Official Report: Minutes of Evidence

The Chairperson (Ms Dillon): I welcome Norman Fulton, deputy secretary, and his team: Pauline Rooney, Colette McMaster and Martin McKendry. We ask that you keep your presentation brief, to about 10 minutes, and then we will allow members to ask questions.

Mr Norman Fulton (Department of Agriculture, Environment and Rural Affairs): Thank you very much, Chair. I want to provide you with a broad overview of the work of the group.

Overall, the group has a staff complement of around 800 and a budget of about £105 million net, although it administers a much larger CAP budget, and we will maybe come to that. There are five divisions in the group, and I have directors from three of them with me this morning. Martin McKendry is the director of the College of Agriculture, Food and Rural Enterprise (CAFRE); Colette McMaster is director of the food and farming policy division; and Pauline Rooney is director of the EU area-based schemes division. The other two divisions include the CAP policy, economics and statistics division, and you will have met Paul Caskie, its director, last week. I think that he was up talking about areas of natural constraint (ANC) support. Finally, there is the science, evidence and innovation division, led by Alistair Carson, who is also our departmental scientific adviser.

I will give you an overview of the work of each directorate. CAFRE is responsible for competence development for those entering or already in the agrifood industry, through development and delivery of a range of education and lifelong learning programmes. It operates across three campuses. Greenmount focuses on agriculture, horticulture and land-based sectors; Loughry focuses on food technology, with business for agrifood and rural enterprise there as well; and Enniskillen focuses on equine provision. Its education service covers the full remit of FE and HE provision — there are approximately 1,800 full-time and part-time students across the three campuses — delivering courses from level 2 right through to honours degree and, indeed, a master's provision. The development service at CAFRE delivers training and development to those within the agrifood industry. In 2014-15, about 12,500 people participated in programmes, with 2,500 achieving level 2 qualifications or higher.

The CAFRE development service delivers the level 2 agriculture business operations programme, which meets an eligibility requirement for CAP pillar 1 for those wishing to claim young farmers' support or apply to the regional reserve under the young farmer new entrant category. In 2015, almost 2,500 young farmers went through that course, and, in 2016, over 500 have gone through it. CAFRE also delivers knowledge transfer elements of the farm business improvement scheme under the rural development programme (RDP), and almost 3,000 farmers have signed up to the business development groups. CAFRE also oversees the farm family skills programme for farmers who are not in a position to sign up to the business development groups. It covers areas such as health and safety, business planning and animal health. I think that one of the first ones was a pig health training initiative under the programme.

I will move on to food and farming policy. It covers a broad range of responsibilities, under Colette, across the food and farming sectors. I will try to pick up some of the more significant ones. I am sure that the Committee is aware of the 'Going for Growth' report. The division provides the departmental lead to the Agri-Food Strategy Board and helps it to develop and deliver the Executive's response to the 'Going for Growth' report. It works closely with colleagues from the Department for the Economy in monitoring and reporting on progress and, indeed, in delivering on some of the components of that report. Significantly, that includes policy lead on the farm business improvement scheme and the agrifood processing investment scheme, both of which are delivered under the rural development programme and are a significant component of the Going for Growth strategy.

Colette's division is sponsor for the Livestock and Meat Commission, which recommends improvements in the marketing of red meat and red meat products from Northern Ireland. It also sponsors the Agricultural Wages Board, which sets minimum pay and conditions for agricultural workers in Northern Ireland. Finally, the division also acts as the managing authority for the rural development programme. That includes organisation of the RDP monitoring committee, liaison with the EU Commission, reporting on progress on delivering the programme, oversight of monitoring and evaluation of the programme, financial monitoring etc. That is a quick overview of the food and farming division.

I will move on to the EU area-based schemes division, which, under Pauline, is responsible for the administration and implementation of various CAP area-based schemes. That will include the basic payment scheme, greening payment, young farmers' payment, operation of the regional reserve, implementation of the areas of natural constraint scheme and implementation of the agrienvironment programmes. That covers the breadth of schemes there. It covers all aspects of operational policy, application processing, verifications of applications, inspections and payments. It is the full end-to-end delivery of those schemes. It is a very important function in the Department and is very important for the industry. In total, it administers about £280 million or £290 million of support to the industry per annum across all those measures. It is a very important part of the work of the Department.

