Common Agricultural Policy (Direct Payments to Farmers) (Miscellaneous Amendments) Regulations (Northern Ireland) 2020

Executive Committee Business – in the Northern Ireland Assembly at 5:00 pm on 16th March 2020.

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Photo of Alex Maskey Alex Maskey Sinn Féin 5:00 pm, 16th March 2020

The Business Committee has agreed that there should be no time limit on the debate.

Photo of Edwin Poots Edwin Poots DUP

I beg to move

That the Common Agricultural Policy (Direct Payments to Farmers) (Miscellaneous Amendments) Regulations (Northern Ireland) 2020 be approved.

As the House will be aware, the UK-wide Direct Payments to Farmers (Legislative Continuity) Act 2020 — DPLC — which received Royal Assent on 30 January 2020, incorporated direct payments EU legislation into domestic law for claim year 2020. The Act contained powers to make further regulations in order to correct deficiencies in domestic law to ensure that the Department can administer the direct payment schemes effectively and make eligible payments to farmers in 2020.

(Mr Deputy Speaker [Mr Beggs] in the Chair)

The House will also be aware that DEFRA has made two UK-wide statutory instruments to address inoperable provisions in retained EU law: the Direct Payments to Farmers (Amendment) Regulations 2020; and the Finance, Management and Monitoring of Direct Payments to Farmers (Amendment) Regulations 2020. Those statutory instruments also amended the domestic legislation that enforces EU direct payment rules in England. Furthermore, Scotland and Wales have made similar legislation, and it is necessary for DAERA to do the same to ensure that Northern Ireland domestic legislation is also fully operable.

The changes contained in the Common Agricultural Policy (Direct Payments to Farmers) (Miscellaneous Amendments) Regulations (Northern Ireland) 2020 — annex A — are minor and technical. As I said, they are necessary so that the rules continue to operate effectively in Northern Ireland for 2020. The Assembly will be aware of the importance of that to support the farming industry.

I will now provide further details on the nature of the technical amendments, which will correct two regulations. First, the amendments to the Common Agricultural Policy Basic Payment and Support Schemes Regulations (Northern Ireland) 2015, SR 2015/191. Amendment 1, to regulation 4, clarifies that paragraph (3) refers to article 22(1) of the Horizontal Implementing Regulation (EU) No 809/2014, as it relates to the 2020 scheme year direct payments. Deadline for applications remains unchanged at 15 May. Amendment 2, to regulation 12, removes references to EU regulation 1307/2013 that have become incorrect due to how the EU regulation has been retained in UK law.

Operability amendments that were made by DEFRA to the EU regulation have changed those references. Minimum claim size, which is what is specified by regulation 12, is unchanged at three hectares.

Amendment 3 to regulation 16 removes an incorrect reference to article 2(c) of the direct payments regulation 1307/2013. That regulation relates to the tree species that can be considered as short coppice rotation, which can be used to meet ecological focus area requirements under greening.

Amendment 4 to regulation 20 is a rewording to include the words:

"as it had effect immediately before exit day"

That is to make it clear that the reference is to the EU regulation as it applied before the EU exit, and therefore extend the areas designated as environmentally sensitive permanent grassland on 31 January 2020 to 31 December 2020. There is no change to the fields that are considered to be environmentally sensitive permanent grassland and are subject to a ploughing ban. As was previously the case, permanent grassland — land that has been in grass for more than five consecutive years — that is located in areas that are covered by the habitats directive and birds directive is considered to be environmentally sensitive and is subject to a ploughing ban.

The Common Agricultural Policy (Control and Enforcement) Regulations (Northern Ireland) 2015, SR 2015/192, amendment 1 to regulation 1, corrects the reference to the definition of "direct payments". Amendment 2 to regulation 1 clarifies references to EU regulations or how they have been retained in UK law, that is, after the operability amendments, and relate to direct payments for the 2020 claim year.

Amendment 3 to regulation 7 excludes the reference to a Commission official to accompany an authorised person at an on-farm inspection for the 2020 claim year. As claims for 2020 will all be paid from national funds, there is no need for the EU Commission to carry out audits and visits to farms.

On 12 March 2020, my officials briefed the Committee for Agriculture, Environment and Rural Affairs. I am grateful to the Committee for facilitating that briefing. To sum up, my view is that the regulations should be approved in order to ensure that direct payments can continue to be made to farmers in Northern Ireland for the 2020 scheme year.

I commend the motion to the Assembly.

Photo of Declan McAleer Declan McAleer Sinn Féin 5:15 pm, 16th March 2020

I thank the Minister for moving the motion. I welcome the opportunity to speak as Chairperson of the Committee for Agriculture, Environment and Rural Affairs and to outline the Committee's views on the motion.

