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Westminster Hall

Wednesday 14 December 2005

[Frank Cook in the Chair]

Agriculture (Northern Ireland)

Motion made, and Question proposed, That the sitting be now adjourned.—[Kevin Brennan.]

9.30 am

Dr. William McCrea (South Antrim) (DUP): 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
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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 the Member for Upper Bann (David Simpson) will no doubt touch on the point if he is able to catch your eye, Mr. Cook.
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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
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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
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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.

Lorely Burt (Solihull) (LD): The issue of gold-plating is of concern to all industries in the United Kingdom. Does the hon. Gentleman agree that we should put tremendous pressure on those responsible for the interpretation of European directives to ensure that they do not interpret them to the maximum extent but reflect the spirit of what they are intended to achieve?

Dr. McCrea : I absolutely agree with that sensible comment. A balance has to be struck, but there is a desire to prove something to Europe by gold-plating legislation coming from Europe instead of dealing with the spirit of its intention, so the UK tries to maximise the legislation, instead of having a balanced reaction to it. That causes grave concern to industry in general and to agriculture in Northern Ireland in particular, bearing it in mind that some of the legislation could destroy the industry completely.

To return to the case of the pig farmers, at that time, we were begging our Government to save an industry that was going down. Many farmers had been encouraged to spend money by the Department. They did so and found that the Department left them high and dry when they were up to their eyes in debt. Many of them went under. In fact, farmers committed suicide because of the tremendous debt they faced because of the Department's encouragement and because, when they were faced with a crisis, they were deserted. There is now another crisis.

I come to the end of my earlier story. When I spoke to the then Minister about the crisis in the pig industry, I   said to him that the difference between the French Government and ours was that they would save the pig industry but ours would have it destroyed. In many ways, that was true because of the number of farmers who were totally destroyed at that time. It was not their fault. If one could say that they had contributed to their situation, it would have been their fault, but it was totally out of their control. There was a fire in one of the major factories; it seemed that one thing after another happened, and the pig industry was in a terrible situation.

I referred earlier to finding alternative uses for slurry, particularly in the intensive pig and poultry sector. Instead of forcing farmers to invest large sums in putting
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up storage, it would be more economical to consider investing the money in a system that would process the slurry into a valuable by-product. That is more rational and acceptable, and would be more acceptable to the environmental lobbies in Europe and elsewhere.

There are also small producers who cannot afford the adjustment to meet the new environmental legislation. Surely, urgent consideration should be given to the introduction of an out-goers scheme. Let us take the example of a small pig farmer who is asked to put up thousands upon thousands of pounds, to which the Government will add £30,000 or £40,000, to put in tanks in which to keep slurry. If he were given a certain amount of money to go out of the industry, because he would not be viable in the long run, it would be a more rational way of spending the money, and more helpful to the industry than giving him that first sum. Will the    Minister ask the Department to consider the introduction of an out-goers scheme for the smaller producers who cannot afford the adjustment? Otherwise, they will have to apply for and take grants to keep going at least for a short period.

Before leaving the issue of implementing the nitrates directive, I ask the Minister to provide me with two assurances. First, will the Government give farmers more time to adjust to the new regulations? It is unacceptable that farmers have only until next August to complete all the works and submit the receipts to    DARD. In reality, it is not practical and it cannot happen within that short time. Given that the Government still have to finalise the action programme and decide whether to introduce a roofing scheme for farmers, surely the additional time could be given.

Secondly, I should welcome a commitment from the Government that Lord Rooker, the Minister in charge of DARD and DOE, will take a more proactive role in the negotiations. It is essential that the Minister lobbies on the issue to get the best possible deal for the industry.

I spoke in the House the other day about the other side of the agriculture industry: fishing. Major debates are upcoming in Europe about quotas and how to deal with the fishing industry, yet I am led to believe that our Minister will not be present. It is vital that he takes an active role, batting in Europe for the farmers, taking on the battle himself and not leaving it to the officials. The Minister has good batting power, and I trust that   he will lobby on those issues on behalf of the farming industry in Northern Ireland. Other pieces of    environmental legislation likely to impact on Northern Ireland's agri-food industry are the water framework directive, integrated pollution prevention and control—the IPPC—and the climate change levy.

I welcome the issuing of single payments to many producers in Northern Ireland. However, with time running out, I encourage DARD to ensure that the maximum number of payments can be made to farmers before the end of 2005. There is some disappointment that, according to DARD's timetable, approximately one third of producers will not receive any other farm payment this year. I was also disappointed that only 75 per cent. of the single farm payment was issued to farmers in Northern Ireland, whereas 80 per cent. of it was issued to producers in Wales. If it can be done in Wales, it can be done in Northern Ireland. I wish my
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Welsh colleagues well, and I am happy for them, but I am looking for the same happiness for the Northern Ireland farmer.