There is the science, evidence and innovation division, which provides oversight of the Department's science agenda and sponsorship of the Agri-Food and Biosciences Institute (AFBI). The science agenda covers R&D and non-R&D components. The latter is primarily statutory diagnostic and analytical work linked with animal health, plant health and food safety, but it also involves the science around marine. The R&D agenda covers agrifood competitiveness, rural development, animal and plant health and environmental issues. Again, it covers the full scope of departmental interests. It is commissioned by the Department from AFBI under the evidence and innovation programme each year and is a very important component of the Department's work. The division is also building its collaborative links with other research providers. It has a long-standing and successful partnership with AgriSearch but is now involved in new initiatives involving the Department of Agriculture, Food and the Marine in Dublin and a new US/Ireland research initiative. Calls for that were issued just three weeks ago, so that is a very new initiative.

Those collaborative links all seek to lever in additional R&D funding and to maximise our access to world-class science through those additional programmes.

Finally, I want to cover CAP policy and the economics and statistics division. The division took the lead on the CAP reform agenda, and there was obviously a significant volume of work under that. Our current focus is on the future of ANC support and designation, and the Committee heard the results from the recent consultation in that area last week. It has also looked at the possible future of coupled support until the end of the CAP reform period. The division also provides economic advice and analysis for the entire Department and conducts a range of statistical surveys and publications that cover the full remit of agriculture, food and the environment, so it has a very broad remit there as well.

I have tried very quickly to give you a flavour of the breadth of the issues covered by the group and to pick up on some of the key areas. A lot more goes on that may be a little less prominent but which is nonetheless still important for the Department. I am happy to throw it open to the Committee to take questions on any aspect of the work that we do.

The Chairperson (Ms Dillon): Thank you very much, Norman. One of my first concerns is that I know that there had been a commitment that, if 70% of applications for single-farm payments were done online, there would be the possibility of advanced payments. From the papers that we have, I am aware that 62% of applications have been done in that way. Is there any notion of maybe reducing that to a lower percentage, given that not having access to broadband is a major issue for our rural communities? We have no way of assessing how many farmers are unable to do it online because they cannot get access to broadband.

Mr Fulton: By 2018, we are required to have 100% of applications on our [Inaudible.]

application system. That is required under the regulations, so we need to continue to advance that. We have made significant progress and advances over the last couple of years, and we need to continue to do that. It is possible. Wales, for example, now has 100% online completion; I think that they got only 15 paper applications this year. That shows what can be done. There are many advantages to going online, for applicants and for the Department, in reducing errors for applicants and the speed of application, processing and getting payments out. There are many advantages to that, as well as with the issue of control.

We need to continue to advance that agenda. We are aware of concerns with broadband. I think that the Committee might be looking at the results of the equality impact assessment (EQIA) later this morning, and you will see the responses to the consultation and the views of the Department. We recognise that we have to assist farmers in moving online, but there are so many advantages to be had. As I said, we have to be 100% assisted online by 2018. It is a regulatory requirement of EU regulation.

The Chairperson (Ms Dillon): I am sure that you accept that that is a requirement on the Department as much as anything. Therefore, to assist farmers —

I raise the rural broadband issue continually. I have raised it in the Chamber and previously in council. If you do not have access to broadband, how do you apply online?

On the back of that, how vital do you think it is for us to retain our DAERA Direct offices? For those farmers who do not have access to broadband, that is their next stop.

Mr Fulton: There are multiple ways in which farmers can access it online. DAERA Direct offices are one possibility, but you could also look at libraries; they are much more widespread. There are many more of those than there are of DAERA Direct offices. Many farmers use agents to input the data for them. There is a range of possibilities. We refer to some of them in the EQIA document that you have before you. We recognise that there is no one answer for everyone; there will be a range of possibilities. We should also ensure that our systems require the minimum bandwidth so that fast broadband is not needed to complete the process. I suppose that that is something that we will design into our systems to ensure that you do not need fast broadband to tap into the system.

The Chairperson (Ms Dillon): On libraries, I think you will accept that many of our farmers need help filling in the forms; that can very often be somebody in the family or a friend. You will not necessarily be able to say, "Come on; we have to go to the library" because library opening times are limited, especially, again, in rural areas. I do not think that is the answer to our ills.

Mr McKee: Are we meeting the 118 targets in the action plan of Going for Growth, taking farming as it is today?

Mr Fulton: Yes, there is a broad range of recommendations. The Agri-Food Strategy Board published its progress report in March, I think —

Mrs Colette McMaster (Department of Agriculture, Environment and Rural Affairs): It was published at the beginning of April.

Mr Fulton: There has been substantial progress against many of those recommendations.

