Official Report: Minutes of Evidence

The Chairperson (Mr Irwin): With us from the Ulster Farmers' Union (UFU) today are Ian Marshall, president; Ian Buchanan, the hill farming policy chair; Crosby Cleland, beef and lamb policy chair; and Elliott Bell, policy officer for beef and lamb hill farming. You are all very welcome. I ask you to make your presentation, and we will ask questions after that.

Mr Ian Marshall (Ulster Farmers' Union): Thank you, Chair, and thanks to the Committee for giving us the opportunity to give you this brief. This is a major concern for the agriculture industry, and, over the last few months, we have consulted our membership and the wider industry on it. There is a clear and fervent view from our committees and the industry that the proposal on the table from the Department of Agriculture to revise or relax their penalty matrix is completely unacceptable and in no way comes close to the more tolerable attitude and standards applied in neighbouring parts of the UK or in the Republic of Ireland.

Before I outline our concerns about the DARD cattle ID cross-compliance penalty matrix that is being enforced, it is important to set the tag replacement issue in context. Over the last number of years, in excess of 200,000 cattle replacement tags have been purchased by farmers at a cost of over £700,000 per annum, which is significant and concerning. At the very minimum, that means that between 6% and 8% of cattle tags are replaced in Northern Ireland each year. While that seems a fairly low figure, it is 50% higher than the figure for our counterparts in the South of Ireland, so it is a major concern.

The strong view of our membership is that there is considerable variation in the quality of tags available in Northern Ireland. There are some quality tags on the market, but there are certainly more inferior ones, too. That is a concern because, ultimately, DARD is the body that approves the tags and gives farmers access to purchase them. With those facts in mind, it is understandable that farmers feel quite aggrieved at DARD's decision to introduce a threshold for the loss of single tags. That decision is a serious concern.

Previously in Northern Ireland, we had 28 days to replace missing tags before any penalty was applied. However, the threshold that the Department introduced in January 2014 stipulated that, where 10% of tags or 20 single tags are missing at inspection, you are automatically in breach of your cross-compliance. The changes were first discussed with the UFU and the Northern Ireland Agricultural Producers' Association (NIAPA) at a DARD stakeholder meeting in May last year. Following consideration by UFU livestock committees, there has been significant objection to the changes by farmers, who consider them to be another example of DARD's desire to gold-plate our European standards.

What makes farmers all the more aggrieved by the changes that DARD has made is the fact that they are not required in any European regulations. The decision to change the penalty matrix was based on a six-year-old Commission guidance document. In cases where single missing tags are identified, the Commission guidance states that, in general, no cross-compliance reduction should be applied as long as the loss rate in the holding concern is within "normal limits". The Commission defines normal limits as taking into account the situation usually found in comparable herds and rearing conditions.

In taking that guidance into account, two points must be considered. How can the Department set a generic threshold of 10% or 20 tags when the number of cattle in each of the 20,000 herds in Northern Ireland varies considerably? That is a clear indication that it discriminates against large herd owners. Secondly, rearing conditions in a closed herd and a flying herd, where the cattle are bought in, are completely different. In a closed herd, the herd owner or keeper has full control over the tag replacement policy from birth to slaughter: how often tags are checked; how often they are ordered; how often they are replaced; and into which part of the ear the tag goes. In the case of a flying herd, the herd owner has no control over the quality of the tag in the animal's ear or any subsequent loss of tags. There is a much higher risk in a flying herd when it comes to managing that and working to fairly tight and onerous thresholds. Further to that, the Commission guidance states that the keeper is responsible for replacing the lost ear tags by a deadline set up by the national legislation, if the keeper has taken, in due time, the appropriate measures to obtain replacement tags. That can be taken into account to support a decision of no reduction. DARD has decided that all herds that exceed the threshold should have a breach applied, whereas the Commission has stated that, where a region can see evidence that the herd has an adequate tag-replacement policy, no reduction should be applied.

