I am grateful for this opportunity to debate one of the most important subjects for the people of Northern Ireland: the state of Northern Ireland agriculture. Agriculture is three times more important to the Northern Ireland economy than it is to the UK economy as a whole.
The industry in Northern Ireland is predominately grass-based, with grazing livestock accounting for almost two thirds of gross industry output. The poultry, pig, cereal and potato sectors also have a significant part to play in the Northern Ireland agri-food industry.
In Northern Ireland, there are more than 28,000 farms, half of which are large enough to have at least one full-time employee. As in other regions of the UK, there have been great changes to the agricultural sector, resulting in many farms merging and becoming larger. The 3,800 largest farms account for 57 per cent. of all on-farm economic activity, for 82 per cent. of the dairy population, for 80 per cent. of the pig population and for 61 per cent. of the poultry population. That restructuring has resulted in the total number of farms falling by approximately 1 to 2 per cent. per annum, reflecting the fact that fewer younger people are entering the industry and that more elderly people are leaving their lifelong profession, handed down from generation to generation. In my contribution, I shall identify problems and express my concern about the fact that fewer young people are entering the industry.
Although the age profile of farmers has not significantly changed over the past decade—the average age of farmers is 55—it is noteworthy that farmers on larger holdings have a younger age profile than those on smaller holdings. It is vital that those on larger farms are given the help and assistance that they require to survive well into the future. If those large holdings do not have a secure and viable long-term future, I am genuinely afraid that the agri-food sector, Northern Ireland's largest employer, will become unsustainable.
Northern Ireland farmers supply the many food processing companies in the Province. Also, a large volume of milk is exported from Northern Ireland to the Republic of Ireland for further processing. The food industry has a gross turnover of over £2 billion per annum, and it accounts for approximately 21 per cent. of the total for the Northern Ireland manufacturing sector. The largest two sub-sectors—milk and milk products, and beef and sheep meat—account for almost 50 per cent. of the industry's turnover, reflecting the importance of those commodities in Northern Ireland's primary production.
The processing sector is heavily dependent on external markets, with sales outside Northern Ireland accounting for well over half the industry's turnover. It is not fully recognised that the food industry exceeds the performance of many other sectors of the economy. The agri-food industry is vital to the Northern Ireland economy as a whole.
I turn to the key problems facing the Northern Ireland farming community. A number of key policy decisions are currently being debated at local, national, European and global level; they will have a massive impact on how the agri-food industry survives in future, and on farmers in Northern Ireland.
The first issue is the Government's attack on the common agricultural policy, and the EU budget and World Trade Organisation discussions. In the past few months we have listened to the UK Government link any possible deal on the EU budget with a further reform of the CAP. I have to say that, at a time when the Government are chairing the EU presidency, the policy is flawed and will ultimately damage the agri-food sector, not just in Northern Ireland and the rest of the UK, but throughout Europe.
I urge the Government not to surrender the UK rebate won by a previous Government and not to accept a deal that will be bad not only for UK agriculture but for the UK economy. When the CAP was reformed in 2003, it was sold to UK farmers in the guise of something that would prepare Europe for a world trade deal. In Northern Ireland, we are already starting to see how the reformed CAP is impacting on the Northern Ireland farming industry.
Due to a reduction in export refunds for milk products, milk prices received by United Dairy Farmers, the largest milk processor in Northern Ireland, are 10 per cent. lower than this time last year. Over the coming months, many dairy farmers will struggle to survive as the price they get paid for their produce continues to decline. They will face losses rather than break even if that decline continues. Given the many hours that farmers spend on the farm, working for nothing is not practical and will drive many to the wall. A further reform of the CAP would undoubtedly mean support for agriculture being further removed, and I fear that that would result in many farmers turning their backs on the land. That will have a negative impact not just on the economy but on the management and sustainability of our rural areas.
This week finds us in the midst of the world trade summit in Hong Kong. The current proposals being tabled by the EU Commissioner, Mr. Mandelson, and supported by the UK Government, will jeopardise the whole rural infrastructure throughout Northern Ireland. They will lead to a reduction in import tariffs for products coming into the EU, and will result in further cuts of export refunds for products leaving it. That will have major consequences for both the beef and dairy sectors in Northern Ireland. I am also concerned that before a final deal is reached, further ground will yet be conceded and farmers will suffer even greater hardship.
This summer, beef prices collapsed in Northern Ireland as a direct result of the importation of high-value beef cuts from regions such as south America. My hon. Friend David Simpson will no doubt touch on the point if he is able to catch your eye, Mr. Cook.
The Mandelson proposal envisages current import tariffs being reduced by a further 50 per cent. The impact of that would decimate the market, and with a reduction in export refunds for exports going outside the EU, the impact on livestock prices would be dramatic, resulting in a loss of producer confidence. Given that consequence, there could be a mass exodus from both dairy and suckler production, and the slaughtering of the dairy and suckler herds which have taken decades to build up.