Mrs McMaster: There are 118 recommendations. Quite a number fall to government, while some are industry-led recommendations. As part of our working together with the Department for the Economy, we are monitoring the progress of the actions against the action plan. There is a Northern Ireland Executive-endorsed action plan, and the Agri-Food Strategy Board is leading on the industry-led actions. Considerable progress is being made. Some of the actions are major and some are smaller. For our Department, one of the big actions was to have a farm business improvement scheme developed. We are taking that forward as part of the rural development programme (RDP); we are designing a farm business improvement scheme. It is a package of measures in that programme. It is launched with the knowledge-transfer measures, and we are working on developing other parts of it to roll it out in the future.

Another big recommendation for us concerned looking at land use; a land use strategy working group has been working on that. We also had a recommendation relating to TB, and a TB strategic partnership forum has been working on that. Those are some of the major things. Working to facilitate access to new markets for trade was another recommendation. Very good progress is being made across the Department on many of the major actions. We continue to monitor that, monitor progress, and drive forward on actions.

As Norman said, the report published at the beginning of April gives a flavour of the status of things in the action plan and the recommendations of the board.

Mr McGlone: To come back to the area scheme for young farmers and the participation by young farmers in the scheme that you talked about, I think that you said that 2,500 had gone through and availed themselves of the scheme. You mentioned the areas of natural constraint, agrienvironment and the like. What is the level of EU support for those?

Mr Fulton: On the young farmers, that was the number of people who went through the training. About £165 million is programmed into the RDP for support for the agrienvironment. That is what has been approved by the commission. That splits, I suppose, between contracts coming forward from the old programme and what will come through into the new environmental farming scheme.

Mr McGlone: Right. Good. I presume that there are elements of the Going for Growth strategy that are supported from EU funding sources as well.

Mr Fulton: That is correct, yes. The rural development programme is a significant delivery vehicle for some of the major recommendations from Going for Growth. The knowledge component of the farm business improvement scheme is funded under the RDP, as is the capital investment component. It is a significant delivery vehicle for Going for Growth.

Mr McGlone: How much — maybe you do not know off the top of your head — is invested in the entire Going for Growth programme from EU sources?

Mr Fulton: The total amount linked to Going for Growth was up to, I think, £215 million or thereabouts. That was a split of national and EU funding. A significant proportion of that is national moneys.

Mr McGlone: Maybe we could get a breakdown of that.

Mrs McMaster: We can provide a breakdown of the EU amounts that are part of that.

Mr McGlone: That is OK.

Mr Swann: Two and a half thousand young farmers have attended the training. How many passed it?

Mr Fulton: The vast majority.

Mr Martin McKendry (Department of Agriculture, Environment and Rural Affairs): It was definitely over 96%; it could have been 96% or 97%.

Mr Swann: How many of those farmers attended the training specifically to get access to the young farmers' payment scheme?

Mr Fulton: It was obviously the driver. We asked that farmers who would be coming forward for the young farmers' payment scheme or the regional reserve had, at minimum, a level-2 qualification. Obviously, that was a driver for farmers to come forward.

Mr Swann: So there was no real reason to do it unless you were going for that funding.

Mr Fulton: Some farmers probably did it anyway.

Mr McKendry: Some farmers did, but they would have been a minority.

Mr Fulton: What it did was bring a whole new clientele forward who had never engaged with the CAFRE programmes previously. I think that that was a very positive thing. Certainly, the feedback from those who took part in that programme was very positive. Indeed, some have now decided to go on to level-3 programmes, even though there is no requirement for them to do so. They see the benefit.

Mr Swann: Do you have numbers for that?

Mr McKendry: We would have thought — we are not to be held to this — that about 400 or 450 have come through in groups. I could give you exact figures around that.

Mr Swann: It is good to see that it was not just specifically to tick the box on the form.

Mr Fulton: No; I think that people appreciated that it would make a real difference to their business.

Mr Swann: With regard to other training that is out at the minute, part of the farm family key skills training is a section on construction, design and management (CDM). There is no longer a requirement to hold health and safety certification to deliver CDM training. Is that correct?

Mr McKendry: The health and safety programme is part of farm family key skills; it is a broad awareness programme that is pitched at about level 3. It encompasses a lot of practical health and safety issues on farms. Part of that is creating awareness of what the CDM regulations will mean for farmers who are coming into the capital scheme, the business improvement scheme. It is not delivering CDM regulations as such at that level; it is creating the broad awareness of what would be required by a farmer to meet those regulations if he comes forward to BIS. It is part of a health and safety package; it is not just to do that specifically.

