Official Report: Minutes of Evidence

Members present for all or part of the proceedings:

Dr Steve Aiken OBE (Chairperson)
Mr Keith Buchanan (Deputy Chairperson)
Mr Jim Allister KC
Mr Pat Catney
Miss Jemma Dolan
Mr Philip McGuigan
Mr Maolíosa McHugh
Mr Matthew O'Toole


Witnesses:

Mr David Brown, Ulster Farmers' Union
Mr James McCluggage, Ulster Farmers' Union



Protocol on Ireland/Northern Ireland: Ulster Farmers' Union

The Chairperson (Dr Aiken): I welcome David Brown and James McCluggage from the Ulster Farmers' Union (UFU). The session is being recorded by Hansard. David, are you going to speak first?

Mr David Brown (Ulster Farmers' Union): I am indeed.

The Chairperson (Dr Aiken): OK, it is good to see you again. Crack on, please.

Mr Brown: I will briefly give a bit of a background to the current situation. Following the withdrawal agreement, Northern Ireland, as you know, was left as part of the UK's customs territory but is the only part of the UK that remains in the EU regulatory zone. Even from back in December last year, we were aware that issues were going to come along. I am going to cover some of those specific issues, and James will come in on the wider aspects that concern UFU policy and decisions, some of which were mentioned in the presentations in your previous session with the road haulage folk.

To be fair, we have had warm words and reassurances from Lord Frost and Maroš Šefcovic. However, in the early part of this year, our president, Victor Chestnutt, had a meeting with his colleagues in Brussels that Michel Barnier and the chief vet were also at. The chief vet basically said, "Tell your farmers there will be no flexibilities on the protocol".

We had aspirations that, from 1 January, there would be negotiation and discussions on the points in the protocol that were causing consternation and difficulties for the agriculture sector. I will give you a few examples of those. The first one, which was fairly well highlighted even before we got to 1 January, was that around 9,000 hill sheep are bought by Northern Ireland farmers in Scotland each year. Those are breeding sheep and are brought across after 1 January. When Brexit happened, that could not take place as a result of a combination of issues. One is that there are controls in the EU relating to scrapie, which is a sheep disease. The sheep have to be tested for it, but that cannot happen until they are a year old, so, if they were born in 2020, the testing would not happen until 2021. Those sheep were stuck in Scotland and remain stuck in Scotland nine months later. We have one farmer who has over 400 sheep, and he has reached the point where he has no option but to take them from the Scottish holding that was doing bed and breakfast and caring for them and to return them to the marketplace in GB because he cannot get them into Northern Ireland. Equally, we are coming towards the autumn sales, and in recent weeks we have had farmers approach us and ask the same questions, namely, "Has this been sorted out? Can I go over and buy those sheep this year?". Our response has been, "Sorry, but the answer is still no". That is something we knew in advance would be a problem, but, again, we hoped that there might be some resolution before we got to the autumn sales this year.

Changes in livestock identification is another example. That basically was about the idea that any animals, including bovines, coming into Northern Ireland from GB would have to have their tags, which are their means of identification, removed. That is a strange request given that, down through the years, our Department here has been adamant —.

The Chairperson (Dr Aiken): Sorry, David, say that again: they have to take the tags off the cattle?

Mr Brown: That is the rule, yes. The tags have to be removed and replaced with a Northern Ireland tag. In effect, you are losing traceability, which is a particular problem for the pedigree sector because animal identification is part of pedigree traceability. Those animals are DNA-tested and all the rest of it, yet suddenly we were being asked to remove the tags. To be fair to our Department, it argued against that, and, to date, the pause button on that measure has been pushed. However, it has not been resolved, and it seems to be a ludicrous state of affairs to arrive at.