Although many farmers have already received their single farm payment for 2005, many are still apprehensive about the inspection procedures under cross-compliance. It is vital that the inspection process is not over-zealous, and that the farmers are not severely penalised for minor non-compliance.

I turn to the potato sector. Despite the area of ground that is planted in potatoes decreasing annually, the sector still has a key role in the Northern Ireland agri-food industry. Although I do not agree entirely with everything in the recent Quinn report, "Review of Support Arrangements to the Northern Ireland Potato Sector", I believe that it could act as a basis for driving   the potato sector forward. Northern Ireland traditionally had a lucrative seed potato sector. It is therefore vital that DARD puts increased resources into supporting this sector, to ensure that the critical mass remains in place to keep the sector viable.

Until there is an agreement over the EU budget, we still do not know how much money will be available for rural development in Northern Ireland for the period 2007–13. We do, however, know that the budget will be significantly less than that in the current round of funding. The rural development fund includes measures to boost farmland biodiversity, to restructure the rural economy and to improve the quality of life in rural areas. These constitute tangible public benefits that will support the EU's social and environmental objectives. However, this budget has been cut by 25 per cent., compared with the Commission's original proposal.

In the future, it is likely that that share of the rural development spend will be funded through compulsory and voluntary modulation of the single farm payment. It is therefore vital that the larger farmer who is likely to have contributed a greater amount of modulated funds in the first place is able to receive some funds through rural development. There is an opportunity here for intensive farmers to get some assistance to meet standards through rural development.

There is a significant lobby for rural development money to be spent on wider rural society. I support more funds going to rural schools, roads and health care. I also believe that the Government should be spending core budget funds on these areas, rather than targeting rural development money.

The future of the agri-food industry in Northern Ireland depends on young people coming into the industry. I welcome the new entrants scheme for Northern Ireland and hope that it encourages many young people into the industry. Despite all the negativity, I believe that there will be a bright future for those who are willing to adapt to new circumstances.

A number of changes could be made to the new entrants scheme that would help to encourage more people to avail themselves of it. I would like to see a mixture of a lump sum payment and a low-interest loan available under the scheme. I would also like other young people who commenced agricultural activity over the last five years to be able to avail themselves of the scheme.
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If it is right that we have a scheme that encourages new entrants, it is also right to have a scheme that encourages and enables older people to move out and allow the younger people to get in. We are talking about an industry here—although the Government refer to it as an industry only when it suits—and in the past a farm enterprise was able to finance not only the older generation, but the incoming farmer and the new generation too. Quite often, two or even three families could be sustained on a farm holding. That is no more. Even the larger holdings could sustain only one family. Therefore, it is vital to encourage young people to come in and to encourage older people out. That can be done only if we have a scheme that allows it to happen.

I should like to say something about the high calibre of young people in the industry. For over 80 years, Queen's university, Belfast, has been training graduates in a degree in agriculture and they have gone on to lead the industry throughout Northern Ireland and further afield. It is vital that one of our main universities in Northern Ireland provides a high-quality agriculture degree to train young people for the largest industry in the Province. Others offer quality training for young people coming into the industry, but if one of our main universities does not offer an agriculture degree, we will not attract our brightest students and they will go elsewhere to qualify.

Will the Minister make it a priority to ensure that one of our universities offers a pure agriculture-based degree? I am concerned that in years to come the best export from the industry will be our young people, who are committed and interested in it but will go elsewhere to be trained. We cannot afford a brain drain from the agri-food sector in the Province.

In conclusion, I shall deal with renewable energy policy. DARD is currently consulting on a renewable energy policy for Northern Ireland. That strategy, together with the recent announcement of a £50 million budget to be spent on renewable energy in Northern Ireland over the next two years, will help renew interest in considering alternative land uses in Northern Ireland. I welcome this innovative move by the Government. With the current trend towards the globalisation of food products and massive increases in the price of oil and gas, many farmers look forward to the day when alternative land uses, such as planting oil seed rape for biodiesel or planting biomass for bio-remediation, will be economically viable. The Government's recent announcement regarding their renewable transport fuel obligations will hopefully allow some farmers in Northern Ireland to diversify into these new niche markets.