Given that DARD's animal and public health information system (APHIS) allows it to monitor the replacement rate of tags in a herd, surely that should provide enough evidence that a herd keeper is taking sufficient action to replace missing tags, rather than simply using a generic threshold. When DARD last briefed the Committee on the issue in January, it made specific reference to the term "several" and said that the Commission had stated that only in cases where "one or several" animals have missing tags should no reduction be applied. The fact that DARD used that term to justify its position puts it in a very weak position. The Oxford dictionary defines several as, "more than two but not many". We do not think it unreasonable to ask the Department what its definition of many is. As we understand it, the definition of many is "a large number of". The reference to 10% or 20 tags is a bit more specific than that. If DARD is going to be particular about definitions in a document that is nothing more than a guidance document, the definition of many is very important because it will depend on the circumstances that are presented. The case that we first highlighted to the Committee and the Department was of a herd of 674 cattle with 23 single missing tags. Do the mathematics and that equates to 1·7%, which is not "many", but it could put the farmer in the position of facing a serious financial penalty.

DARD has stated that it has already implemented relaxations to its penalty matrix for issues relating to cattle ID cross-compliance. However, at the last Committee meeting at which it briefed you, the officials neglected to explain that any future breach by any inspector on a farm will increase the risk level that DARD perceives there to be in that farm business. That will result in a higher level of scrutiny for that business and a greater chance of re-inspection. If a re-inspection takes place, there is the potential for farmers to, once again, fall foul of the ridiculous and wholly impractical thresholds, let alone having to deal with the burden and fallout from those difficult proceedings.

Overall, it is completely unacceptable that DARD has taken an approach that has put herd keepers in Northern Ireland at a distinct disadvantage in comparison with not only our neighbouring regions in the UK and Ireland but many other regions in Europe. It is very difficult to understand how neighbouring regions in the UK and Ireland have managed to adopt a mechanism that demonstrates much greater flexibility whilst satisfying the Commission. Remember, in the South of Ireland, if you have a missing tag, you have three months to replace it. In Northern Ireland, we have the most sophisticated livestock traceability system in Europe, in the form of APHIS, and cattle with a single missing tag are still fully traceable. Even that is not good enough for DARD, which insists on continuing to gold-plate and fails to demonstrate any balance between what is practical for farmers and what appears to be acceptable to the Commission and all other European regions.

In conclusion, we again thank you for the opportunity to give you this brief. This is a serious issue for livestock farmers and is imposing massive financial penalties on many of our herd owners. I ask you to consider agreeing with the following positions of the union. First, there should be a complete removal of the threshold that DARD has imposed. The threshold means that we are seriously disadvantaged, it is not practical, it is not fair and it is an overly zealous approach to the implementation of rules and regulations. Secondly, DARD, as a matter of urgency, must publish the Agri-Food and Biosciences Institute (AFBI) research on cattle-tag performance in Northern Ireland. That important work should be nearing completion. Thirdly, DARD must overhaul its standards, which allow companies to sell inferior tags in Northern Ireland. If it is going to impose thresholds and penalties, it is not unreasonable for an industry to expect that all the tags that it has to use are of a certain standard.

The Chairperson (Mr Irwin): Thank you very much. I declare an interest as a farmer. I have to replace tags regularly, so I fully understand the situation. You raised a number of concerns about the revised approach that DARD has taken, and I am sure that you have spoken to DARD. What response did you get?

Mr Marshall: The response from DARD was frustrating and disappointing, in that it feels that it is perfectly justified and reasonable. However, looking round at our neighbours, we have never seen a similar attitude or approach. DARD does not feel that it has done anything wrong; it actually feels that any relaxation of this is good and that we, as an industry, should applaud it for the relaxation. However, we feel that it still falls terribly short of what is necessary.

The Chairperson (Mr Irwin): The Committee has had concerns on the issue, and I have had serious concerns. I think that it is discriminatory to a point because, if someone has 200 cattle and 20 missing tags, they are fined; if someone has 1,000 cattle and 20, 22 or 23 missing tags, they are fined. It certainly is discriminatory in nature. You have looked at other areas and regions of the UK or the Republic —

Mr Marshall: No.

The Chairperson (Mr Irwin): — and they are more relaxed.

Mr Marshall: They are, indeed.

Mr Byrne: I welcome Ian and the delegation. Why do you think that DARD is being so particular and so stringent? Is it because there has been a history of difficulties here that differ from other regions, or do we have an over-zealous Department?

Mr Marshall: There are serious concerns with the Department's attitude, which harks back to the time when GB had an audit. As a result of that audit, in which no concerns were highlighted, DARD felt — it was in a climate of fear of audits — that it should apply these thresholds. Elliott, I think that you looked at that in some detail.