That brings me on to the fact that any animals, not just pedigree cattle, coming from GB to Northern Ireland will have to have a six-month residency period. We in Northern Ireland have a substantial pedigree business that trades regularly with GB. In normal circumstances, breeders would bring those animals across not only to shows that are their shop window, such as the Welsh show, the Highland show and the Yorkshire show, to raise their profile but to the sales in Stirling, for example. I will give you a few figures. In 2018, there were 109 bulls at the spring Stirling sale from 43 exhibitors, or farmers; in 2019, there were 120 from 37; in 2020 the sale was disrupted and did not happen because of COVID; and, in 2021, there were four bulls from three exhibitors. That is down to the fact that, if animals that go over to be sold are not sold or cannot be sold, they cannot return for six months. It has done away completely with the opportunity for our pedigree breeders to have that shop window in GB. It has also done away with the shop window they had when bringing the bulls across to the like of the Highland show to promote.

Horticulture is a completely different sector, but you will be aware of the fact that, back in the early part of the year, there was discussion about soil on plants. Something that highlighted the issue for me was when my wife asked me back in early March why she could not get the bulbs and plants she used to order online. We went online and looked it up. I was able to tell her that it was probably because of Brexit, and, sure enough, it was. Prior to this meeting, I went online to look at the business's website and found that things are the same, nine months later. I will not promote the company, but I will read a couple of lines of what is on its website:

"It is with a heavy heart that I am writing to let you know that for the time being we will no longer be able to deliver orders to Northern Ireland."

It goes on to say that, unfortunately:

"the cost and complexity of these checks" —

— that is, all the vital sanitary and phytosanitary (SPS) checks the other guys were talking about — made it "impossible" for the company. It then states:

"Northern Ireland will continue to be part of the EU's plant health territory and will no longer be part of that of the rest of the UK."

That distinction was made. At the start of the year, we had horticultural businesses in dire straits because they could not get the produce and plants they needed, and when individual householders and families were ordering the plants and so on online, they suddenly became much more aware of the difficulties that existed in getting produce.

We also had soil on machinery to consider. That was a particular issue for machinery businesses and dealers bringing in machinery from GB to Northern Ireland. It is fair to say that the UK took unilateral action on that. That action was received with some angst on the EU side. Fundamentally, it was very upset about that, to put it bluntly, but, at that point, those businesses were going to close down if some action was not taken.

I will move now to plant protection products — the sprays and so forth that are needed to protect and keep safe the plants, vegetables and arable crops we grow. An example of what can happen arose this summer round Teppeki, a spray used by carrot, vegetable and seed potato growers in order to protect against aphids, which bring a bacteria that can destroy the crop. The EU decided that it was no longer going to be available. It is still available in the UK. That was an example of diversions starting, and suddenly something that we had been able to supply to the GB supermarkets and that was still eligible to be used under UK rules was no longer allowed to be used. Trying to source something that would replace it caused a lot of consternation. That was not possible at the time. There is all that happening in plant protection, products and the changes taking place in the regulatory environment.

Another example is veterinary medicines. We are well enough aware of human health and the issues that have been raised in recent weeks about the drugs needed for human health. Equally, veterinary medicines, I suppose, fall into that same category, with concerns about animal welfare and the drugs and treatments we need. As we continue to diverge, those will be more difficult to source. In fact, in some instances they will not be available any more in Northern Ireland.

Another issue we were well aware of, and this is my final point before I hand over to James, is the rules of origin. That pertains not only to the milk sector but to many other sectors. A total of 2·4 billion litres of milk is produced in Northern Ireland. One third of that is transported across the border for processing, mainly by the likes of Lakeland and Glanbia — the big companies that are based in the South of Ireland. The product from that milk, be it cheeses, milk powders or whatever, is known as a product of mixed origin. That is not a good place to be when you put something on the shelf. That, too, needs to be resolved. The Irish Government are particularly concerned about that too, because it has implications for their businesses in the South of Ireland. They would like to see it resolved at an EU level, but to date it has not been resolved.

In summary, the issues that existed on 1 January still exist. That is perhaps where farmers get extremely frustrated. Their expectations were probably too high in that they thought there would be common sense, discussion and some level of compromise. I hope we can move to that point, but I will go back to that comment from the chief vet earlier in the year and say that it did not give us much comfort. Basically, as far as he was concerned, the idea was, "Tell your farmers there won't be any flexibilities". I hope that there will be flexibilities, because the things that do not work need to be fixed.

I will hand over to James. Thank you, Chair.

The Chairperson (Dr Aiken): OK, thanks, David.