The Committee became aware of the changes to direct payments to farmers when it received a briefing from the Department on 21 January 2020. At that meeting, officials updated the Committee on its proposal to ask the Assembly to give legislative consent to the Direct Payments to Farmers (Legislative Continuity) Act 2020.

Members heard that EU direct payments legislation, which provided the legal basis for common agricultural policy pillar 1 support to farmers, would no longer apply from exit day on 31 January 2020. The Act provides powers to fill the legal gap that was created through the withdrawal agreement of 19 October 2019, and incorporates EU legislation into domestic law for the direct payments scheme for the claim year 2020. It also creates delegated powers to make subordinate regulations to ensure that legislation operates effectively from a domestic perspective. The delegated powers in the Act also enable any deficiencies in domestic legislation in respect of the 2020 scheme to be corrected. Members welcomed the legislation and forthcoming subordinate legislation, which will ensure that the Department has the ability to administer direct payments to farmers without any delay, as well as being able to process payments to eligible farmers for the 2020 claim year.

Members welcomed the reassurance from the Department that no changes to the application process were planned that could have the potential to complicate matters further for farmers. That was one aspect on which we had been lobbied very heavily by the farming sector. The sector very much welcomes the fact that there will be no complications or changes, and that it will, effectively, be a rollover for 2020.

At its meeting on 27 February, the Committee considered a written briefing on an SL1 for a statutory rule, arising out of the Act, on the direct payment to farmers. We are debating that statutory rule today. The SL1 made it clear that there was an urgent need to correct deficiencies in domestic legislation relating to the 2020 payments to farmers. The Committee considered the issue and indicated that it had no concerns or objections.

The Committee received a further oral briefing from the Department on 12 March on the proposals to bring forward the statutory rule, entitled the Common Agricultural Policy (Direct Payments to Farmers) (Miscellaneous Amendments) Regulations 2020. The officials advised the Committee that the regulation is minor and technical in nature and will provide assurance that direct payments will continue to be processed for the 2020 claim year. We very much welcomed confirmation from the officials who came before us at the Committee last Thursday that the full payment amount will be made in October. That will be very welcome in the farming community. The Committee also learned that the jurisdictions of England, Scotland and Wales have made a similar technical amendments using their own procedures.

The Committee posed a number of questions to the DAERA officials, including on confirmation that the funding allocation for 2020 was still estimated to be £293 million and that the timelines for the 2020 payment year would remain the same for the application and assessment process. We are glad to say that the Department confirmed that that was the position and that it is still on track to process and issue 100% of the payments from mid-October onwards. The Committee was content with the proposals from the Department and recommends that the statutory rule is confirmed by the Assembly.

I turn more broadly to my role as spokesperson on agriculture and rural affairs. The topic of the direct payment permeates strongly throughout agricultural and rural communities. Indeed, throughout our scrutiny of the Agriculture Bill and the statutory rule that is before us today, the issue of direct payments runs very deep. Recently, we received research findings from Dr Dobbs and Dr Gravey of Queen's University, which indicated that, without the direct payments, as many as 30% of farms would cease to exist. That, in turn, would result in high levels of land abandonment, unemployment and, obviously, knock-on implications for services in rural areas.

In my constituency of West Tyrone, single farm payments totalled £43 million last year; that is the absolute backbone of our rural economy. Without that, the effect on farming families would be absolutely phenomenal. The representatives of the Livestock and Meat Commission (LMC) who attended last Thursday's Committee meeting drew on that point as well; that the direct payments are crucial for the sector to survive and, particularly, to try to stem the decline of the beef and lamb sector. The certainty around the direct payment, for this year at least, is very welcome. People from rural backgrounds will know that our farmers face a great many issues, including climate change. That is maybe more profoundly felt in the hills and severely disadvantaged areas.

We have looked at many other issues, including income. We noted recently that farmers' incomes had dropped by a staggering 25% in the last year. That should also be noted in the context that the overwhelming majority of a farmer's income comes in the form of direct support. That is really important. People who are not farmers should realise that, whilst the farmer is subsidised to produce food, the subsidy is, effectively, passed on to the consumer, who is able to buy food for a reasonable price. That is a really important point; people who are not farmers think that farmers are getting grants and support but do not realise that the subsidy is passed on to the consumer who can, then, buy traceable, tasty, nutritious food at a good price that they can afford.

Low farm-gate prices is a huge issue, as is climate challenges. We also have the challenges of Brexit. Something that has come up in the Committee, time and again, is the prospect of Britain diverging from here and the EU regulations and the implications for the market given that 75% of our produce goes into Britain. That is absolutely crucial, as is the continuation of the direct payments. Whilst we have certainty this year and guarantees that the amount will remain the same for the remainder of the Westminster mandate, we do not know what will happen after that. We see farmers in Britain effectively being incentivised to leave farming. We do not know what implications that will have for the future here.