I am grateful to have had the opportunity to draw hon. Members' attention to the importance of this industry. Many are the challenges that the industry is facing. I believe that Northern Ireland farmers are willing to face, and meet, those challenges. There is a future; I am simply asking the Government to ensure that they do all within their power to give the farmers that future.

10.8 am

David Simpson (Upper Bann) (DUP): I congratulate my hon. Friend the Member for South Antrim (Dr.    McCrea) on securing the debate. I listened
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carefully; he covered nearly every point of agriculture, including the fertiliser that goes on the grass. I have to congratulate him on going into so much detail, because agriculture is an important industry in Northern Ireland.

My background in the agricultural business is 25 years in the meat industry. With my youthful looks, people find it hard to believe that I have been in it for 25 years, but that is so.

Dr. McCrea : They would certainly believe it given your size.

David Simpson : Someone told me that it is good to be a positive advertisement for the industry. It took an awful lot of money to put it here.

Dr. McCrea : It would cost a lot of money to take it away, too.

David Simpson : It would be a shame to lose it.

The beef industry has gone through hard times, and I would like to comment on that. I will do so briefly, as I know that the Minister is eager to start answering   all the questions that have been put to her. I welcome the Government's announcement last week that £1.3 million will be put aside to assist Northern Ireland's beef industry. It is to be hoped that that, along with the money available under the fit-for-market initiative, will help to find new markets for the sector. However, I was disappointed that the Government did not provide more money to compensate for the beef special premium scale-back for 2004.

The beef industry's finding new markets is solely dependent on the UK getting rid of the beef export ban. My party is actively engaged in seeking that. Only yesterday, our colleague, Mr. Jim Allister MEP, met the European Commissioner for Health and Consumer Protection, Markos Kyprianou, to discuss this issue. It is clear that the UK has now taken all necessary steps to satisfy both the Food Standards Agency and EU officials that beef from these regions is safe to eat. However, I must also say that I am disappointed that the UK Government have not taken a more proactive stance on the issue during their presidency of the EU.

With the removal of the over-30-months scheme and the introduction of the older cattle disposal scheme in the latter half of January, there will be a significant increase in the number of cattle coming on to the UK domestic market. My party has already lobbied both the European Commission and the Government on keeping the OTM scheme in place until the market opens up for beef exports. That would prevent a glut of beef from coming on to the UK market and continuing to depress beef prices, as has been the case over the past months. Can the Minister confirm that the Government are pushing for the lifting of the beef export ban at the earliest opportunity? Are they also lobbying for the OTM scheme to remain in place until the export ban is lifted? Those are two vital components that must go together.

On the subject of beef exports, and on the assumption that the export ban will be lifted at the earliest opportunity, I wish to mention live animal exports. I understand that that is an emotive subject in the UK
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and that we cannot ignore animal welfare issues. However, it is essential for the live animal export market to be opened up for Northern Ireland, alongside the beef export ban being removed.

Northern Ireland is the only part of the UK that has a land border with another member state, and it is traditional for animals to be traded between the two    countries. I was encouraged by the recent announcement by the noble Lord Rooker supporting the case for live animal exports from Northern Ireland. In 1995, the last year that Northern Ireland was allowed to export bovine animals, the value of that trade to the economy was placed at some £34.6 million. Currently, in Northern Ireland, dairy-bred male animals are being humanely slaughtered at birth, which is disgraceful. There is no viable market for these animals in the United Kingdom.

Over the 12-month period ending 30 September 2005, there were 64,953 animals of dairy sires registered on the database. Only recently did DARD adjust its rural portal to facilitate the humane slaughter of those young calves. If there were live animal exports, and these animals were exported to the Republic of Ireland rather than being humanely done away with at birth, they would be worth approximately £50 per head, which would make an awful difference to the farming community. It is therefore vital to the Northern Ireland economy that the export market re-opens for live cattle.

In an era where farmers are compensated for environmental and animal welfare management, instead of given direct production-linked subsidies, it is difficult to see how the primary producer and processor can survive with current market prices. It is vital that there is an open and communicative supply chain that will help   achieve closer relationships between the primary producer, the processor and the consumer. In my lifetime in the industry, I have always preached that that should be the case. For many years, it was a "them and us" situation between the farmers and processors. That has to change, but I believe that it will because the pressure coming on to the industry will inevitably make it happen, and that is vital. To survive in future, the primary production sector must be competitive and profitable. For that to happen, the major multiple retailers need to pass more money down the food chain to processors and, ultimately, to the primary producer.

