COMMITTEE FOR AGRICULTURE AND RURAL DEVELOPMENT

Report
Restoring Profit for the
Beef Producer

(Continued)

140.

Mr Rowe: I have just two comments on that, fallen animals and that sort of thing are not, should be regarded as something, as disposal of meat-and-bone meal is regarded not just as a farming problem but as a human health problem and should be dealt with in the overall Government expenditure.

141.

Just one other thing to come back to Gerry, I thank him for his good wishes, but he talked about the £400,000, that is for the marketing grant. There is another scheme as well for the health of pigs announced in the Summit on 30th March of £66 million over three years. When Nick Brown was here on whatever day, Tuesday, we did ask him and that he said that £26 [sic] million of this will soon be coming on-line now. The administration has to come and all the rest of it, he hopes it will be through Brussels in a few days time. We did ask him to look sympathetically at some regionalisation or relaxation of the rules towards Northern Ireland to put it at its simplest, Mr Chairman.

142.

The Chairman: Thank you very much. We come to the beef. If you can make your submission as short as you can then we will have more time for the questions. I know you don’t want to avoid questions. Some people getting at the table have a long preliminary because they don’t want to hear questions, we know that is not so.

143.

Mr Sharkey: I think you have got the paper, no doubt you have read it or will read it. I would just like to highlight a few points and leave as much time as possible for questions.

144.

The main contributory factors to the whole beef crisis as we all know and we are all sick of hearing is the BSE issue. Basically what it has done to the market place in Northern Ireland, it took away our competition for cattle basically overnight, that has been the ruling factor since then. The other big problem is the currency exchange rate and it is a twofold prong. First of all, just like the pig sector, it is drawing in all the imported beef into the UK market and let’s face it the UK market is the only market we have as our GB counterparts. So that market is being provided with a lot of cheaper beef, therefore making the differential with our prices against GB even greater than was normally the case. Indeed when we were exporting it was the opposite effect to that. I am pleased to say that of late the differential has narrowed somewhat but it is still a big issue and a very great concern to us. We would have to question the loyalty of some of the supermarkets, while very sympathetic to Northern Ireland and very loyal to purchasing our product we wonder if our prices were the same as the mainland, would the loyalty be as such.

145.

Secondly, the currency element on our direct payments is a very big issue as well. As you appreciate our payments - I will speak a wee bit more about them later on - are in Euros therefore as well as the price reduction with imported product we have the big reduction in our direct payments, that is a twofold attack basically on our livelihood.

146.

The cattle grading issue, we know a lot of people talk and there is a lot of discussion regarding that, we do realise that we must have a classification scheme within Europe. We must have and work towards the Europe grid. We believe and I strongly believe that the grading of cattle is not the main issue; it is the price that is paid for the various grades that is the issue. After all, the farmers are not particularly worried what grade is on the animal if he receives the same price or a fairly reasonable price. So that, we feel, is the main issue. I am pleased to say again, we have been working on this quite hard with the processors and we believe that maybe in the near future we will be able to get that price structure amended.

147.

Can I move on quickly to what action we believe could be taken to help some of these problems? First of all the BSE low incidence, we know you are all very familiar with that particular case, could we just ask you to reinforce the case, basically what we want is a workable, simple scheme so that we can export carcass beef and live animals and bring competition back into the situation. So that is basically what we are asking for, all the pressure we can to have a simple workable scheme. The regulations regarding all our schemes and premiums and whatnot are very complex, indeed the form filling exercise now is a very big worry and burden to some of our small farmers. I mean, we have the ICAS forms, we have all the premium forms and the there is a lot of documentation regarding this, it has to be very accurate and indeed we feel as farmers that we have no room for error whatsoever. If we do make an error, be it whatever type, there are penalties involved. The farming community feels very aggrieved that the Department, as infallible as they are, do make mistakes and there are no penalties there. We feel the penalty system is much too great for simple errors.

148.

As I mentioned the currency fluctuation, can I just come back and say one thing: We are part of Europe and we accept that, but if there is a mechanism in Europe for currency fluctuation, the agri-monetary system, we must have an undertaking by Government to fulfil their obligation there and pay that agri-monetary money. We believe strongly if this money had been drawn down and paid from the 1996 situation we certainly would never have been at the trough we were in because we all know a portion of money at the outset would have been a big benefit from saving us getting down so low. So we would like a firm commitment from Government that if this situation continues or increases or changes in the future that that mechanism is automatically there, that we don’t have to go with a begging bowl begging for money rightly due to us.

149.