We are also looking at changes such as the immigration-points rules that the Home Office plans to bring in. They will have a huge impact here, particularly on our food-processing sector. There are factories and food processors here, up to 90% of whose employees are new nationals. We also have about 1,500 seasonal workers who come here, particularly at harvest time, and are hugely important to the industry. There are many challenges posed by the immigration-points rules that the British Home Office proposes. Many of the farmers that I met over the weekend — and no doubt some in the Chamber — are relieved that the red diesel rebate was spared in last week's Budget. However, we are also looking at possible removal of the agricultural property relief, which could lead to inheritance tax and the inhibiting of the intergenerational renewal of farms. Again, that feeds into concern for the future.

Of course, our most prevalent concern is how to deal with coronavirus. The Minister will no doubt be heavily involved in trying to work out the Department's plan on that. Indeed, on Thursday, officials will give the Committee a briefing from the Department's perspective, focusing on legislative and operational matters and what advice they will give to the industry. Indeed, the matter arose when the LMC was at Committee last week. The point was made that there are exceptional challenges for the farming community, as it is perhaps more challenging to deep-clean farms and factories than other institutions, and it is difficult to lock down a food supply chain. In this era of great uncertainty, anxiety and unrest, we need to appreciate our farmers and food producers more than ever so that they can give us the security and supply of food that we need.

We welcome the motion. There are many challenges facing the sector, and this will at least give farmers at some degree of certainty for this and the coming year.

Photo of William Irwin William Irwin DUP

I declare an interest as a partner in a farm business that is in receipt of a basic farm payment. I welcome the motion. There has been a considerable discussion of this matter at the AERA Committee. I have found it very useful to hear submissions from various industry leaders and representative organisations that are involved in agriculture in Northern Ireland.

The post-Brexit era that we are entering will offer opportunities in the long-term interest of agriculture in Northern Ireland. I am optimistic about the future outside the fetters of the European Union. The legislation before the House is necessary to enable a transition from the EU basic payment towards a new system of support that can be properly tailored to the realities of farming in the United Kingdom.

The process for reaching the new system of payments will intensify in the coming weeks and months. It will continue to be important to canvass the views and opinions of farmers and stakeholders in the industry to arrive at a system that is best placed to support, sustain and grow agriculture outside the EU. Change is coming with a new system of support. How that change is managed and implemented will direct the course of agriculture and wider food production in the UK in coming years. Agreeing this motion will bring an important element of stability in the shorter term and allow for the continuation of an engagement process between the Stormont institutions, Westminster centrally and, of course, the industry.

The exchange rate for the payments being set at last year's rate is also a welcome reality and has given confidence to farmers, which is another important factor for the industry. The fact that payments can be made in full in October 2020 is another welcome addition, and, as I said on a previous occasion in the House, thanks must go to our Department staff for working hard to create a payment system that has delivered payments on time. Farmers have adjusted well to the online system, and that, in no small part, has accelerated progress in this regard.

With the current COVID-19 response, we are seeing across the globe a renewed importance attached to food production and, indeed, more critically, locally accessible food production. That should be considered more acutely, and the United Kingdom must create a food production network that utilises local producers as much as possible. That creates a lesser reliance on outside sources for food and helps to achieve greater sustainability.

I look forward to the discussions and debates ahead on the replacement support scheme or system, and I will continue to represent the farming community to achieve the best possible outcome for sustaining and growing agriculture in the future. I support the motion.

Photo of Patsy McGlone Patsy McGlone Social Democratic and Labour Party 5:30 pm, 16th March 2020

Gabhaim buíochas leis an Aire. I thank the Minister for this.

The direct payments to farmers legislative continuity regulations before you are of critical importance to farmers across the North. Crucially, the payments make up a significant proportion of the income generated by our farmers. They have been a lifeline through many difficult months and are worth more than £280 million of farm income. Let us not forget that farmers have been in receipt of basic payment scheme payments because it was a widely held belief that what they were doing was in the public interest and, therefore, it was imperative that they should be supported, correctly so.

