The Northern Ireland Assembly - Restoring Profit For The Beef Producer

BSE has, without doubt been the main contributing factor to the current crisis together with the double impact of the strengthened pound against the Euro and other national European currencies. The strong pound both lowers the value of EU direct payments to producers and their potential returns from beef exported to EU markets.

It is imperative that BSE "Low Incidence" Status be obtained for Northern Ireland as early as possible.

The UFU draws attention to Government’s unwillingness to draw down all available packages of agri-monetary compensation and to provide matching funds where possible. This has unnecessarily exposed beef producers to fluctuating exchange rates.

It also points out that Government’s slowness in making direct payments has added un-necessarily to farmer’s cash flow difficulties.

The formerly premium priced EU markets are now less profitable for NI beef exports than GB supermarkets because of the currency impact.

Many of the difficulties facing the industry originated with the BSE crisis. Although consumption has largely recovered, there are many lasting side-effects relating to the stringency of controls, thirty-month slaughter and onerous conditions applying to exports.

Payment differentials for cattle grades need to be fundamentally overhauled. Producers in NI have been penalised heavily in recent years by this unfair payments structure which clearly has not rewarded producers properly for the true quality of their livestock.

It is an accepted fact that the quality of the beef herd has deteriorated mainly due to the influence of the dairy herd on the suckler cow population. Equally, it is essential that a system that pays producers a proper return be established.

Since the onset of BSE a lot of people lost heart in breeding and decided to sell the best heifers and keep the worst for breeding because they were not worth anything anyway. As cows they were worth something under the thirty months scheme. We are reaping the rewards of that.

UFU has been trying to get the powers that be and the meat plants to pay better for higher quality. They find it very frustrating that the meat plants would not talk to them for fear that the OFT would say they were price fixing. The OFT reported back in early 1999 that there was no case to answer.

Carcass conformation is deteriorating due to the overwhelming use of the Holstein cow in the dairy herd.

Post BSE pessimism has led many breeders to stop buying specialist bulls turning instead to retained three-quarter beef own-bred bulls.

It is ready to co-operate with DARD and the LMC in staging winter evening meetings to reverse this trend.

The lack of suitable cattle for premium export markets is the single greatest obstacle to our successful re-entry. The current Livestock Breeding Initiative developed by DARD in conjunction with LMC is an attempt to address this.

Perceived quality of beef involves quality parameters throughout the supply chain. To the markets served by the LMC this includes farm quality assurance, quality of animal and product traceability, cattle/carcass quality, hygiene quality, service quality and eating quality. In most of these aspects the major customers perceive and inform LMC that Northern Ireland is at the high end of the quality spectrum.

There is a major adverse impact on carcass quality deriving from the high proportion of dairy cows in the herd. Scotland, with thirty two percent of dairy cows in 1999, had seventy percent of its cattle graded as E, U or R. In Northern Ireland with a forty eight percent dairy cow percentage the E, U or R percentage was only forty-two percent. Scotland is a major competitor at the premium end of the market.

Northern Ireland’s superior traceability and Farm Quality Assurance Schemes are being emulated elsewhere and the terms are being devalued as a result.

There is a massive amount of evidence that herd quality has deteriorated. The animal is now a subsidy earner rather than a quality end product. Over forty percent of the animals emanate from the milk herd which has gone to extreme Holstein breeding.

From the integrity of FQAS production and the quality of service of processors the quality score is at the top of the scale. However, for carcass quality the score is around or below the mid-point on any scale.

Market led research and feedback to producers can do much to counter the downward trend and a ten-year market-led strategy involving all the parties is needed.

Australian five star beef carries a money-back guarantee anywhere in the world. Northern Ireland farmers are a long way from that and must work toward that sort of peak in the long term.

It is not for the Department alone to secure an improvement in beef quality; producers, processors and the LMC all have a role to play. The Livestock Breeding Initiative is already in operation involving the Department, AI services and the LMC. Progress is being made. Another project involving herd genetics has also been commissioned.

It fully accepts the rationale behind branding and the extension of the "Greenfields" brand. In spite of the possibly high cost there is definite merit in exploring the proposal further and even considering a "Northern Ireland Food" brand.

Everybody in the industry needs to explore the branding concept. This industry has a big Department with a lot of expertise and this sort of thing is in their remit. If a Europe-wide brand was introduced across Europe it could attract money to promote it. It is a pity that agriculture doesn’t have a brand as distinctive as Bushmills Whiskey. A branding initiative could be led by the Red Meat Strategy Group or by the Minister’s new Vision Group.