Mr Swann: Chair, one of the things that has concerned the industry and the Committee in the past is health and safety on farms. Why did the Department remove the requirement for the trainers to be health and safety-certified? That was required in the original tender but is not now required. We are going to have farm family key skills, to which farmers will go for health and safety training, but there is no longer a requirement for the training deliverer to be health and safety-certified.

Mr McKendry: As I say, as we have it at this stage, the programme at level 3 is a broad awareness programme. You can achieve a qualification from the farm family key skills programme. The health and safety component is about three points, and you will require 10 points to get a certificate. The awareness training and the previous programme that was delivered on farm family key skills required people purely at level 3.

In the previous programme, we did not have a requirement for trainers specifically to hold a higher-level health and safety qualification. We feel that, because of the practical nature of it and the fact that it is broad awareness training, it will be open to more people to deliver that training. If we want to lift it up another level and give further training, then, yes, we will be asking for an Institution of Occupational Safety and Health (IOSH) qualification at that stage.

Mr Swann: I come from a Northern Gas background, and we would never have put anybody into the industry without health and safety training. Even saying that you have basic health and safety training, if it was delivered by somebody who did not have a certificate to back up what they were training in, is remarkable, especially with regard to health and safety. Consider the number of fatalities that we have had on farms. Level 3 is the equivalent to what, Martin?

Mr McKendry: Level 3 is equivalent to national diploma.

Mr Swann: An A level?

Mr McKendry: Yes.

Mr Swann: So if you get that, you are part way towards an A level in health and safety.

Mr McKendry: It is not an A level in health and safety.

Mr Swann: It is an A-level equivalent, and CAFRE is content that it is being taught by somebody who has no professional qualification in health and safety.

Mr McKendry: As part of the development of the programme, there were Health and Safety Executive people there. The package was put together by the Farm Safety Partnership. That has been agreed.

Mr Swann: That is where I am coming from. Initially, when the tender was put out, that requirement was there for trainers, but subsequently it was removed.

Mr McKendry: Yes. It was removed in consultation with the Health and Safety Executive; it is happy with the level that we are pitching the programme at.

Mr Swann: OK. I am not content, Chair. There is a gap there.

Can I ask about basic farm payments? Where are we?

Ms Pauline Rooney (Department of Agriculture, Environment and Rural Affairs): For this year?

Mr Swann: Yes.

Ms Rooney: We have about 25,000 applications in for basic payment this year. We have started inspections on those and will process them right through to the end of the year to make as many payments as we can.

Mr Swann: How many remote aerial inspections will there be?

Ms Rooney: We have six zones this year, which is two more than last year. That is to try to distribute the concentration of the inspections a bit more evenly than before.

Mr Swann: Is it working all right?

Ms Rooney: Yes. We are out and operating already.

Mr Swann: OK. Thanks, Chair.

The Chairperson (Ms Dillon): On the back of both of those subjects, with young farmers' training, is there any specific assistance for people with a learning difficulty?

Mr McKendry: Yes, there is. If anyone on the programme registers under the Special Educational. Needs and Disability (Northern Ireland) Order 2005 (SENDO), we provide support to them, whatever those learning difficulties may be. We have done that for the past few years.

The Chairperson (Ms Dillon): I must ask about inspections and basic farm payments. You do not know that you are not getting your payment until you check your bank and find out that there is no payment there. Why can somebody who is being inspected not be given notice: you are being inspected and there may be a delay in your payment. It has a big knock-on effect, into the following year, on all the people who rely on you to pay. You have to get supplies in. I am particularly thinking about farm chemicals and things like that, that you need to have to assure your farming for the following year. If you have no notification that you are not going to get paid, you have no opportunity to put in place anything to try to protect yourself. I am not saying that there is a way of putting something in place for a lot of these farmers, but banks are not giving any leeway at the minute to farmers. If they say, "My single farm payment will be in by December. Do not worry; everything will be fine" and it is not, the bank, in almost all cases, immediately says, "No more leeway; your overdraft is done". The people who are waiting on payment are pretty much in the same position. They will say, "No, if you have not got it, we have no assurance that you are going to get it".

Could the Department give them some form of notification that they are being inspected and that they may not be paid until January or possibly even February? Hopefully, it would not go beyond that, but I know of a case in which it was March. At the very least, I think that those people deserve some type of notification so that they can protect themselves.