Brexit now raises so many more uncertainties for our farmers. That is undeniable. As soon as the referendum result in 2016 became clear, SDLP representatives consistently pressed the Government to outline their plans to replace this vital income; indeed, colleagues, these payments and the millions more we received from the EU are part of the reason why the SDLP resolutely opposed Brexit. It is clear that the uncertainty caused by Brexit over the last three years has impacted negatively on many different sectors, not least farming, given the uncertainty that has been created. Today, we have the opportunity to finally provide some clarity to farmers across the North by continuing to fund direct payments. Whilst the common agricultural policy had its weaknesses and imperfections, at least it provided our farmers with some sort of security on a year-on-year basis and an ability to forward plan with some degree of certainty. With the ever-increasing impacts of climate change and extreme weather patterns, the last thing that farmers in our rural economy need is further uncertainty. Our farming industry is about to be opened up to unprecedented global competition. Our farming communities have uncertainty regarding their future funding and the competition that they may now face.

Whilst the legislation is welcome at this moment and provides some hope, the uncertainty seems destined to continue, with the legislation providing welcome months — months only — of clarity. Can we really expect to have a settled agriculture policy and a replacement payment mechanism in place by the end of 2020? That is one of the reasons why the SDLP has sought a transition period extension. Why are we not seeking breathing space for our farmers by requesting that the basic payment scheme extension be much longer?

The payments have already gone some considerable distance towards improving public health, animal welfare and environmental standards, but there remains a lot more work to be done. Whilst few would argue that there has not already been a welcome shift in emphasis on improving the environment, adapting to climate change and protecting the welfare of our livestock, we need to be mindful that this is enabling legislation. The detail to be set out in regulations will need to be drafted and approved before farmers can be sure about what the new payment system will mean for them. If we want to ensure that any new scheme is robust, properly monitored and measured and transformative, we need to engage in a purposeful manner with our main players in the agriculture sector. As we all know, that takes time.

It is important that the direct payments legislation for 2020 is entered in the statute book. We need to think carefully about the years ahead, as our farmers need to be able to plan ahead. Once again, I welcome the regulations and the fact that the UK Government will provide upwards of £250 million of support for 2020. However, there is no mention of what support will be provided in the following years. Can the Minister provide assurances that support will not drop off dramatically for a key sector of our community? In the current health climate, there will be increasing uncertainties. Local food supply will be a key element in making sure that we get over the coronavirus crisis.

For our farming communities, the prospect of losing perhaps 60% of their income with no real certainty about what their replacement income will be will certainly not be an incentivisation. It is possible that many small farmers may decide that now is the time to quit. As we all know, farming is not an easy career option. It is increasingly difficult to attract young people into the industry, and we do not want to have a bad situation become worse. We are all too painfully aware of the increase in poor mental health among farmers. We must be mindful of the pressures that they already face when it comes to making decisions that influence heavily their futures.

I am concerned that farmers may be somewhat in the dark as to exactly what their income is likely to be beyond this year, and I would be grateful for the Minister's comments. Like any other business, farmers need to make a profit. With regard to our environment, can we realistically expect our farmers to go green if, in fact, they are in the red? In the future, I look forward to schemes that will hopefully allow us flexibility, are focused on outcomes and, where possible, are tailored to the needs of individual farmers, particularly those in upland and less-favoured areas. Those farming communities are often forgotten.

I ask Members to join me in supporting the regulations, and I thank the Minister for his efforts in this regard. Without them, farmers would be even more severely prejudiced against in future. However, although we accept the need for the legislation and that it is now inevitable, we cannot accept that it is an ideal situation. Much work remains to be done.

Photo of Rosemary Barton Rosemary Barton UUP

The welcome confirmation of direct payments for 2020 will be good news for the farming community, which has faced uncertain times in recent years and has seen its income reduced by 25%. Further, the clarity that it provides in the form of the exchange rate remaining similar to that of the last year and the fact that 100% of the direct payments will be paid in October is most beneficial, particularly when farmers are trying to plan ahead for farm improvements for the forthcoming year.

The full payment of direct payments, not the 70% initial payment that happened in October 2019 with the remainder paid in December 2019, has also signalled that, as a country, Northern Ireland is now moving towards taking control to regionalise a Northern Ireland-tailored scheme for our Northern Ireland farmers. The certainty that the 2020 scheme will provide crucial comfort for farm businesses will continue to support the production of the high-quality, affordable food that many of our consumers demand. That can only be welcomed. The regulations are welcomed by the Ulster Unionist Party.

Photo of Harry Harvey Harry Harvey DUP

I thank the Minister for tabling the regulations. First, I welcome the amended regulations, which, as has been outlined, will provide for the continuance of direct payments following the EU withdrawal and the subsequent ending of the UK legislation under which payments were previously administered. Those living in rural communities will be all too aware of the importance of payments received under the policy and of how vital they are to farm businesses across the country. It is important that decisions on CAP are taken in consultation with all those involved and that farmers are provided with as much certainty as possible to enable them to best plan ahead. The extension of the current framework and the adoption of the amended regulations will provide for that.

