Written evidence from the Ulster Arable Society (AGR0010)

The Ulster Arable Society (UAS) is a membership organisation which brings together people from throughout the arable production, processing and supply industries with a common interest in –

 furthering the competitiveness of the sector;

 fostering knowledge transfer; and

 facilitating the professional development of those working in the sector.

The UAS therefore represents the arable sector which is an important contributor to agricultural output of Northern Ireland in its own right but also underpins the sustainable intensification of the livestock sector through the production of feed inputs and the effective use of excess nutrients from those enterprises. The sector currently utilises in the region of 50,000 hectares to deliver £60 to £70 million of output while supporting the wider Northern Ireland economy and employment through providing input to the animal and food processing industries, and a degree of food security for animal feed supply.

1. Introduction.

The UAS welcomes the opportunity to input to discussions on this issue of such fundamental importance to the industry.

2. Background.

2.1 As Members will be aware Northern Ireland is primarily a livestock production area with this production based largely on grassland farming. Arable farming in its various forms therefore provides environmental diversity in what otherwise would be a grass monoculture while at the same time achieving effective use for excess nutrient from both the intensive and extensive livestock production sectors.

2.2 The Statistical Review of NI Agriculture 2017 produced by DAERA identifies the industry as having a gross output of some £2,092.8m of which £65.5 m comes from arable field crops. Ref Table 1.

2.3               As a predominately livestock area Northern Ireland has a high demand for cereals and associated products for incorporation into feeding stuff. It is therefore a grain deficit area and imports large quantities of cereals from Ireland and around the world.  NI is about 25% self-sufficient in cereals compared to 75% to 90% in Ireland and around 100% in EU. Barley is the main cereal crop and most of this is used on the farm of production or sold to other farmers. Clearly there is an opportunity to substitute home grown for imported grain if the economics are favourable while anything which impedes the flow of imported grain or impacts on the price will affect the cost of livestock production. Straw is imported from Ireland in significant quantities for animal bedding.

Growing protein crops is also an opportunity but these will need to compete with that grown in Ireland with the aid of significant area payment under their national  Protein Aid Scheme. This has been very successful in increasing the area of crops such as Field Beans grown in Ireland in recent years. No such support for protein crops is provided in Northern Ireland.

2.4 The specialist cereal growers in Northern Ireland achieve yields on a par with the best in the UK and can compete on a level playing field with imported cereals, produced to the same standard and with the same inputs. However, cereals are competing for feed inclusion with other crops such as maize and industrial by-product such as maize gluten, rape seed cake/meal and citrus pulp. Where these crops are produced with the aid of technological advantages denied to UK producers, e.g. genetic modification in Maize or subsidies for energy crops, then local production of cereals is at a disadvantage. Ensuring competition on an equal basis is imperative to securing the future of local cereal production.

Any reduction in crop value through increased competition will result in a further rapid decline in area and impact adversely on the diversity of land use.

3. Health and Harmony: the future for food, farming and the environment in a Green Brexit.

3.1 This report is largely built on two key principles -

a)      Government support to the industry should be for items which are provided in the “public good”.

b)      Polluter Pays.

While it is difficult to argue with the logic of these positions their application in practice has not been easy administratively or politically, and this will not be any easier in the future.

3.2 The report talks about a dynamic and self-reliant industry which is of course a laudable aim but, after decades of National and EU support regimes which provided cushioning from the market, transition to this new self-reliant, market led environment will take time and be very difficult or impossible for many to embrace. It is imperative that the proposed Agricultural Transition period be long enough to facilitate this change and that mechanisms be in place to support those unable or unwilling to make this difficult transition.

3.3 There seems also to be a perception that Direct Payments are a bonus over and above income from the market. However, for many businesses these direct payments are the farm family income.

Table 2 shows that in Northern Ireland for many years the direct payments equal or exceed the Total Income for Farm Families (TIFF). This indicates that any reduction in Direct Payments would be extremely painful and must be made very gradually (over many years) within the Agricultural Transition period.

One means of ensuring that these less efficient businesses survive to sustain rural communities and maintain the countryside in the public good, would be to provide a very simple agri-environment scheme for which most farm businesses would be eligible. This seems to us to achieve little since it would effectively just be “cross compliance” under another name but be achieved with more bureaucracy and upheaval for the individual business.

3.4 It is encouraging to find that improvement of productivity / profitability is seen as falling within the concept of public good.  This is of fundamental importance for two reasons. Firstly, science has proven that in many instances the most efficient practices are also the most environmentally positive as they make best use of inputs. – e.g. reduce CO2 and impact on climate change. Secondly the paper talks simplistically about support for environmental / public good enhancement practices without recognising that the funding, over and above the support payment (which is unlikely to exceed 40%), must come from farm income earned form the market through efficient market led production.

