Committee for
Agriculture and Rural Development
Friday 8 September 2000
MINUTES OF EVIDENCE
Pig and Beef Industry
(Ulster Farmers' Union)
Members Present:
Rev Dr Ian Paisley (Chairman)
Mr Savage (Deputy Chairman)
Mr Armstrong
Mr Bradley
Mr Dallat
Mr Douglas
Mr Kane
Mr McHugh
Mr Paisley Jnr
Witnesses:
Mr W Aston)
Mr C Pogue)Ulster Farmers' Union
Mr D Rowe
The Chairman: Gentlemen, welcome. We have two things to discuss with you - pigs and beef. We will hear your opening statement first, Mr President. Could I ask you to be as brief as possible because we have already read your briefing, and then we will have questions. Each member wants to ask a question. I was very liberal this morning, but I would warn Members that we want questions and not pieces of advice or homilies. I notice two men smiling broadly because they transgressed wickedly this morning.
Mr Rowe: Thank you for inviting us back. We regard this Committee very highly. Allow me to introduce Mr Pogue and Mr Aston.
There is no point in my going into further discussion about our letters, which you have already read. The debt situation in the agriculture industry is probably not getting any better at present, although there is a little optimism. When God makes the sun shine, it helps us all feel better. That is definitely true in agriculture, where we are so dependent on the weather. As for the economic climate, things are making only a little headway. There is a lot of ground to be made up. The amount of debt with the banks and finance houses has not been reduced to any great extent. All of our efforts will be greatly needed to keep farming alive for the next five years.
It is important that agriculture receives as much support as possible in the programme for government. Everybody should get a fair share, and agriculture needs a fair share, not just of finance but also in terms of recognition of the problem. It will have long- and short-term effects on the country at large and on the economics of agriculture and of the rest of the community.
It is sometimes forgotten that we are a food-producing community. We have to remember that over 70% of the world does not have enough food, although it does not happen here. Those who think that they will forever be able to buy food from across the world and disregard their own agricultural enterprises are skating on very thin ice. I believe that you Gentlemen agree with me. If there is something else that needs to be drawn out, we will do it during the question session.
The Chairman: I note in your submission reservations about the creation of a producer group covering 50% of production. Other Members may want to pick up on that. How strongly do you support the creation of a better-organised producer base in, for example, the pig industry?
Mr Rowe: In general we support co-operation. The problem is that the analogy for co-operation in the farming world is two farmers getting together to screw the third one. That is an analogy that we must overcome, both as a perception in the minds of farmers and as the reality. If co-operation can help in any way then we are very keen on it, and we have cited a number of co-ops that work well. The problem is that co-operation and trust takes time to build. The issue we are currently looking at is debt and how to relieve it. Perhaps Mr Pogue, as our pig specialist, can answer on the specifics of the pig industry.
The Chairman: We have already heard Mr Pogue and perhaps he can speak on that later. Is there not a difficulty with the men who prepare the meat for market? Are they not the people who are screwing the farmers, more than one farmer screwing another?
Mr Rowe: Yes. I only used the other analogy as a joke. There is a degree of screwing - not just by the processing industry which is definitely living well off the backs of farmers, but right up the chain. We presently have many problems with the end customer - the supermarket that we are tied to. They are dictating what they will pay, whether they will pay it, what they will do, and saying "Take it or leave it". That is very wrong. They do not realise that sooner or later that will end, and they will have no one to talk to at the bottom of the chain.
The Chairman: I take it that the remarks you have made are equally applicable to both the beef and pig meat industry?
Mr Rowe: Yes.
The Chairman: Secondly, what steps do you believe are necessary to bring about more co-operation - a better organised producer base? Evidence has been put before the Committee, even this morning, that the producers, the farmers, are crucified because there are big men with their eye on the big investors who are tyring to get every penny out of the business. You also mentioned the large multinational retailers, which adds another dimension. Those are two powerful forces, and the farmers, because they are divided, are a weak force. What steps could be taken to secure a fair price for producers and to help them negotiate their prices? What resources are the UFU prepared to devote to that end?