Branding is the most consistent way of maintaining market share and possibly giving an enhanced premium. Greenfields was a classical example. If it could be demonstrated to be so financially beneficial then farmers would be willing to invest, subject to seeing a return. Processors should share the cost.

It anticipates that successful development of export markets will create the competitive environment necessary for producers to receive an equitable return.

Market research is under way to select the most logical targets from a "World-Map" of beef. Findings are being disseminated to processors and we have already investigated five countries in detail. The programme has already been agreed in the Red Meat Strategy. Implementation has been greatly frustrated by the continued export ban.

LMC’s ability to source more E, U & R grade cattle is a pre-condition for success. The weakness of the Euro is a major obstacle at present.

Branding is a complex process within which naming and promoting the product are but two parts. A branded product has to be carefully created to satisfy particular customer needs. Above all, the product has to deliver 100% consumer satisfaction from the outset. Not all NI production could meet the specification.

The branding of NI beef in a number of markets is both possible and viable. There are no fundamental objections to branding in the industry but there are concerns about cost and who would pay. Processors who are profitably supplying retailers where there is no demand for a brand have no commercial incentive to promote a Northern Ireland brand.

The danger of retailer substitution of cheaper imported beef has to be of very real long term concern to beef producers. However, it is unlikely that the next round of world trade talks will totally expose European markets. There are logistical difficulties in bringing fresh produce from the southern hemisphere and carcass quality would take some time to align with the market.

There is absolutely nothing to protect Northern Ireland beef from a decision to switch sourcing by the supermarkets other than anxiety on the part of retailers to be seen to be supportive of locally-produced beef. Such a move need not have major implications as Northern Ireland processors could easily use raw material from any part of the world. It has serious strategic implications for primary beef production in Northern Ireland, and how the industry addresses this will determine the long term viability of beef production in this particular region.

This is the fundamental reason for LMC supporting the concept of branding - as a defence mechanism for Northern Ireland producers.

The short answer to the question "does the future lie in well-chosen European supermarkets?" is "No". The future lies in dealing with the bigger UK supermarkets which are the highest-priced outlets in the EU. All available quality grass-fed steers are currently being marketed to GB retailers. Any niche markets in the EU would have to be supplied at the expense of the premium markets in GB.

There is no bigger marketing blunder than to sell something which cannot be delivered consistently, fifty-two weeks a year.

The beef ban has not been lifted. Even with Low Incidence Status it will only be eased further and this is what makes these niche markets very nervous. It is correct to assume that the Northern Ireland meat industry will engage in vigorous attack of those markets when the low incidence clear is given.

Only 43,000 steers in last year’s kill of 215,000 were export eligible. Premium markets demand Farm Quality Assurance standards as a minimum, yet one quarter of beef farmers choose to stay outside the Scheme. In ROI this is being made a statutory condition of farming livestock. Perhaps the NI Assembly should follow suit.

The Department is striving to achieve low BSE incidence recognition and a relaxation for Northern Ireland beef exports. The £2.5 million already provided to support the Red Meat Marketing Strategy will be augmented with £500,000 under the Agenda for Government.

The industry faces marketing challenges relating to consumer taste and lifestyle changes, changing market structures and the need to strive for higher quality. The Vision Group of industry experts will be addressing these issues.

A partnership approach is needed right across the chain where each link recognises that it is dependent on another. The Department would also say to the processors that if they squeeze out the primary producers they will not have a ready source of raw materials.

The Department is fully committed to the principle of building partnerships both vertically and horizontally and there are many examples of this in practice. The Department will not impose co-operation but does not favour creation of co-operation between producer groups to strengthen their marketing as this could backfire. However if there is a demand from the producers for one producer group the Department would co-operate.

The Department’s responsibilities are wide, embracing rural development, the rural community and the farming community and, of course, responsibilities to the taxpayers and consumers.

In recent years producers have received £200 million per annum in direct payments and £100 million per annum in indirect payments. The processors have received £5 million per annum. It is wrong to claim that the emphasis is biased. All links in the chain require focus.

The Vision Group is looking at how the viability of all sectors can be maintained by continuing to provide both advisory and financial and technical assistance where this is needed. The Department’s role is to build an integrated approach rather than pit one part of the chain against another in what could be a pointless and self-destructive battle for control. It could backfire given that processors could decide to source their produce from elsewhere.