Mr Elliott Bell (Ulster Farmers' Union): Yes. I think that DARD has taken an ultra-precautionary route by introducing this threshold. If you compare Northern Ireland with the rest of the UK or even Southern Ireland, you will see that, in APHIS, we have the most traceable system in the British Isles. As the president pointed out in his presentation, even cattle with a single tag missing from their ear are fully traceable. On APHIS, DARD can also check how often a farmer replaces tags. Those are three key factors, you would have thought, in proving the traceability of the animal. Yet, even at that, DARD was not satisfied and felt that it needed to introduce these extra thresholds, which we think are extremely unfair, given that the tags that it is approving for the market are not of a satisfactory standard. It is very difficult for us to say which tag manufacturers are better than others. We have no firm evidence. However, there is a lot of anecdotal evidence from farmers that they are not satisfied with the tags currently on the market, and they feel that DARD needs to improve the standard. There are tags that are very good, but, equally, there are tags that are very poor, and, if DARD is to impose such stringent cross-compliance rules, we do not think that this is acceptable.

Mr Byrne: Your comment leads me to my next question. Are the tags approved by DARD from one company or a number of companies? What is the situation?

Mr E Bell: DARD has asked AFBI to carry out a study of the performance of cattle tags in Northern Ireland. It is my understanding that information from that study is based on APHIS records. AFBI is looking at each company that sells tags in Northern Ireland, and, from that study, it will be able to identify the best and worst. We think that that information should be made public to farmers as soon as possible. The study is, we think, not far from completion. As the president said, we ask you to press DARD strongly on that to make sure that farmers are aware of the companies that sell good tags and the companies that clearly do not.

Mr Byrne: Finally, in relation to the AFBI survey of tags, how much consultation was there with you guys — the farming organisations? Did you have any input into the discussions, and were you able to offer any views on the type of tag that you would like?

Mr E Bell: We met DARD and AFBI in early December last year, and we had a bit of a discussion on the AFBI study. We have had no input to the study as such. It is a desktop study being conducted using data from APHIS. That is as far as it has gone. Apart from that, we have not been consulted in any way.

Mr Anderson: Thank you, Ian, and your team, for your presentation today. Joe has taken up some of the points that I was interested in, such as the quality of the tags. How many different brands are on the market in Northern Ireland? Is the place awash with them?

Mr E Bell: I can certainly get you the figures. Off the top of my head, I think that there are between 10 and a dozen different tags.

Mr Anderson: Are they manufactured locally or imported?

Mr Marshall: A combination.

Mr Anderson: What would encourage the quality to improve? Are farmers encouraged to buy the inferior ones because of the cost implications?

Mr E Bell: There is not much of a cost difference. It is generally more about local availability. If you have a local tag store, you are more inclined to go to it because it is quicker, and you can replace them fairly readily. You can also order them online. There are an awful lot of places you can buy them from, but, ultimately, the standard that must be met is set by the Department for Environment, Food and Rural Affairs (DEFRA), and DARD acts on that. We do not think that that standard is high enough because, clearly, quality tags meet that standard easily, but there are also tags —

Mr Anderson: Do the 10 or 12 different manufactured tags meet the standards set down?

Mr E Bell: They meet the DEFRA and DARD standard, but whether they meet the standard that farmers require to ensure compliance with European regulations is another story. In farmers' minds, the current standard may not be good enough.

Mr Anderson: From your experience, on a score of, say, one to 10, what is the difference in quality? Are there some really poor tags and some really good ones? Has the lack of quality got a lot to do with why they are lost? If everyone were to use the highest quality available, would that go some way to reducing the number lost?

Mr E Bell: I will give you an example: Southern Ireland has a single tag manufacturer, and its replacement rate per annum is about 4%; we have a selection of between 10 and12 manufacturers, and our replacement rate is between 6% and 8%. When you look at the bigger numbers, there is a considerable difference, which demonstrates that the Republic has a very good tag manufacturer, whereas we have a multitude of tag manufacturers, and some of them are not very good at all.

Mr Anderson: You talk about having 28 days to replace the tags, compared with three months in the Republic. That is significant. Would it go a long way to assisting you —

Mr Ian Buchanan (Ulster Farmers' Union): The old regime was 28 days, before it tightened up suddenly, and now there is zero tolerance, basically. Down South, it is three months.

