Agriculture and Rural Development
Friday 19 October 2001
MINUTES OF EVIDENCE
Vision Group Report:
Discussions with Sub-Group Chairpersons
Membership and Powers
The Committee for Agriculture and Rural Development is a Statutory Departmental Committee established in accordance with paragraphs 8 and 9 of Strand One of the Belfast Agreement and under Assembly Standing Order No 46. The Committee has a scrutiny, policy development and consultation role with respect to the Department of Agriculture and Rural Development and has a role in the initiation of legislation. The Committee has 11 members including a Chairperson and Deputy Chairperson and a quorum of 5.
The Committee has power:
- to consider and advise on Departmental budgets and Annual Plans in the context of the overall budget allocation;
- to approve relevant secondary legislation and take the Committee Stage of relevant primary legislation;
- to call for persons and papers;
- to initiate enquiries and make reports;
- to consider and advise on matters brought to the Committee by the Minister of Agriculture and Rural Development.
The membership of the Committee since its establishment on 29 November 1999 has been as follows:
Dr Ian Paisley (Chairperson)
Mr George Savage (Deputy Chairperson)
Mr Billy Armstrong
Mr PJ Bradley
Mr John Dallat*
Mr Boyd Douglas
Mr David Ford
Mr Gardiner Kane
Mr Gerry McHugh
Mr Francie Molloy
Mr Ian Paisley Jnr.
* Mr Dallat replaced Mr Denis Haughey on the latter's appointment as a Junior Minister.
MINUTES OF EVIDENCE
Friday 19 October 2001
Rev Dr Ian Paisley (Chairperson)
Mr Savage (Deputy Chairperson)
Mr A Anderson;) Vision Sub-group Chairpersons
Mr D Graham
Mr M McAree
Mr D Shaw
Mr W Taylor
Mr T Stainer;);Department of Agriculture and
(Secretary to the Vision Group)
The Chairperson: I welcome Mr Arthur Anderson, Mr David Graham, Mr Michael McAree, Mr Derek Shaw and Mr Will Taylor from the vision sub-group and also Mr Tom Stainer, chief economist for the Department of Agriculture and Rural Development and secretary to the vision group.
This session is being recorded and you will be sent a record of your comments. I have a personal apology from Mr Small who is unable to attend today. I told him that we were not interested in seeing him for we wanted to see the culprits themselves. We have received copies of the vision group report and there are many matters of interest. Do you each wish to make a statement, or one of you? How would you like to proceed?
Mr Stainer: The vision sub-group chairmen would like to proceed to questions.
The Chairperson: I have a question. The establishment of a food body seems to be central to this report - see key themes A and B. To what extent would this body be independent of the Department and what actual decision-making powers are envisaged for it?
Mr Anderson: This obviously is a major plank of the recommendations, and we have been very careful not to be too prescriptive because we feel that it is extremely important that all of the stakeholders within the total supply chain are part of this. There are some people in the supply chain who have not been part of this vision group and whom we would need to include - for example, the Consumers' Council.
With regard to the area of powers, we would need some professional help. It will be a subject of debate during the consultative process, and we intend that a working group will help to bring that together after Christmas. I am not trying to avoid the issues; I appreciate there are a lot of questions there, but that is the overall perspective we took of that.
A key issue is that the food body would need to be industry-led. However, we recognise that the Department is a key player within the food chain and that we may need its involvement in a variety of ways, so we would very much see it as being involved. We feel that the funding of the body should be a matter of joint funding, if possible, by the Department of Enterprise, Trade and Investment and the Department of Agriculture and Rural Development, because they both are involved. Industry must also be a part of the funding process.
Such a food body should be inclusive but have a sense of reality and determination to quickly progress, because we are all very aware that the world is changing quickly and we cannot sit around and wait for more reports and more committees. Perhaps industry has the freedom to take risks and drive the process forward in a way that is not always possible for Government Departments.
The Chairperson: Is it envisaged that the proposed food body would assume the responsibilities of organisations, both governmental and industry-led? As stated in the report, there is already an overlap, duplication of effort and a fragmented approach to tackling the major problems in the industry.
