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8. Mr Allister asked the Minister of Agriculture and Rural Development for her assessment of how the EU has delivered the promise of article 39 of the Lisbon treaty to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture. (AQO 9165/11-16)
The variability of farm incomes is a problem all over the world. The complex factors affecting farm incomes are many and varied. Bumper harvests reduce prices, while poor weather reduces yields and can result in higher prices. Economic recession, wars or political unrest can all curb demand for food, particularly more expensive food items. Exchange rate movements can affect the competitiveness of food exporters over a short period. In other industries, manufacturers can more precisely match supply with demand, and hence income variability is much less of a problem.
Agriculture is a special case, and that is why the EU supports farming to the extent that it does. How successful is EU support for farmers? As we all know, the agriculture sector is struggling, and I want the EU to do more to help. However, taking a longer-term view, the EU has been good for the farming community in the North. In the last 15 years, the underlying trend in real income is upwards. Of course, there is variation around that trend, with 2014 being an example of negative variation. As I have already outlined, volatility in farm incomes is inescapable because it is due to factors beyond our control.
In 2014, our farmers received around £295 million under the CAP. Farmers in the North would have been much worse off without this EU funding, which, of course, would disappear in a Brexit situation. Outside the EU, funding for agriculture would fall, unless the Treasury provided additional funds. We all know that the British Government have long wanted to reduce the funding going to farmers. This would be to the detriment of all our farmers.
Leaving aside the propaganda, is the fact not that current falling incomes are a devastating testimony to the abject failure of the EU to live up to its own promise in its own treaty — the Lisbon Treaty — to increase the income of those depending on agriculture? It has lamentably failed and its recent attitude to the milk crisis showed that it could not care less. Is that not so?
As I said in my original answer, there is room for reform. I said that I do not agree with the position that Europe has taken in response to the dairy crisis. I have made that statement to the House on a number of occasions; I have made that very clear. I am continuing to lobby the Commission on what more it can do in relation to intervention prices. I do not think that the approach that it took was the correct one. However, the fact remains that the CAP ensures that almost £300 million a year goes into the pockets of farmers. If we were to find ourselves in a scenario where we were no longer part of a CAP, where would that money come from? Who is going to assist farmers to be able to continue to produce food?
Agriculture is different. I tell you what, I would not want to be dependent on the Tories being able to replace the CAP. I would not want to be dependent on the Tories replacing almost £300 million a year of subsidies to farmers, because they are opposed to subsidies; that is not their ideology. You can have your opinion on Brexit, but I strongly do not share your view. Whilst the CAP creates plenty of challenges, red tape and regulations — all things that we have to work our way through — the benefit to farmers is almost £300 million a year. Almost £500 million was provided for the rural development programme. That is money that was invested in rural communities and rural businesses. All those things make a difference to the lives of rural dwellers and farmers. Whilst there are plenty of challenges with the EU, I think that the benefits for the farmers speak for themselves.
The Member knows that we are continually looking at how we can improve things and trying to reduce red tape. I think that we will have another opportunity to improve things further with the change in the make-up of the Departments. I think that we will have an opportunity to look at our inspection regime in particular. We can point to a number of examples of where things have been improved.
The Member also asked about practical support. My advisers are on the ground. College of Agriculture, Food and Rural Enterprise (CAFRE) advisers are working with farmers, particularly in relation to benchmarking. We are currently recruiting for business development groups. Again, that will be advisers working with farmers on how best they can meet the needs of their business into the future. So, there is plenty of practical work going on within CAFRE and across our three campuses in terms of the education opportunity. It is great to see that so many farmers are availing themselves of that and wanting to learn more. They want to benchmark; they want to look at knowledge transfer; they want to look at how they can improve efficiency.
The new rural development programme is going to be a vital tool in supporting the industry into the future. As we work our way through the development of the farm business improvement scheme, there are certainly going to be benefits around looking at production efficiencies for all farmers across all sectors. I have worked very hard to secure that. We have the largest rural development programme that the North of Ireland has ever seen. The sooner we can get these programmes opened up at the start of the year, the better it will be for the industry in its entirety.
The Minister will be aware of the recent case where a local vegetable grower received 8p for a turnip, while, at the same time, the same turnips were being sold in the supermarket for 80p. Does the Minister agree that that is a shocking state of affairs? What is the Minister doing to ensure that suppliers get a fair and reasonable return for their produce?
I totally agree with the Member. It is a disgrace; it is shocking. The Member will know that, since I have taken up office, I have been committed to bringing forward a strategy for the industry as a whole going forward, the Going for Growth strategy. Central to that strategy in going forward is a recognition that there is one supply chain. In order to have one supply chain, there needs to be respect right along it. Farmers need to be paid a fair price for what they produce. Obviously, nobody could be accused of using the example that you have highlighted merely to startle. Somebody getting that kind of price for what they are producing is absolutely disgusting and it should not be acceptable.
Recently, I convened a supply chain forum, which is an attempt to bring primary producers, processors and retailers together to look at how we can move forward together, how we can create more respect within the supply chain and how we can communicate that better.
We are involved in that work alongside challenging the major retailers, as I am always happy to do, on what they are paying for what they buy from local farmers.
Going back to the thrust of the main story, the European Milk Board has actually just called for Commissioner Hogan to stand down because of his failure to redress the ongoing milk crisis. I know that the Minister and her party have been critical of Commissioner Hogan in the past. Will she join in that call for him to resign?
As I have said consistently, I do not agree with the approach that Europe has taken. I do not agree with the approach that the commissioner has taken. I have been critical of him and to him in person. I have been critical to him when I have written to him. I will challenge him continually on the role that he is playing to support the industry. Yes; I think that if the dairy industry continues with the low prices and the glut that it has, there will come a time when his position of burying his head in the sand and saying that there is no crisis will no longer be sustainable. I will continue to challenge the commissioner while he is in position on what he is doing to deliver for the dairy sector. I have not been shy about it in the past, and I will certainly not be shy about it in the future.
Yes, because when we point to the situation in the dairy industry in particular, we know that one of the contributory factors is the fact that Russia stopped buying. Whilst we were not sending many dairy products into that market, we were sending cheeses, so that created a problem for the industry and has helped to sustain the low price. Yes, I believe that Europe could have done more. That is the point that I am making. I will continue to challenge Europe and Commissioner Hogan around what he is doing, because I believe that the approach that they took in Europe, whilst I accept that there is some funding and money going into farmers' bank accounts as we speak — it has been paid out from last week, so they will have received it last week and this week — and that is, in a sense, as a one-off, slightly helpful, I do not think that it is the longer-term approach that we need. I believe that we need to see a review of intervention prices that would allow the market to correct itself.