Ms Rooney: I know that that was certainly the case a number of years ago, Linda. That concern was raised — I think at the Committee — and we started to write to farmers who had been inspected. It used to be that, years ago, when you just did classic inspections on the ground, everybody knew who was inspected because there had been somebody there. When we introduced remote sensing, if there is nothing unclear, we do not have to go out and do rapid field visits. We have to do quite a lot of those, but we do not have to do that if there is nothing unclear. There was the concern that people may not know that they had been inspected.

In the last two years, we have written to everybody who was inspected in November and advised them of that and that it might have an impact on when they get paid. We have paid more and more over the last number of years — I think that we paid about 78% of inspected cases last December, so it is a smaller number. We are trying to do everything that we can to reduce the number that have been impacted by that, and we will continue to do that.

There is a balance to be struck in that we cannot inform people that they are going to be inspected beforehand. If we carry out rapid field visits, we cannot provide a lot of advance notice. That is why there is a balance to be struck in when we can send those letters. We send them now, and we send them at the earliest time that we think that we can.

Mr McMullan: Thank you for your presentation. Norman, the appeals process is still very slow in turning round. A man whose payment has been stopped has to appeal, and it still takes months. That is something that the Chair was talking about with payments to the banks, etc. Can we do anything to get a quicker turnaround on appeals?

Mr Fulton: We are looking at appeals processes to see whether we can streamline them. It is a two-stage appeals process and is there to give the maximum opportunity for people to present their case and have it heard. There is a balance to be struck. Pauline, did you want to come in?

Ms Rooney: Oliver, this year is probably a particularly big year for appeals. Every time you go through a new CAP reform cycle and introduce new schemes, you get more people ending up in the appeals process. That is certainly what happened the last time, and that is what happened this time as well. We have put more resources into addressing the stage-one review of decisions to process the requests that we have as quickly as we can. We are succeeding; it is just that there are a lot of appeals. We will continue to do that and will try to get through them as quickly as is practical.

Mr McMullan: I have quite a few appeals. Some of them have come through the Department for advice, and the advice that I got was very good.

I wonder how many of those appeals could have been sorted out before they went to appeal with a little bit of lifting the phone and talking to each other or maybe having a look at paperwork again. Two appeals that I was involved in were sorted out very quickly because there was an oversight on the paperwork. That could be done without going to appeal. We go into the appeals process too quickly. We should have a second look at it before we go to appeal. Could that be taken on board?

Have you ever talked about climate change? The Environment Department is talking to the Ulster Farmers' Union about the effects of farming on climate change. What is your take on it?

Mr Fulton: We have the efficient farming strategy in place. I have to point out that we are all part of one Department and have a common view.

Climate change will pose challenges for agriculture; there is no doubt about that. It will affect animal and plant health, and there will be extreme weather events. There is such a potentially wide range of impacts from climate change. You probably heard from Robert Huey the other week about the potential animal health issues, such as bluetongue and the encroachment of new diseases, because of a changing climate. Yes, it is a long-term challenge for the industry. It is about starting to think in the long term about how the industry can adapt to some of the challenges in the years ahead. We are looking at very long-term effects.

Mr McMullan: My last question is on one of my hobby horses. Agents that we have for form-filling have their own association. We keep a list of agents to hand out. They do a good job, but should there not be more regulation of them? If an agent makes a mistake, that mistake is still down to the farmer, who has no cover. Often, if a farmer takes an agent on, he is depending on that agent to fill in the form correctly, but, if the agent makes a mistake, that mistake is the farmer's and not the agent's. The farmer will get penalised. Surely, at the very least, agents should have insurance cover in the event of something happening so that farmers are not out of pocket.

Mr Fulton: I do not think that it is an issue of regulation. Farmers need to satisfy themselves that, if they use an agent, that agent is fully aware of his obligation and carries professional indemnity insurance. Farmers should ask that of anybody who completes a form on their behalf.

Mr McMullan: If the Department holds the list and is giving it out to farmers, surely the onus is on the Department to ensure that agents have the adequate cover.

Mr Fulton: It comes down to individual farmers to ask the question and to satisfy themselves that, if something goes wrong, the agent —

Mr McMullan: Does the Department not ask the question before it gives out the list?

Mr Fulton: We are not employing the agent; the farmer is employing the agent.

Mr McMullan: We are giving the list of agents out to the farmers. We are recommending them, in a way, to the farmer.

Ms Rooney: Sorry, Oliver. I am not aware that we do that.

Mr McMullan: You have a list. I saw it in Committee papers.