Mr Anderson: We have been careful to indicate that quite a lot of new work needs to be done, particularly within the supply chain management, that is not currently being done by other organisations. There will also be work in helping to organise and focus the work of Government where it will have more of a role in providing funding for business issues.
We came to the conclusion that any new work that needed to be done would not be a threat to any existing organisations and that where stakeholders felt that it was to the benefit of the industry as a whole, there would be an opportunity to combine resources and perhaps save costs. One focal point is that we see this as being primarily a way of becoming more efficient in what we do. Therefore, it is not an area in which we are looking for new money for everything, but we feel a responsibility for being efficient ourselves.
The Chairperson: Are you saying that it would be by consensus rather than by compulsion?
Mr Anderson: That was the feeling of the group.
The Chairperson: To what extent does your report depend upon a food body being established?
Mr Anderson: Douglas Rowe made the point clearly that our report highlights the main issues. The issues are not going to go away and will have to be dealt with, regardless of whether there is an Assembly or a food body. If circumstances should change significantly, we will have to find an alternative way of dealing with those issues.
The Chairperson: Your report states that in the event of the food body not being established, the industry and Government should seek other ways of ensuring that the recommendations for which the body would have been responsible are implemented. Does the vision group have a contingency plan to assist the industry to meet its potential if the food body is not established?
Mr Anderson: There is no plan B. That paragraph was included to emphasise the fact that those issues must be dealt with.
Mr Savage: The report suggests that the market must be serviced
"with a product that is in some way differentiated in order to be successful".
How can primary producers hope to be successful, given that they provide the basic product?
Mr Anderson: Unless the supply chain works together, the consumer will not be satisfied. Each party has a unique role to play within the food chain. The food chain is not as efficient as it could be. If the chain is brought together in task forces and working groups to deal with the real issues that everyone faces, we may be able to provide solutions to those problems. The primary producer has a key role in providing an output that is safe, of a high quality and of the lowest cost that will enable the rest of the chain to perform.
Mr Savage: Let us turn the clock back to pre-BSE times. The housewife was paying a certain price for beef. Since then, the price to the producer has dropped by 35p to 40p per kilo, yet the housewife is still paying the same price. Where is that extra 35p to 40p going?
Mr Anderson: In our sector of the industry there are enormous extra costs in meeting the strict requirements of legislation and the supermarkets. Supermarkets compete with one another; each supermarket is looking for a price advantage over the other. Price has perhaps gained too much importance in the way competing supermarkets trade. It increases the pressure on producers.
We are living in a free market. It is difficult for the Government or a food body to influence the spread of profit within the food chain. If the retailer, the consumer and all other parties involved co-operated, there would be a greater sense of transparency and of working together to eliminate waste. It is not about grabbing more of the pie. We have to make the pie bigger and get rid of senseless expenditure. I am sure that farmers would agree that money is being wasted in parts of the food chain.
Mr Savage: I do not doubt your word. However, I do not care how big the pie gets so long as primary producers get their fair share. Unless primary producers get their fair share, they will not be around.
Mr Anderson: Processors are also finding the situation difficult. The figures in the report are some two years old, and things have become worse since then. There are profitable and less profitable areas in producing and processing. Together we must find a way of increasing efficiency in the free-market economy. The European Commission seems to be moving towards more decoupling.
Mr Taylor: Looking at the question from a production point of view, the price of a weekly food basket has fallen significantly over the last 15 years by between 25% and 30%. That immediately puts pressure on the whole food chain - producers and processors. We share a common interest in that we have identified where the real profits are going to at the point of sale.
It must be remembered that the red meat sector, one of ten sectors in the Northern Irish food processing industry, has been in an unusual situation since 1996. You and I know that to our cost. Exports have been effectively been banned since then. As the Committee highlighted in a previous report, there is mistrust and hostility, particularly in that sector, that is blighted and far-reaching.
An overarching body, such as a food body, could take forward initiatives that are ongoing in other parts of the United Kingdom and further afield. That includes walking the food chain. Ordinary farmers like us can walk the chain upwards, see the problems and identify consumer requirements. Equally, the information is fed downwards in order that retailers and processors can know our real problems. From a production point of view, that would be one of the pluses of an overarching food body. On three occasions in a fortnight, I was talking to the same people in London about different sectors. I was there. There are only five major buyers of our Northern Irish product. Let us be frank about the levies raised from producers. There is room for efficiencies and coming together for a common cause.