The Department is concerned about any structural weakness and agrees United Dairy Farmers is an example which is working, though one created in totally different circumstances. Not all milk producers are members.

The Department does intervene in the market by advising, enabling and helping producers to become more competitive in a changing market and is seeking an extra £500,000 for a market development scheme. This could include direct assistance, including the secondment of staff, to producer groups as in the past. However the Department has no evidence that a large scale co-operative is the right approach.

The Department has a responsibility to make clear to the processors what steps they need to take to comply with EU regulations. This advice may lead to extra costs which may be passed back to the producer as part of the operation of the food chain.

Meat inspection costs are not charged out to the plants at the full rate nor does the Department charge for all the other activities conducted at meat plants.

There has been mistrust in the chain between processors and primary producers and the Vision Group is promoting sensible and open dialogue on the subject. Getting that relationship right is crucial.

In considering the evidence before it the Committee addressed each of the main issues as outlined in Section 2 above.

There is no doubt from the evidence taken at the earlier stage in our work, and during the period since that the Northern Ireland beef industry is greatly affected by the market power of the UK supermarkets.

On the positive side the success of the industry in winning increased market share with these top retailers is greatly to be commended. With European exports closed what could have been an unmitigated disaster has been converted into a strong market position with arguably the best retail outlets in the world.

Even with the export markets beginning slowly to become available the strength of the pound is such as to make these outlets more profitable for processors than the alternatives immediately available in Europe. This could of course change, and quickly.

Having an excellent market for beef is not the same as being paid a fair price. There is a strong belief on the part of all farmers’ representatives that Northern Ireland farmers are being paid consistently less than their GB counterparts for essentially the same product. The tone and content of all the evidence taken from farmers’ representatives indicate deep levels of dissatisfaction with a situation where their major partners (the processors and retailers) appear to be making good profits from beef whilst they are working at or below production cost. There is little evidence of trust between the farmer and the other parties. Representatives of the processors deny that this is so. The Committee does not agree. The Committee believes that what the processors see as trusting behaviour is that of suppliers who are utterly dependent on them for their livelihood. Compliance where there is no option but to comply is not the same thing as trust.

This is serious at two levels. First, farmers are trapped in a market place which is unable to yield them a fair return for their investment and labour. Second, the kind of relationship needed to make a healthy supply chain is denied to the industry because of the mistrust that is created by feelings of exploitation. Whether these feelings are well founded or not, the Committee is certain that they are genuinely held by those who have given evidence.

This evidence is, in a general way, strongly corroborated by the findings of the Competition Commission when they say:

"There appeared to us to be a climate of apprehension among many suppliers in their relationships with the (supermarkets). We therefore put a list of 52 alleged practices to the main parties and asked them to tell us which of them they had engaged in during the last five years. We found that a majority of these practices were carried out by many of the main parties. They included requiring or requesting from some of their suppliers non cost-related payments or discounts, sometimes retrospectively; imposing charges and making changes to contractual arrangements without notice; and unreasonably transferring risks from the main party to the supplier. We believed that where the request came from the main party with buyer power it amounted to the same thing as a requirement. We conclude that five Multiples (Asda, Safeway, Sainsbury, Somerfield, and Tesco) each having at least an 8 percent share (of the market) have sufficient buyer power that 30 of the practices identified .adversely affect the competitiveness of some of their suppliers and distort competition in the supplier market for the supply of groceries".

Furthermore, the market power disparity between processors and farmer suppliers makes it possible for the Northern Ireland processor to pass all such charges back to the farmer through the price paid for livestock. All the evidence received leads the Committee to believe that this is the case.

Thus the market power of the Supermarkets is not only plain for all to see, it is also, according to the Competition Commission, provably being used systematically to add to the benefits gained by the normal terms of trade.

Given that the large supermarkets not only dominate their suppliers but also collectively dominate the UK retail beef market they have the power collectively either to raise or lower the retail price of beef at will. They could, if they were so minded, take account of the effects of current pricing regimes on the beef farmer’s ability to survive and would have the power to act. This has already begun to happen with milk production in GB.

We have had it put to us that there is a cartel in operation by the processors. As noted earlier the Committee has no power to investigate such allegations. It has, nonetheless, listened to these allegations and to the equally vigorous protestations to the contrary by NIMEA. The Committee accepts the primacy of the Office of Fair Trading in responsibility for investigating this matter and, as the OFT is considering a complaint at the time of this Report, it would be unhelpful to comment further. The Committee agreed, however, that it would facilitate the OFT consideration in every possible way.