Mr Fulton: We certainly do not recommend. We do not have a recommended list as such. It may be for information. Really, the agent is the farmer's agent. The farmer is employing the agent and needs to ask about professional indemnity insurance, should anything go wrong.

Mr McMullan: I have heard good reports about the education side of your young farmers' scheme. We now have a new educated group of young farmers coming out. From what I hear, they are very pleased with the scheme.

Mr Fulton: Thank you. That is good to hear.

The Chairperson (Ms Dillon): On the back of Oliver's point, can you check, for our information, whether there is a list of agents? If there is a list, there is an onus on the Department to check whether those people have insurance. The Housing Executive gives out a list of builders when it is giving out a grant. They have to have certain —

Mr McGlone: Regulation.

The Chairperson (Ms Dillon): Yes, it has to regulate. That is not to say that, if something goes wrong with the builder, it is the Housing Executive's fault; it is not. It ensures that, if something goes wrong with that builder, the builder can be held responsible and accountable. You have to accept a certain amount of responsibility if you are prepared to give out a list of names. If I were a farmer and a list were given to me by the Department of people who could assist me in filling in my forms, I would take it that the Department had done a certain amount of checking.

Mr Fulton: We will check whether we have a list.

The Chairperson (Ms Dillon): Rightly or wrongly, I would assume that, as the Department has them on its list, the agents are viewed as being a good option for me.

Mr Fulton: We will check whether we have a list. We are not aware that such a list is being handed out.

The Chairperson (Ms Dillon): I am not saying that you should not hold the list or give it out. As you said, it is a simple question to ask, so the Department could ask it just as easily as the farmer could.

Mr Ford: I welcome the team. I want to go back to the Going for Growth issue. It is more a point than a question. If I remember correctly, we had a vast ministerial fanfare at Balmoral three years ago, when a strategy was announced. It then appeared that nothing very much happened for a while. I accept that things need to be done in the background, so that does not mean that nothing was happening, but, in the context that we were expecting a new strategy to be making a real difference, there was an impression that nothing much was going on. I still do not know what real, joined-up action we have between DAERA and the Department for the Economy, what the role of the strategy board is in driving things forward or what the budget commitment is. It would be useful to get a briefing, which might mean getting the strategy board here rather than relying on Colette to relay information about its work second-hand. It is such a crucial part of what we seek to do that we will need to see some detail on it. As I said, that is just a point.

I will now ask a more specific question. I am pleased that, in the group, we now have direct responsibility for CAFRE and the sponsorship of AFBI and other elements of scientific research. However, there also seem to be real issues around how we get the value of that research into the more informal aspects of education, such as farm walks and one-evening courses, which are the kinds of things that attract people who are already engaged. AgriSearch has been doing a fair bit recently, but it seems that there has been a slight rowing-back in the amount that CAFRE has been sponsoring, whether on its premises or on other farms. Maybe that rather than the full-time education, which is also important, has had to be cut back on. Can you give us an assessment of how much is able to be done to ensure that that research becomes valid on farms and does not just stay in the academic community?

Mr McKendry: I will pick up on that, David. The AgriSearch farm walks that are delivered have a CAFRE component to them. CAFRE, AFBI and AgriSearch work together to deliver those farm walks. They have delivered a number of them across the dairy sector and across suckler, beef and sheep farming. The programme to get them rolled out on to farms and to get research and an innovation component adopted is critical to delivery through the business development groups. That is a committed five-year programme that all farmers in the programme participate in. We see that as an excellent vehicle to get the adoption, specifically on the 2,950 farms.

The second part of it is how we get it adopted much more widely on the other 22,000 farms. Definitely, our work with AgriSearch and AFBI on farm walks and our CAFRE technology transfer, through having open days and on-farm work, are important components, as is linking the programme to the farm business improvement scheme. There is an innovation measure there, and that should be developed. That should, in a way, focus on demonstration farms in Northern Ireland, where other farmers outside of the groups can see the latest innovation and potential for technology adoption.

Your comment on seeing some actions working their way out is important, but they are in the pipeline. We are very committed to the CAFRE component on ensuring that adoption and research outcomes gets out on to farms. It is very far up our agenda, and we are working with others to do that.

Mr Fulton: You are absolutely right about the flow-through of research from AFBI being vital: if you are paying for research and it is not happening, it is not good value for money. More broadly, we are looking at ways in which AFBI and CAFRE can work more closely together, including the potential for AFBI scientists to start to help deliver some of the higher education provision, which would bring the scientists into the classroom. That is a very positive thing to do. We are looking at how we can treat the AFBI and CAFRE farm estates as a single estate and at sharing the facilities. There is great scope there to do that and to expose students more directly to the science and vice versa.