The Chairperson: The Committee could not agree more. Some of what you said mirrors the Committee's opinions on that matter. The researcher has drawn attention to our common ground.
Members can ask questions on matters other than the food body. The witnesses are here to answer questions on the whole sphere of their work.
Mr Dallat: Page 33 of the report states that
"Those who contribute to the over production of fairly average, undifferentiated commodities should not expect the market or Government to reward them, fairly or otherwise."
It also states on page 34 that
"To be truly successful, producer co-operation must embrace a broader ethos of servicing the market with a product that is in some way differentiated"
and that things will not change
"unless there is effective supply chain co-operation and management".
Given that, how can primary producers hope to be successful when they just provide the basic product? Would a producer co-op need to be set up with the help of the Department of Agriculture and Rural Development and then run in another way? Unless there is something definite, the report will be another one that will gather dust.
Mr Anderson: An area of strength in some sectors is the number of contracts that exist for primary production that are based not just on price, because the price can be variable, but also on specification, quantity and timing. If the primary producer is making what the markets require and the market is getting what it is looking for, there must be an opportunity for it to work better and with less waste.
Speculative production will always be with us, but we need to move more towards contractual procurement, and that is already happening in the industry. Before a farmer buys cattle, plants seeds, or whatever, he should have more of an understanding of where his income is coming from and what he must do to succeed.
Mr Dallat: I am not a farmer, but I understand that if you are a large farmer, the economies of scale can be applied and there can be constant supplies and standardisation of quality, et cetera. The vast majority of farmers in Northern Ireland are not in that sector. What proposals are in this report that will give them some hope for the future and that this really is a vision?
Mr Taylor: You are really asking how producers can position themselves in the next decade in order to be competitive. We have narrowed the supply base for processors, and the number of major retailers has been reduced to five who are operating in the United Kingdom.
My colleague and I represent two of the successful producer co-operatives in Northern Ireland and would be supportive of more co-operation between farmers. The major retailers do not wish, and are not capable of, dealing with hundreds of suppliers spread throughout the Province. However, after having looked at the co-operative movement in some detail, we believe that it must be industry-initiated. There have been numerous examples over the last 20 or 30 years where it has been inspired by Government, and, once the initial pump-priming ended, the people all walked away from it. It must be industry-led, industry-driven and with industry participation. Co-operation and coming together are vital components of this vision.
The other part of the question concerns how farmers can differentiate themselves. There is a series of recommendations that could have substantial influence on differentiating. A single unified farm quality assurance scheme is needed. I cannot understand why one day, under the Livestock and Meat Commission (LMC), a man took two or three hours of my time doing a farm quality assurance. Virtually the next day my dairy company's representative drove down the same avenue to have a farm quality assurance for the dairy side of my industry. If I had some arable farming, the same thing could have happened again on the next day. This is a cost both to me and to the industry, and such costs must be eliminated in this competitive age.
The Chairperson: You are really talking about streamlining.
Mr Taylor: Exactly.
Mr Shaw: We have identified that problem. It will be difficult for the smaller farmer to be fully aware of the market requirements, and that will require a lot more co-operation from companies. I am involved with the Farmers' Co-op, but there are other processors.
Everyone is in the business of producing something that housewives want to buy, and we must realise that we are all in this together. Taking beef as an example, co-operatives or processors must indicate to the smaller producer what the market requires. It is more difficult for the producers, especially those who are part-time, to understand the latest trends in consumption. It is the vision group's job to provide that information.
Mr Graham: Co-operatives have a role in educating producers. Producers need to understand what is required and the long-term benefits of being involved in co-operation. A current problem is that producers are inclined to take a short-term attitude.
Mr Savage: How much longer can the producers stay in business? The past few years have been bad for producers, although processors have not been affected very much.
The Chairperson: That is the question that we are all worried about.
Mr Savage: We are not stupid.
The Chairperson: Nobody thinks that you are stupid.