It is evident that any future policy must be compiled in light of the UK's trading position beyond Brexit. That will, undoubtedly, have a major bearing on what help farm businesses will require and, therefore, on what form the new policy will need to take.

The Ulster Farmers' Union, with other union representatives, was before the AERA Committee recently. It was evident that their members are in need of continuity and stability, given the fact that there has been an estimated 26% depletion in income for farmers over the past two years. The retention of some form of resilience payment, incentivising production and growing sustainable, environmental activity will need to be considered in a future policy. We must also ensure that Northern Ireland farmers can compete with their counterparts in the Republic. In the meantime, provision for the continuance of direct payments under the CAP scheme is essential, and I thank the Minister for ensuring that that is the case.

Photo of Emma Sheerin Emma Sheerin Sinn Féin

The purpose of the statutory rule is to make minor technical amendments that will address deficiencies in our domestic law, namely section 24 of the NI Act 1998. The SR is intended to bridge a gap in legislation enabling direct payments to be made for 2020. The powers in the statutory rules are time-limited and expire on 31 December 2020. The rule will ensure that existing law functions effectively for the direct payment scheme for this year. The regulations have not been subject to consultation because their purpose is to retain the status quo for this year. Effectively, the rule will provide continuity and stability, albeit limited, for farmers in receipt of direct payments for this year only.

As everyone is aware, funding for direct support to our farmers currently comes from the EU as part of the common agricultural policy. What people might not be aware of is the impact that that funding has had on our rural farm families. Sinn Féin is gravely concerned at the loss of CAP single farm payments to farmers in the North of Ireland as a result of our exit from the EU, which, as people will remember, was a decision made against the wishes of the majority of the population here.

Between 2014 and 2020, the single farm payment was worth in excess of £2·3 billion to farmers and their families in the North. In my constituency of Mid Ulster, payments in 2018 alone amounted to more than £29 million. That is a huge amount of money. Think about the number of rural households, small businesses and independent contractors that have been able to keep their lights on as a result of that funding. That is not something that we can dismiss. Annual payments from the European Union account for 87% of annual farm income here, compared with 53% in the UK as a whole; in other words, for every £10 that farmers in the North earn, the common agricultural policy accounts for £8·70. The challenges faced by our farmers, who are engaged in a livelihood that has no guarantees, no monthly salary and no statutory sick pay, are exacerbated now by uncertainty about the future.

The purpose of CAP pillar 1 funds is to support agriculture sector incomes. In 2017, the European Union issued a communication on agriculture. 'The Future of Food and Farming' outlines the main objectives of the future CAP to:

"Foster a smart and resilient agricultural sector Bolster environmental care and climate action and to contribute to the EU environmental and climate objectives Strengthen the socio-economic fabric of rural areas".

Central to achieving those objectives is that direct payments remain an essential part of CAP, unlike the English draft policy, which phases out direct payments. It will be for a Minister to decide future agricultural support here in the North. I am aware that schedule 6 will provide the legal basis to continue direct support for farmers after this calendar year. Also, according to the Treasury statement, while the North will receive £279 million for 2020-21, it is not clear how much money will be allocated for direct payments for farmers beyond that date.

Sinn Féin responded to the Department's 2018 discussion document on a future agriculture framework. That engagement exercise by the Department received 1,200 responses from across the North, a sizeable number made all the more significant when you consider the rural areas across the North with little to no broadband provision.

Sinn Féin wants to see our own primary legislation evolve from that consultation. We have an opportunity in this mandate to look at having an agriculture Bill that is designed to cater for and best serve our all-Ireland economy.

The Government in the South of Ireland invest more heavily in agriculture than the UK Government. A number of weeks ago, I spoke at length about areas of natural constraint (ANC) payments. Those have been scrapped in the North, while the South has increased them to €250 million for this year. It is vital that we retain and enhance our share of the CAP budget to help mitigate trade distortion across the island. Sheep in Glenties in Donegal are no different from sheep in Glenullin in County Derry.

Ivor Ferguson, the president of the UFU, recently stated:

"We were pleased that the withdrawal agreement took into consideration the current political situation in" the North.

"The level of support payments given to agriculture in" the Republic

"must be tracked and matched so that" the North's

"competitiveness in the all-island economy is maintained."

Data on farm income revealed that dairy farmers and cattle and sheep farmers had the lowest average farm-business income in 2017-18 across all the devolved regions. Given that that was the case even when they were in receipt of EU direct payments, the cessation of payments does not bear thinking about. The rule is necessary to provide some certainty for our farmers as we plot our way through the uncertainty ahead.