Mr Anderson: It is still three months there.

Mr I Buchanan: Yes.

Mr Anderson: OK. That certainly needs to be looked at. We are working on a six-year-old penalty matrix, you say. Is that the 2010 matrix?

Mr Marshall: It is based on a Commission document that is nearly six years old. We all have serious concerns about tag quality, but the more important issue is that, at a time when the Department has autonomy to work with our industry to help us to meet this legislative requirement, it is being increasingly overzealous and imposing tighter rules and regulations on Northern Ireland farmers. It is not necessary, and it is not required in European regulation. That is a serious concern. We all accept that tag quality will be variable, especially given the large number of suppliers, unlike the South. That said, if there were a pragmatic approach to applying the rules and regulations, as there is in other member states, the industry would deal with it, but it is certainly a concern at the minute.

Mr Anderson: There should be a level playing field for member states.

Mr E Bell: As we have outlined and as the Committee knows, the threshold in Northern Ireland is 10% or 20 single missing tags in total. In Scotland, there is a threshold of 16%, and there is no "or". In England and Wales, there is no threshold whatever, and the Republic of Ireland has a very flexible system.

Mr Anderson: I tend to agree with you: the percentage is irrelevant when you think about the bigger herds and talk about 20 single tags, as you said, Chair, quite rightly. Percentages go out the window. I see your point. Thank you very much for your comments. They have enlightened me greatly on a number of issues.

Mr Buchanan: Given the penalties on the farmer if the tags are not there, how detrimental are they to the farming community and the agriculture industry in financial terms?

Mr Marshall: The issue is serious. The whole cross-compliance issue itself is a minefield, but, that being said, there is a penalty matrix, and this is what is completely unfair: depending on the size and scale of your business, the size of your single farm payment and the nature of the offence, whether it is deemed to be negligent or intentional, we have seen financial penalties on farm businesses in the tens of thousands because of a single tag that was not replaced. So, it is a huge issue.

As Elliott rightly indicated, the focus of the Commission has been on livestock traceability and public health with regard to food safety. Yet, when an animal still has a second tag in its ear, there is no public health or traceability issue: it is not an unidentified animal, it is an animal with one plastic tag missing. We have defended cases for our members, and the fines have been tens of thousands of pounds.

Mr Buchanan: Would it be a bit cynical of me to think that it is a way that the Department has to get money back off the farmer? [Laughter.]

Mr Marshall: I would not like to comment or share your cynicism, but it has crossed my mind.

Mrs Dobson: Well put, Tom.

Apologies for missing your briefing; I was asking a question in the House. I declare an interest, as my husband is a beef and cereal farmer.

Ian, in your letter, which I have read in detail, you totally hit the nail on the head. A constituent of mine shot himself because of a cross-compliance inspection. Miraculously, thank God, he survived, but such is the pressure on farmers. It is not fraud, it is not an animal welfare issue, it is not cruelty and it is certainly not negligence, yet the Department persists in gold-plating. Therefore, I agree with Tom Buchanan's final point.

You started to outline the major differences between DARD's approach and the approach in the Republic. Is there anything further we are missing? Obviously, there is a willingness to help and assist the farmers in the Republic that seems to be lacking here. Is there anything else you can do to outline the differences other than the time span for replacing tags?

Mr Marshall: This issue is not isolated to animal identification. We see it in other areas of the Department's functions where it refers back to Commission rules and regulations in its reasons why things have to be so onerous and difficult. There is a clear demonstration here, Jo-Anne, that there is a mechanism to make something that is more practical and get a more common sense approach to work with the industry as opposed to working in conflict with it. Certainly, we are disappointed, because when we look south of the border, we see a completely different attitude to working with industry.

Mrs Dobson: There is a different mindset.

Mr Marshall: Completely.

Mrs Dobson: Elliott, I like the way you spell your name, because it is my son's name too. The very nature of the tags, as Elliott said, means that it is inevitable that a small percentage will go missing. You talked about the traceability, which Ian also mentioned. DARD's definition of "small" is crucial. Is that another example of DARD creating work for itself, as Tom said, and to heck with the personal consequences for farmers and their families? Ian, I noted your comment that the whole cross-compliance system is a "minefield". I could not have put it any better myself. Is this them creating work for themselves, not thinking of the consequences, and to heck with the farmers?

