Northern Ireland Assembly Flax Flower Logo

Northern Ireland Assembly

Tuesday 8 October 2002 (continued)

Mr Dallat:

George Savage put his finger on it when he said that something is wrong somewhere. Of course there is something wrong somewhere. Therein lies the question. Where is the problem that causes such a variation between the farmgate price and the price that is charged in the supermarkets? I am sure that Mr Savage would agree that to establish a fair price commission would not guarantee that all would be put right and that the beleaguered farming community would obtain a fair price for its produce. Indeed, there is concern that it could turn into another layer of bureaucracy. At a time when the Ulster Farmers' Union, through its care campaign, has been highly critical of the Department of Agriculture and Rural Development for being over-bureaucratic, it might well add to concern that we plan to create another layer of bureaucracy.

Do we have the power to set up a fair price commission? We shall have to wait for the Minister's response for the answer. It would be unfair to mislead the farming community that such a measure could be implemented if we have no power to do so. The issues are more complex and much more difficult to confront than simply setting up a fair price commission.

That is not to say that we should do nothing. The Committee for Agriculture and Rural Development addressed the issue on at least two occasions but failed to produce concrete evidence that price-fixing exists. That is not to say that price-fixing does not exist. Indeed, most farmers believe that it does. It would be wrong to believe or claim that the setting up of a fair price commission would provide a solution to what is a serious issue. I commend Mr Savage for tabling the motion and enabling the debate, but I do not believe that it is achievable or that it would be successful. However, I do not mean to question Mr Savage's sincerity; he is an influential and important member of the Committee for Agriculture and Rural Development.

1.15 pm

There is no denying that the farming industry is in crisis, but tinkering with the problem will not bring about the fundamental changes that the farming industry needs. Today is an opportunity to reflect on the work that has been done - for example, by the vision group and as a result of the encouragement given by the Minister to farmers to establish co-ops to improve their marketing methods and skills, to add value to their products and, in a range of other ways, to try to achieve better prices for their produce. However, that is not to say we should not focus on the supermarkets, which have a major role to play in ensuring that their source of supply is protected. While I agree with the sentiments expressed by Mr Savage, I believe that his proposal is fraught with difficulties.

Mr Armstrong:

I support the motion and add my voice to my Colleague's calls for a fair price commission, which will have the ultimate aim of securing a fair price for farmers' produce. The situation in the agriculture sector is desperate. Two years ago there was a mass demonstration by farmers to Parliament Buildings to protest at the low prices in farming. Today the prices are still unsustainable - and that is five years after the real crisis began.

Why is the farming industry still on its knees? Farmers know why. Fat-cat processors and supermarkets are the culprits. They take more than their fair share of the profits. The need for a fair price commission is clear, and it was particularly highlighted in recent weeks by the Ulster Farmers' Union's campaign against rural exodus (CARE).

On 26 September the Ulster Farmers' Union put fresh food on sale at the farmgate price that the farmer receives, rather than at the supermarket retail price. One litre of milk cost 15p and 2·5kg of potatoes cost 22p - a 900% drop from the average supermarket value. That is a disgrace.

Farmers have to bear the high costs of feeding and housing livestock. This year's wet weather will add to those costs. However, farmers receive only a small return on their produce. Large supermarket chains have massive bargaining power. When a bargain is to be given to the consumer the farmer receives less for his product, yet the supermarkets' profit remains the same. Supermarkets are able to dictate the prices they pay to farmers for produce, and that undermines the notion of a fair market system.

In recent years large processing companies have gained what amounts to almost a monopoly situation by buying over small abattoirs. Once again, this results in low and unfair prices for farmers. Farmers are working an average of 70 hours a week, and some work over 110 hours a week. Farm incomes are unsustainable, while supermarkets and other parties in the food chain continue to announce massive yearly profits. Where is the level playing field?

The system is not working. I support the call to urgently establish a fair price commission to expose how profits are being unfairly distributed on a massive scale. I also call for that commission to scrutinise profits and to ensure that they are shared equally.

Mr Bradley:

I apologise for not being present earlier, but I was attending a Business Committee meeting. Therefore, I have not heard the theme of the debate.

When the motion was first tabled, I obtained copies of the Committee's reports on its inquiries, and also the document 'Retailing in Northern Ireland - A Fair Deal for the Farmer?' in which the Committee made 16 recommendations. I imagine that Mr Savage revisited much of that during his remarks.