Photo of Jemma Dolan Jemma Dolan Sinn Féin 5:45 pm, 16th March 2020

I welcome the opportunity to speak on the motion. As has already been highlighted, the SR makes technical amendments only. It will have no policy impact. The amendments will ensure that direct payments to farmers under retained EU law will continue to operate effectively in the North as far as they relate to direct payments for this year, 2020. Farmers will receive payments the same as last year. It is my understanding that 100% of payments will be made in one payment in October of this year. I also note that Scotland and Wales have adopted the same regulations.

Sinn Féin is an all-island party. We have a vision for the agri-food sector in a new and united Ireland. Agriculture has led the way in all-Ireland cooperation and trade. Agriculture in an all-Ireland context will enhance and strengthen the social and economic needs of our society. Agriculture, farming and food are interconnected: they are the backbone of our communities. I represent Fermanagh and South Tyrone, which, as I outlined in my remarks a few weeks ago, sees approximately £48 million a year in single farm payments direct to farmers. As I also highlighted in the recent ANC debate, Fermanagh as a county has almost 92% of land that is severely disadvantaged. I welcome the fact that the Assembly supported the implementation of a new areas of natural constraint scheme. It goes without saying that the farming community in Fermanagh welcomed it. Fermanagh is a cross-border community, where my neighbours, my family and my friends live their daily lives with euro in one pocket and sterling in the other. Border counties will be impacted on the most by the challenges of Brexit. Any changes to what we currently have will be a disaster. People work and operate on borders throughout Europe, but, when it comes to Ireland, the only real difference is the colour of the postboxes or the road markings. Agriculture is one of the most important industries in the North, with an annual turnover of £4·5 billion and a workforce of almost 48,000 people.

Regarding GDP and employment, the North of Ireland is more reliant on agriculture and the agri-food industry than any other area of Britain. Agriculture operates on an all-island basis. Greater support for small farms has more environmental benefits than supporting large intensive farming practices, especially in severely disadvantaged areas (SDAs), where land management and biodiversity are very important. Being the daughter of a small farmer and having grown up on a small farm, I saw the importance of that at first hand.

Although the regulations provide some form of continuity and certainty for farmers, the devastating impact that Brexit will bring to the agri-food sector and the farming community in the North of Ireland cannot be overestimated. We have no answers to so many questions. We welcome the unfettered access on an all-island basis that the Irish protocol will bring in. It will help our economy to operate on an all-island basis. However, we will not have a level playing field when it comes to farm support. Research shows that the North of Ireland is the most reliant on agriculture regarding its share of GVA and percentage share of total employment. Compared with Britain, Scotland and Wales, the North has the smallest average farm size. Grass-based cattle and sheep account for 89% of the total number of farms in the North. We have more dairy cattle and sheep less-favoured-area farms than any other devolved region, with 70% of the total agricultural area farmed in the North defined as being less favoured. That brings challenges in productivity. Figures reveal that farm income here, including that of dairy farmers and less-favoured-area cattle and sheep farmers, is the lowest of the devolved regions.

Farms are reliant on EU direct payments. As a result, the agri-food sector is reliant on EU direct payments. Consequently, our economy is reliant on EU direct payments. I support the statutory rule.

Photo of Cathal Boylan Cathal Boylan Sinn Féin

I welcome the opportunity to speak to this motion. I was talking to the Minister in the corridor a couple of weeks ago. Unfortunately, I did not get the opportunity to sit on the AERA Committee, but I have a good interest in it, representing one of the best constituencies in the North, Newry and Armagh.

Sometimes, when we speak about the rural and farming communities — this is not any slight on any Committee members — they do not get the recognition that they deserve for the contribution that they make to the economy and the environment. I went to the Christmas show mart in Keady, and anybody who might think that they could take the farmers for granted would get their eyes opened. If you spend a day in the mart, it is a learning experience for those people who have not tried it. Any urban people who have not spent a day in the mart should go down for one day at least, and you will get your eyes opened to what it is all about. I recognise the contribution of the rural community and the farming community.

As I said, I welcome the opportunity to speak in this debate and await with bated breath to hear how the Minister is going to get himself out of this one. Whilst I recognise that the 2020 payments will be secured, we are going to have great difficulty over the next number of years in trying to address the concerns of the rural community.

As has been said, the intention of this statutory rule is to make technical amendments in order to ensure the operation of the direct payment scheme for 2020. I also note that Scotland and Wales have adopted the same regulations, basically so that there are no policy changes. Farmers will welcome the fact that for this year — 2020 — there will be no changes to direct payments, the application process or inspections. That will provide a degree of certainty and continuity in what are uncharted waters for some of us. Whilst we have certainty, as I said, for this year, there are concerns in the agricultural sector that it cannot survive without financial support. In the constituency that I represent, Newry and Armagh, £25,113,862 a year comes in from single farm payments.