Mr Douglas: Anyone with a vision for improving the future of the farming industry and the economy is welcome here. I hope that the vision group's attendance today is seen as an effort to work in partnership to achieve that aim, and that the Committee's questions will be taken on board as part of the process of working together.
With regard to theme C in the report, is it realistic to compare farming in Northern Ireland to farming in Australia, New Zealand or Argentina, given the costs that are imposed by EU regulations in Northern Ireland? Can more suitable comparisons be made? Has animal health status in Northern Ireland declined rapidly since the relaxation of border controls throughout the EU following the establishment of the single European market in 1992-93? Is there a case for tightening regulations on health grounds?
Mr Shaw: I can deal with the first part of the question and the issue of globalisation because I was involved in identifying the key issues that needed dealt with. Producers face globalisation, whether they like it or not. It can be resisted with the help of politicians, but globalisation will spread as the EU expands, and producers face competition. For example, the meat plant, Linden Foods Ltd, with which Mr Graham and I are involved, sells meat to Albertheijn, which also buys meat from Argentina. Competition is strong. However, 350 million people in the EU cannot get food from elsewhere, and that provides a safeguard. Producers must face up to the fact that they will be put under pressure to compete with companies that can provide products at a much lower cost.
What was the second part of your question?
Mr Douglas: Animal health status has declined since the relaxation of border controls in 1992-93. Should that issue be addressed if Northern Ireland is to compete with countries such as Argentina and New Zealand?
Mr Shaw: That is a problem. We must ensure that the quality standards and the farm quality assurance standards that are imposed on our producers are also imposed on overseas suppliers. Globalisation increases the risk of diseases being brought into the country - not just foot-and-mouth but other diseases that we might not even know about yet.
The Chairperson: Was Argentina mentioned as a competitor?
Mr Shaw: Yes.
The Chairperson: If we are to enter that market, we must look at all our competitors to see if we can do better than them.
Mr McAree: You make a valid point about animal health. After the system of cross-border controls was dropped in 1992, there was clearly a decline in animal health in Northern Ireland. We all remember the halcyon days of disease-free status and when life was a great deal easier and simpler.
Unfortunately the rules of the game have changed, and it is now illegal, if not impossible, to place restrictions on the movement of animals across the border. As we highlighted in the report, we were reasonably fortunate to have only four cases of foot-and-mouth disease - far fewer than the outbreak in Great Britain. If we had been able to put in place the rules allowed before 1992, it might have been easier to stop animal movements.
We have examined all the evidence taken during our discussions. There is a desire to go back a little to make it more difficult to import exotic diseases into Northern Ireland, and there is probably the necessary political will for that in this room. The difficulty with that is on the question of whether one can do that within the legal framework of a United Kingdom region. The foot-and-mouth problem, for example, was imported from the rest of the UK - it was not even cross-border. Secondly, it is not possible to place restrictions in the European Union.
We thought that it may be necessary to review the current animal health status, for there is no need to put up barriers to protect that status if it is no better - or perhaps is even worse - than that of Spain or Portugal, for example. The idea would be to get our animal health status closer to what it was before 1992 and afterwards to put in place certain safeguards to make it more difficult to import exotic diseases.
Mr Douglas: That is certainly something we should keep to the forefront of our thinking.
Mr Kane: I question the Department's logic on herd improvement. We are reducing the suckler herd year after year through modulation and not allowing any in-calf heifers to be claimed for as part of the suckler cow premium, yet we have ended the calf processing scheme. How can we expect the vision to be realistic when the policy is working to achieve the opposite effect?
Mr Taylor: I agree that some areas of the policy that has developed over the last few years have brought about a reduction in numbers, a waste of resources in the calf processing scheme and a lack of opportunity. However, we must re-emphasise that that situation was our starting point.
Those who read the report in some detail, as you have obviously done, will pick up some discreet criticism of policies and their implementation. Given the questions that have been asked about the development of markets, and differentiating the Northern Ireland product so that it gets into the higher-value parts of the food chain, we believe that quality is an overriding factor. You will have picked up that there are clear targets for both numbers and timescale in relation to that, and that resources will be required.