Mr James McCluggage (Ulster Farmers' Union): Thanks, Chair, and everyone for inviting us today.

I will focus on the key general principles that the Ulster Farmers' Union is looking for in Northern Ireland. Those are stability, certainty, simplification and costs. I was listening in to the Road Haulage Association (RHA) earlier. I will focus on a few points that were raised and parts of some of those questions.

The issue of trusted trader came up. We need to look at certifying our arable supply chain, so we should look at green channel ports that are based on low-risk goods entering Northern Ireland. We need, if possible, to encompass a group of goods and traders throughout the agri-food supply chain.

Mr McGuigan mentioned a veterinary agreement, so I will cover that now. An agreement could remove up to 80% of the checks and documentation that would otherwise be needed. That would help to support the agri-food sector, including farming, and keep costs down. We realise that there are divergent opinions on the precise contents of such an agreement, but even a time-limited agreement would assist in the short and medium term. It would certainly minimise friction in conducting trade. The Swiss-style approach is one way of doing it. It is not the only way, but it would be helpful if the Government and the EU would recognise the unique starting point between both parties, keep friction as minimal as possible and negotiate advanced equivalence mechanisms that allow trade to flow as freely and with as few administrative burdens as possible.

The phrase "at risk" was used as well. That situation has now become a barrier to trade, and it had put some businesses in an unsustainable position. The definition of "at risk" is far too wide. If we look at the arable sector, for instance, we see that businesses in the arable supply chain are starting to report difficulties in sending GB-grown grain to Northern Ireland for further processing, whether that be for milling or animal feed. That falls into the "at risk" category and requires significant customs requirements and paperwork. It could lead to businesses moving away from Northern Ireland processing or using GB grain to supply the market as well to a risk of shortfall in finished product, such as flour or animal feed in Northern Ireland. We need the UK Government to find long-term solutions to that. The current waiver scheme is probably insufficient for the volumes of grain that are being moved, and there are state aid limitations there as well for those businesses that are involved in primary agriculture. There are also issues for people claiming duty back.

The rules of origin continue to be an area of confusion. We asked for clarity on them and for a simpler approach that is easily understood and can be delivered to those from the very largest traders to the smallest traders alike at producer level. We also have issues with machinery parts and field machinery. Farmers in GB and Northern Ireland are experiencing issues in moving second-hand machinery between GB and NI. As David Brown mentioned, machines have to be free of soil and other potential contaminants in order to come into Northern Ireland. While there may be a temporary easement that allows for washed machinery, a longer-term solution has to be found. Farmers are reporting delays for up to seven days for machinery parts that are delivered via delivery schemes. That is not good when farmers need machinery, especially at harvest time and silage time. We urge the UK Government and the EU to work proactively on the matter in order to seek some sort of permanent solution that can suit farmers.

Mr Brown: I am sorry, Chair, there is one thing I omitted when I was talking about plant protection products and animal health. It is to do with seeds, which pertain to this time of year in particular. I was reminded of it when James was speaking about cereals. We bring cereal seeds in from GB, and again this year, the testing and labelling requirements for those seeds have created a severe limitation on the numbers, types and varieties our farmers will have available to them. Those farmers are going out to sow their barley, wheat or rape or whatever it is. They had full access to the whole range of seed types that were normally available in GB. That is no longer the case, and it is limiting the choice of varieties while increasing the cost to those Northern Ireland growers.

The Chairperson (Dr Aiken): Why is it limiting the varieties? Is that just because the EU is not recognising the certification? What is the reason for that?

Mr Brown: They have to go through a process of being certified, which takes quite a period of time. Normally, that certification was accepted and recognised when GB was not a third country. Under the auspices of GB being a third country, it basically means that anything that comes into Northern Ireland has to go through that regulatory testing, checking and labelling. Fundamentally, we cannot do that for every variety we used to have. We will try to do it for a number of varieties. The limiting factor is the laboratories that do that testing and labelling. It all has to be done in order to accredit that seed, because we do not want to bring diseases — that was always the case — into our growers as well. The laboratory testing and requirements have limited the variety of seeds that will be available now for planting.