Agenda 2000, there are some issues in Agenda 2000, we do realise it is mainly European guided, but we do realise there are a couple of items that the UK Government has discretionary regard. One of the main issues or two of them that were discussed this time last year was the 90 head limit to claim BSP premium on. And we prefer that this limit be abolished simply because we have to have an upper stocking limit which we do feel is quite an adequate limit. It is even more detrimental to the Northern Ireland farmer than his GB counterparts for the simple reason a Scottish producer, for instance, he can finish his animal, he is getting £50 to £60 more on the market place for it, on a cereal base system his feed is some £15 a ton cheaper so he is saving about £20. In other words, the Scottish producer would have the equivalent of one of our premiums over and above us. So this is why the Northern Ireland farmer cannot finish cattle successfully with one premium, he needs two premiums. The 90 head limit is there, obviously that is holding back our finishers from being able to achieve the second premium.

150.

The other issue, just a quick one on the siphon of the transfers of quota, we have a 15% siphon from all quota transfers. We believe that is too high because that goes into the national reserve. We were never happy with the way the Department implemented the national reserve or distributed the national reserve so we believe the siphon should be reduced.

151.

Promptness of payment of direct payments is another very grave issue to farmers and all basically we would be asking you for is to have a system where the dates are known and abided to that, when the 16^th October comes, whenever payments are due, from that date onwards those payments will be prepared in advance, even could be put in the envelopes and could be made available to the farmer within that week or what not because each year this goes on. Each year there is a different reason why the payments are delayed, but it all results in the same thing - we, as farmers, have to finance overdrafts for those extra months each year. We want a specific date regime for payments, when we would expect them and keep to that date irrespective of the problems.

152.

Could I just finish off very briefly, the relationship between processors and retailers we believe have been very detrimental to the farmers’ share and just as Charlie said on the pig issue we believe the retail prices are adequate to give everyone a reasonable return within the sector, but unfortunately we are at the bottom of that structure. We believe strongly, and I think we have evidence to support, we do not get a fair share of the chain. So we are asking that we could have some transparency there and get our fair share. We believe retail prices could remain something similar.

153.

Can I just finish off by saying we understand as producers we do need to cooperate better with one other, maybe that is something on the rural development front we believe more rural development money could go to agriculture to go to help us work together and strengthen our place in the market. So I will finish at that, gentlemen, and answer your questions.

154.

The Chairman: Thank you very much. This low incidence BSE status for Northern Ireland as you know there is great discussion in Europe, at the moment it is all over how this beef goes out of Northern Ireland and how it is going to be labelled and so on. Have you men any views on that?

155.

Mr Sharkey: Well the labelling issue is really a European issue at the moment on all the new labelling regime. Indeed it would be thought that when all the information that could or should be put on that the product would be no longer visible there is so much information. There are fors and against the labelling regime, it is difficult to say whether — certainly if we had a Northern Ireland image it would probably be okay. Probably as a UK image of beef may not be as good throughout Europe, so there are pluses and minuses, but it is something that is happening in Europe and it is slightly separate from the low incidence issue.

156.

The Chairman: But in the low incidence issue there’s going to be a labeling that this came from Northern Ireland from a low incidence status. Then the argument from the Commissioner, whom I have talked to and who of course is a legal man, he sees it all the way from the legal man, he is a former Attorney General from the South, he feels that it leaves the way open for other meat to go in and pretend to have the status that this low incidence section of the European market has, because it is sort of a new departure, this low status incidence.

157.

Mr Sharkey: I appreciate that. I’m not exactly sure what you mean.

158.

The Chairman: I’m asking you what way do you think you can get your meat from a low incidence status area of Europe across Europe without giving opportunity for people in the smuggling racket to get stuff across the border, label it the same way and get it away?

159.

Mr Rowe: Mr Chairman, all the other 14 countries in Europe, sorry 13 of the 15 are low incidence areas and they do not have this problem to any great degree. We therefore do not see this as a problem for us as a region. All right we are a region of a country that is regarded as high incidence BSE. The only place this could come into any problem is meat that has been brought in from UK from a high risk area into the low risk area for further processing. This can be safeguarded, we believe, quite adequately, by what’s technically known as reverse XAP scheme. In other words it comes out of England, comes to dedicated plants or plant, processed under supervision which will be done anyway because we have a high degree of supervision in the plants anyway, and then it is put back on the lorry and sent back to England. Whereas meat that comes from Northern Ireland, it will be coming from different plants, it can go to the market anywhere in the world hopefully after low BSE incidence status. Technically this should be able to be overcome without a great deal of bother. Now, I say technically, I see it as that way, that is what we are looking for, we have 15 member states to convince, and we have got to get the thing set up correctly. So there are a lot of hurdles to go over, but it is not impossible. And I believe that David Byrne at least knows it can be done if the will is there. It is making sure that the will is there, not only with him, but with SEAC, the committee who look after it and the 15 member states.

160.

