Why our farmers have got to stay ahead of the field
The agri-food industry can’t afford to stand still in the world market and must seize any available opportunity for growth, says Helen Winter of Walker Legal
This is a challenging time for many farmers and agri-businesses. There has been pressure on prices in various sectors, particularly dairy and livestock. To get through tough times, Northern Ireland agri-food businesses need to continually improve. Those that stand still will be overtaken by the competition.
But continual improvement brings new opportunities, and our world-class products can be truly competitive in national and international markets.
This was demonstrated by 12 local companies which took part in the world leading Anuga 2015 food fair in Cologne. A world-class agri-food sector that stays ahead of the competition can drive growth in the Northern Ireland economy. A range of factors will underpin this growth in the coming years. They include:
World demand for agricultural products will keep increasing, albeit with the usual temporary market ups and downs. Estimates suggest that at least 150m people will enter the global middle class every single year until 2030.
This massive growth in disposable income will result in significant dietary changes. Therefore, there is a strong potential for growth in exports of high-quality, safe and sustainably produced Northern Ireland food and drink products.
It is imperative that our local agri-food businesses pursue new markets. After almost 20 years, Canada has recently re-opened its market to EU beef imports. The European Commission is also pursuing ambitious trade agreements with Japan, Mexico and Vietnam. These developments offer huge potential to Northern Ireland businesses.
Agriculture and food production must adapt to 21st century reality. Production must increase, while environmental and climate challenges must be met. We have to produce more using less. This requires a move towards modernisation, precision agriculture and increased use of sensors and IT on farms to improve efficiencies.
Innovation in areas such as food processing and food technologies as well as increased collaboration between agri-food businesses and research institutes will also support growth. And support is available. Examples include the Department of Agriculture and Rural Development (DARD) EU Rural Development Programme (RDP) which supports knowledge transfer; while Invest NI provides direct research, development assistance and also operates a voucher scheme to help Northern Ireland companies explore EU funding opportunities.
Accessing competitive finance will be crucial to driving growth. Local banks have been to the fore in promoting their products and services to agri-food businesses.
However, there still appears to be a need for competitive financial instruments that are tailored to address the specific volatilities of the industry.
This could include, for example, loan repayment terms which are linked to milk prices. So when prices are high you repay more, but when prices are low you repay less.
Further product innovation by banks and forward thinking by the NI Executive in instances of market failure have the potential to address the very specific financing needs of local agri-food businesses.
Much has been done by the Department of Enterprise, Trade and Investment (DETI) to roll out high quality broadband across Northern Ireland, but access continues to be an issue for some rural businesses. Improved access to high quality broadband is essential to support modernisation and growth.
Farmers and agri-food businesses must see broadband as a tool at their disposal to enhance their business performance.
It is a vital component in supporting business growth, enabling job creation, and keeping jobs and families in rural communities.
Helen Winter is head of corporate practice at Walker Legal. Contact Walker Legal at 6 Bridge St, Portadown, tel: 028 3833 7591, and at 7 Donegall Sq West, Belfast, tel: 028 9091 8461