The Chairperson (Dr Aiken): OK, thanks, David. Team, before we go to questions, I have allowed a bit of latitude beforehand so that everybody can get their 10-second sound bite or party political broadcast to put up on social media. However, can we concentrate on asking questions on the specifics for this sector?

Mr O'Toole: Thank you, Chair. I will endeavour to do that. Thank you, David and James, for your presentation. I appreciate that the past few years have been a stressful and uncertain time for farmers. Well done to your organisation for representing your members' interests and helping to guide them through it.

I have a few, I guess, underlying questions. You make the point in your briefing — we strongly agree — that a sanitary and phytosanitary (SPS) agreement is critical to a lot of things. I will start with a basic point, David. I think you are Fermanagh-based. I wish there were a complete, Swiss-style UK-EU alignment, but would it be possible to have, as it were, an SPS border between Fermanagh and Cavan for the checks that are required between the EU and a third country? Would that be advisable?

Mr Brown: Matthew, I recall taking Karen Bradley, back in her time as Secretary of State, to a dairy farm on the border that supplied milk across the border. Some of the suggestions about how that might be facilitated or made possible were, I have to say, acceptable neither to the farmer nor to me as a representative of the Ulster Farmers' Union.

The difficulty with anything needing checks — the haulage guys talked about this — is the just-in-time supply process. It could not apply more to fresh produce, including milk, which is collected daily. We went through discussions on the potential for a Brexit that would mean, basically, that all milk haulage lorries and the milk going onto them would have to be checked at a point; in other words, the haulage firm would have to pull in its lorry and get the paperwork done. It would have been a regulatory nightmare. We have not gone into the detail of that, because the haulage guys covered it well enough, and I do not need to go back over the ground. However, to use milk as an example, our unfettered access to GB is not unfettered, because of the paperwork and documentation. On an Irish border, it would be equally difficult if not impossible.

I am certainly not advocating SPS checks: SPS checks between GB and Northern Ireland have turned out to be a complete and utter nightmare. Some 2,800 checks are said to be done at the port by our DAERA veterinary service, which has struggled to deliver them. There is talk of about 15,000 checks, which is equivalent to 20% of the checks in the whole of the EU, if we did not have an extension of the grace periods. It is just unmanageable. The frustration is that we have kicked the problem down the road with grace periods, but they are not a solution.

Mr O'Toole: OK. Thank you. That is really helpful, David. Contrary to what others have said, there definitely are issues that need to be streamlined and sorted for movement of goods from GB to NI under the protocol. One thing that Northern Irish agri-producers have, theoretically, is access: unlike food produced in GB, Northern Ireland food can get into the EU market. Are any of your members availing themselves of that, in the sense that a Comber spud can get seamlessly onto a French supermarket shelf? I do not know whether many French people buy Comber spuds, but, if they wanted to, could they? Spuds grown in Cambridgeshire cannot get there. Are farmers and producers noticing that? Is it useful?

Mr Brown: Matthew, I will take a step back and say that that is normal; it is what we always had. You mentioned the south of England. I will make the comparison with counterparts in Kent: they are having a nightmare getting their produce across. We all warned you about the problems and difficulties that we have. However, we have always been able to get produce across the Irish border and into the rest of the EU. Therefore, at farmer level, we are not seeing the same stress with getting the produce away. I used the example of milk. It is the haulage companies and processing business that are dealing with the documentation and paperwork. To be fair, at farmer level, we have been, in some ways, shielded from all of that.

Mr O'Toole: Finally, what is the picture with regard to EU labour on farms here, particularly, but not exclusively, in the arable sector? Proportionately, we do not have as much of an arable sector as, for example, Lincolnshire, but are your members noticing the impact of EU labour shortages?

Mr McCluggage: Do you want me to come in on that?

Mr Brown: Go ahead, James.

Mr McCluggage: We have been increasingly worried about that over the past month. We have written to all Northern Ireland MPs, the AERA Minister, the Economy Minister, and the Secretary of State. Our president and our chief executive are meeting Priti Patel in London today on that issue.