Mr Rowe: That is a very large and complex question, and I will answer it as best I can without referring back to notes. There are a number of co-ops that have worked well in the past. One of the things that would help co-operation would be a definite move by the powers that be - whether by Government at a Northern Ireland or United Kingdom level - to assist co-operation by grant-aiding or significant financial help. Perhaps not totally in the form of money, because sometimes money cuts across state aids, but in the form of advice, secretTahoma work, market research and examination of the end product in order to understand what is produced and how to co-operate to produce it in a certain way.
Many years ago a co-op called UFIL was set up and it is still active in the meat trade, although it is no longer a sole entity; it works in co-operation with a number of producers. I was only a small boy when that was established in 1974. The powers that be in this House granted £900,000 of Department money to help it get off the ground and that was one of the reasons why it was able to get off the ground and be successful, even at a time when beef farming was at a very low ebb - some people here may remember that. That was a great help, and that sort of thing would still be helpful to producers if they knew that there was institutional assistance to do this job which would not lead them up the garden path and drop them over the cliff at the far end into the jaws of the first waiting crocodile of commercialism.
This would be applicable in every sector of agriculture. Sorry, I have forgotten the rest of your question.
The Chairman: What steps do you believe are necessary to bring this about, and what resources would the UFU be prepared to devote to this end?
Mr Rowe: The Ulster Farmers' Union is an organisation that lifts subscriptions from members to keep it running. It puts in a lot of work through its officers, paid staff and its unpaid volunteers. Co-ops, including United Dairy Farmers, which is running well at the moment, Ulster Farmers' Investment Limited (UFIL) and a number of others in the community are benefiting from the Ulster Farmers' Union putting in its time and effort for free. Few other people do that. If you bring in a Department person, a consultant, anybody from the business world, somebody is paying them, whereas the farming community, through the Ulster Farmers' Union, is putting in quite a lot in terms of time and resources.
The Chairman: Such a co-operative would need leadership. Would the Ulster Farmers' Union be prepared to take a lead role?
Mr Rowe: We have members who could be leaders. It must be considered as to whether the presidential team could give leadership or not. I have always been a keen supporter of UFIL. I am not a dairy farmer, but I am also keen to see that United Dairy Farmers succeeds. It has done great work for the dairy industry here, particularly when you compare it with England, Scotland and Wales where such a co-operative was not allowed to exist. We have members who would be capable of leading these sorts of organisations. Obviously when a co-op or business is set up it must not only be co-operative, but commercial as well. You must look for the best commercial brains to run any organisation, even a co-operative. Co-operation without commerciality will fail.
The Chairman: Funding is the big question. Do you believe that farmers and processors should be prepared to make a contribution towards this? It seems, at the moment, that processors are not too happy about farmers getting more clout in regard to their produce. It seems to be that processors make money on what is produced but set the terms of the purchase price and refuse to negotiate. They can threaten to buy elsewhere, which is a very big threat, especially in the pig industry. We understand the plight of a farmer if he cannot get his pigs off the land.
Should the Government be expected to contribute to the funding of such a development? You have partly answered that by saying there may be EEC reasons. The Department of Agriculture and Rural Development has some intelligent people and if they wanted to invest their brains in this organisation - I do not know any Government Department that has such a wealth of knowledge by the way it is tied in with education and relations with universities. What is your view on that?
Mr Rowe: Mr Chairman, in business life the man with the money down will always react better than the outsider. Farmers with a stakehold in any co-operative are important. The problem is that this inquiry is also about debt and many of the farmers who could make the best contribution are unable because of financial restraints. There should be a shareholding base and some money, perhaps not a lot, but some from each of the players so they will all have a stake. To make these schemes work, it is important that everybody who gets involved has a stake.
Mr Aston: Farmers are already investing financially in producer groups at a much lower level. For example, they may pay £25 to join a particular producer group. The extent of the investment is crucial in these cases. Producers are willing to invest, but to what extent, given that the present situation is so difficult?
The Chairman: We all know farmers have debts, and they are not in a position to invest when they are in debt themselves. We wanted to seek a general opinion on this from the union, which is giving us an adequate reply.
Mr Rowe: As Mr Aston said, there are quite a lot of small scale co-operative movements being formed among farmers.
Mr Pogue: We mentioned the UPP earlier on when we talked about these schemes. It has have already been approved for grant aid from the Department under the marketing development scheme. When we were carrying out consultations about proposed marketing assistance, we made provision for possible funding for a PR marketing consultant to help get the co-op up and running. We hope to get funding for this from the marketing co-op.