On the food side, we have the food scientists co-located with the technologists at the Loughry campus. There are things happening to try to ensure that we knit together the parts of the knowledge chain — the pipeline — more closely and maximise the benefit.

Mr Ford: I particularly think of the 22,000 farms that Martin mentioned. A fair bit of that sector will be part-timers — I declare a personal interest — and it is about how you ensure that the knowledge is out far enough in advance that people can plan to be available for an afternoon or an evening.

Mr McKendry: Fair comment.

Mr McGlone: When it comes to the basic payments, there were one or two embarrassing glitches last year that presented difficulties for farmers. Money came to them, only for them to be refused by the bank. I hope that that difficult and embarrassing situation will not occur again. Have you put in place measures to prevent that? I will balance that by putting it on record that a number of the staff in Orchard House have been extremely helpful in sorting out situations. I ask that you pass on my thanks to them, please.

Ms Rooney: I hope that that has been addressed. It was a one-off. It affected — I cannot remember — about 20-odd farmers out of all those whom we paid last year, so it was a small error. It should not have happened, and we have taken steps to make sure that it does not happen again.

Mr McGlone: Good. That is OK. Thank you.

Mr McKee: I represented a farmer at an appeal. I would not have represented that applicant had I been in any doubt, but to me he poured out his honesty, and today he has failed. What percentage of appeals are won?

Ms Rooney: I am not aware off the top of my head. I can provide the figure to the Committee. If I said a figure now, I could not stand over it.

Mr Fulton: We can get back to you on that.

Mr McKee: Can you go beyond an appeal? If you are beaten at an appeal, is that it over — end of story?

Ms Rooney: Beyond that, you have the opportunity to go to the ombudsman. The second stage is the final stage in the Department, and that includes that review by the independent panel, so the stage beyond that is to take it to the ombudsman.

Mr McMullan: I just want to confirm that there will be staged payments to applicants this time in the rural development programme.

Mrs McMaster: That is the LEADER part of the programme, I think.

Mr McMullan: Yes.

Mrs McMaster: I would like to get an update and confirmation from colleagues who deal with that part of the programme and come back to the Committee on it.

Mr Fulton: The LEADER aspect is delivered not by this group but by the rural affairs group.

Mr McMullan: No, but it may impact on some schemes that farmers will go into, so I just wanted to know whether there are to be staged payments this time. There was talk of that happening.

The Chairperson (Ms Dillon): Can we be kept updated on the Department's plans for the EQIA and getting 100% of applications online? Let us know what happens so that we can keep a close eye on it.

Mr Fulton: OK.

Mr Swann: What does the new unit envisage doing about farmgate prices, Norman?

Mr Fulton: We have to recognise that this is not a Northern Ireland problem, a UK problem or a European problem but a global problem. One thing that you can say is that government cannot control markets. We have to look at how we can equip the industry to deal with the volatility that is there now and, there is no doubt, will stay with us.

That is part of what we have to address through our knowledge programmes. We can look at equipping farmers to be as efficient as possible. We can look at risk management options on farms. Those are things that farmers need to be in a position to address. Markets are more volatile and will continue to be more volatile — we know that. It is really about equipping the sector to cope with volatility.

Some sectors — for example, the pig sector — are more familiar with that. Pig farmers have dealt with volatility over many years, and it has now spread to other sectors. The dairy industry is going through a particularly difficult, prolonged downturn. How can farmers cope? What mechanisms can they deploy to take costs out? The feedback is that farmers are taking real steps to reduce costs in their business to cope with the downturn.

When it comes to the capital investment programme — this is on the back of farm investment plans — we will ask that plans be sustainable. We expect that people coming forward with investment plans will have looked at the issue of volatility. Can they cope with downturns? We do not want to take farmers into investments that ultimately they cannot afford. They have to stress-test their investment plans, and the banks would expect that of them as well. Farmers need to do sensitivity analysis around their projections under their investments so that, if markets do turn down, they can continue to cope with the repayments and the return on the investment. That is the responsible thing to do.

Mr Swann: You mention banks. One of our major agribanks in Northern Ireland has recently sold off some of its agricultural loans. Do you think that that will have a detrimental effect? Obviously, if it is selling them off, it sees them as a major risk.