I also welcome the fact that the Assembly voted in favour of the new areas of natural constraint scheme a couple of weeks ago. The farmers in my area will welcome that, and I congratulate all the Members who took part in that debate and secured it in the House.

In a presentation to the Agriculture, Environment and Rural Affairs Committee, Queen's University flagged that, without direct payments, 30% of farms are likely to cease functioning, which will lead to unemployment and land abandonment. That is deeply worrying for the agricultural sector. We are very proud of our agri-food industry and our farming community. We have international customers buying our products, based on our high-quality standards. Our farm operations are based on high standards, regulations, farm quality assurance and traceability. We produce food to standards that are amongst the highest in the world. We need to design a future agriculture policy that is based on the needs of our sector in the North of Ireland.

In a recent presentation to the Agriculture Committee, the Livestock and Meat Commission (LMC) highlighted the following figures for cattle and sheep producers: approximately 20,000 farmers are classified as cattle and sheep producers, and the 2018 figures show that they represent more than 25% of the gross output of farms; the beef and sheep meat processing sector employs over 5,000 people, and, in 2017, its annual turnover was in excess of £1·31 billion; over 87% of sales were outside the North, primarily servicing the GB marketplace.

We must tell the positive story of our industry. These figures highlight the need to give financial support to our farming industry. The LMC has also highlighted a concern that the sector could be completely undermined as part of UK trade deals due to the implementation of a cheap food policy at any cost. As we move forward, we need to confront the challenges that Brexit poses to our rural communities, agriculture and farming. Agriculture and farming are policy areas that will be significantly impacted by Brexit. As we know, there are many economic benefits for local communities from the subsidies that local farmers receive. What would be the consequences if those farmers did not receive those subsidies or if those farmers went out of business?

In conclusion, I am interested to hear what the Minister is going to do for the good people of Newry and Armagh following the 2020 direct payments. I support the motion.

Photo of Philip McGuigan Philip McGuigan Sinn Féin

As the Deputy Chairperson of the Agriculture, Environment and Rural Affairs Committee, I note and welcome the comments made by the Chair about the issues before us, and also his comments about the industry having come before the Committee to give evidence on this and other issues. I welcome the Minister bringing the SR to the Chamber today. I welcome approval of the regulations before us, and the direct payments to our farmers here in the North. This support, and the knowledge that their payments will be made in full this year, will bring some relief to farmers across the North. I also welcome the Minister's comments, when the issue first came to the Floor, that the limit on advance payments, which was 70% of the total payment in 2019, has been removed. As a result, his Department intends to make full payments in October.

I note and welcome the comments from the Ulster Farmers' Union:

"As the Brexit process progresses, it is vital that" the North's

"competitiveness in the all-island economy is maintained. The level of support payments given to agriculture in the"

South

"must be tracked and matched."

Of course, as has been said by others, the certainty that this SR brings is only for the short and medium term. What we do not know is now long these vital direct payments will last for and what they will cover in future. All this uncertainty, of course, is a consequence of Brexit. The European Union placed a priority on farming and protected it for decades through the common agricultural policy. Annual payments from the EU, as has been said, account for 87% of annual farm income here in the North. We now face the uncertainty of what will replace that payment and whether or not our agriculture industry will be adequately funded. I, for one, have no great confidence that it will. Therefore, whilst we have clarity for this year, we do not have that clarity for the years beyond that.

Our farming and agri-food sectors are vital to our economy and to the fabric of our communities, and that is particularly true in my rural constituency of North Antrim, where these direct payments are worth over £29 million to local farmers, their families and the local economy.

North Antrim gets the third highest contribution across the North, and, given the number of major companies that have been lost in that constituency in recent years, the number of jobs that have been lost as well and the impact that that has had locally, the importance of direct payments to local farmers is clear, and we must do everything that we can to protect it.

Investment and support is needed to deal with the consequences of Brexit and the challenge of farming more sustainably. It is therefore critical that there be adequate funding to replace the EU funding that is being stripped away. It is also critical that we have a policy suited to our farming and agri-food industry across the whole of the North, a policy and funding that supports sustainable farming and family-run farms.

It has to be said that single farm payments and EU membership have done more than just offer direct payments to the agriculture sector in the North; they have played a huge role in increasing environmental and public health standards. That must continue.

I support the continuation of the direct payments. I support the SRs. I do not support — other Members have mentioned it — the uncertainty for our agriculture industry and farmers beyond 2020. Any future agriculture policy must ensure that there is no diminution of food standards as a result of any potential trade agreement that the British Government may reach. We must also ensure that there are no barriers to trade. Others mentioned the British Government's rules on migration policies and how they will have a negative impact on our agriculture industry.