Mr Marshall: I think, Jo-Anne, the problem is that, in Northern Ireland, we have a culture of being risk-averse, because the fear or threat of audits or of Big Brother looking over our shoulder seems to be a bigger threat to our Department than the threat of the industry not being able to cope with rules and regulations. There is no aptitude for accepting that it could, in fact, be simpler and much more straightforward with no detrimental impact on the industry. So, I think it is very much a case of risk-aversion as opposed to accepting that it has the autonomy to do things in a more pragmatic, simple way for the industry.

Mrs Dobson: How do you change that mindset? It does not seem to be getting through. I note that you said that you made recommendations last November. Has the Department given you any indication of a willingness to work with you — the union — on this, because you are the voice of the farmers? Farmers need to be heard, and they need to know that someone somewhere is listening to their concerns, rather than their concerns falling on a deaf ear time and time again.

Mr Marshall: At some of the meetings, it certainly pays lip service to the fact that it could be better, yet, when we come to making significant changes at farm level — primary production level — there does not seem to be an appetite for making real differences or significant changes. I think that that is the frustration. Everyone says that they are willing to do things differently, and they see the difficulties and the problems, but —

Mrs Dobson: They are not followed through with actions.

Mr Marshall: — we continue to go back to members, and it is very much a case of no change.

Mrs Dobson: It is frustrating for us and frustrating for you. What is your next step? You mentioned potential legal action. Where do you go from here? I am mindful that we are about to have the Balmoral show. This Committee will certainly be asked time and again, as will you, what we are doing or what we can do to stop this stranglehold on the farmers.

Mr Marshall: This brief to the Committee is very much about, first, making the Committee aware of the issue and of the significant cost that it may have to the industry and, secondly, to ask the Committee for its support in applying pressure to the Department. This is something that we feel you as a Committee can deliver on. You can apply pressure to the Department and say, "Look, this should not be; this is not necessary".

I sit on the Agri-Food Strategy Board. When we are trying to create and grow an industry and encourage a sense of people wanting to grow, develop and seize opportunities, it is difficult to understand why we do not seize the chance to help the industry when there is something here that we can do to make the job simpler and more straightforward. Furthermore, in the union's opinion, there is no risk for our Department, so why would it not do it?

Mrs Dobson: You did not answer the question about potential legal action. As a union, do you see that?

Mr Marshall: No.

Mr McMullan: Thank you for your presentation. Why are there fewer manufacturers in the South than there are here?

Mr Marshall: There is a completely different approach to how they procure their tags in the South. Crosby, do you want to answer that?

Mr Crosby Cleland (Ulster Farmers' Union): No, I do not actually; I have more of an angle on sheep. I think that they looked at all the tags that came together, the numbers and the most economical and the best. They chose it, and it was the better one.

Mr Marshall: Oliver, they basically put out a tender for a single tag manufacturer to supply the industry. Allflex was the successful company in that tender and, as such, got the contract.

Mr McMullan: Am I correct in saying that they do not allow any suppliers from the North to tender for that?

Mr Marshall: Yes.

Mr McMullan: So, it is a closed shop. Something has to be done about that. It is a double-edged sword. That refusal to let manufacturers into the South is one of the things that need to come out when we are talking about cattle tags. They let sheep tags in.

Mr Cleland: I think it is possibly a brand and not so much the manufacturer. They picked a brand. I am not sure whether they are manufactured in the South.

Mr McMullan: I think you are right when you talk about a brand, but they let sheep tags in from the North but do not let cattle tags in. I think that that could be part of the problem. I take on board what you have said today. Thank you.

Mr Byrne: I wonder whether I can raise another issue, given that the union is here. Over recent times, the issue of the labelling for sheep meat and spring lambs has caused massive frustration and cost to farmers. Traditionally, we have a history of many spring lambs being sold in the market here for the southern processor. Obviously, there is the double whammy of the differential between the euro and sterling and the labelling. Ian, have you any comment to make on that? Are we making any progress with the Department? I have raised this issue with the Minister because I believe that there needs to be strong and meaningful discussions with her counterpart, Simon Coveney. Softly-softly phone calls do not work.

