Pig Industry Restructuring (Capital Grant) Scheme

– in the Northern Ireland Assembly at 11:30 am on 2nd April 2001.

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Photo of Ms Brid Rodgers Ms Brid Rodgers Social Democratic and Labour Party 11:30 am, 2nd April 2001

I beg to move

That the Pig Industry Restructuring (Capital Grant) Scheme (Northern Ireland) 2001 (Statutory Rule 2001 No 90) be approved.

Members will need no reminding of the difficulties which the pig industry here has had to endure over the past few years, to say nothing of the current added effects of the foot-and-mouth-disease outbreak. I hope that Members will also need no reminding of the efforts that I have been making to try to secure the introduction of an aid package for pig producers at the earliest possible date. Members will also be aware that the Pig Industry Restructuring Scheme has two elements. The Regulations referred to in the motion relate to the second element for on-goers — that is those people wishing to remain in the industry.

The control provisions needed for on-goers required subordinate legislation, made under two separate pieces of primary legislation. These have different powers and, although the controls are identical, it meant that we had to make two statutory rules — one by negative resolution in the usual way and the other by confirmatory resolution on the part of the Assembly. Both rules are similar in providing for controls on the payment of grant-aid over a two-year period in respect of interest rebates on loans for expenditure incurred in restructuring a pig production business.

Such expenditure can relate to either capital or non- capital, but the primary power to regulate for such payments on capital expenditure requires the rule to be confirmed by the Assembly. It will cease to have effect unless approved by a resolution of the Assembly within 40 days of 30 March, the date on which it came into operation. This rule and the equivalent one for non-capital expenditure provide the necessary legal basis for my Department to approve applications under the on-goers’ part of the Pig Industry Restructuring Scheme. This is very important as, although no payment can be made for one year after an application is approved, we must have evidence that interest has been paid to the lending institution, and we wish to be able to make those payments as soon as that anniversary is reached. The confirmation of this rule by the Assembly will ensure that this hurdle does not exist, and I hope that Members can therefore agree to confirm the rule today.

I emphasise that these rules are important, but, essentially, controlled provisions will allow the Pig Industry Restructuring Scheme to benefit pig producers here. Accordingly, I decided that it was not necessary to prepare regulatory impact, human rights or equality impact assessments or to undertake any public consultation. I invite the Assembly to confirm its approval of the rule identified in the motion.

Photo of Ian Paisley Ian Paisley Leader of the Democratic Unionist Party

I am speaking as Chairperson of the Agriculture Committee, and there will be no gagging of the Chairperson just because minorities in the Committee cannot have their way. Mr McGrady had better get his act together and get the two members from his party in absolute agreement before he comes attacking me in the House.

The great thing about the system here is that nobody can remove the Chairperson of a Committee. The agreement that the Member entered into to keep Nationalists and Republicans in place covers me too. If Members want to remove me they will have great bother doing so. It is ridiculous that petty statements are made because minorities cannot have their way. My Committee, by a majority vote, gives me the right to speak. However, on this matter there is unanimity, so I am speaking for the whole Committee. Of course, sometimes members are not there when decisions are made or they do not even express themselves when decisions are taken.

When the proposal for the Pig Industry Restructuring (Capital Grant) Scheme was brought to the Agriculture and Rural Development Committee on 2 March members questioned a department official on the details. As a result, the Committee was content for the Department to proceed with making the rule that is now before the House.

In reconstructing their pig production business, many farmers — and this is a concern of the Agriculture Committee — face huge capital expenditure costs which can only be met by taking out loans. The restructuring scheme provides for the payment of grants towards the cost of such loans. The scheme is welcome and it provides a lifeline in these difficult times as long as those farmers who seek it are accepted into the scheme.