I support the SRs, but I ask the Minister to do all that he can in future years to ensure adequate funding and support for our agriculture industry in the North.

Photo of Edwin Poots Edwin Poots DUP 6:00 pm, 16th March 2020

I welcome the comments made in the debate. Agriculture remains the most important element of industry in Northern Ireland. It employs in or around 100,000 people, has a turnover of £5 billion each year and provides food for close on 10 million people. Agriculture remains a key part of our society; it is part of the fabric of our society. It should not be dismissed as being of no relevance; indeed, the recent outbreak of coronavirus should drive home to people the importance of having quality food available at a source close to home.

I was with the Chief Scientific Adviser in the Irish Republic last week, and he believes that such viruses could come on a more regular basis as the years go forward. It could be in a particular breed of animal next time, or it could cross into humans. We do not know. However, we can expect that there will be more viruses across the world. Consequently, food security should be important to all of us. Having quality food produced in Northern Ireland, on the doorstep of the GB market, is something that should be appreciated and supported.

I welcome the fact that it is being supported to the tune of £293 million this year; indeed, four of the Members who spoke from Sinn Féin quoted the figures in their constituencies. They are gobbling up £129 million in four constituencies. Thank you for giving me that useful information. It is appreciated and taken note of.

As we move forward, we will seek to ensure that we can retain as large a single farm payment as possible that supports production, the environment, animal health and food quality and supports companies that do their job well and provide good care for the people they employ. Those are the food standards that we in Northern Ireland want to meet. We can face head-on the South Americas of this world by doing that, because we have the qualitative material going on to the supermarket shelves that the public need and want.

The European Union was mentioned. I hear what was said about uncertainty. There is uncertainty. We have a manifesto pledge from the Conservative Party, but what exactly that will be, going forward, has not yet been tied down. However, does anybody believe that there was certainty in the European Union? Europe is just going into a round of talks for the next seven years. The one thing that I am certain about is that the slice of the cake that we would have got, had we remained in the European Union, would have been smaller, because, reasonably, the countries that joined the European Union — the accession countries — had not got their fair share of the cake, and part of the deal the last time round was that they would get their fair share the next time round. There are only two ways in which to increase payments to the accession countries. One is by increasing the European Union's taxation on all nations, but I do not think that the other nations will wear that. Will the big contributors, such as Germany, France, Denmark and Holland pay more? In the absence of them paying more, the only way that the accession countries can receive more is if they take something off the other countries. That is exactly what will happen. Let us be honest with the farming public — they know it anyway; farmers are ahead of the politicians most of the time —.

Photo of Edwin Poots Edwin Poots DUP

I will give way in a moment. Farmers know full well that, had they stayed in the European Union, they would have seen their single farm payment diminished.

Photo of Christopher Stalford Christopher Stalford DUP

Will the Minister also reflect that, now that the 28 is 27, those who, up until this point or relatively recently, enjoyed being in the position of net recipient will quickly find that their club membership fee rises rapidly?

Photo of Edwin Poots Edwin Poots DUP

Over the past number of years, the Republic of Ireland has been contributing, I think, in and around £700 million net. That is likely to rise to over £2 billion as things stand, and, having been a net recipient for many years, they might find that it is not as desirable a place to be when they are contributing large amounts of money and having most of the laws made for them and most of their democracy stripped away from them.

We will seek certainty; that is what Members are asking for.

I welcome the fact that farmers in this part of Ireland — Northern Ireland — will receive all of their money in one payment, in October. I know that some Members want it to be as it is for farmers in the Republic of Ireland, which would mean that they would not get it all in October; they would get only 70% of it and 30% later on. I did not hear Members say that precisely, but they were saying that they wanted to be the same as the farmers in the Republic, which would mean that we would give them only 70%. I have good news for the people whom Sinn Féin represent: I will give them 100%, not the 70% that Sinn Féin wants to give them.

It is an important issue. Farming incomes have been down 25%, two years running. That is well over 40% when taken cumulatively. This is an important element of farm income. Ultimately, we need to work across the board to drive up profitability, because this does not cover the pressures that farms are under. We need to push to drive up profitability, and the best means of doing that is by ensuring that we have qualitative markets — the best market that we have is the Great Britain market, which takes around 50% of our product — and no barriers. No barrier is of benefit to any person in Northern Ireland when it comes to trade between Northern Ireland and Great Britain.

Question put and agreed to. Resolved:

That the Common Agricultural Policy (Direct Payments to Farmers) (Miscellaneous Amendments) Regulations (Northern Ireland) 2020 be approved.

Photo of Roy Beggs Roy Beggs UUP

I ask Members to take their ease for a few moments.

(Mr Principal Deputy Speaker [Mr Stalford] in the Chair)