That there is deep mistrust between producers and processors is not in doubt. It is caused, in our view, by several things:

the massively strong buyer power of the processors relative to the market power of the individual farmer. In this situation the farmer has no option but to take what he is offered for his livestock;
the lack of practical options for sale open to most farmers. A few farmers have shipped cattle to GB and have done better there. For practical reasons this is not open to all;
a payment for carcass quality system which, in the view of all on the producer side, does not adequately reflect the value differential across the grades; and
the belief that processors have remained profitable throughout the period of deep crisis for the farmers.

The net result of these four factors operating together is to feed and deepen mistrust.

However, the Committee also accepts that the market power differential between processor and retailer means that the basic price on offer is, in fact, determined fundamentally by the retailers.

All parties agree that improved co-operation throughout the food chain is a requirement for a successful industry. Most see the need for more collective efforts in such areas as herd improvement.

The Committee sought views on the proposition that the formation of a co-operative approach to beef production could be a vehicle for repairing a badly broken supply chain. It would also be a means for farmers to negotiate, on a more equal footing, with processors and others on how to create a more professional and responsive supply side. It would additionally lead to a more equal balance of market strength between producers and processors.

On the whole the producer side was keen on the principle but somewhat wary of how to make such a thing happen. This is based on scepticism about the reaction of processors on the one hand and an equal scepticism about the propensity to co-operate on the part of farmers. NIMEA expressed its willingness to co-operate with such a development although it shared doubts about its feasibility. The LMC view was more positive, both in principle and about the practice, and suggested that any co-operative should be limited to those producers willing to meet all the requirements of quality production.

All are agreed that much of the problem of farm debt stems from two other fundamental causes, the BSE ban and the strength of Sterling.

The BSE ban has closed off the competitive element in marketing and has left the industry in the hands of a few major retailers in one country.

The strength of Sterling has had a major impact on beef farmers by slowing the potential re-opening of premium market niches in the EU. It has also depressed the value of Euro-based direct payments. According to NIMEA the former profitable EU niches are now less profitable than markets within GB.

Northern Ireland beef has a high reputation for quality. The best of our grass-fed steer beef stands comparison with any competing product in terms of farm quality, traceability, hygiene, service and eating quality.

The problem lies in the deterioration of the conformation of the beef herd. There are several reasons for this. The "Holstein effect" of the almost fifty percent of dairy cows in the herd is the primary problem. This has been exacerbated by pessimism among many farmers whose determination to keep improving their beef herds has been dampened by poor market returns. This tendency has been exaggerated by the lack of incentive in the ratio of final price to produce quality. The fact that over half the return does not come from the market does not help. The Committee is concerned to see this downward trend in herd quality reversed.

This problem will cause market failure if not remedied and must be resolved if we are to successfully penetrate markets with high demands for quality cattle.

The Committee heard evidence on two linked elements of marketing strategy. Both are based on the belief that Northern Ireland grass fed beef is a superior product when compared to non-grass fed competing offerings from Europe and beyond.

The evidence supports the hypothesis that when market conditions permit we should open up new European markets where discerning customers will pay a premium for this product. However while Sterling remains at its present level the opportunities will be more limited than formerly.

Equally there is across the board support for the principle of protecting the place of our beef in any new market by selling it as a branded product. This would do two things. It would create the possibility of a price premium if the quality warrants it. More important, it would greatly hamper any tendency on the part of the retailer to substitute product as happened to pork recently.

It emerged, as the Committee took evidence, that the processors are reasonably content that they have meaningful partnership arrangements through their producer groups. These are aligned in the main with particular retailers and appear to satisfy the needs of these customers for such things as traceability, farm quality assurance and the like.

The producers, although not commenting adversely on these specific arrangements, are clearly not behaving as if they were equal partners in a venture with which they are happy. We heard no evidence pointing to meaningful contractual relationships with two-way undertakings to deliver on quality or price. These are not real partnerships in the normally accepted commercial sense.

It is our view that much needs to be done to create meaningful partnerships where the two parties feel equally empowered by the relationship. Current arrangements seem to the Committee to be unacceptably one sided.

The Committee was pleased to be able to engage in a constructive dialogue with the Minister regarding the role of the Department across the spectrum of relevant issues.