Figures have been bandied about concerning how many applications were made to the scheme and how many were accepted. The Agriculture and Rural Development Committee has got no confirmation as yet from the Minister on those figures. The Committee is not content with that. It has asked officials from the Department of Agriculture and Rural Development to attend its meeting on 6 April so that members — and this was a resolution of the whole Committee — can question them to see if this is going to be effectual. Many people want to get into the scheme but some have already been told that they are not accepted. It is important that they are given another chance. It is also important that the ratio of applications to successes, 500:80, is changed and that the pig farmers who are in difficulty can benefit from the scheme.

Photo of George Savage George Savage UUP

I welcome the scheme that the Minister has introduced. It is an indication of a vote of confidence from the Department of Agriculture and Rural Development to the agriculture industry, and especially to the farmers.

Will the Minister give details of the take-up of the scheme that enables pig farmers to leave the industry and will she tell the House if that take-up has been lower than expected? Many telephone calls to me suggest that that was the case, so will the Minister tell the House how much money is left in the kitty and how much money is available for the restructuring of the scheme?

The scheme is UK-wide, and other areas are involved, but surely there was a designated amount of money for Northern Ireland. How much of that money has been used, and what contingency plans are in place for making the remainder available to more pig farmers?

With two experienced politicians — one on each side of me — I have to be careful how I proceed, but I welcome the loans scheme for pig farmers. In these days when the agriculture industry has come through crisis after crisis it is an opportunity for the pig industry to restructure, for the out-goers scheme to be successful, and for those who want to stay in the industry to do so. I congratulate the Minister and I will support her 100% in any way possible.

The agriculture industry must modernise and unless it goes forward as a modern agriculture industry, Northern Ireland cannot compete with its counterparts across the water. People must realise that we are part and parcel of Europe. It is hoped that the Minister will see fit to broaden the outlook of the loan scheme to cover other areas. Time will tell as to the major difficulties that will be faced by the agriculture industry due to foot-and-mouth disease.

I hope that, in time, the Minister will broaden her outlook and take those things on board.

Photo of P J Bradley P J Bradley Social Democratic and Labour Party 11:45 am, 2nd April 2001

I too support the motion. Cattle-related matters have dominated the agriculture agenda, so it is good to know that back at the ranch people were working in the interests of the pig industry, because it is very much part of our history. I will not give into the temptation of rehashing much of what was said about farming debt and about restoring profit to the pig industry. I support the capital grant scheme. As the Deputy Chairperson of the Committee has said, it is long overdue. The on-goers will welcome it, and I thank the Minister for moving this motion this morning.

Photo of Gerry McHugh Gerry McHugh Sinn Féin

A Cheann Comhairle, the Agriculture and Rural Development Committee agrees that this scheme is overdue. It is also a welcome opportunity for people who previously missed out on the wider scheme. There are many difficulties with funding, and there is the possibility that it may not do what it was intended to do and help farmers. Those involved in the fishing industry have also found that the scheme is so complicated that it is difficult to say whether it will benefit those who are most in need of it in the long term. This is due to a lack of information and to delays on the part of the Department of Agriculture and Rural Development in delivering and implementing the schemes.

These are the main problems that farmers face. In this instance, they have to decide if they want to, and need to, get out of the industry. They have not always had the information to allow them to do that. They have to decide if they want to leave the industry permanently, although a son may want to get into the industry in the next few years. These are all very difficult decisions. A farm has to be taken out of the business of pig production completely even if there is a possibility that it may become profitable in the future.

Farmers must decide whether to go for the scheme or to try to have a future as a pig farmer. Whether we have a future as an area that produces pig meat, or we just give in and allow imports, has an impact on the overall economy. Our debt reports have shown that most of the difficulties that farmers faced were beyond and outside the farm gate. That includes the BSE crisis and now foot- and-mouth disease, which may be the deciding factor for many farmers on whether they remain in the industry.

We have covered most of the arguments regarding the ‘Restoring Profit for the Beef Producer’ report. There are similar arguments in the pig industry, which was very strong in all counties 20 years ago. Most of that industry, certainly from the area that I come from, is no longer there. You could count on one hand the number of people who are involved in pig production in Fermanagh, and a number of years ago every second farm was involved in it. The pig industry now faces the foot-and-mouth disease, and pig farmers must decide whether they have a future.