The Chairman: It would be a terrible thing if because of legal technicalities and (inaudible) Minister we did not get it. I think that there are interests in Europe who do not want us to get it, that’s the first thing, there is opposition to it. That being so, we must be able to say there is a scheme like the scheme that you are talking about which seems to be quite simple and you are not really adding to what has already been done. If we could get that and I think that we need to be lobbying in Europe along that line because what I’m getting out of Europe is that it is too difficult, we would love to do it. I mean we were told by Nick Brown there was going to be no quick fix in this anyway, it was going to be a long time. I’m not so sure about what the Department here is doing, I’m not so sure because we had a document before them when they said they were definitely - they only looked at it this morning - they were definitely supporting it, but they weren’t saying it was their target. I put them over it today. So I think that we need now to get all the strength of agriculture on that one particular subject so that we don’t fall by the wayside.

161.

Mr Rowe: Mr Chairman, we, as a union, totally agree with you. It is one of the biggest improvements that we see not alone, it may not be the biggest in financial improvement in agriculture, but it will be one of the biggest boosts for morale not only for agriculture but for Northern Ireland. I believe it will also be a big boost for moral for the rest of the UK, because it will show them that it can be done , that there is a way out of this position and that we are not producing, for want of a better expression which is not very good, a dirty product or contaminated product, but I believe it can be done. We will endeavour and are endeavouring in every corner we can to do what we can for it.

162.

The Chairman: We might need the agriculture interests ourselves to maybe go directly to Europe because I’m worried that this is going to fall by default because they are all the things that are said to me. I talked myself with Byrne, of course he is sympathetic I mean I confirmed that he is sympathetic because he says "I am in a position where I’m easily got at" because people are saying he is the Attorney General in the south of Ireland, he is not interested in getting anything for Northern Ireland. I said I quite understand that, he is sympathetic. At the beginning of this they were talking about impossible standards that they wanted to go through with which would be so expensive that, at the end of day, we were not getting a free market into Europe. So I think we might have to develop more a strength because I sort of thought that Nick Brown was putting off the awful day, I might have taken him up wrong, he wasn’t saying that it was definitely coming. He said they are working on it. Now the officials are working on it. Sometimes I’m a bit afraid when officials get into the matter, especially European officials. At the end of day there is not much left so I think that we need to keep that in mind.

163.

The members want to ask you some questions.

164.

Mr Ford: Thank you Chair, I’m going to concentrate on your proposal and what action can be taken to overcome the crisis. I think it’s very interesting reading down the number of things we have already said, but unfortunately also the things like agri- monetary compensation which are rather beyond our abilities to have much influence on the current policy of the MAFF Minister. Although I think this direct payment is something which we could take up rather further with DARD. Can we just follow through your point about low incidence BSE because that seems to be a crucial issue at the present stage; the Chairman has already hinted at it, do you believe the will is there within MAFF, official and Ministerial level to push forward our case as strongly as it should be pushed forward?

165.

Mr Sharkey: I appreciate we are dealing with our own Department and in Dundonald House they in turn work through MAFF, I suppose the best hope is that MAFF is on our side. It is a sort of a three pronged attack. We work through the Department, they go through MAFF so, as the Chairman rightly says, there is a lot of change working there and if we could have a more direct involvement with Europe that could be useful to cut out of some of that because the message can get watered down, as it were, when it goes through three different bodies, but we are reasonably assured that our Department along with MAFF are on board and do want to deliver on this.

166.

Mr Rowe: David, can I answer that question? I was at a meeting with Nick Brown on Tuesday, he came out at that meeting with us very strongly in support of it. He said that he would do everything and make sure that his staff did everything possible to deliver. Now he didn’t come with a bit of paper in his hand saying: Here you are boys, export. But that was what he told us in that meeting.

167.

The Chairman: He told us that too, but then he was questioned when, when we came to the time factor, then we were running into difficulties.

168.

Mr Ford: I think, Chairman, we have got to continue with "shortly" is the answer to any question in relation to the time. In the meantime the issue about the build up of the Northern Ireland market within GB multiples for selling beef, your paper seems to be slightly confused, there is no justification for the differences in price and yet if we didn’t have those differences in price we wouldn’t be selling them to the GB supermarkets. Is there any prospect for any improvement in the marketing arrangements within GB on the presumption that we are not going to get low incidence BSE status tomorrow?

169.

Mr Sharkey: Well of recent times the price differential has narrowed for various reasons possibly. But we believe that the only time that our prices will come on par with GB is when we have competition and that will be as a result of exporting. I don’t foresee us ever getting to a situation that will be equal to the GB prices without the ability to export or bring competition into the market.

170.

The Chairman: I need to bring you in now.

171.

Mr Douglas: Thanks Chairman, thanks for your presentation. If you just highlight the fact that farmers are the only ones I think who are not allowed to make mistakes. I think that is important and something that needs to be driven home. Your paper mentions a lack of competition which exists, can you tell us how you feel more competition would benefit the farmer and how can more competition be introduced?

172.

Mr Sharkey: Well I think you just touched on that. How it can be introduced is basically with more people in the market place, which is people buying to export or indeed live exports to some parts would bring more competition into it. The second question?

173.