Vision group members feel that they are the technicians in the exercise, and that you, as political representatives, are our partners. The group very much hopes that you will oversee implementation and give guidance on the resources needed; that is vital to improving the quality of our red-meat industry. We will be relying on the Committee to monitor the progress being made to achieve the targets set out in many of the recommendations. I know from having met you on numerous occasions that you will offer your criticism to the appropriate bodies - the Department of Agriculture and Rural Development and, ultimately, the Executive - if those targets are not met. The report can only succeed if sufficient resources are provided and identified in the Programme for Government. We are in this together.
Mr Kane: I take your point. An agricultural forum bringing together all the parties in the agrifood chain, and thus creating greater transparency, seems to be applicable to many of the vision group's recommendations. How do you feel about the absence of such a recommendation?
Mr Anderson: I do not fully understand the question.
The Chairperson: Why does the vision group not recommend the establishment of an agricultural forum?
Mr Anderson: In recommending a food body, the vision group dealt with the need for transparency and for better communication - an agricultural forum is a similar idea. Making the food body more inclusive is the key issue. All of the participants in the chain, whether from health and safety, food safety or elsewhere, have to be involved in it. The rate of change concerns us. Unless effective, pragmatic decisions are taken quickly, the ever-changing market will leave us behind.
The Chairperson: Are you suggesting that the food body is the forum under another name?
Mr Anderson: No, I was drawing a parallel between the two. The food body is the vehicle that the vision group designed for dealing with communication in the food chain.
Mr Bradley: My question relates to headage payments, as mentioned at C13 on page 43. How strong is the vision group's conviction that an area-based support mechanism would create quality incentives, improve our animal health status and reduce fraud in the industry? Is it the group's view that environmentally fragile habitats are currently under threat?
Mr Taylor: The vision group received 37 submissions of oral evidence from organisations in Northern Ireland, the United Kingdom and further afield. In addition, numerous written submissions, and background information from Departments, were received. There are four areas that lead us to the conclusion that a change from headage payments to area-based payments is the way forward over the next decade.
You rightly asked how that would lead to quality products. We believe that the headage payment system brings about an ethos of chasing numbers. Take the sheep sector, for example. During the last 25 years, the number of breeding ewes in Northern Ireland has increased from approximately 500,000 to 1·3 million. That, according to our submissions, has led to substantial environmental damage in a number of our hill and upland areas, to the detriment not only of individual producers and communities, but to the whole of the Province.
The classic example of how the drive for numbers has fallen apart is the current situation in England and Wales. Upland and hill lambs - an undifferentiated and, in most cases, inferior product - were transported to places such as Spain and Portugal on a spasmodic basis. When there was a better alternative at a lower price, there was no market, and, likewise, when there was not, there was a market. Because of the export ban due to foot-and-mouth disease, there is now a welfare scheme to dispose of thousands of those undifferentiated products in England and Wales. We could have been in a similar situation but for the good guidance and grace. That is a perfect example of the chasing-the-numbers game.
I have already covered the second area - environmental damage. The third area involves aspects of fraud. It seems that the biggest growth industry in the Province at the moment is the appointment of grade 4 inspectors to count sheep and animals. There is a plethora of audits - departmental and other - to check on the various percentages involved. For my arable enterprise, I fill in my integrated administration and control system (IACS) form on 14 May, and in the middle of November my arable cheque will come out. How more simple and efficient than that could it be?
That sums up the practical problems and outlines the advantages of moving from a headage-based payment scheme to an area-based payment scheme. Most compelling of all are the political policies currently emanating from the UK Government. Whether we like it or not, it is a fact of life that they are influencing the way that farming is going to go. They are clearly moving towards area-based payments. That same ethos is coming from the European Commission. You cannot have one sector in area-based payments without the other. We are advocating that the industry move to area-based payments for those reasons.
Mr McHugh: You are all welcome, especially Will Taylor, who has worked for a long time in the farming side of the industry. I have heard what you have said this morning, and I have looked through the vision document. We are limited for time - the Committee could almost do a report on your report. We have covered most of the issues in your report in our past four or five reports. Many people - and certainly farmers - on reading your report would have to say that if that is a vision, then it represents the death knell of farming as we know it in the North, because it does not give any direction for the future.