Mr Marshall: Not a problem, Joe. We are seriously concerned about where the whole labelling thing is taking us. It is not just specific to sheep meat and lamb markets. It is also having an impact on our red meat industry and on dairy and could potentially impact pork. It is a major concern because, as we see it, it is often just used as a mechanism to drive the price down. It was highlighted to us that French traders were concerned about the British or Irish label, yet, when I was in Portugal at a meeting of the Committee of Professional Agricultural Organisations (COPA), a fortnight ago, I asked representatives of the French farming industry about their attitude. They said that they had no concern whether it was British or Irish lamb, because the quality was the same. Yet again, that is another demonstration of the industry, either at international marketing level or processor level, using it as a stick to beat us with. We firmly believe that the trade between products North and South is vital. It is crucial for the agricultural industry. I know that Crosby, Elliott and Ian were in Dublin two weeks ago with Eddie Downey. Crosby, do you want to comment on that?

Mr Cleland: Yes. If we take last week as an example, the difference between last year and this year was £18 a lamb. The euro really covers a maximum of £8 of that. ABP, Dunbia and Linden are our main plants. Linden has a link with Navan Irish Country Meats (ICM). It really baffles us. I think the labelling idea is being used. We came forward with another idea of "Reared NI" and "Processed NI". They were trying to say that the French were saying, "If it comes through England into Ireland, why, you know, with the UK?". That is a myth. We have blamed their sellers, because they have been wound. There is a phrase that they use; I do not think you are allowed to say it here. One of them was caught off guard one day, and I said, "Why do you take advantage of the situation with the sheep ban?". He just said, "Because we can". That is the unfortunate situation we are in.

Being at the end of the line, we have to take what we are given, but those prices have been manipulated. My personal opinion is that it has been manipulated to get things down. We got it up to £3·90 per kilo last week in the spring. In the mainland we are talking about £4·30. Over last year, from May right through to the middle of July, there was a 40p and 60p difference a kilo. That is a lot. If you take the 60p differential, that is £12 a lamb. A lot of lambs stayed north last year. They killed up to 14,000 some weeks, and only about 3,000 went south. After July, it broke even, and then it got bigger in the South because the Southern plants opened up. We are just mystified about why that happens. You can put any sort of accusation in, but we are just baffled by that. The plants here can handle more lamb. They just take another day to do it, and they said they would, but it is the price that is hitting the farmer. I do not know what to do to get control of that. We are at the wrong end of the line.

The Chairperson (Mr Irwin): The National Sheep Association is giving a presentation to next week's Committee meeting on the issue.

Mr Byrne: Thanks.

The Chairperson (Mr Irwin): Does the union feel that a threshold would be enough to suffice in that situation if the Department gave a time frame as it did in the past?

Mr Marshall: We personally feel that a threshold is unnecessary. We feel that there is a mechanism to say that we have the most robust traceability system in Europe. We have APHIS and are due to get its successor, the Northern Ireland Food Animal Information System (NIFAIS), in the next couple of years, which will, hopefully, be a better system.

We have a completely traceable animal identification system, and we feel that, where an animal loses a single tag, a breach should not be applied immediately. There should be a time frame to replace the tag and then, after a three-month period, if the farmer has not replaced the tag, it is hard for us as a union to defend a breach at that point. But that is not what we are asking for: we just feel that we need a degree of tolerance so that, if an animal has a single missing tag, it should not qualify as an immediate breach for the single farm payment. There should be a reasonable time given to replace the tag. That is what we need. That would only give us parity with other regions; it would not give Northern Ireland special treatment.

The Chairperson (Mr Irwin): I think that, in the past, there were 28 days in which to acquire the tag. You did not have to have it in the animal's ear, but you had to purchase the tag within 28 days, if I recall right.

Mr Marshall: That is right.

The Chairperson (Mr Irwin): We will provide the Department with a Hansard report of the meeting, and we will ask it to come before the Committee to address the issue. We have concerns as well as you do. We know the issue, and it is something that we will push on, I assure you of that.

Mr Marshall: I thank the Committee for its time. There was a lot of detail in there. Elliott would be happy to email to the Committee a copy of the details, as there are a lot of facts and figures.

The Chairperson (Mr Irwin): OK. Thank you.