Mr Douglas: I was just wondering how more competition could be introduced, I mean you are talking really about the live markets here.

174.

Mr Sharkey: The benefit of it? We all know in any free market or even any auction place one only pays what you have to pay to purchase something. So I mean if somebody else is prepared to pay more you pay more. That again is back to the thing of competition that meat processors in Northern Ireland will pay what they have to pay basically to buy a product from us, but if there is somebody out there prepared to pay more they are quite happy to pay more, so competition is the word.

175.

Mr Kane: Ken, with reference to the livestock grading, farmers are under the opinion that stocks are being downgraded at abattoirs, they are not too happy with the LMC operation in general. They also believe that there is a cartel being operated within the LMC, the meat exporters, abattoirs, meat processors and retailers. I personally feel if this is the case an urgent investigation should take place for the benefit of the producer and the meat industry. I have also experienced LMC staff making drastic errors in grading, I can assure you it doesn’t go down well. Where do farmers stand in this respect and what initiative can they take, Ken?

176.

Mr Sharkey: Well grading has been an issue, a hot potato issue all down the years that I have been involved. I suppose the most up to date position on it is that LMC are now looking at the possibility and you know there has been some work done on the machines for looking at carcases and what not. I think that would probably be the way, it is probably a few years away as yet. So that will take the human element as it were, or some of the human element, out of grading. The question of whether LMC is fair or unfair at grading, when you do look at LMC and we did a review of LMC activities, there are not a whole lot of people wanting canto do grading or do classification in Northern Ireland. We as a union believe that LMC are still, if not perfect, are still the best body probably to look after that. There are fluctuations in grading. Human beings as they are have different opinions and different views so you do have some fluctuations. The last year or so we believe it has been more stable than prior to that. I still go back to the point why farmers are so unhappy with the grading is because of the price linkage to the grade. That is why he is so detrimental to the grading because it reflects the price he receives. We believe if the price structure was such that two or three grades made the same price then he wouldn’t be as anxious which of those three grades his animal got and it probably wouldn’t be as big a hot potato. We believe the machine route, automatic route will come and will take some of the human error out of it and that couldn’t come probably too soon for that, but the price differential, the price structure is the main issue we feel.

177.

Mr Kane: I’m sorry, I would have to disagree on your comment about LMC, but that is neither here nor there. Thank you Chair.

178.

Mr Paisley Jnr: I think the union should be congratulated coming up with the low incidence BSE status initiative. I hope that it does go through with some success, it is one of your babies, that has to be acknowledged. But in part of your submission, Mr Sharkey, your oral submission, you said that there appears to be enough money in the market in terms of profit, it is just the percentage share out of that profit between the producer, the middle man and the retailer, it prompts the question: Who is screwing who here? You know, one of the things following on from that, if you can answer that, I have my suspicions who is screwing who here, following on from that has the UFU considered seriously addressing the issue of setting up co-operatives to cut out the middle man in all of this and make the farmer not only the main producer but also the man who sets the price?

179.

Mr Sharkey: Well the question of who is screwing who goes on. All we know we are at the bottom of the chain and the processors and retailers, everybody gets a margin out of our profit, it obviously comes out of our little pot as it were so we are at the bottom. Whether it is the processors or retailers that is a very debateable point and one can argue all various ways because we would have a view that probably both are sharing in that situation.

180.

The Chairman: Isn’t it a fact that all these other people are doing well at the present time and the farmer is doing badly. We had all these people around the table, none of them are committing suicide, none of them are driving a poor car, none of them are doing anything, they are all doing well. But the farmer who is the primary producer he is doing very very badly.

181.

Mr Sharkey: That is quite correct. It is a known fact that we as farmers have been taken to the cleaners as it were over the last three or four years, but it goes back to the old position, I mean, what can we do, how do we force them to pay us more and nothing would force them to this competition, that’s the only thing that will force them or change the situation. We are all human beings and who is to say I wouldn’t do things that much different, but you must get a mechanism.

182.

The Chairman: We must move round the table.

183.

Mr McHugh: Thank you Chairman, in relation to committing suicide the only way that some of them might is if they are asked here often enough.

184.

In relation to the question of paper work, farmers are overrun by paper work at the minute. If you take a look at teaching at the present time teachers are no longer teaching, they are spending almost half their time in the business of paper work and they are under the very same pressures as farming, they have become very frustrated not to be able to do their job and it is affecting the whole thing. In terms of the other thing is that DARD are the people that negotiate more and more paperwork on behalf of the farmer and more regulations, some of it and quite a lot of it, I think could be done without. I asked Nick Brown the other day that we met him down in the Stormont Hotel, I asked him was there anything he could do in terms of putting some system in place such as tribunals or appeals system in order to address the situation where farmers who make unintentional errors have somewhere to go. I just wonder at the amount of money that is lost in terms of payments in terms of the community with 300 plus farmers each year being penalised and penalised very heavily at a time when they haven’t any money at all. That is a very, very severe system which is not in any part of our outside industry.