The Chairman: How much money will be coming from the Government?
Mr Pogue: That will depend upon the throughput of pigs for which we get a 50% costs grant. The maximum grant approved over the three-year period, is £150,000. The provision made under the marketing assistance is £15,000 per two-year period. That can be left open. There is another £35,000, part of which may be transferred towards that. So we will be receiving in the region of £160,000 to £175,000 over a three-year period.
The Chairman: Thank you very much. That is helpful.
Mr Savage: In recent times, the pig-meat industry had a unified market on board. A farmer-owned processing plant and a strong farmer-owned brand. These have either disappeared or passed from the farmer's control. What can we do to try and bring these elements under farmers' control? The farmer must have a say. An outsider with no business interest does not have the same input as the man that has been involved at the coalface. How can we move back towards a situation like before?
Mr Rowe: The marketing boards were also very successful for farming between 1947 and our entrance to the EU. The problem was that they were regarded as being in breach of competition laws and anti-state laws and many had to be removed. This is all well documented particularly in relation to pigs and milk. All co-operative schemes must be, to some extent, commercially led and the farmers involved must have a commercial involvement in order to make it pay. You cannot keep something going that is not making its payover, maybe not every year, but over a five-year averaging period. I can see farmers getting back into business in a number of ways - one of them would be if they were able to buy and produce for example, if they bought a factory particularly in the pig marketing world and went back into marketing.
Considering the size of multinational companies that you will deal with on the retail end and those that you will be competing with, it would be very hard to achieve the necessary size and scale of operations. It is probably better if the farmers can co-operate to sell to the best outlet available. That might involve putting pigs or cattle on to a boat and having them slaughtered in Timbuktu to get more money. It is that sort of thing. It also involves making contracts with companies that will honour the contract through thick and thin. However, the farmer has got to remember that he must honour his side of the bargain as well. It is a two-way street when you go in to this business. It is very important that farmers get back into processing and that they market their product to the best processor.
Mr Savage: It is important that we have another outlet for what we produce.
Mr Rowe: It is important that we have as many outlets as possible for any product that we produce. It is interesting that in the apple world there is a firm in Clonmel, County Tipperary who are increasing their production of juice. In turn the price of apples has increased for everybody. As far away as that farmers are making a difference.
The Chairman: We will reverse the order of the proceedings, because some people came in late and we are putting them in early.
Mr Bradley: The pig-meat sector is not grant-aided by the EU, but remains totally exposed to the commercial sector. What steps does the industry need to take to become, and remain, globally competitive and thus be able to face competition from the US and other highly efficient producers in the future? How well equipped is the industry to face such competition, if and when it arises?
Mr Pogue: The pig industry has suffered. Over the past two years there has been no investment made in that industry. There would need to be an injection of capital into it so that we could make our units more efficient. At one stage we were asked to go into loose housing and we had a loan for a wheen of years. However, the deadline was at the end of 1998, when we were at our lowest price for years. They were converted on a shoestring. There are a lot of units now, where the housing of sows is not very good. We need capital to improve this housing and to improve the welfare of sows in general. This would help to improve our industry. We do have very efficient pig farms in Northern Ireland, mostly family-run units which can keep operating. There is a scarcity of good trained pig men in other areas, especially in the South of Ireland. The bigger units have difficulties hiring labour to run their units efficiently. In Northern Ireland the family farms can keep running, while some of those bigger units can not.
Mr Rowe: I regard with scepticism the idea of unsubsidised production in Europe. There is a similar situation in America, where the Secretary for Agriculture said "I will not let my farmers suffer" and produced $5 billion on one day to help out. He has been known to do little things..
The Chairman: We would love to have him over here.
Mr Rowe: We would love to have him but I presume -
The Chairman: It would be better to keep the Secretary of Agriculture than getting Clinton back.
Mr Rowe: I presume he will be out of a job when Clinton goes, so maybe he will be available for employment on a pig unit somewhere. The world stage on pig meat is not level so we need to be careful not to fall into the hole of expecting to get something when other areas receive help - an example at the moment is the age scheme which is in place in three counties in the Republic If the scheme proposed in the United Kingdom does not come to fruition, and it is looking increasingly unlikely, this House should consider a scheme in Northern Ireland similar to that in the Republic of Ireland.