We all know what was there previously. We did not need to get people together, driven mainly by the food-processing side, to tell us that. The consumer will be more than happy with parts of the report. Many of your answers this morning have been conflicting and contradictory.
Contrary to what the Committee has been saying all along, the report makes no mention of capital investment in farming. How many farmers will be in business in ten years' time? How many are needed to run farming as we know it? Will it be 5,000 or 10,000? How many are going to be involved in hedge cutting and how many in ordinary farming? Are we going to go down the global route, as Mr Anderson has said, and face up to the situation of dealing with Argentina and Brazil? What is the cost of that? Is it cheap food? Is clearing rainforests at the rate of an area the size of England per year - to create a few years of farming for the people who live there - good world policy? The costs involved are completely different.
On imports, you say that such countries are expected to maintain food standards similar to ours. I do not believe that that would be the case, no matter what we are told. Are the supermarkets demanding such standards if prices are competitive? Food is allowed to come in and be repackaged as a Northern Ireland product, despite the disease situation. How good is our disease situation North/South? The systems are not compatible. It is my belief that over-30-months cattle can leave the North with a permit and arrive somewhere in the South. I hope that I am wrong about that, but the systems should be compatible. The report does not address that problem. It talks round the issue, but it does not say that we are going to have an all-island traceability system that will be clear and transparent and that will make it completely safe for people on both sides of the border to eat food.
I have other criticisms of the report. In relation to young farmers, there is no mention of what is to be done to bring new people into the industry. If you want a benchmark, the commitment in the Programme for Government is totally different to the commitment in the South in terms of the money that will be spent on enterprises over the next seven years. We are going to run the Department - we will see to that - but precious little else.
I would go as far as to say that the whole idea of part-time farming, or plural activity, as it is now known, is a back-door method of subsidising agricultural production here for the benefit of processors and the consumer. Many part-time farmers spend more time on their farm than they do at their main paid job. They are working for nothing, as slaves.
The next generation will decide that it is worth selling up, because it will not have any interest in the land. Northern Ireland, as we know it, cannot turn to large-scale farming, with one man on a horse or a quad bike looking after 1,000 or 2,000 head, as happens in Argentina. Where is the concern for the countryside and the environment? Where is the concern about pollution? I can see very little future for farming in any of this. If you can show me otherwise, I would like to see it.
Mr Graham: Contrary to Mr McHugh's claim, there are references to capital grants in the report. There are recommendations on grant aid in relation to pollution and biodiversity objectives. There is a welcome for the countryside management scheme, the extension of environmentally sensitive areas (ESAs) and the Northern Ireland biodiversity scheme - all of which could bring funding to agriculture. It is not strictly correct, therefore, to say that there are no references to capital grants.
Mr McHugh: Yes, but not in terms of the amounts of capital that are available down South compared to here. If you talk to farmers, they will tell you that they are not getting any capital at present. Farms are falling apart at the seams because of problems with buildings and pollution. As Will Taylor said, people are inspecting farms for quality assurance, which has little to do with beef production. However, farmers are expected to stand for that. Why should they have to compete with Brazil and Argentina on the basis of quality assurance? The rules and regulations are unnecessary for the production of quality beef. We do not operate on the same lines as those countries, so it is not a level playing field. People will be put out of business because of the costs. If farmers were to improve their farms to meet the regulations, they would be far better to turn - [Interruption].
The Chairperson: We should hear the answer, as Mr McHugh is repeating things that he has said. I do not know what terms you met under in relation to the finances. Did the Department of Agriculture and Rural Development tell you that it was prepared to finance your recommendations?
Mr Taylor: That is the crucial point in this exercise. Otherwise, my colleagues and I would not have spent so much time devising 208 recommendations - many with specific targets and timetables. The Committee and I must work together to ensure that the timetables and targets are met through the Programme for Government, which is the mechanism for obtaining resources. There may be some personal disappointment, but the vision group notes that a provisional resource recommendation for £10 million was made. As Mr McHugh said, that is a drop in a bucket compared to the resources that were identified by the Government of the Republic of Ireland in the document on their vision for agriculture.