185.

Mr Sharkey: I’m not sure of the exact figure. We have our own technical people working on these queries, a lot of them are resolved but it takes a lot of time, effort and money to do. Yes, if there was some mechanism that these errors could be easily rectified or at least get a fair hearing towards them that would be very useful.

186.

Mr McHugh: I find there is no hearing for farmers, that is my response from the Department, a brick wall.

187.

Mr Rowe: I must say we have a technical team in the Union who will take members or people’s cases forward and we find that we do get a fair degree of results so we do. Not as many results as we would like, not as handy as we would like, but we do get a fair result.

188.

The Chairman: President, the trouble is the present day men were depending on money to be paid promptly, some of them got promises. A case recently where I have a letter saying it would be paid on a certain day then they never paid it for nearly three months and argued about the man didn’t fill his form right. It was only when I intervened and made an issue of it the man got his money, but he was three months out, the bank manager was pushing him for he had said: "I have £8,000 coming to me" and the bank manager took him at his word. It didn’t come, it threw him all astray.

189.

Mr Rowe: Chairman, you are looking at a man the same thing happened with. When somebody calls with an error and says: "I have a problem, we have a team who look into the problem".

190.

The Chairman: Right.

191.

Mr Armstrong: I will just ask half the question.

192.

The Chairman: One question.

193.

Mr Armstrong: Would you support the idea if farmers joined quality assured schemes and do you feel that these are a necessary part of future marketing and with quality assured would it be one way that we can see that the incidence of BSE would be eliminated and that we have give people the idea that BSE is not a problem in Northern Ireland?

194.

The Chairman: That isn’t one question, it’s actually two questions.

195.

Mr Sharkey: The quality assurance scheme in the beef sector has been running very successfully from the early 90’s. We believe that prior BSE that it was a big influence, a big factor in getting into markets so we do believe it is necessary to have a farm quality assured scheme. What we don’t agree with is and we touched on it earlier in getting members in the farm quality assurance scheme and to get people to join or to support it there has to be a differential between a farm quality assured animal and a non-farm quality assured animal. I think it has been the downfall scheme of late, the differential hasn’t been always there. We do understand that the market place does require farm quality assured animals and will pay more for them against non-farm quality assured, so we would support it, yes, we believe it is necessary.

196.

The Chairman: We will leave it there gentlemen. Mr President and your colleagues and your back up team, thank you very much for coming. Thank you for the information you have given to us. It will certainly be helpful when we draw up our report.

197.

Mr Rowe: Mr Chairman, can I thank you for having us and just as a word of closing that other things may need to be watched in the world out there is if our supply chain, for example or feeding chain contracts into fewer hands it may be detrimental to us because there will be less competition. It is the same thing if those who are buying our product in any circumstance are reduced in number competition reduces and I would like the Committee to remember when they look at the general news and things that this does have an effect on us. Thank you very much gentlemen.

MINUTES OF EVIDENCE

Friday 30 June 2000

Members Present:

Rev Dr Ian Paisley (Chairman)

Mr Armstrong

Mr Bradley

Mr Douglas

Mr Dallat

Mr Ford

Mr Kane

Mr McHugh

Mr Paisley Jnr

Witnesses:

Mr H Marquess )

Mr T O’Brien ) National Beef

Mr A McKevitt ) Association

Mr W Gordon )

198.

The Chairman: ...for this is a very long stay session, we started at 8.30 this morning. We have been going hard at hammer and tongs. You are very welcome, thank you for coming. What we wish you to do is to make a submission to us for about ten minutes and no longer if you can keep to that. Then we will have questions from the members of the Committee and your response for a further half hour, we have 40 minute for the whole session.

199.

Mr Marquess: Well first of all we would to like to thank you from the NBA for inviting us here. I hope we can put forward points that will help our industry. You have all got copies I take it from the NBA of the submission so we will just deal very briefly for I’m sure you would like to ask us a lot of questions and I hope we have answers for you.

200.

The Chairman: We’ll not be too hard on you, we are reasonable people.

201.

Mr Marquess: First of all, we need low incidence BSE for Northern Ireland. That is the main point and that is actually not on our summary. We have added quite a few points because that submission was made in a short space of time from GB from our Chief Executive. There is a lot of points that are in Northern Ireland that they don’t realise the implications to be honest. The low incidence BSE, as we say, would be in all of our cases I suppose the prime objective, if we can get that it at least it gives us a market. We were told coming in here no mobile phones. I asked the fellow how did he expect us to buy mobile phones with the state the industry is in at the present time.

202.

Greater prime cattle price transparency is probably very high on the agenda. I think that the processors would have - I need to watch what we say here - we are not saying they have created a cartel, but they have made it fairly possible for them all to work under the same price scale. That would be a thing that we need to look at.

