a good outcome.

It wasn’t of the same value to farmers as the Russian market, but still a significant penetration of markets. [European] Commission President [Jean-Claude] Juncker has written to President Putin to see if trade relations between the EU and Russia can be normalised.

Agriculture and food has been taking the brunt of the trade ban. The last year has seen oversupply of product in the EU, which is a problem for us, and food prices rocketing in Russia, which is a problem for them, so the hope is that we can restore trade.

It’s not just dairy and meat products – Europe supplied Russia with a high proportion of fruit and vegetable products; we have provided €350m of support to that sector alone. Within that, there are non-embargoed products we would like to redevelop trade with Russia on – the fifth quarter in particular.

2016 will have to be a year where there is an interrelation between agriculture and politics. We need to find new markets, particularly in the context of the ongoing Russian situation.

I will be going to Mexico, Colombia, Vietnam, China, Japan and Indonesia on a diplomatic offensive to open new markets for EU exporters.

The WTO deal in Nairobi was significant – much more significant than people might understand. We succeeded in getting rid of all export refunds and credits. That means we have removed the low-interest loans that Brazil and Argentina have been giving.

Over the next eight years, there will be a total abolition of product support, which will help European farmers to compete on a level playing pitch with US farmers.

The Mercusor talks have been ongoing since 2004, and have been going largely nowhere. With a new political situation in both Brazil and Argentina, there are indications of a new offer, but we’ve been hearing that for about 18 months now.

We’re conscious of protecting EU farming, and I’ll be watching the Mercosur talks like a hawk. I will not allow a bad deal for farming to be agreed.

The timing of the WTO deal should give comfort. Remember, this is the first deal of any kind since the Uruguay round, back in the 1990s.

There is oversupply of many products, particularly milk and grain – about 2%. The reduction in purchasing power and thus demand in China has been a key factor. There is evidence of a re-balancing between supply and demand, partly due to the drought in New Zealand, Australia and indeed the southern US states.

There is no doubt that the first half of 2016 will be difficult, but my new assertiveness on trade and on the pursuit and establishment of new market opportunities in Africa and Asia will impact, we hope, in the second half of 2016.

The challenge is to be centrally active – with the trade commissioner – in finding new markets.

On simplification and red-tape

In terms of simplification, I have gone out of my way to push Brussels and the political system to push the balance in favour of the producer. There’s been 25 new initiatives in 2015 alone. I’m working on new proposals for a yellow-card system.

A small error has a disproportionate effect on income for farmers – especially for smaller farmers of under 10ha, who could lose everything. That’s not acceptable to me; I am working on a change.

I want the administration to ensure that the penalty is proportionate to the error the farmer makes. At the moment, that’s not the case.

We’re also bringing in a pre-clearance check for applications. Officials will be able to have a look at a farmer’s application, and will be able to alert the farmer as to any minor errors. [The farmer] will have 30 days to correct them without penalty.

I want to formalise a partnership approach between farmers and the Department. In future, we want a more risk-based approach to inspection; farmers with a consistent track record of excellent compliance will be less likely to be inspected. This can happen quickly in those regions and administrative authorities, such as Ireland, that have shown competence.

The yellow-card system is being looked at intensely.

This was the first year of the new CAP. Like any new system, there were teething problems. Greening was an issue at the start of the year, especially the whole area of understanding what was required around hedgerows and buffer strips. We provided clarification and hopefully this was helpful for farmers in Ireland.

This year will see a review of greening. This, and the simplification review and work we are doing, will guide me as to whether we need a review or a reform of CAP, or whether it just needs adjusting. (By the way. I’m claiming the credit for the good yields farmers got this year.)

The idea is that we should err on the side of the farmer if we can. The schemes are complex enough – we don’t need to make them more difficult. It must be always remembered that many member states are hugely dependent on agriculture, particularly in eastern Europe.

On finance for farmers:

I want to replicate the success of Ireland’s indigenous agri-food sector all over Europe. The European Invesment Bank initiative is central to that. I announced it in March, with seminars in June.

Last month, Minister Simon Coveney announced that there would be an amendment to the Rural Development Programme, which is required, to allow low-interest loans for farmers under the EIB initiative.

There’s plenty of evidence that there is no competition in banking in Ireland. I was concerned by recent research carried out by IBEC showing that a potential 3,000 jobs in the food sector that could have been created fell through due to lack of support from lenders.

On active farmers:

We have a negative list as to what an active farmer is. That shouldn’t have happened and must be addressed. In fairness, Commissioner Ciolos had a proposal with a positive definition.

Young farmers in particular are fed up with a situation where people receive payments but do no farming. The new CAP has had a positive impact for young farmers. The greatest impact I can have for them is through the new financial tools. We can ensure that they don’t have to lock up their asset base to access finance.

On food production:

There is a disconnect between the cost of producing food and the resources used up in food production, and the price of food and how it’s valued and utilised. The environmental commissioner has highlighted the need for resource efficiency – we must reduce food waste.