The current retailer code of practice has clearly failed the agricultural community, not just in Northern Ireland, but throughout the whole United Kingdom. Strengthening that code is vital so that a greater percentage of revenue coming from the food chain is passed down the line. The Office of Fair Trading should not only scrutinise the major multiples but investigate those companies' suppliers. I am concerned that monopolies can be created—if they have not been already—in the supplier sector of major retailers, due to their adoption of single sourcing policies in the United Kingdom.

Dr. McCrea : Does my hon. Friend agree that in Northern Ireland there has been a major bone of contention, in that while the housewife continued to pay high prices for the products on the shelves of these large retailers, in reality many producing farmers were receiving a price at the farm gate that did not even cover their costs? That bone of contention remains; therefore,
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there should be a major inquiry into that whole position. There is sufficient cake for everyone, but the issue is the division of it. Does my hon. Friend agree that an inquiry would be helpful?

David Simpson : I agree 100 per cent. with my hon. Friend's comments. Recent television programmes have shown the situation; he mentioned the pig sector, about which a programme was made. It showed how much it took to produce a pig up to a certain stage and how much people were losing by doing so. They took that same pig and transferred it into the retail side at the supermarkets; the price for the same weight was 10 times more. There is no doubt that we need an inquiry and we need fair play. That returns to my earlier point that it is imperative that there is a closer working relationship between the processor, the producer and the consumer. That must be done for the industry to survive. I hope that the Minister will take my points on board.

My hon. Friend mentioned waste material and the renewable energy methods that need to be examined in the industry. A system called anaerobic digesters is currently being researched and operated in Northern Ireland. A company is experimenting, trying to develop an anaerobic digester that will take much of the waste material that he spoke of, along with the blood and other animal waste from the meat plants, not only from the beef sector but from the pork and poultry sectors. It will make a viable fertiliser for the ground, which will deal with the nitrates problem and all the difficulties in the industry.

However, the company has come up against some difficulties, which derive from the lack of investment. It is a family with a private farm who have moved into this area and are forward thinking. Some problems have been caused for local residents, involving the odours coming from the plant. It is important that, although we are trying to help the company develop an anaerobic digester, we take on board the concerns of residents.

My hon. Friend mentioned the money that has been put aside by the Government to examine different sources and alternative uses for waste material. I would encourage them to consider helping the company to do further research in this area. We have in Northern Ireland one or two rendering plants for disposing of dead animals and other waste, but that is not the future; the future is anaerobic digestion, which we need to examine closely. I ask the Government to examine it and perhaps to contact the company to see whether there is any way that it can be helped. I know that Lord Rooker wrote a letter to the company and that it was not too promising. Will the Minister use her influence to see whether something can be done? It is obviously the future for the industry.

Lorely Burt : I wonder whether the hon. Gentleman is aware that funding for anaerobic digestion and for development of the use of slurry is available to other parts of the United Kingdom under the national industrial symbiosis programme, but that no funding has been allocated to Northern Ireland. I have written to the Minister to ask why. I will discuss her answer to my question at more length in my speech; otherwise I run
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the risk of making too long an intervention. I just mention that to find out whether the hon. Gentleman is aware of it.

David Simpson : I thank the hon. Lady for that information. I had heard that the money was not going to Northern Ireland, but I thank her for confirming it. The Government need to consider the issue in order to help the situation, and they need to think of the future.

Dr. McCrea : Returning to the situation that my hon.   Friend talked about, it is a lot easier for the Department to close places down—that is an easy way out—than to help them to overcome their problems. There are problems in the community that need to be taken seriously and overcome, but we need to deal with the underlying problems, rather than simply close down a company to get rid of a problem, and that certainly requires Government help.

David Simpson : I agree. I encourage the Minister to use her influence. Perhaps she will even agree to a meeting with the company of which I spoke, or to receive representations from it and from me, to find out whether there is a way forward. I honestly believe that anaerobic digestion is the way forward for waste material in Northern Ireland, and indeed the United Kingdom.

I thank you for allowing me to speak, Mr. Cook. I am sorry that I took a little more time than I said I would. I look forward to hearing what the Minister has to say.

10.26 am

Lorely Burt (Solihull) (LD): I begin by echoing the concerns of the two hon. Gentleman who have spoken so far. I am sure that the Minister will confirm that it is her full intention that the whole Government should fight for our agriculture industry, particularly with respect to farms in Northern Ireland, where agriculture is obviously more important than in other areas of the United Kingdom.

I should like to speak about green issues. Not a lot of people know this, but my party has nominated me green Minister for Northern Ireland, which is a great honour. [Interruption.] Shadow Minister, that is, I hasten to reassure the Minister.