203.

Updated costs of production. I would think that not one in 20 farmers know the cost of production of an animal, to be honest, and I think it needs to be looked at closely where production costs should be based — now I have been to Hillsborough and Greenmount, they base them on their particular costs where they can buy feed stuffs at a discounted price, they can get their silage, they have everything at a discounted price as their budget is so high. They are not really showing the true picture to the farmer how much it costs to produce this animal. I think if we do base a cost on that and try and work out a system whereby we need say a 10p profit say and an animal costs £1.70 a kilo to produce, if we have any means of forcing the processors into paying say £1.80 to allow us to have a profit. I know it is going to be a hard thing to implement, but I think it is worth looking at.

204.

Encouragement for more prime cattle through the live auction marts. Now the Department of Agriculture, I think, and LMC have pushed us into a sense of security, lulled us into a sense of security whereby we send animals now to the processors, they can give us exactly whatever price they want where if they were forced to go out to the live cattle auctions to buy them and I know it is a bad time to do this because there is too many cattle and not enough markets, but I think that farmers need to go back and look at the system they were working on a few years back where they go to the live auction marts and that raises competition. If you allow the processors and they have got into the situation when the market is not there they can just give you whatever price they want. We met the Office of Fair Trading in Newcastle in November and tried to bring it to their attention and they are working on it at the minute, but it is hard building up a case because farmers are not wanting to come out openly against the processors because they could be blacklisted very easy. Northern Ireland is a very small community and it would be very easy for one plant to say "Don’t take that man’s cattle", and in that case they are afraid.

205.

Imports - the standards of imports are nothing up to the standards that we have to produce. Either the standards of imports should be raised or else imports should be stopped unless they come up to our standards. The price of Sterling is against us, no doubt and that lets imports come in.

206.

We need easier access to the GB market for live cattle for slaughter. I know some of our members who took cattle across, there is a 25% differential on some occasions where they were making £30 to £35 a head more when they took their cattle across after expenses were paid. They felt the Department hindered them going across by protocol, TB and Brucellosis testing where cattle were going to a plant across the water, if they were going directly to that plant we don’t see any necessity for them to have a TB or Brucellosis test because they are tested at the plant anyway and this would show up.

207.

We need to raise the clean, green image of Northern Ireland. The resources has put into Northern Ireland farming. The little red tractor is a GB logo that in our instance, I think that we are lowering ourselves and I have stated this to LMC who don’t agree with me. I think we are lowering our standard if we get low BSE incidence by accepting a logo of a country which is not up to the same health standards at present as what we are. I think we should be promoting Ulster beef or Northern Ireland beef or go under the name of Green Fields. I think we must look at our own brand.

208.

I would think if we could get quality of cattle improved we could have buyers from Spain and Italy which would, if they come across as they have done in the Southern Ireland, they could probably raise the prices of our finished cattle by making a scarcity. We need that, that all ties back into low BSE incidence.

209.

There is too much bureaucracy and paper work attached to farming. There are people making laws over in Europe at the present time who don’t understand the practicability of implementing them, it is impossible in some cases. Labelling is one good instance at the present time.

210.

I think the Department has placed a lot of extra costs on us by health and safety towards cattle clipping and things like that where at the present time we have noticed that the Department are already looking for methods to protect their own vets from coming into close proximity with cattle because they have had one or two accidents. They don’t seem to worry about the implications of the farmer getting kicked or hit up the face with a pair of clippers, they don’t seem to worry about that, it is all one sided, too one sided, it doesn’t seem to matter about the farmer any more. Tagging has been a failure which was thrust upon us too. Torn ears 30%, some farmers would tell you their cattle have lost tags, others 20%, some 10%. Things like that place an awful cost on the industry. Another thing which we could look at there maybe is punching by computer where it would mean that a farmer wouldn’t need to bring his cattle into close proximity and have the chance of a Department official getting hurt or himself getting hurt. It is an extra cost to bring cattle in and extra time for punching. When computerisation is as good as they say I can’t see any reason why they can’t do it that way.

211.

Labelling is going to throw another extra cost on us, another £25 per head probably. That is a thing ongoing at the minute, we will not go into detail there.

212.

Semi-retirement scheme or an opt scheme as we talked about maybe four or five years ago. We suggested at that time that maybe a quota could be phased out over a period of three years where a man could get out of farming, still hold to get money from his quota for say three years. And a national reserve for quota the same as the milkmen have, his quota could be paced into that national reserve if he wanted to come back into beef farming after his three or five year period or whatever, his quota would be there for him to pick up again and it could be used meantime, if somebody else — the problem is no young farmers coming into the industry.

213.

90 head limit. Again another —

214.

The Chairman: If you could come to a conclusion now, we want time to ask you some questions.

215.