The Committee welcomes the Department’s willingness to explore the possibility of creating a large-scale producer co-operative and willingness to support initiatives of this kind in practical and financial terms. We agree with the Minister when she says that nothing should be imposed on the industry. This Committee would not suggest either, that any major initiative be embarked upon without carefully studying its feasibility first. We have taken the idea to the industry and are satisfied that it has sufficient merit and acceptance as to warrant such a study.

We note the Department’s analysis of the background to the current crisis and acknowledge that it shares our concerns. We endorse the Department’s continuing efforts to push through the Beef Exports initiative and it’s funding of marketing initiatives. We look forward to dialogue with the Department’s Vision Group and hope that our work here will be of assistance to them.

The Minister argued strongly that in the absence of evidence this Committee could not lay blame at the door of the retailers for low returns. We cannot accept this. First the Competition Commission cite fifty-two areas where these supermarkets have abused their market power to impose requirements on their suppliers. The Committee believes it is reasonable to conclude that the base price might be similarly imposed. What is beyond dispute is that the beef producer has no option but to accept the price offered by the processor. The supermarkets maintain that they are reflecting farm-gate price movements in their store prices.

There is a difference, however, between profiteering and exploitation. The Northern Ireland beef farmer feels exploited and all the evidence relating to farm income points to this as a possibility. Equally, there is no doubt about the power of the UK supermarkets to dictate prices. The supermarkets in GB have recently admitted that their retail pricing of milk was causing undue pressures on farm profitability. We are simply arguing that the same is true for beef.

We also agree with the Minister’s point that creating confrontation would solve nothing. There are plenty of examples of this kind of short-sighted approach. But there are plenty of examples too of positive, market-led co-operation which leaves everybody a winner. Size does not need to mean belligerence, but it could mean efficiency, progressiveness and economies of scale for the processors.

The Committee accepts entirely that DARD has primary responsibilities to both the farmers and the consumer and is not suggesting that the Department should become restricted in its focus. However, accepting the need to be cognisant of the whole chain, we believe that the Department cannot neglect a situation where the rest of the chain is ignoring the well being of the primary producer. This is all the more important when we take into account the huge public investment in the primary producer part of the chain. Making that link work and securing its viability is not to turn on the rest but to secure the very foundation of their existence. We agree totally that the outcome of this ought to be a real partnership to replace the tense one-sided relationship which characterises the current position.

The Committee is pleased that the Department is fully committed to the principle of building partnerships, both horizontally and vertically, between different stages in the food chain. This is exactly what the Committee seeks. We share the Department’s vision that all parts of that chain should work together for mutual advantage rather than one sector seeking unfair advantage over the other. There must be true equality based teamwork between the producer, processor and retailer to satisfy the customer’s needs for quality, food safety and good value for money.

We understand the Department’s reluctance to dictate to farmers on the isue of co-operation. However we would point out that when something is in their interests, even when a measure of persuasion has been necessary, this has rightly not deterred the Department when it was convinced of the need for action in the past. The farmers did not ask for APHIS or for the Farm Quality Assurance Scheme, both cornerstones of the industry’s image of superior quality. We do of course accept that there is a need to be sure of the efficacy and feasibility of any new initiative before pushing ahead. In short we are endorsing the Department’s track record as a leader and moulder of industry opinion and a catalyst for beneficial change.

In that regard we are glad to hear of the Department’s quest for additional funds for marketing development schemes for application to this area. We are pleased too to hear that the Department has quite a degree of flexibility in how it can assist farmer groups strengthen their marketing position and that in the right circumstances this could include the secondment of staff, as they have done in the past.

We are glad too that the Vision Group has confronted the issue of mistrust between farmers and processors.

It is clear to the Committee that the issue of farm debt in the beef sector has several fundamental causes, some outside the control of the parties in Northern Ireland and others capable of being remedied.

The whole industry and the Department will have to continue working together to make a significant impact on the current situation.

The Committee, after hearing all the evidence, is convinced that the following conclusions are borne out by the totality of the evidence before it.

The continued exclusion of Northern Ireland beef from formerly lucrative markets in the EU is a matter of the utmost strategic importance to an industry which requires the stimulus of market competition to restore prices.

The current exchange rate with the Euro of course greatly reduces the opportunities referred to at 31.1 and this is further exacerbated by the UK Government’s reluctance to take advantage of the agri-monetary arrangements which exist to alleviate the effects of adverse currency movements.

