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3. Mr Lunn asked the Minister of Agriculture and Rural Development what discussions she has had with her counterparts in London and Edinburgh concerning contingency plans in the event of the withdrawal of payments to farmers under the common agricultural policy should the UK vote to leave the European Union. (AQO 9539/11-16)
First, a referendum in favour of Brexit would be disastrous for agriculture and rural development in the North because it would hinder access to vital EU markets and lead to reduced agricultural support. That is a point I have made consistently in the House.
As for contingency planning, if there were a Brexit scenario, notification would be submitted to the EU. It would take up to two years following that for a withdrawal to be complete, and I am told that that number of years can be extended. The period between the decision to withdraw and the withdrawal actually taking effect would be used to negotiate the terms of withdrawal from the EU. It would also be used by the Assembly to negotiate with the British Government on what contingency plans might be developed to replace existing EU rules and financial support systems following EU withdrawal.
Over the 2014-2020 EU budget period, pillar 1 payments to our farmers would amount to €2·3 billion. In addition, €228 million of EU funds is devoted to our rural development programme, resulting in a total planned expenditure under CAP of €2·53 billion. Importantly, the Assembly could not maintain this level of funding unless additional funds were provided by the Treasury. The British Government have consistently pushed for reductions in the support going to farmers and rural development under the CAP. They do not regard that spending as value for money, so I believe that the Treasury would be unsympathetic to our calls for some of the money saved from withdrawing as a member state from the EU to be used to maintain support to farmers and rural communities. A significant reduction in direct support would leave many of our farmers in real and long-term financial difficulty. A reduction of funding for farmers and rural communities would have knock-on effects for the environment.
I thank the Minister for that answer. Frankly, she has more less answered any supplementary that I might have come up with. However, for the benefit of others who are present, does she agree with me that this would be an absolute disaster for Northern Ireland and that the British Government would have neither the will nor the ability to replace the payments like for like?
Yes, I totally agree with that. As I said, we are talking about €2·53 billion of supports for the agrifood sector and rural communities. The current Tory Government have no intention to replace that. We have seen cuts to our block grant year on year. If those are the projections for the future, I do not hold out much hope with the Tories, who have an ideological position opposed to subsidy. They have been trying to reduce year on year. They voted against the financial package in Europe. They voted to reduce the payments that go to the farming and rural sectors. I am not confident about what they would bring into place.
I have consistently said that the biggest concern that the industry has is that there are so many uncertainties. We do not know what the future holds. We do not know what a post-Brexit situation would look like. Without all those certainties, it is hard for anybody to make a rational choice going forward. However, €2·53 billion is significant and speaks volumes on what it means to our local economy, what it means to the agrifood sector and what it means to everybody: if farmers are not subsidised to produce food, all consumers will pay more for food that we will have to import from other countries. Where do we get that from if we cannot trade openly and freely in Europe? We need to consider a number of significant challenges in terms of where we are and how things will be in the future in a Brexit situation.
Does the Minister not agree that talking about nightmare situations in the context of a Brexit position does not help the discussion, which should be a rational discussion of whether the UK and Northern Ireland as part of the UK stay in Europe or leave it? The uncertainty about the financial assistance that may be on offer to our farming communities, which she rightly talked about, exists equally whether we stay in Europe or leave it.
I have made my position clear: we need to have a rational discussion. We need to up the ante in having the debate. We have had this discussion at each of my last two or three Question Times. We need a real and meaningful debate around our future, but €2·53 billion of investment in our local economy speaks volumes. Agrifood is the mainstay of our local economy. It is one of the main drivers of growth. The stats around farm incomes that were published towards the end of last week clearly point to the fact that, without that subsidy and that payment going to farmers and rural people, they would be in a negative situation. We need to be serious about what this means.
I think that we all can agree that Europe needs to be reformed — absolutely. We can all stand and say that there is room for improvement of some of the regulations, the red tape and everything that goes with it, but we were elected to do that job. It is our job to make sure that we challenge where things are not right and could be made better. I was able to successfully challenge on CAP reform for some simplification around greening, so we can point to examples of where we have been able to make a difference. I am elected to do a job. I am the Minister of Agriculture and Rural Development. I will fight my corner for the local industry in Europe. That is what I should be doing. That is the job that I concern myself with. I am 100% concerned, as are the industry and the business community, about what a post-Brexit situation would mean. If we take it purely in terms of the agrifood sector and the rural economy, it would be a significant blow if we were to withdraw from Europe.
The latest available figures indicate that 73% — again, this points to the significance of trading in Europe — of our agrifood and drinks-processing sector trading was to destinations outside the North of Ireland. In terms of exports from the North, 60% of exports of all goods and 90% of food and drink exports go to other EU countries. Therefore, it is no exaggeration to say that the EU markets are critical for the North's agrifood industry.
As well as the trade in processed food products, there are high levels of live animal and raw milk trade across the border with the South. In 2015 alone, almost 28,000 live cattle came North, while 332,000 sheep and around 20% of milk produced in the North went South. When you look at the stats, even those that have been very quickly put together, you see how important the implications for trade will be in a post-Brexit situation. Our level of trade in the EU is so significant to our local industry. Those are the factors that we need to take into consideration when it comes to deciding on our future.