Belfast Telegraph

Tuesday 29 July 2014

Plan for future of farming high on ambition but weak in detail

DARD has a lot of questions to answer on farming
DARD has a lot of questions to answer on farming

Just before the new year, the farming community received cheques in their banks for £184m. This was the current value of Single Farm Payments (SFP) which were due to Northern Ireland farmers through the rules of the EU Common Agriculture Policy (CAP).

The £184m was estimated to be only 83% of the final total. Outstanding claims will bring the total to just over £220m. The important feature of the SFPs is that they are not output-related. The logic is that across Europe, farming merits this financial support for social and environmental reasons.

The scale of the SFP may be varied in the next review of the CAP but the principle of continuing SFP seems well settled. No longer does farming depend extensively on deficiency or intervention payments based on amounts produced.

In the year 2011, when the net value added by farming in Northern Ireland (excluding subsidies) was estimated to be worth £108m, the addition of the subsidies (including SFP) increased the net value added to £420m.

The results for 2012 have now been published and show that, by comparison, 2012 was a worryingly depressed year. Excluding subsidies (mainly the SFP) the net value added in 2012 was NEGATIVE by £4m. Presented differently, without the SFP (or its equivalent) the incomes of nearly 30,000 farms would have averaged at a catastrophically low level.

The evidence of recent years points to a more positive outlook for farming and food production here and in similar temperate areas of Europe.

In 2014, the CAP is preparing for the end of a system of milk production quotas (and levies). Already, the impact of milk quotas is much reduced in Northern Ireland and a similar boost is expected in the Republic of Ireland. Retail food prices are responding to a reduction in world-wide surpluses and related shortages as populations increase along with higher living standards in developing countries.

Local farm output has already benefited. Output prices have, despite some critical voices, risen. However, Northern Ireland is particularly vulnerable to higher prices for animal feedstuffs for which the sector is heavily import-dependent.

In the last six years, in current prices, farming gross output in Northern Ireland has increased by 60% to reach £1.7bn in 2012.

The big increases, in absolute terms, have been in cattle (over 50%), pigs (over 60%), poultry (over 70%) and eggs (over 150%). The value of milk output has fluctuated and fell slightly in 2012.

What is now needed is a well-informed production and marketing plan that will create a framework for strategic development. In the Republic of Ireland estimates are being made that ask whether milk and milk products might expand by up to 50% in the next decade.

Possibly with this type of ambition in mind, the Minister for Agriculture and Rural Development has published a consultation discussion about a strategy for the period to 2020.

The draft Strategic Plan is long on aspiration but very short on quantification. In terms of economic impact, the stated goal is 'to help the agri-food industry prepare for future market opportunities and economic challenges'. Unhelpfully, the DARD document offers neither quantifiable aspirations for the changing output of food and farm produce, nor does it identify the challenges and opportunities.

At the risk of tracing a circular argument, the DARD strategy concludes where it might begin. 'We will enter into strategic partnerships with industry leaders to develop a long-term strategy for the sector based on export-led growth and promote supply chain cohesion'.

Should DARD, in 2013, now be far enough ahead for these partnerships to be well signposted and awaiting careful refinement? Is a 50% increase in beef output and/or milk production possible? Can poultry output survive, living with the constraints of worrying planning decisions on disposing of chicken litter? Is DARD giving a lead or waiting to be lead?

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