The Committee will recognise that there are different funding mechanisms between North and South. Mr McHugh mentioned the new entrants and retirement schemes. In the Republic of Ireland, some £200 million per annum goes into the retirement scheme. To have any effect, the scheme would need to operate for 10 years, so we can multiply that figure by 10.
We made an assessment that we felt was realistic. If we were to call for similar resources on a pro rata basis in Northern Ireland, nothing else would happen for the next 10 years. That was not our call. It is most unfortunate, but it reflects reality. Hence, with considerable disappointment, we emphasised that the limited resources that are available should be channelled towards a new entrants scheme, with a farmer facilitation retirement scheme as a back-up.
The Chairperson: We are in difficulty because the £10 million was not asked for in the Programme for Government. It has been dropped. The argument put to us was that the proposal was dropped because the Department was not ready to move on it, and that it is hoped to get the money from elsewhere. The £10 million is not in the Programme for Government at all. That worries me because there must be capital expenditure to save the farming industry. We feel - as you do - that we sit here; we spend time willingly; we examine people; and we publish documents, but what is the use in making recommendations that are not going to be acted upon. That worries us all. That is an important point that we need to keep in mind.
Mr McHugh: Do people feel that we can move into a competitive position without subsidies? Are we going to move to a position without subsidies in the near future? Can we continue to farm without subsidies? Can we compete and move to larger-scale farming here, as is the case in Argentina?
Mr Shaw: I want to pick up on an earlier point. Mr McHugh said that farming, as we understand it, would never be the same again. My father said that 30 or 40 years ago. There is continual change, and we must be aware of that. Farming will not be the same.
A report published in the South was even more pessimistic about some of the changes than we are. Apparently farmers in the Republic are going part-time or moving into industry at a faster rate than we thought was happening here. We do not have the same grant structure as the Republic. The system is different, as we know. We can lobby about it, but there is nothing much that we can actually do about it.
I think that we will see more aggregations of people taking land in conacre. There are already people farming on quite a large scale in partnership with farmers operating on a smaller scale, putting larger aggregations of suckler cows together. Some aggregations in Fermanagh are very large, while not owning any, or very little, land.
Mr McHugh: That is not necessarily a help to the countryside.
Mr Shaw: I have seen farms of 300 to 500 acres that are better looked after than 10 farms of 50 acres. They are tidy and look after the environment well. I do not necessarily buy the argument that you have to be small to look after the countryside properly.
Mr McAree: I want to clarify matters because there seems to have been a slight misunderstanding. When we talk about globalisation, and the effects of competition from Argentina and Brazil, we are just recognising reality. When we talk about product differentiation as part of the vision and move forward, we are recognising that Northern Ireland has a lot of small farmers and that we cannot possibly compete on the same level as people in those countries. We have to do something slightly different.
Although subsidy systems may well change in the next 10 years, we do not believe that the level of subsidy per se will drop, even with enlargement of the EU. That is based on much of what we heard during our exercise. The subsidies may come as area-based payments rather than headage payments, but the Northern Ireland farmer cannot possibly compete with someone who owns 50,000 acres in South America. That would be ludicrous. Farmers here, therefore, have to do things slightly differently. That is part of our supply chain management, increasing efficiency and making it better for everyone. That is how we saw it.
The Chairperson: We have to be realistic. Margaret Beckett's speech was a catastrophe. She was writing an obituary notice. I was surprised that anybody clapped. I felt like going up and saying "You need a slap in the face." Of course, that would have been out of order, but her speech was ridiculous. She is at it again now. That is the sort of thing that new Labour is feeding into Europe.
We all know that we do not have the say on the final shape of farming here. It will come from Europe, and we have to work within those rigidly policed lines. There are no Admiral Nelsons with bad eyes in our Departments. The officials police matters very rigidly. That is not so in other places. I look South and see some of the things that happen there, and I wish that there was a bit more liberality in the way in which we are inspected.
We are tied into a system. I am an MEP, and I can see that that system is coming asunder. There are going to be radical changes to the CAP. Immediately these other countries come into Europe, there will be drastic changes.
The kitty of Europe is not what it used to be, where people could expect large sums of money. We are not now masters in our own house. We have all the pressures of the competitive market, and we could never align our industry to that in Argentina because it is a different thing altogether. Subsidies are becoming an issue in Europe. If there are no subsidies in Northern Ireland, we are finished. It is the funeral money. We need to face up to that problem.