We are also losing other aspects of farm production such as beef. This is due to the impact of the power of people outside the farm gate — the supermarkets and the processors — and how they deal with farmers. The reports that we published have several recommendations for putting this right. Some of the recommendations point to the Department of Agriculture and Rural Development’s taking a proactive role in helping farmers who remain in the pig industry to have a future. Malton Foods and others have stood firmly against any moves towards strengthening the hand of the individual. That difficulty may be overcome if farmers can remove the fear of trying to stand against large corporate organisations that work for profit, try to stifle all opposition and create a total monopoly over the profit of an industry.

At present, those outside the farm gate have the power. When farmers are making an income of approximately £22 each and everyone else is talking about the massive economic impact in relation to farming, it shows who is making the money and the profit and who is being excluded entirely from this. It is up to the Department of Agriculture and Rural Development, in particular, to do its best and to work with the farm groups that want to move to a position of strengthening their base.

I support the motion because it allows progress and allows farmers to go for money at this point. Previously, they were afraid to move because they lacked the information to make a decision.

Photo of Mr Gardiner Kane Mr Gardiner Kane DUP

The benefits of the Pig Industry Restructuring Scheme and the length of delay can all be measured best and most accurately by the number of producers who have been forced from the industry. I accept that the blame for such delays in the introduction of support lies with the United Kingdom Minister and with Mr Fischler in Brussels. Delay in supporting, during crisis, any of our farming sectors is increasingly becoming the norm. However, for those producers suffering the collapse or manipulation of their markets, this is of little comfort.

The pig industry has, without support from subsidies, endured the rigour of what has often been a very uncertain market for its product. I pay tribute to those who have remained in production against impossible odds. That said, a strategically targeted £400,000 grant at this stage might have a positive impact on those who have managed to remain in production. Further developments involving Government funding for producer co-operatives would have attracted much support, both within the industry and from many members of the Agriculture Committee. In order to bring the price of Northern Irish pork into line with the United Kingdom mainland, a level of financial commitment from Government, however costly in the interim, could prove one of the only alternatives.

Regarding price differentials, I share the view of the producers that explorations of the impact of swine fever and the more extensive downsizing of the pig herd on the mainland are the factors that explain the higher prices for pigs across the water. The Ballymoney fire has had an enormous impact on the prices paid to producers, but so has the procurement of pigs in the Republic. Tie in those factors with the disadvantage of Northern Ireland’s greater input costs and the fact that a level playing field of animal welfare Regulations does not exist, and the stage is set for the extinction of the pig industry. United Kingdom pig producers have been forced to accept the stall-and-tether ban in advance of other EU states, which has imposed costs on the industry that it cannot afford in the current circumstances.

This welcome, but late, injection of cash for restructuring the pig industry, involving the development of marketing structures and improving quality, is welcomed by the industry. However, it must be seen in the context of the current difficulties, and I urge the Minister not to rule out the provision of cash to fund a new co-operative initiative in the future.

Photo of Edwin Poots Edwin Poots DUP

The pig industry has faced many difficulties in the past few years, and many farmers find themselves with debts that outstrip their assets. To this end, the on-goers scheme must be welcomed as a step in the right direction. There are other steps that many of us would like to have seen included. Nonetheless, we welcome the steps that have been taken in the interim.

I have a number of questions arising from this issue. Mr Savage said that there may not have been a full uptake of the on-goers scheme. If that is true, is it possible for money from that scheme to be put towards the out-goers scheme where it appears that there has been a higher take up? I understand that many farmers have applied to the out-goers scheme and have been rejected. I want to question the role of the Department in that.