At that time we were awaiting the outcome of the Competition Commission's inquiry. It found no evidence of price-rigging or collusion between retailers. Perhaps Members are suspicious by nature; we still thought that there might be something there, but the wheels that were put in motion could find no evidence of it, so we had to accept that.

Farmers are blaming part of their downward spiral on retailers' charges, as their profits are not in line with the farmers' profits. Farmers are working for nil profit, and shareholders in large multinationals would not live with that. We are victims of that.

Many concerns have been expressed about farmers, and I ask the Committee for Agriculture and Rural Development to take a step back and look at where the House could be heading and what that would mean for the farming community.

Over the past three or four years we have heard many cries from the heart about the farmers' plight. We met lobby groups; we met many farmers on the steps of Stormont; we visited farms to hear their plight at first hand; we listened to farmers' unions; and we pledged 100% support. However, any thought of collapse of the institutions will not back up our support. I ask Committee members to search their souls, in the interests of the industry, to see if that is what they really want. I will fight tooth and nail to save the institutions, in the interests of the farming and rural communities. Perhaps I am drifting slightly from the motion, but this is all interlinked. We want farming for the future, and a future for farming. I did not hear the wording of the motion, but I support it.

The Minister of Agriculture and Rural Development (Ms Rodgers):

I pay tribute to the Members from the SDLP, the Ulster Unionist Party and Sinn Féin who have found it worthwhile to come to the House to debate the state of the agriculture industry. I regret that the Chairperson of the Committee for Agriculture and Rural Development and his two party Colleagues on the Committee have not thought it worthwhile to come to the debate. They purport to be concerned about the future of agriculture in Northern Ireland, but their actions have spoken louder than their words.

The motion calls on me to establish a fair price commission to examine the distribution of profits in the agrifood sector. I am fully aware of the many challenges that the agrifood sector has faced in recent years, and the impact that these have had on producers and the rural community. I spend a great deal of time in that community, and I know everything about it. I am not a farmer, but in the past three years I have learnt a great deal about the difficult situation in which the farmers find themselves.

Moreover, the problems that we have discussed today are not unique to Northern Ireland. Producers throughout the British Isles are voicing similar concerns. I agree that, for some time, farmers have not been achieving a reasonable return on their investment and labour. However, it is vital that goods be produced in response to consumer demand and at a price that others are willing to pay in order to succeed in today's market environment. In so doing, buyers and sellers have a right to operate in a market that is free from anti-competitive behaviour and abuse of power.

Mr Savage and other Members will be aware that 'Retailing in Northern Ireland - A Fair Deal for the Farmer' pointed out that excess profits do not seem to be generated by processors or retailers. That report was published as a result of research that was carried out at the behest of the Committee for Agriculture and Rural Development. In addition, a report published by the UK Competition Commission - formerly the Office of Fair Trading - also concluded that retailers were not making excessive profits. Therefore, a simple redistribution of profit will not solve the problem, even if I had the power to bring that about.

Under the Northern Ireland Act 1998, the regulation of anti-competitive practices and abuse of dominant positions in the market are reserved matters. The motion does not fall within the gift of this devolved Administration. It is asking me to do something that I do not have the power to do.

In the light of that, we must examine other ways of addressing the issue. First, an integrated food chain must be developed so that there is clear communication of market demand and greater understanding of, and trust between, the links in the chain. Secondly, we must try to move away from producing under-differentiated products, which are subject to severe price competition. We must position ourselves elsewhere in the market where issues such as quality, safety, production methods and reliability as business partners assume greater prominence.

In view of investigations into the distribution of profits in the food chain, I am not sure what more a fair price commission would achieve. I thank Mr Dallat for his comments because, as he and Mr McHugh pointed out, there are concerns about whether such a commission would be toothless and powerless to deal with the issues. Given that competition is a reserved matter, it would be toothless and powerless.

I am also concerned that, as Mr Dallat pointed out, such a commission would create a further layer of bureaucracy for little gain. I would be the first person to be criticised heavily for wasting resources on useless administration for a toothless commission. Therefore, I remain unconvinced of the merits of the proposal.

When I took up the post of Minister of Agriculture and Rural Development, I recognised the need to develop a strategic approach. I am putting the finishing touches to the vision action plan. I was surprised by the accusation made by the Deputy Chairperson of the Committee for Agriculture and Rural Development, Mr Savage, that the Department has been putting obstacles in the way of farmers. Since I became Minister, all my endeavours have been aimed at ensuring that farming becomes a viable economic livelihood. However, I cannot achieve that overnight; it must be done strategically.