Mr Marquess: Coming near the end. The 90 head limit, again we will not go into detail on that there. Road signs are a thing, in farming diversification at the present time you can’t put up a road sign, DOE won’t let you put a sign up if you want to diversify, you can’t tell people you are there. Another point I would like to see implemented would be to keep farms and farming families, there are too many developers coming in buying up lands to make new villages and things like that. I thought the proposal that was put forward was a very good one, by the way, of a house on the farm, I think you need to look at it and make sure it is kept near the roadway where you can sell it off without disturbing the farming activities.

216.

Scientists should not be allowed to speculate at the expense of the industry. I think that has cost us an awful amount of money, scientists speculating, telling us what’s going to happen.

217.

On the last two now. Farmers have become the supermarkets slaves and Government has allowed them to become that too because supermarkets and customer wants are sometimes thrust upon us. Customer wants are not really always what the customer does want, it is a perception that is put into their heads.

218.

As regards DARD, the sooner farming pays out all subsidies should be paid so the banks can get their money sooner. There is has been a whole back in all of that. I think DARD should also show an example to farmers by reducing spending in colleges. There is a big percentage of the budget that goes to colleges at the present time and I’m a neighbour of a college and I notice when it comes to a certain time of the year it doesn’t matter what the money is spent on it has to be spent, I think that’s so they can get their budget topped up for the next year. I think that is wrong, if they have too much money it should be pulled back and put into something else. There is a perception now that DARD has turned from being helpful to farmers to hindering processes by bureaucracy and I think we should have a meeting like that here - that’s the end of our submission - I think we should have a meeting like this here every three months or not as high up as that maybe, but with an Agricultural Committee of some standing, say over three months to bring us up to date. Thank you.

219.

The Chairman: Thank you very much. My colleagues will want to ask some questions, but you did start off with a matter that causes us great concern. I notice, of course, it is in your submission, the most common complaint levelled against the factories in Northern Ireland by the finishers who supply them is that they operate a purchasing cartel. I think that this is a matter that causes us all grave concern because there was a funeral undertaker in Belfast when I came here 54 years ago who had a big sign up: No ring, no combine, the Wiltons, but I tell you there is a ring and combine we feel in this matter. The man that primary produces and puts agriculture wheels in motion is the farmer, but everybody above that is getting out of him but he is not getting out enough to cover his costs. That is where we really are in this whole situation. So we would be pleased to have more information of what you know to be happening. You don’t need to give it in public, but you can supply it to us, we can have an inquiry into it and look at it because I think that has to be done. I think there are many here around the table, I can’t speak for this Committee, I speak for myself, but there is other members of this Committee who feel sore about this as well. I think that we need to keep that in mind. I want to try and get my friends in. Ian junior?

220.

Mr Paisley Jnr: First of all, you are all very welcome. One of the things that I would like you to consider because your submission has an awful lot of detail in it, is if we don’t get low BSE status what is the fall back position? That is absolutely essential, that our minds are focused on that as well, that there are alternatives for the industry. Also this question of the cartel, has the Association put its mind to try to address that by way of establishing farm co-operatives where the farmer, the primary producer becomes the man in charge of all this and cut out the middle man who actually is doing an awful lot of damage to the profit margin that the farmer actually can make?

221.

Mr Marquess: Could I answer that second question first, maybe Henry would like to talk on the other one? The problem here is that there is five processors I think who own seven factories, now Ballymena was a good example as you know that was sold over to a private processor. That was a place where butchers had an opportunity to take their own cattle and get them slaughtered. It still can be done, but we feel that they have closed the gap completely and only for small abattoirs opening up — you talk about co-operative, where does a co-operative go to get their cattle killed? You know, they are in a trap, unless they build an abattoir there is no place really where they can go. So that leaves the cartel, if you want to call it that, that they have limited the farmer’s capacity to get rid of his cattle.

222.

Mr Paisley Jnr: As a butcher, do you find that the consumer is actually interested in quality and welfare of the beast, or are they only really interested in the price?

223.

Mr Marquess: They are interested in price, a bit of quality. Yes, you need quality, price. They are not interested in health standards at all. Consumer council, to be honest, I think they have words put into their mouths by the supermarkets.

224.

Mr Paisley Jnr: Is that not an indictment on the whole agricultural policy that we are currently pursuing in this country? I mean, the Government is pushing standards, welfare and everything else on the industry, you are saying as a man who is there at the coal face that the consumer isn’t interested in these things?

225.

Mr Marquess: No-one has ever asked me at any time did a sow come from a stall, is that an organic beast.

226.

TheChairman: They know the gender of a sow, but they don’t ask when they go into bullock meat is it male or female, they don’t ask those questions.

227.

Mr Marquess: They are not interested in that, I think it’s a total waste of money doing that. I think you must have quality. You can sell on quality but you must have a sort of half decent price too. There is a big margin of people out there that haven’t the money. In Northern Ireland at the present time it is get tighter and tighter all the time in the farming community because I was always told from I was a child that if a farmer had no money nobody in Northern Ireland had any money. It seems to be quite true apart from developers.