I want to speak about the national industrial symbiosis programme. The hon. Gentlemen who have spoken mentioned alternative uses for slurry and referred to the lack of investment in anaerobic digestion—both issues are crying out for investment in Northern Ireland. The Government's refusal to allocate funds under NISP, as it is colloquially known, has greatly hampered the farming industry in adapting to change as it needs to do.

I wrote to the Minister about the lack of NISP funding for Northern Ireland. The programme tries to marry different types of industry in a symbiotic way, so that, for example, slurry can be used for different purposes. It allows different parts of industry to work together in new and innovative ways, particularly those that help the environment. When I wrote to the Minister, she responded:

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Will the Minister say just where that need is greatest, given that we are talking about an industry that is suffering as a result of gold-plated European directives, and that faces all sorts of challenges? How is Northern Ireland agriculture to reshape and reform itself to meet challenges, which are not only industrial but environmental and global, if it is not to receive the support that is being enjoyed by other parts of the United Kingdom?

10.30 am

Mr. David Lidington (Aylesbury) (Con): I congratulate the hon. Member for South Antrim (Dr. McCrea) on securing the debate. The subject is of even greater importance to the economy and people of Northern Ireland than it is to the rest of the United Kingdom. I   appreciated the wide-ranging nature of his speech. It certainly alerted the House to the complexity of the issues that we are debating and the way that Government policies and European legislation impact on many different types of farm and food businesses in the Province.

There is no doubt that farming, whether in Northern Ireland or elsewhere in this country, is going through a period of rapid and sometimes traumatic change. There is the major reform of the common agricultural policy—a reform that is largely a response to the development of    not just a European, but increasingly, a global marketplace for food and food products, with the additional competitive pressures that that brings to bear on our producers. We have, both from the public and the Government, pressure for stricter environmental controls and higher standards of animal welfare. However, at the same time as imposing those higher standards, we as politicians are asking our farmers to compete with producers in parts of the world where such standards of environmental protection and animal welfare do not apply. That is often the case not simply in countries that we might label as developing economies, but in some quite advanced agricultural competitor countries.

It is therefore important for the Government—whoever it is that is in office—to approach regulation in the right way. I recall that about four years ago one of the Select Committees of the House of Lords produced a valuable report on the regulation of agriculture. It suggested a number of ways to change the culture of regulation which would not compromise the need for high standards and the need to root out the rogue elements that exist in farming, as in any industry. At the same time it recognised that, at the end of the day, farmers have to run profitable businesses and we would   not get the attractive countryside that we all appreciate—whether we live in villages or cities—were it not for the existence of a thriving agricultural sector. It is important for us all to appreciate that, even in an increasingly urban and suburban society, we do not want our countryside to become simply a museum or an illustration on a chocolate box. We want it to be a vibrant part of the economy and a place where people can make a home and earn a living, as well as an attractive place for city dwellers to visit.

The House of Lords Select Committee concluded that, among other things, there needed to be much earlier consultation with the agricultural sector about regulation, and in particular European regulation, that affected it. In the report, the Committee drew attention
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to how a number of key European directives—for example, those on the disposal of waste—had got to quite an advanced stage before anyone in Whitehall woke up to the realisation that farmers, as well as more    traditional industries, were going to be affected,   in some cases quite severely, by that new legislation. Consultation should happen earlier and the Government should firmly resist the gold-plating of European legislation; I agree with everything said by other Members on that subject. However, we also have to recognise and be prepared to say to the electorate that if we are going to rule out gold-plating, that will sometimes mean also saying no to pressures for even higher environmental welfare standards than those provided for in the relevant European legislation. Sometimes, although the gold-plating may be well intended, we in the United Kingdom end up imposing stricter rules on our own businesses than apply elsewhere in the European Union.

My third conclusion from the House of Lords Select Committee report is that a change in the culture of    inspection and enforcement in this country is needed.   We certainly need fewer different inspectors and inspections, and fewer forms, which too often appear to seek exactly the same information as has been provided on a previous set of forms. We need fewer people coming up the farm track and knocking on the door.

We also need something less tangible, but none the less important. I have lost track of the number of occasions on which farmers—whether in Northern Ireland, my constituency or elsewhere in the country—have contrasted the attitude of inspectors in the United Kingdom with that of inspectors and enforcement officers elsewhere in Europe. The farming organisations' view is that, on the continent, there tends to be a realisation by those charged with enforcing new rules that they have a duty not only to enforce the law, but to discuss with the operator of the relevant farm business how that can be done so as not to compromise the profitability and sustainability of that enterprise.