Farmers had to pay £350 plus VAT to get their animals valued. It has also been claimed that those who applied to the out-goers’ scheme were told at meetings held by the Department of Agriculture and Rural Development that they should do it on a 10-year basis. Yet the vast majority of those who listened to the Department’s advice have had their schemes rejected. What opportunity is there for those people to reapply? Is there any advice that can be given before they go down that road to ensure that they will get finance from the out-goers scheme?

Photo of Jim Shannon Jim Shannon DUP

Does the Member agree that we do not have the details of how those people who have not been accepted for this scheme can be included in a second phase? Does he agree that it is a problem that farmers who applied for this scheme were told by the Department that they should apply for the full amount of money and, when they did, they were then refused? That is one of the concerns that pig farmers have about this issue.

Photo of Edwin Poots Edwin Poots DUP

I agree.

I know that the Minister is busy with the foot-andmouth-disease crisis. Believe it or not, we are sympathetic to the Minister. The fact that we ask awkward questions does not mean that we are trying to get at her. However, our constituents are concerned about the issues we are raising on their behalf. There are 500 farmers out there, and 420 of them are not very happy. It would be useful if the Minister could make a statement to the House at some stage on the out-goers scheme. It would be appropriate if the Minister could set out what has happened so far and the way forward as the Department sees it and allow the House the opportunity to ask questions about it.

Photo of Ms Brid Rodgers Ms Brid Rodgers Social Democratic and Labour Party

I would like to thank all Members for their contributions. I understand the concerns that many of them have about this scheme, which was long in gestation.

With regard to Dr Paisley’s comments, the applications accepted were based on a UK-wide tendering process. That meant we had to accept the cheapest bids. There could not be any question of regional shares for Northern Ireland, or anywhere else, but I can confirm that the out-goers’ bids so far show that Northern Ireland has received approximately the proportion that we should have, based on sow numbers. That may well not be proportionate to our problem, but it is proportionate to our sow numbers.

Taking Mr Savage’s points next, I have already said that we will get our share based on applications to date. There will be a second chance for others in the mark II out-goers scheme. The Member asked me to broaden my mind regarding the loans scheme. I think that my mind has always been pretty broad, but in relation to loans scheme, there is the little matter of the EU state aids regulations.

12.00

With regard to comments made by Mr Savage and Mr McGrady, the next issue is the need for a grant scheme for Northern Ireland pig farmers. I have said many times that I cannot hand money out without EU state aids approval. Although I would like to do that, it would be illegal. As Members will know from my remarks earlier today, I am not prepared to act illegally for the pig farmers or for any other farmers. I thank Mr Bradley for his comments and his support for this scheme.

Mr McHugh raised a number of issues. I accept that the Pig Industry Restructuring Scheme is complicated. That was necessary in order to satisfy the EU that we are not simply handing out money to farmers who might go and increase their pig production, which would be adding to our problems. My officials have tried to help farmers to comply with the scheme and are happy to continue to do so. Mr McHugh’s point about co-operatives is noted, but it was merely an observation rather than a question. It has been made in the past by many people, including Mr McHugh.

I fully agree with Mr Kane’s comments regarding the delay in approving the restructuring scheme. The delay was both inexcusable and frustrating, both for me as Minister and also for the people who are waiting for it. However, neither Nick Brown nor myself were in the driving seat on this. I have pressed Mr Brown on numerous occasions to exert pressure on the European Commission to speed it up. The other points made by Mr Kane about the cost of stalls and tethers are points that have been made in the past. I have dealt with them before.

I am grateful for Mr Poots’s welcome for the restructuring scheme. It is not possible or, indeed, necessary to reallocate cash from the on-goers scheme to out-goers. The budget that we have is the maximum available. Many of the bids were low, thus allowing us to achieve the reductions at a lower price. Mr Shannon asked whether unsuccessful bidders in the out-goers scheme could reapply. The answer is that they can.

Question put and agreed to.

Resolved:

That the Pig Industry Restructuring (Capital Grant) Scheme (Northern Ireland) 2001 (Statutory Rule 2001 No 90) be approved.