I challenge the Minister today: is she content with the depopulation of livestock numbers throughout the United Kingdom? Are the Government satisfied with leaving the job of supplying the food for the UK to another nation? What will happen when there is a global pandemic of a disease such as bird flu or foot and mouth? What will happen when there is a major natural disaster in one of the countries on which we rely to provide us with our food? What will happen if bioterrorism affects the food imported into this country?
Returning to the reform of the CAP, I say to the Minister that farmers have had to meet strict environmental and animal welfare standards. Are those same conditions and standards being requested from other countries that supply us with our food? My hon. Friends and I have grave doubts about that; we believe that other countries that sell their food in Northern Ireland and under cut prices are not meeting the standards, and that strict animal welfare and environmental conditions are not being met. Those are serious matters, to which the Government ought to give serious consideration.
In Northern Ireland, the implementation of stringent environmental legislation is causing considerable concern. Currently, both the Department of Agriculture and Rural Development and the Department of the Environment are discussing with the European Commission how best to implement the nitrates directive in Northern Ireland. My view is similar to that of many farmers: the environment should be protected from pollution. However, I harbour concerns that the implementation of the nitrates and water framework directives will result in a massive cost to the industry without any proper environmental gain.
The implementation of the nitrates directive will cause massive problems for the dairy sector and the intensive pig and poultry sector in Northern Ireland. Those problems cannot be overstated; neither should they be underestimated. In early July 2005, I gave a guarded welcome to the announcement made by the agriculture Minister, Lord Rooker, of a reduction in the closed period required for organic manures and to account being taken of producers who out-winter livestock, rent winter accommodation and use straw bedding. I was disappointed to learn that the Commission was not willing to accept the points given to DARD at that time.
Several issues need to be addressed before the action programme is formally submitted to Brussels. It is vital that the closed period for organic manures should be kept to a bare minimum. I would have preferred to see a system that allowed the spreading of slurry according to the prevalent climate conditions and those forecast by the Met Office. That seems more logical than using dates on the calendar to decide when and when not to spread slurry.
The current proposal, which will prevent slurry from being spread on land whose gradient is greater than 20 per cent., is also open to challenge. Its very nature shows how detached policy makers, even those in DARD and the DOE, can become from the reality on the ground. I would welcome a commitment from the Minister that the Government will reconsider the proposal to ensure that farmers can spread organic manure on land, even if the gradient of that land is greater than 20 per cent.
Another measure included in the proposed action programme which will severely limit the area of land available for spreading organic manures is the ban on the spreading of manure within 10 m of any other waterway. Do the Government realise that the majority of fields in Northern Ireland are small and have open drains? To have a policy that means that manure cannot be spread with 10 m of a waterway is totally illogical and, in many ways, impractical. Will the Minister give a commitment to look afresh at the matter and ensure that when the regulation is implemented, there will still be some available land left for the spreading of organic manure?
Another concern is phosphates. I recognise that traditionally there has been a surplus of phosphates in fertilisers and animal feeds used in Northern Ireland. However, the farming industry has already taken major steps to reduce the levels of phosphates included in fertilisers and animal feeds. That alone should help to address the phosphate imbalance that has traditionally existed. I oppose the introduction of individual farm phosphate balances from 2007. In the longer term, it is vital that the Government find alternative uses for animal manures, particularly from the intensive pig and poultry sector.
I welcome the group that has been set up in Northern Ireland and tasked with addressing that issue. However, much of the European legislation that the group is addressing has been on the statute book for years, so it is rather late in the day to set up the group, although it is welcome. That should have been done within the Department years ago. It is equally important that there is appropriate financial backing to deliver projects that will provide an alternative use for organic manure produced by the intensive sector. Without that, the measures will be impractical.
I welcome the announcement earlier this year of the £45 million earmarked to help farmers to make necessary adjustments to their holdings to cater for the implementation of the nitrates directive. However, there are a number of changes that could result in the farm nutrient management scheme providing better value for money. My party has called on the Government to introduce a roofing scheme to reduce the dirty water collected on farms instead of constructing additional storage capacity. The Government should not delay the scheme but seek to introduce it at the earliest opportunity.
I have received numerous complaints regarding the specification of tanks funded under the farm nutrient management scheme. I often wonder whether the current specification required from farmers is above that required under the slurry and fuel oil regulations. It is vital that, when DARD is providing 60 per cent. grant aid for the construction of tanks, it does not gold-plate the building specifications. I always find that when regulations are introduced to deal with issues that have emanated from Europe, the UK Government gold-plate the legislation, rather than trying to bring the Community along with them.
I remember one of the issues that we faced in the crisis in the pig industry. Another noble Lord was the Minister at that time, and I remember begging him to save the industry from total collapse. He told me that European legislation would not permit that; no help could be given. However, France gave help to its farmers. I pointed out to the Minister that a great European country, France, the leader of Europe, was giving help and asked why the United Kingdom—we are looked on as poor Europeans who do not know whether we are in or out of Europe—could not help its farmers.