Mr Fulton: That is really a commercial issue, and I do not think that we are best placed to comment.

Mr Swann: Would that be something that the Department would look at from an applicant? If the debt had been sold on by the Ulster Bank — or a bank, sorry.

Mr Fulton: More generally, we have to look at the viability of any business that comes forward and the viability of its business plan. We are certainly not doing anyone any favours if the plan is not a viable plan and the investment will not improve the business's bottom line, which is what it all should be about. If we have investments that are not viable, I doubt that they would get as far as us, because the banks would not back them. We would like to think that farmers, having gone through the process, would not proceed anyway if they had seen that the proposal did not stack up. That is the message from the analysis. The value of going through that process is that people go into it with open eyes.

Mr Swann: Is minimum pricing legislation an option?

Mr Fulton: I do not think that it is an option. We have to trade. Quite apart from whether we would be able to do that within a European competition framework, we have to trade. We have to be competitive. Setting minimum prices would simply undermine our ability to compete and be successful, and we have to compete. Some 70% or 80% of our produce is sold outside Northern Ireland, so we cannot cut ourselves off from those markets by imposing artificial prices.

Mr McKee: Norman, you mentioned mismanagement: DAERA can read into mismanagement of the farmers, is that right?

Mr Fulton: I do not think that I said "mismanagement" at any point.

Mr McKee: Yes, you said "mismanagement" — of the farmers and of their business.

Mr Fulton: Right.

Mr McKee: Shortcomings in what they do are maybe creating costs that should not be there. The issue that I see there is this: if a farmer does not realise that there is something that he can do to minimise some of the financial burden and does not realise that he could manage his farm in a different manner, is there anything that DAERA can do to come in — not to be seen as coming in to do some sort of inspection but to assist and guide the farmer through — and say, "If you did this some other way, you would have a better income", if you like?

Mr Fulton: Any farm business — any business — always has opportunities to develop and look at ways to become more efficient and take costs out. That is really what the business development group process is all about; it is about peer learning in the group, as well as input from advisers and taking on board new technologies. That is really what that is all about.

You can draw on examples of how that has worked. For example, the dairy discussion groups in the Republic of Ireland have made significant advances for the farmers in those groups. We would have similar hopes and expectations for what we can now achieve from the discussion groups here. Obviously, it takes time for the farmers to build up the trust to start sharing information. Peer learning is a powerful way of learning and of driving business forward.

Mr McKendry: At the start, that was the rationale behind having business development groups. We saw the benefits that had accrued in the South of Ireland, New Zealand, Holland and other countries that have been maybe a year or two ahead of us in this game.

I go back to what David raised earlier: there are the guts of 3,000 farmers in this five-year programme, and it is getting information out to other farmers as well. What we would do and how we would pitch the open days, training events or knowledge-transfer events is saying what the key drivers on economics, business and technical efficiency that we see from our benchmarking analysis are. We analyse that data annually and see that, across farms, the use of grass or forage, for example, has decreased over a number of years. We would put a focus on that area of work. Herd fertility is another area, as is grassland management on beef farms. We are seeing areas of good technical efficiency that will drive business improvement on farms. That would become the focus of a lot of our work, whether that be press articles, promotional events or AgriSearch, AFBI or CAFRE events. I suppose that the task that we have, which David raised, is to get more people to those events in order for them to interact more regularly. We are happy that we will get at least 3,000 if people attend eight training events per year for the next five years. It is getting others to attend the other events that is important, because the strong message is that people can drive efficiencies in the business. That is really the crux of what we do in our work.

Mr Fulton: You should not discount the informal learning opportunities for people outside the groups to see how the people in them are developing their businesses and changing their practices. We should not discount those informal networks. If you get a certain group leading the way, others will fall in behind when they see the advantages. Neighbours talk to one another. We should not discount that as a means of learning as well.

The Chairperson (Ms Dillon): Before we finish, can you confirm when we are likely to hear that the business investment scheme is open for applications?

Mr Fulton: That is something that the Minister is considering. An announcement will be made in due course.

The Chairperson (Ms Dillon): Soon?

Mr Fulton: I cannot give you a date today.

The Chairperson (Ms Dillon): OK. The Agri-Food Strategy Board was tasked by the previous Minister to look at the fairness of the supply chain: can you come back to us with a written update on that?

Mr Fulton: Yes, we can do that.

The Chairperson (Ms Dillon): The Committee would like to have that information. Thank you very much for coming along and giving your briefing.

Mr Fulton: Thank you very much.