However, the farming industry here certainly feels that too often the inspector comes in, bangs a wodge of papers on the farmer's desk and says, in effect, "It is up to you to read those and comply with them. If you step out of line, I'll come down on you like a ton of bricks." We need to think our way into some form of co-operation between inspectors and those who are trying to run businesses and serve their customers. That comes through when we consider specific directives.

I shall not repeat everything said by the hon. Member for South Antrim about the nitrates directive; his detailed points about time scales and the 10 m rule on the spreading of manure were valid and well made. I hope that the Minister will say a word about the water framework directive, which will clearly have a massive impact on agriculture throughout Northern Ireland. The fact that in future river quality is to be measured in biological rather than chemical terms marks a very significant change.

It seemed to me from the Select Committee report and other material on that directive that we are still very much in the dark about exactly what standards are to be applied. Yet, from memory, the directive—at least, its initial stages—is supposed to be implemented by 2010.
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The changes required to apply the directive will probably mean considerable planning to ensure that businesses can make the adjustments in time. I hope that we will get greater clarity from the Government on that point.

I should also like to express my concern about two aspects of the reform of the CAP. First, I am concerned about the delay in the introduction of the entry-level scheme for Northern Ireland. I had always understood, when the CAP was being negotiated, that the Government regarded the introduction of the entry-level schemes throughout the United Kingdom as integral to their vision of the future of agriculture, and that it was a way to turn farm support payments away from subsidising production and towards providing support for the environmental stewardship carried out by farmers and land managers. Yet I am told by the Ulster Farmers Union that the introduction of the entry-level scheme in the Province is to be delayed for several years. I should like to know why. Is that due to budgetary constraints, or are the Government considering a pilot scheme that might operate with farms in some parts of the Province?

Secondly, I am concerned about cross-compliance, which was touched on in earlier contributions. The industry fears that minor, probably unintentional, lapses could lead to a disproportionate cut in farm payments in a particular year, yet I can recall the repeated assurances from Ministers, while the CAP reforms were being negotiated, that cross-compliance would amount only to what good, well run farms in the United Kingdom were doing already in terms of environmental standards. I hope that we are not seeing what might be described as agricultural mission creep, where environmental standards that one might have expected to fall within the ambit of an entry-level scheme will instead be imposed through the use of cross-compliance. I hope that the Minister can provide some reassurance on that point.

I should like to make two points that particularly affect the cattle industry. First, on the beef export ban and the over-30-months scheme, will the Minister say where we are now on the Commission's expected proposal to lift the export ban on cattle born on or after 1 August 1996? We have been waiting a long time for   that. Farmers in Northern Ireland feel especially aggrieved by the delay, because they have not had the curse of BSE that we have had on the mainland of Great Britain and they have seen producers in the Republic of Ireland being able to continue to export their beef and beef products while Northern Ireland's farmers have been constrained.

It is well over a year since the Commission's food and veterinary office published a satisfactory report on the United Kingdom's BSE controls. I should like to know why we are still waiting. Is the delay with the Commission, or is there foot-dragging on the part of other beef producers in the EU? If that is so, will the Minister name and shame those countries?

Secondly, there is a consultation going on about how the new rules on specified material might operate following the hoped-for permission being given for exports. I read with concern in DARD's impact assessment about the possible impact on small rural
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producers in Northern Ireland and on small abattoirs if the Government did not make use of the derogation to allow the spinal column to be removed at butcher's shops, but instead ruled that it could take place only at certain licensed cutting plants. I very much hope that the   Government will listen carefully to the views of the    industry—retailers as well as farmers—and of customers who like to eat a piece of mature, grass-reared, well hung beef, and are willing to pay a premium for it in the shops.

Finally, can I press the Minister to say something about bovine tuberculosis? I am sure that, like me, the Minister tuned into "Farming Today" this morning and heard that her colleague, the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Exeter (Mr. Bradshaw), is due to make a major announcement on the Government's bovine TB policy tomorrow. I know that the number of reactors in Northern Ireland fell a bit last year compared with the previous year, but I return time and again to the fact that the evidence from the Irish Republic is overwhelming: although the culling of wildlife, and in particular of badgers, is not a panacea, it is effective as part of an overall TB eradication strategy. Northern Ireland's cattle farmers face a crisis. This is a drain year after year on revenues that the Government could well spend on other priorities, and I hope that the Minister will give us some news on that, too.