3.5 The paper mentions the desire of Government to “open up markets to increase competition and keep food affordable” and to “prioritise innovation and lower prices for consumers”. Our top growers are already working at the forefront of technological application and are finding it difficult to survive even with direct payments. There is no magic innovative bullet which will enable them to improve performance to the extent that they can accept lower prices and invest in environmental enhancement / environmental land management.

3.6 The proposals to do away with the current “greening” requirements are welcomed. The scheme was never appropriate to a mixed farming area such as Northern Ireland.

3.7 The move to an “integrated enforcement system” is also welcomed, as is the intention to move to a risk based proportionate approach to enforcement.

3.8 There are numerous references within the paper to reducing the complexity and moving to outcome-based schemes with reduced emphasis on evidence. While these are laudable intentions, once public funding becomes involved audit requirements and the need to demonstrate value for money will increase the complexity and scrutiny requirements. Simple schemes with easily evidenced implementation, supported by long term evaluation is likely to be the most cost effective in the long term.

3.9. We support the intention in Section 12 to “encourage a stronger culture of cooperation, transparency and fair dealing as part of modern supply chains”. Again, a laudable aim but not new and a restatement of long held aspirations of UK governments and devolved administrations. Such aspirations need to be backed up with financial incentives and support to overcome past failures and the inherent mistrust and reluctance of farmers to engage with such schemes. This process will take a long time to develop and become embedded.

3.10. Assuming the reduction in direct payments is progressed, the most logical protocol is Option (i); namely to apply reductions progressively as eligible area increases, since larger units will achieve economies of scale not available to smaller units.

3.11. Within Section 4 mention is made briefly of the “scope for reforming agricultural tenancy laws”. This is an urgent imperative for increased productivity, efficiency and long-term stewardship as required for environmental development and environmental land management. This is a particular issue for Northern Ireland where some 28% of land is rented and the majority of this is on short term (11 month) conacre agreements. This rented land is frequently held by non farmers and such ownership is encouraged by the current Inheritance Tax rules. As taxation is not a devolved matter this can only be resolved by a review and action on a UK wide basis.

3.12 High plant health status is clearly a priority for the island of Ireland and is best tackled on an all-island basis. This is entirely compatible with the DEFRA desire to minimise endemic disease. Close integration of both legislation and enforcement procedures on either side of the EU land border will be essential if the high NI plant health status is to be secured and protected in the future. Movement of plant material across the border will be impossible to prevent, placing the NI industry at risk should there be a divergence of standards or enforcement activity between EU and UK. An integrated all-island plant health strategy must remain an objective for the future.

3.13 There is no mention in the DEFRA paper of securing international research capability. In a small region such as NI with similar climatic conditions and disease pressures to those in Ireland, the ability to undertake research jointly between NI and RoI and to share the emerging knowledge and expertise is very important. This has worked well in the past and must be secured in the future.

3.14 The proposals to simplify and integrate enforcement action will be very welcome. However, the importance of sustained enforcement of plant health standards and import controls is imperative as, unlike animal diseases, any loss is borne entirely by the individual producer.

3.15 In international terms, no farms in NI could be classed as large. However, there are a large number of farms owned by those who could not be classed as Active Farmers. There will also be many businesses which could be classed as “non-developing” and which will be slow to adopt new technology and continue to farm in traditional ways.

To achieve rapid change, financial support for capital investment should be focused on developing farms but with adequate provision to support those non-developing farms who will be impacted by the increased pressure on prices envisaged in Health and Harmony.

3.16 Plant diseases, wildlife and pollution know no borders and so to deliver policy requirements there needs to be similar regulation standards and comparable enforcement on each side of the border between the EU and NI.  This will require continued open and effective communication between the responsible Departments on the different sides of the NI/EU border.

3.17 Seasonal workers from outside UK are essential for the harvesting of field horticulture crops such as vegetables. Local recruitment does not attract sufficient labour and automation is not yet economically viable due to the seasonal nature of the activity. It is therefore imperative that a Seasonal Agricultural Labour Scheme (SAWS) is introduced each year to permit seasonal labour from EU and elsewhere to be engaged during the harvest period.                                                                     

3.18 The present local arrangements by the Executive Departments for consultation on issues relating to Brexit, appear to be based on a single DAERA consultative committee based around organisations representing the major enterprises. We are not aware of any other efforts, other than the consultation calls emerging from DEFRA and the NI Affairs Committee to facilitate individuals and other organisation to provide input to this developing policy area.

3.19 The Health and Harmony policy proposals are perceived as distant and complex. A simplified “key elements” publication needs to be produced and following that communication, all organisations and individuals should be encouraged to comment on the proposals. Without that the policy development runs the risk of being biased by the larger organisations representing processors and the major sectors of the industry, to the exclusion and potential disadvantage of the minority enterprises.

The NI Affairs Committee are to be commended for providing this opportunity to input to this important policy area.  The opportunity is greatly appreciated.

27 April 2018