228.

The Chairman: Right, we come to Boyd?

229.

Mr Douglas: Thanks Chairman, one of your proposed solutions is to increase the sales of cattle through the auction system which seems difficult at this time when the auction markets are disappearing. Why is this a solution? Why is the current through put so low and how would authorities change so we could have more stock sold in the auction market?

230.

Mr Gordon: Again, it comes back to we are down to such a small number of factories here. On the mainland the auction market system works well and it actually gives a price guide to what the factories should be paying. Because our auction marts have got so low here and so few in numbers we actually have no idea what the price we are capable of demanding is, it is really what the factories decide to give us. That is why we would be keen to see a viable auction mart system going again.

231.

Mr Douglas: Those cattle sometimes are sold at the market and then they go to the meat plant. These people have a big influence really.

232.

Mr Gordon: Well we are sort of brought up in farming to get away from the markets because if somebody bought your bullock at market and took it to the factory he was getting a commission on it so you were better to go to the factory. But definitely on the ground farmers feel if they take it to the market and are not getting a fair price they can take it home again. Once the animal goes into the factory, with the price, you can’t do anything with it.

233.

Mr Douglas: Basically you need markets to keep a fair price?

234.

Mr Gordon: You need both

235.

The Chairman: Thanks.

236.

Mr Marquess: Could I maybe add a wee bit there? A very interesting thing happened at Christmas at the fat stock sales. The supermarkets didn’t — whenever Tesco’s came in here and Sainsburys came in at the start they bought all the top cattle, they bought all the prize winners. Last year that didn’t happen. And I saw that as they had got the processors into their grasp, got the farmers into their grasp, they didn’t need to go out and give a price, those cattle were all bought by locals, by people that had been trading here for years, I don’t want to say butchers because you will think I’m pushing it, but it was very evident at the fat stock sales.

237.

The Chairman: That’s a strange side light on the whole situation isn’t it, that first of all they were going for the prize beasts and then suddenly they were able to say "we have the market".

238.

Mr Marquess: That’s right.

239.

The Chairman: It wouldn’t at all surprise me, it wouldn’t at all.

240.

Mr O’Brien : Could I add another bit to it?

241.

The Chairman: Yes.

242.

Mr O’Brien: I think the Agricultural Committee should support the auction mart in some shape or form. I don’t know what way you would do it, but I think they should lend their weight and put their voice to it, it would be very useful.

243.

The Chairman: We will consider that.

244.

Mr O’Brien: Because we need everybody who can help this industry.

245.

The Chairman: Right. Gardner?

246.

Mr Kane: Thanks Chair. Firstly, I would commend the National Beef Association for their submission to the Agricultural Committee. A very frank insight into producer difficulties and, I believe, a very accurate account of the factors of trading organisations responsible. First Harry, in reference to livestock grading, farmers are under the opinion that stock are being downgraded as you have said, probably at abattoirs, and they are not too happy about the LMC operation in general. They also believe that there is, I must emphasise, that there is a cartel being operated within the LMC, the meat exporters, abattoirs, meat processors and retailers, and being the member that brought this issue up at the first instance I would call upon the Office of Fair Trading to investigate the issue immediately for the benefit of producers and the meat industry.

247.

I have also experienced LMC staff making drastic errors in grading and I can assure you it doesn’t go down too well. Harry, where do farmers stand in this respect and what initiative can they take?

248.

Mr Gordon: If I could take that point? I think quite honestly we have got to the stage that farmers, it used to be if a farmer went into a cattle market and bought an animal he had a fair idea where it was going to grade, now he hasn’t a clue, no idea at all. I think too farmers have got past the stage of trying to do anything about the grading because they see they are getting nowhere. If you do anything with LMC they tell you DARD are responsible and DARD are checking them. If you go to DARD they tell you it is LMC, they are only overseeing it. I think the way to fight it is get away from the pricing structure that we are under. As you all know before BSE, 82% or 83% of beef out of Northern Ireland was exported. Our factories tell us what a wonderful job they have done, that they are getting 80% into the English supermarkets. Why aren’t we being paid the same price as the English? We are being paid in grades, the English farmer laughs at us. The cattle are graded in fat as you know, R3 for example is the average bullock. If we go to an R4 we are cut 6p. England, Scotland are given a penny more for it. We are all going into the same supermarkets, that is our gripe. We need to get a transparent pricing structure that a farmer knows, two or three prices. Over six prices were quoted by LMC last week in their bulletin. The Northern Ireland price varied 24p, the English price varied 9p and Scottish price 8p, that is what we are up against.

249.

I don’t honestly think we have a chance of changing the grading structure because it is coming from Brussels through MAFF through DARD from through LMC it is just kicked about. You can’t get at them to change that, but I do think we can change the price structure and that has to be our way forward, to try and fight that price structure.

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