10.46 am

The Parliamentary Under-Secretary of State for Northern Ireland (Angela E. Smith) : I congratulate the hon. Member for South Antrim (Dr. McCrea) on securing the debate, and on the reasoned, knowledgeable and passionate way in which he put forward his views. He clearly feels strongly about the subject, and I assure him that my ministerial colleagues and I feel equally strongly about it.

We must ensure that we have a sustainable and efficient agriculture industry in Northern Ireland that is capable of addressing the challenges posed by the rapidly changing society of the 21st century. Contributions to the debate have highlighted many of the current difficulties facing agriculture. If the Northern Ireland industry is to move forward in what is an increasingly competitive environment, it must be fit for purpose and in a position to embrace change and exploit the opportunities that change inevitably brings. Both hon. Members from Northern Ireland made that point.

In the time available to me, I will do my best to address the points that have been raised. With regard to the broad charge that the industry is in decline, the 2005 reduction in the numbers of farmers and farm businesses does not represent evidence of a major exodus from the industry; it is no more than a continuation of existing trends. The rate of decline in the last 12 months is in line with the trend over the past five years—a decrease of about 2 per cent. per annum, as the hon. Member for South Antrim said. Similar patterns of structural adjustment are occurring across Europe. In many cases, the decision to exit the industry coincides with farmer retirement. It is also important to remember that the overall reduction in numbers improves the structure of the sector, and that it will contribute to its future competitiveness and sustainability.
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On the age structure of the farm work force, the evidence that we have suggests that the age profile of farmers in Northern Ireland is relatively stable and that   it is in line with the average for the EU 15 member states. The Department of Agriculture and Rural Development operates a new entrants scheme, which was launched in June this year. Its aim is to encourage and give support to young entrants who want to build a future in the industry. I can give further information on that.

On the request for a mixture of a lump sum and interest rate subsidy, I have received legal advice and, unfortunately, that is not possible. However, research shows that the interest rate subsidy offers better value for money in respect of encouraging new entrants into the industry and sustaining them. Applicants to the new entrants scheme must have been in business in their own right for no more than one year. We are bound by the legislation on that.

Some Members also referred to the announcement in the draft budget that DARD was proposing to delay the start of the entry-level countryside management scheme in 2008. That has been a cause of concern for a number of stakeholders, including the main farming organisations, which have made representations to my noble Friend Lord Rooker, who has ministerial responsibility for agriculture. I understand that the Department is looking into that again to see if there is anything we can do to bring that forward. An earlier starting date would be of assistance.

The issue of the WTO meeting in Hong Kong was raised. Progress with ongoing WTO negotiations in the development round has been slow, but significant benefits could be delivered to developed and developing countries as a result of an agreement.

The CAP reforms being implemented will help the industry focus on meeting market demands and improving competitiveness. The Department has in place numerous measures to help the industry make the adjustment. They will ultimately put the industry in a position to face the market pressures that are causing difficulties.

The hon. Member for Upper Bann (David Simpson) described himself as a walking advert for the Northern Ireland beef industry. I congratulate him on his commitment. The hon. Gentleman, along with the hon.   Members for South Antrim and for Aylesbury (Mr. Lidington), raised a number of issues about beef imports. Hon. Members will be pleased to hear that imports to the UK for the first nine months of 2005 were 18 per cent. below those for the equivalent period in 2004. More than half of the 2005 imports came from the Republic of Ireland, and less than a quarter came from south America, Brazil, Uruguay and Argentina.

The issue of standards was also raised. Beef can be imported to the EU only from countries and establishments that meet strict EU food, veterinary health and hygiene requirements. Full compliance is ensured by inspections carried out at border posts. There is also full traceability under EU-wide beef labelling rules. Looking to the longer term, we must recognise that there is greater competition, and we must address it and help prepare the industry. Rather than trying to stifle trade, we must support the industry to allow it to compete.
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All the hon. Members referred to the beef export ban. The recent lifting of the over-30-months rule is a significant step forward. It is a welcome boost for the food industry and for Northern Ireland's beef farmers, who can now enter their older cattle into the food chain. There are three plants that have been approved to slaughter OTM cattle for human consumption. The UK has met all conditions that the Commission set for lifting the ban. Effective BSE controls and traceability systems are in place. BSE has been reduced to achieve moderate risk status and the OTM rule has now ended.

I recognise the concerns that were raised about the matter, and the UK is pressing the Commission for a proposal to be made and adopted to lift the export ban as early as possible in 2006. I understand the concern that any gap between the OTM scheme ending and exports resuming may cause market difficulties. The Commission has made it clear that it is opposed to any extension of the OTM scheme, and there are mechanisms available to consider what action is needed to deal with market difficulties. We are pressing for the lifting of the export ban as soon as possible. It will provide new opportunities for agriculture.