Mr Kane: Your submission states that the food supply chain and Government should provide meaningful support for smaller producers. Would legislation to protect primary producers help?
Mr Rowe: Yes and no. Legislation to protect primary producers is always useful to any business. However, we would have to ensure that legislation did not keep small producers small. The industry must have freedom to evolve.
A mechanism must be found to allow, first, the retailer to buy our product because it is of a certain standard and quality, which have been met, secondly, we must get our fair share of what the housewife puts in her basket. It is unfair that those who hold the product for the shortest time get the biggest profit. That is a problem across the industry.
Mr Kane: That is a valid point.
Mr Armstrong: Some supermarkets tell us that they only use Northern Ireland products. Could the farmers and some of the smaller processors not form a partnership to supply that market? That would provide a United Kingdom market, allowing our producers to supply Marks & Spencer with Northern Ireland brands and service both the Great Britain and Northern Ireland markets.
Mr Rowe: A group of producers, and I must be careful in what I say as some of this may be confidential commercial information, is already trying this. The problem is, however, that they have to bat against a very large corporation, which wants to supply the supermarkets - and the better the supermarket, the greater their desire to supply it. They will use every method they can to ensure that they get the business. Competing against them is a massive problem.
It is up to the supermarket to be loyal enough to say "We are willing to buy from the small guy and we are willing to charge the premium." It is up to their customers to pay the premium, and it is difficult to get people to do that.
Mr Armstrong: Marks & Spencer likes to think that it has a niche product which could give its suppliers more of a premium price than, say, Safeway's.
Mr Pogue: Some processors are already supplying Marks & Spencer and are looking to that market. It is difficult for some of the bigger supermarkets to get in because some of the bigger factories have distribution centres in England. It suits them to supply the English distribution centres. It is cheaper and more convenient than using Northern Ireland producers.
We should look to the catering trade as well as to retailers for an outlet for our products. This is an area in which local producers could be scoring. They can guarantee food safety, which is much more important than animal welfare to the catering trade, hotels, restaurants and fast food outlets. We should also be developing product, especially in the pig sector, which is suitable for bacon, egg and soda fast food outlets.
We need to look to the catering sector as well as to retail outlets.
Mr McHugh: Which option aimed at the way forward are you prepared to give the most commitment to with regard to the idea of greater organisation of the farmer? That includes beef and, in particular, pigs. Is the long-term strategy for the way forward to start to organise now as a total group?
Mr Rowe: Organising farmers into a total group would be difficult, but to organise a sizeable proportion of them is probably achievable. People in the pig industry are trying to work in that direction. We have been supportive in various ways and would be supportive of them going as far as possible down that route.
Mr McHugh: If farmers look back at what has happened to them in the last 100 years, strengthening themselves can be their only option now for them to have a future.
Mr Aston: It is ideal if we can jump from our present situation to controlling a big share of the market. However, that is not going to happen given our present situation and also given our history. It is important that these things evolve, and if the smaller groups are successful, they will grow in any case. Realistically that is the only way that we see it happening. There is more need for Government assistance and producer involvement in these types of things.
Mr Pogue: In Great Britain, producer groups are affiliated to one body. We looked at this in the pig sector when we brought Scotlean over to assist us in the development of our co-op, but it did not work out. If we got our co-op going here we could be affiliated to the Great Britain body and many groups are incorporated into that body.
Mr Paisley Jnr: The House of Commons Northern Ireland Parliamentary Affairs Select Committee, in its last report on agriculture, stated that it was essential for farmers and processors to work together to establish co-operative groups. In our first report, at the end of the last session, we made a similar suggestion that we would like to see the development of existing producer groups, new producer groups and also branding of products.
With regard to your written submission, and with what you have said today, you seem to be reluctant to pick up on those suggestions. If you are reluctant to pick it up is there any other way to develop the industry to a successful outcome? Or is your reluctance one of not that it should happen, but how it happens?
Mr Rowe: There are some ways this could happen but we are not as reluctant as we seem. We see the practicalities of it working on the ground at all times. So the practicalities have to be taken into account. If you do not take good enough cognizance of the practicalities, the theories do not really work. There is no point building up the theory that co-operation will solve our problems overnight. They will be useful in solving our problems and when the co-ops develop, and those who are successful continue, that will be a big help. Both sectors, but particularly the pig sector, need a commercial solution in the short term.