The BSE crisis has created a situation where Northern Ireland’s best beef is now being sold almost exclusively in the leading UK supermarkets.

The industry needs to open up new markets to ensure healthy levels of competition and to exploit the superior quality of Northern Ireland grass fed beef.

These UK retailers have great market power which they are quite prepared to use exclusively in their own interests subject only to maintaining a satisfied customer base. We have no reason to suppose that the interests of producers feature high on their map of priorities, a judgement borne out by the findings of the Competition Commission.

These customers have market power many times greater than the Northern Ireland beef processors and can, and we suspect do, dictate prices which the latter have no option but to accept.

The processors are immensely more powerful in market terms than the individual producer who, in his turn, has no option but to accept the offered price for his animal.

This scenario is currently underpinned by the inability of the industry to export either live or processed beef because of a combination of the BSE beef ban and the strength of Sterling. This is further exacerbated by a scarcity of export standard animals.

The fragmentation of producers is a serious obstacle to the creation of a modern responsive supply chain and the Committee’s proposal to the industry players that a co-operative coming together of producers would be in the interests of the whole industry is widely accepted.

There are, however, serious levels of mistrust between the producers and the rest of the supply chain which must be remedied by the creation of real partnerships. These must be based on a mutually agreed approach to supplying the market with the quantities of quality product needed, at the right time and for mutually agreed prices.

The beef herd is deteriorating in conformation quality because of a combination of the lack of sufficient quality related monetary incentives from the processors, the impact of over fifty percent direct payments per animal from government and the impact of the nearly fifty percent Holstein input from the dairy herd.

Although this issue has been clear for five years and was highlighted in the 1996 Red Meat Strategy, little impact has been made on the problem to date. However a recent DARD initiative and the announcement of a further £300,000 for the Beef Quality Initiative is to be welcome^d.

The Committee concludes, in light of all the evidence, that the Department cannot, in the public interest, continue to remain on the sidelines in relation to the inequalities which are so obviously a feature of the existing supply chain. This chain is being subsidised by significant subventions of public money. Furthermore, part of the intention of this money is to maintain the viability of beef farming. This is clearly not happening. The market power imbalances we have had so vividly illustrated to us cannot simply be left to continue as they are. Our consideration of all the evidence compels us to believe that the massive superiority of market power of both processors and retailers has led in large measure to the impoverishment of beef producers.

We are not recommending that Government enter the market in any way or that the Department interfere directly in market mechanisms. On the other hand the Department cannot afford in the public interest, nor in the interests of its own investment in farming, to be mere spectators as the produce of Northern Ireland beef farms is profitably processed and marketed in the absence of an acceptable return to the farmers.

It is therefore the duty of the Department to facilitate the re-balancing of this supply chain in such a way that the interests of the consumer and the farmer are both accommodated to those of the retailer and the processor. The EU’s cheap food objective needs to be in proper balance with the other aim of ensuring that beef farmers can sustain their businesses.

The Committee also believes that the Department has a crucial and leading role to play through its various agencies, in facilitating the reversal of the continual decline in herd quality which has characterised the past few years.

The industry should continue to strive to keep at the forefront of perceived quality by being vigilant in relation to competitive attempts to emulate or improve on such features as farm quality assurance and traceability.

The industry should also develop one or more brands to ensure that once its product has achieved high levels of customer satisfaction and loyalty that this loyalty is to the Northern Ireland product. Otherwise it will be perpetually prone to the kind of substitution which has recently characterised pig-meat in Great Britain.

This is not a simple matter when several processors are involved, nor is it trivial in terms of its cost. However branding is the only bulwark against the risks of product substitution at some future date, creating as it does consumer loyalty to the specific producer’s product as opposed to loyalty to that of an intermediary.

Farmers should look beyond their present difficulties and become even more positively involved in creating their own future by responding to the recommendations we have made in this report.

The Northern Ireland beef industry has the capacity to become a true European market leader, albeit a niche player because of its relatively small size. The Committee urges the Department and the farmers urgently to do what is necessary to create a supply side with the capability to meet this aspiration and to be able to work as equals with a processing sector which has already proven its capability in this regard. The Department and producers should work together towards the creation of a well organised series of producer/processor partnerships based on trusting relationships, parity of market power and branding. There should be a Department-led strategy for the creation of these conditions and to achieve the herd quality on which everything in the end depends.