Several hon. Members raised the issue of the nitrates directive and what compliance will mean for the industry locally. The Government are keenly aware of the significance of the issue, and DARD and DOE officials recently met the Commission yet again to discuss outstanding issues about the draft action programme and secure a viable way forward. There have been continual meetings. I remember, in my previous incarnation as a DOE Minister, meeting the industry myself to discuss the matter. The Government have been working with the industry for some time to find ways forward. The process has been protracted and difficult, and there are still differences between us and the Commission over the matter.

The position on a closed period for spreading organic manure has not yet been finalised. However, I can assure hon. Members that phosphorus balance measures at individual farm level will not be required at this stage. That may give some reassurance to the hon. Member for South Antrim, who raised the issue.

The draft action programme will be issued to stakeholders and discussed at their next meeting in January. We are seeking a balance on the issue. We recognise the pressures on farmers, and we shall do all that we can to ensure that we strike a balance between letting the industry get on with the business of farming and recognising the support that we must give to the environment.

If we consider the money that has been made available, we see that significant resources have been allocated to the industry. As part of the revised budget in December 2004, £45 million was announced; that   money is still available under those proposals. Moreover, £16.6 million has been allocated for 2006–07 and £28.4 million for 2007–08, so the Government are going a long way to assist farmers in that regard.

The farm nutrient management scheme was also mentioned. Initial uptake has been slower than expected and the closing date has been extended to 31 March 2006. However, commitments totalling £10 million have
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now been made out of a total Government provision of £45 million, which represents additional support for the industry.

The hon. Member for South Antrim raised concerns about pig farming. I would refute the accusation that we have abandoned that sector or any other. It is always the role of the Department to give support and advice whenever possible within the constraints of EU legislation and within budgetary constraints. Hon. Members will be aware of the pressures on the draft budget. The hon. Members for South Antrim and for Upper Bann have made numerous representations to me    about other areas of the budget. Within those constraints, the Department does everything it can to support farmers.

The hon. Member for South Antrim raised the issue of single farm payments being made in Wales and asked if our payments could be as good as those in Wales. I think that ours are even better. We are meeting the targets: of all applicants, 71 per cent. will receive payments totalling £103 million by Christmas and by the end of December that will have risen to 73 per cent. receiving £110 million. The hon. Gentleman mentioned the figure of 80 per cent. in Wales. There is a slight difference in the way that the money is counted; it is not the case that less money is being paid out in Northern Ireland. From a slow start, that represents very good progress, given that the applications were made in May and so much money is being paid by the end of the year.

Renewables and the environment were mentioned. It is worth flagging up that in the draft budget announced today there will be £50 million for an environment and energy fund, which will allow us to look for new opportunities to bring Northern Ireland to the fore in the field of renewables. As an energy Minister, I have a particular interest in that.

The hon. Member for Upper Bann mentioned anaerobic digestion. DARD has carried out extensive research and development in this area. It has offered
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financial assistance of about £3 million to a centralised anaerobic digestion plant; that particular project faced local opposition. However, part of the new strategy is the work of an expert group on animal waste, and research and development in the Department will help us learn what else can be done. We shall consider the opportunities that can be made available.

On university provision, I assure the hon. Member for South Antrim that we are working to ensure that there is in Northern Ireland a degree-level qualification in agricultural technology. There is extensive provision already in the sector, of which we should be proud.

The power of supermarkets was mentioned. I assure the hon. Gentleman that the Government are working closely with supermarkets on local sourcing; I know that he has asked a parliamentary question about that recently and has further information. I understand the concerns raised about the increasing concentration and buying power of supermarkets. I am concerned about allegations that multiple retailers are making excess profits at the expense of producers. If there is specific evidence of that, I ask hon. Members to give it to the Office of Fair Trading, and action should be taken.

The hon. Member for Aylesbury raised the issue of badgers and TB. He will be aware that the badger stakeholder group is considering the matter at the moment, and the results of the work will be presented to the badger group at a further meeting. It is expected to report to Lord Rooker in early 2006. I recognise the strongly held views on both sides of that argument. We felt that research and investigation was the appropriate way forward.

I hope that I have addressed as many of the points raised during the debate as possible. The breadth of issues raised shows the scale of interest in this subject in   Northern Ireland and the challenges faced by the   industry. There are numerous difficulties; I assure hon. Members that the Department will work closely with farmers and those in the industry to do all that we can to support them because that is important to the future well-being of the industry and the economy of Northern Ireland.
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