If the price for the finished pig product in Northern Ireland stays at 85p much longer we will see those who are breaking even coming to a stage where they will not. They will have to continue putting money into the business to keep it going and that will bring them down. We will start to go down further. Critical mass will drop, and we will fall off the edge.
Mr Paisley Jnr: As regards the commercial goal, how do we get there? What should the industry do? What should the Committee do? What should the Department of Agriculture and Rural Development do to get us there?
Mr Rowe: We have got to keep pushing at why there is a 20p differential between Northern Ireland and Great Britain. Why is it there? Why is it that - and I do not want to say anything which could be sub judice and for which I could be hauled across the coals - there is seemingly a price slump even in the South for pig meat at the present? We have been told that it is a case of supply and demand. However, where will supply and demand end? Will someone say, in three months' time, that it will or will not have happened? Will someone give us direct guidance about where we are going?
Mr Paisley Jnr: Are you saying that there is price fixing in the market?
Mr Rowe: I did not say that. You are inferring that from what I have said.
The Chairman: A pig, called by any other name, is still a pig. We are in a serious commercial war. The war is not to the farmers' advantage. The farmers are not even allowed to fight because their hands have been tied and their arms have been taken away. That is the trouble, and we are saying that a properly organised co-operative is the long-term solution. We are facing the short term, and the short-term solution is putting money into saving jobs and the industry. It is not putting £890 million into a dome. We need to insist - and keep insisting - that a massive cash injection is needed to save our industry. What about the debts? The debts are evidently forgotten by the Government. We are in difficulty, and I was rather grieved when I read the budget that was presented to the European Parliament this week. There is nothing in that budget that would adequately face up to the dire needs of Northern Ireland's agriculture. I see from the 'Financial Times' that the Scottish Farmers' Union is mad about the proposals that are going to put them into Queer Street. We need to accept that we must work towards a long-term solution. In the meantime, we must keep working at one of the most important things, which you mentioned, and that is to get the same money for our pigs that they get in England.
Mr Pogue: Part of the problem with the differential in the pig industry is that we have a land border with "Euroland". Pigs are obtainable from the South at £1·05, which is the same as for those from England. I do not object to pigs coming from the South. There has to be two-way traffic, and the pig industry in Ireland, as a whole, has to be looked at in its entirety. As long as there is a differential in currency, I do not think it will be easy for us to achieve the price that they have in Great Britain.
The Chairman: That war of money is going to increase because the whole basis of finance is shaky when one looks at the American and German stock markets. We get the German Chancellor speaking up for the euro one day, and the next day it plunges.
Mr Pogue: In respect of the pig industry Ireland has to be considered as a whole. One of our problems with exporting live pigs to Great Britain, and I do not think that this has been made clear, is that neither Northern Ireland nor the South of Ireland are Aujeszkys-free. Now that our sow numbers are low it is an opportune moment to clear Ireland of Aujeszkys, and some assistance should be given to that.
The Chairman: We will take that on board.
We will now move on to the beef issue. The quality of the composition of the average beef herd in Northern Ireland appears to have deteriorated in recent years, yet we are being told that the best of Northern Ireland beef is good enough to command a premium price in discerning markets such as those in Holland. Do you agree that improving the quality of the total beef herd to be the best is an urgent industry objective? What proposals does the Ulster Farmers' Union make to the Committee in order to reach that objective and make a contribution to that important cause?
Mr Rowe: Yes, the beef herd has deteriorated in quality over the last number of years but there are a number of reasons for this. One of these reasons is that we are comparing the quality of today's beef herd to that of the 1970s and 1980s. However, in the 1970s and 1980s we were legally allowed to use hormones which resulted in leaner, fitter cattle. Then we had the onset of BSE. When that happened people lost heart in breeding and a lot of us, myself included, decided to sell the best heifers and breed the worst ones because they were not worth anything anyway. Then when they came to be cows they were worth something under the 30-months scheme - and we are reaping the rewards of that.
There are a number of ways out of this problem. But remember one thing - when we start to talk about beef quality we are looking at objective grading as a beef quality. Recently I was at a seminar given by the Australian Beef Board, and it was interesting to note that for some of their markets they are going away from objective grading and going on to the taste and eating quality of beef. It is very important that we do not lose sight of this. If the housewife buys a piece of beef - no matter if it is from an E steer or an O minus P - if it eats badly she will buy something else the following week. It is important that we look at the issue correctly and realise the importance of the eating quality.