Mr Taylor: I agree with your comments, Chairman. I expressed publicly the disappointment of the vision group that the initial provisional resource in the Programme for Government has been removed. I trust that the Agriculture and Rural Development Committee will, as the consultation period draws to a close towards the end of the year, make proper resourcing within the Programme for Government an urgent priority. It is needed to bring to fruition at least 207 of the 208 recommendations.
Mr McHugh painted a gloomy picture. However, we, as a group, specifically looked at sectoral performance within each range of production, and we found a substantial difference between the top and bottom players in each sector - big differences of up to 200% and 300%. I trust that the Committee will note that there are specific recommendations under farm structural reform to address that issue. We trust that the necessary resources will be made available.
There are two specific areas where the matter can be addressed. First, we have a target that, by 2005-06, 7,500 farm businesses should be on a benchmarking programme, linking them and their financial aspects with the top quartile. Second, we trust that the Assembly will find resources to create 100 model units. The best in each aspect of production would be used as focal points for 2,500 to 3,000 of their neighbours. Some 25 to 30 people would feed off each model unit to bring up the standards of efficiency, performance and, it is to be hoped, income of each farm.
The Chairperson: We have worries on two issues that need to be resolved. First, new entrants - we need to get young people into the business - and, secondly, retirement. I know, although I was not present, that there was controversy at our last Committee meeting over the difference between the Minister's comments and what Mr Byrne said to me. In the presence of Mr Hume and Mr Nicholson, Mr Byrne told me that there was money that could be put into a scheme for retirement. It was the matching money that was the difficulty. We have to find a way into this scheme, as farmers have no opportunity to retire. As practical politicians, we all know that it is difficult to even get planning permission to build a retirement building on a farm.
Mr Savage: It is clear to the Committee that poor communications have created mistrust in some sectors of the agrifood industry. However, the vision group has suggested developing and pursuing an all-Ireland animal and plant health policy, aimed at controlling the spread of, and eliminating, diseases. In light of that, does it not make sense to also develop the same strategy and methods for electronic identification and traceability on an all-Ireland basis? Does that not have resonance, given your suggestion that an Irish branding theme, in association with An Bord Bia, should be explored?
Mr McAree: From a disease control standpoint, we thought that looking at the island of Ireland would be a practical starting point. It has only a small number of ports and, given that we are on an island, it should, therefore, make it easier to control the movement of animals and the inward movement of all diseases, especially exotic diseases. The difficulty is finding a disease control structure and system that would work in Northern Ireland, the rest of the UK, and the Republic of Ireland.
It is a good idea, in the longer term, to implement a strategy to improve the traceability of animals. However, it would be premature for Northern Ireland to introduce such a strategy while the debate on the form of tagging or animal identification is ongoing in Brussels. In other words, we do not want to spend money on plan A now, only to later have to spend more money on plan C put forward by Brussels. Those are good ideas, but we must wait and see the shape of things coming out of Brussels.
Mr Savage: The main aim is to keep Northern Ireland and the South disease-free. It is only then that we can go places. However, if a question mark is there, the problem could become even greater. For example, sheep tags that are acceptable here are not acceptable in the South. Sheep must be re-tagged to be taken over the border. There are many matters that need to be sorted out.
Mr McAree: An EU-wide policy may be implemented. If not, it seems that people would like a common system introduced throughout the British Isles. In other words, there would be a commonality between Northern Ireland, the Republic and Britain. That way, the system would allow everything to work together.
The Chairperson: The Committee will, of course, meet with the Minister of Agriculture and Rural Development and the Department at a later date. We welcome your thoughts on finance, and we will push for more money from the Department so that action can be taken.
No doubt the Department will read your report and will say which recommendations it will accept and which it will not. We await the outcome of the consultation period. The Committee will fight for the best possible advantages for the agriculture industry because, despite the cutbacks, it is our basic industry. Given the current worldwide terrorist threat, it may well be the only major industry that we can retain. We are in a serious situation.
The Committee thanks you for coming here today and for the work that you have done.