The initiative, which started over three years ago, will achieve real outcomes and will allow the industry, in partnership with Government, to address the real problems that it faces. I emphasise that it must be done in partnership with Government, because the Department alone will not deliver the strategy. I hope soon to announce the action plan for the modernisation of my Department. One purpose of the plan is to ensure that the interface between customers and the farming community is as effective as possible.

We should proceed by working together and focusing on the issues that are within my power as Minister. Nevertheless, all the links in the food chain must realise that they depend on one another for survival, and that they all must share in the profits. I am aware of, and share, the concerns of the farming community. Farmers are at the bottom of the food chain, and they cannot pass on the costs that are passed down to them. There must be co-operation down the chain.

1.30 pm

As Mr Dallat pointed out, I am anxious to enable that. I cannot force it, but as Minister I am most anxious to enable that partnership to happen, for that trust to be built, and to ensure that everyone in the food chain secures the profit that he or she deserves, and a fair share of the profits of the industry.

Mr Savage:

The Minister summed up the issue in her last few sentences when she said that she realised that there was a problem - that problem must be resolved. She said that she may not have the power, but at least she has the power of persuasion in her Department. That can be a mighty tool if used properly.

We all know that I would not move such a motion unnecessarily. I thank all the Members for taking the time to show an interest in what is happening in the agrisector, for the problem is real. It is hard for milk producers, for example, to see their product in a supermarket selling at double or treble the price that they got for it. That is not on. I do not know what we can do to resolve the problem, but I know one thing for sure - farmers cannot continue to produce for nothing. They are quite happy to produce if they receive a reasonable return, but there is a certain pride in the farming community. They have worked and cut back. Northern Ireland farmers are as efficient as any in Europe, and yet we are being ripped off right, left and centre. As soon as beef or milk leaves farmers' yards, the gulls are ready to dive for the profits. They all live off the farmer, and he receives nothing in return.

The situation is beyond belief. As we discuss the issue, another meeting is taking place on the other side of Belfast. A few things could solve the whole problem - an extra 3p or 4p a litre on milk; 3p or 4p a dozen on eggs; and the same sum on pigs. It all boils down to greed. We should not pussyfoot around; we should call it for what it is.

We must sort out the matter. I do not know how that is to be done, but one thing is certain: if those people cannot get their act together, there will be no farmers left. I do not want to see the agriculture industry going the way of the shipyard in Belfast.

Mr Deputy Speaker:

Under Standing Order 25(4), a vote cannot be taken if a quorum is not present, which is the case at the moment. I shall, therefore, ask the Clerk to ring the Division Bell and wait three minutes to see whether I can put the question.

Mr Dallat:

On a point of order, Mr Deputy Speaker. Is it reasonable for people to turn up for a vote when they did not take the trouble to listen to the debate to make sound judgement on the issue before the House?

Mr Deputy Speaker:

It is indeed reasonable, Mr Dallat. I thank you for your question, but you are as aware as I am of Standing Orders, and a vote cannot take place without a quorum in the Chamber.

Mr Dallat:

Further to that point of order, Mr Deputy Speaker. That was not the point that I was making. Will those who may come clamouring to the sound of the Division Bell be able to make sound judgement on what was discussed here? They did not take the trouble to turn up for the debate.

Mr Deputy Speaker:

I am acting under Standing Orders; it is not for the Deputy Speaker to decide what is reasonable or not.

Mr Bradley:

What is the view of the mover of the motion? Does he wish to put the matter to a vote or is he satisfied that he has delivered his message?

Mr Deputy Speaker:

As Mr Savage has not indicated that, it would be impossible for me to say. However, perhaps he wishes to say whether he wishes a vote at this late stage.

Mr Savage:

Mr Deputy Speaker, what Mr Dallat and Mr Bradley have said is true. When Members are not present in the Chamber, do we expect them to vote on something that they know nothing about and have not taken part in? I am satisfied that the Members who were present put their points across.

Mr Deputy Speaker:

I understand, Mr Savage, that you are not begging leave to withdraw the motion. Unless there is a quorum, I will ask the Clerk to ring the Division Bell.

I understand that there is now a quorum. Therefore, I will put the Question.

Question put and agreed to.

Resolved:

That this Assembly notes the disastrous situation of agriculture in Northern Ireland and urges the Minister of Agriculture and Rural Development to establish a Fair Price Commission with one of its principal functions being to investigate the distribution of profits within the Agri-Food sector.

Adjourned at 1.36 pm.

<< Prev

TOP

7 October 2002 / Menu / 8 October 2002 (ii)