That is an overview. At the present time farmers and those in the meat industry trade are on the European grid with regard to beef. The European grid was used for intervention, and it has been allowed to carry over into the present time. How we improve cattle on that dead weight grid scale is a long-term position. A decision is made on the day of conception as to what the meat is going to be like - three years before it is on the plate. There is a number of things that we can do. One thing that could be done in the short term is the provision of a subsidy for the synchronisation of heat in cows in suckler herds and the use of good AI at a subsidised price. In 12 months time that would probably give a crop of calves of superior value and would immediately increase the quantity of quality cattle on the European grid until we get someone who can devise more tender beef. That would particularly help those farmers who are keen to do the job both on a part-time and full-time basis. They can then synchronise their herds to calve in a certain period, and they will know exactly what bulls they are going to use.
They can lay out their plans. The best laid plans of mice and men come apart, but it would be a good starting point. It is something practical that can be suggested by the Committee and is not going to cost the earth.
Mr Douglas: I am interested to hear you admit that the breeding policy needs to change. Unfortunately, most farmers will say that they are producing the best beef in the world and that someone has to buy it. That is a very poor way to go forward, and I am glad that you are prepared to admit that.
Regarding the grading system, people do not mind a poor price for poor quality animals, but they would like a better price for the good ones. The problem with grading is that we do not get the price. We are aiming for quality. That admission is a start and that is what we need. Could that go down the line to the farmers or is it possible to get that throughout? Could we have this better quality grading?
Mr Rowe: Yes. The present pricing and grading structures for animals - whatever we think about the grading structure - are tied together. The six-pence differential between grades was brought in to accommodate intervention when that made up the main market for beef before and during the times of the BSE crisis. Intervention is no longer a market for beef, and we need to be recompensed for what goes to the commercial market. During my time at the headquarters of the Ulster Farmers' Union, we have been trying to get the powers that be and the meat plants to pay on a more simplified classification system and to pay better for higher quality animals. It is very frustrating. I, and other union members, the chairmen of the Cattle and Sheep Committee, Mr Aston, and Mr Pogue, put a lot of time and effort into going round to meet the meat plants. They would not talk to us about pricing and grading together for fear of the Office of Fair Trading saying they were price fixing. The Ulster Farmers' Union had the Office of Fair Trading look into that situation in 1997. They reported back in late 1998 and early 1999 that there was no case to answer as far as collusion on price was concerned. Mark my words. Others think that they have introduced this into the community as a new idea, but it was already checked years ago.
It is important that we, as farmers, manage to get the bands of grading brought closer together. Instead of having 42 bands - or 36 bands of pricing if one band is removed - we could get down to a four-band pricing system. That would ensure that good cattle are well paid for, medium cattle are reasonably well paid for, and poor cattle can be penalised or sold to the appropriate market. Do not get me wrong. There is a market for poor quality cattle. There is a market for the Holstein animal in the processing world. Cows, in the distant future, will fill that market. At this moment it is a developing market - the catering market. But the upper end of the market must be better recompensed.
Mr Aston: Overall, in the longer term, it is about where we have come from in relation to how BSE has helped the deterioration of quality and the grading structure. How do you compare a piece of beef sitting on your plate to a grid system that somebody happened to devise? The bottom line is that if there is a proper reward for producing quality animals then farmers are the marketeers producing that animal. It is a combination of those factors.
Mr Rowe: That is a much more precise answer.
Mr Dallat: Earlier we made reference to co-operatives and, even earlier, we learnt how the pig industry has virtually lost control of itself. Co-operatives represent people power at its best. They are already in control of the large supermarkets who have shown no loyalty whatsoever to Northern Ireland or its distinctive rural community. Is there a need for the farming industry to be seen as part of the greater rural community? A rural community with farmers and no people, or vice versa, is useless. A number of independent butchers have survived the onslaught of the large supermarkets and have done it exceptionally well. Are there opportunities for help and co-operation from the Department of Agriculture and Rural Development to develop the relationship between the farmers and the independent butchers who are loyal to Northern Ireland?
Mr Rowe: The farmers are members of the community and must be kept there. That is something that is very important for the future. Farming in general needs to be sure that it has a relationship with its nearest market which is its local market, because the cheapest place to sell any produce is locally. Farmers do have a relationship with the local butchers, and a number of local butchers buy beef from farmers, have it slaughtered on a contractual basis and then sell it to local people. You can go into your local butcher and in some cases, they can tell you who provided the produce. The older family butchers are keen to do this. I can think of a very renowned butcher in Enniskillen who still does this. There is an opening there for some products, but some may be different. We have to market these products on a wider scale to gain market share and sell the produce. We need a bigger market share, not only of the local market, but of the other retail market.
As far as marketing in Northern Ireland is concerned, the Ulster Farmers Union has run a food initiative for the last two years, and are still looking at one for this year, to try to enhance the position of Northern Ireland agriculture in the home market. It was very successful in the last two years, and if we are able to run one in the future, we hope it will be successful also. As an organisation, we are trying to highlight this from our own headquarters in order to get the co-operation, not only of the local supermarkets, but also from the multi-nationals, so that their Northern Ireland branches will demonstrate what we have for sale and, it is to be hoped, increase sales of Northern Irish produce in their national areas also.
The Chairman: We are now very short for time. Will you please keep your answers short, Mr President.
Mr Savage: I have listened very carefully to what you were saying about quality. There are so many people living off the backs of farmers, and they have been doing for a long time. You said you wanted short-term solutions. What are these, and will they be compatible with the long-term requirements?
Mr Rowe: I do not want to be a politician or move in political circles - we represent all political walks of life - but you mentioned one solution that would be of use in any industry, never mind agriculture. The subsidisation of interest payments by those who are in debt would be very useful in the short term, and everybody across the political scene in Northern Ireland would have to agree that this is something that should be looked at more carefully and brought into play. It is not unique across Europe, but I know that when I was at college over 30 years ago, it was a recognised fact that on the continent, some of the farmers did not get grants and subsidies, but they got cheap money, and that was a big help to them.
That was a big help to them. We do not get grants and subsidies, and cheap money from any source would be useful.
Mr Bradley: Whom do you think should be exploring the branding concept which you mentioned in your submission?
Mr Rowe: Everybody in the industry needs to explore the branding concept. This industry has a big Department with a lot of expertise, and that sort of thing is in its remit. If one used a brand across Europe, one could get money to promote it. Sadly, Northern Ireland never had a brand that it could use. It had the Greenfields brand, but that is no longer unique, as it is used in Holland and Belgium - a firm there owns it now. We can use it in the rest of Europe, but Northern Ireland needs a brand of its own. It is a pity that the agriculture industry does not have a brand as distinctive as that of Bushmills whiskey.
Mr Bradley: Who should lead it?
Mr Rowe: The Department of Agriculture and Rural Development should lead it. It is recognised by all other Governments as part of our body. It should lead; it has the cash and the expertise.
Mr Aston: There are two organisations which could lead. One is the Red Meat Industry Strategy Group; it works with all parts of the industry and with the Department to see what can be done with red meat. There is also the vision group set up by the Minister. It is to issue a report soon, and it is crucial that it tells us if it considers it worthwhile to pursue this.
Mr Bradley: EU regulations 201 and 202 will mean that they probably will need a brand.
Mr Rowe: If all Northern Ireland products are to be branded, it should be done by the Northern Ireland authority. If one particular sector is to be branded, the obvious one is the red meat sector.
Mr Kane: Are the existing groupings too small to have any significant effect on prices or on the monitoring of the product? Why is a major co-operative, in your view, too big a leap?
Mr Rowe: The small co-operatives do make a difference for those who are in them. They can help make substantial reductions in costs at the buying end of the business. The United Dairy Farmers' Co-operative has kept the milk price. Although it remains bottom of the league at every stage in Northern Ireland's pricing, it has ensured that Northern Ireland's milk prices have been much better than the United Kingdom's. It has handled 50% of the milk, so it is not impossible. It is something that we can aspire to; but we cannot aspire to it on 10 September 2000. This is where the problem is. We can aspire to those higher ideals, but we must do it in time; we must save the industry soon.
The Chairman: Thank you very much. We are sorry for being so pressed for time, but we have a report to compile. When you have read the Hansard report, we will welcome feedback from you.
Mr Rowe: Thank you very much.
8 September 2000 (part i) / Menu / 8 September 2000 (part iii)