Our main concern is about hold-ups on the processing side. This morning, I was in a meeting held by DAERA, and there are sectors where they are having issues. That might be on the processing side, but that will affect the primary producer, because, if they are limited in the amount of kill that they can do in their factory, it means that they cannot take the full kill of that farmer. That leads to issues about whether farmers have space etc on their farms and cash-flow issues, because they are used to getting a certain amount of money coming in to pay the bank back.

It is across every sector: arable, horticulture, red meat and the pig sector. There are reports on the dairy sector as well. It affects the horticulture sector at grassroots level, but the other sectors have issues on the processing side that have a knock-on effect on the farmer.

Mr K Buchanan: Thank you, James and David, for that information. I have one general open question on the Command Paper. What are your thoughts on the Command Paper, and how far should it go?

Mr Brown: I will make it simple. If what was in the Command Paper was delivered, it would deliver solutions specific to agriculture. As I said at the outset, the difficulty is that we have had warm words — in Fermanagh, we call it "tea and sympathy" — but, in reality, we have not had action. Fundamentally, the farmers who have been ringing you, me or the president in the past number of weeks about the sheep sales in England can scarcely believe that they are in the same position a year on.

James, do you want to comment on the specifics in the Command Paper? In reality, I do not know when Lord Frost or Westminster plan to deliver some of that, but, from our perspective, some of those things need moved on.

Mr McCluggage: I will cover three issues. First, there are the live animals. It seems that their objectives for live animals are pretty clear. They are, basically, to take trade back to pre-Brexit requirements. We want more information on that. Secondly, David, our deputy president, mentioned scrapie, issues of retagging and what that means. Hopefully, it will sort that out, but a wee bit more information is needed on that. There are plants as well. What is realistic for plants? Can we build on a farmer/plant passport regime and add in other mitigations? You also have ancillary issues, such as machinery with soil and mixed pallet loads etc and any mitigations on that. It is a good start, but we need a wee bit more information on it.

Mr K Buchanan: I have one final question: where will the agriculture industry be in 12 months' time if the things that you have mentioned are not implemented?

Mr Brown: I will give one example, that of the pool of genetics, and give James time to think, Keith. Northern Ireland is a small place, with 24,500 farms. Many of them are very small: fewer than half are full-time farms. In truth, we punch well above our weight in the marketplace, particularly with pedigree animals. You see that when you look at the results from the Stirling bull sales or, indeed, ram sales in recent weeks. Some of the prices and the headlines in the farming press have focused on Northern Ireland, yet now we hear about the problems faced by breeders. Recently, I had a phone call from a breeder of Charolais cattle who was regularly over at the sales in the autumn, who told me, "I can't risk going over there, David".

There are two problems. First, the business people who are farmers across there know fine well that you are coming there with an animal and are not going to leave it on the shelf. It is for sale, so you cannot hold out on the price. Secondly, an awful lot of the top bulls and rams from Northern Ireland end up going to sales in GB, and that is no longer the case because of the constraints that have been placed on that sector of the industry. Indeed, in the past, we have had that into ROI, and we still have that. If we concentrate the pool of genetics in Northern Ireland and do not have the movement of animals from GB into Northern Ireland and vice versa, although it will not happen in 12 months, it will, over time, have a detrimental impact on our farmers' and breeders' ability to give the best genetics to the livestock guys like me who do not breed pedigrees but are dependent on others who do. James, do you want to add to that?

Mr McCluggage: Yes, a similar issue is seed availability, which the deputy president covered earlier. If you are limited in the amount of seed or the varieties of seed that you can plant, that is not a good thing. You want to have as wide a variety as possible. You have this fear then that suppliers and breeders will pull out of the Northern Ireland market because we are simply too much hassle to supply, and that could reduce the supply even more.

On the horticulture end, the deputy president mentioned the usage limit on Teppeki and the divergence between the EU and GB. You have a scenario where a plant protection product is not authorised for beetroots, carrots or parsnips, and we have an issue of us growing them in Northern Ireland, basically putting our growers out of the market where they need to look at other vegetables to grow. The issue is divergence — I cannot overstate that. The deputy president covered divergence in the pedigree sector and the genomic issue. I do not know how you would calculate it, but it would be scary to put a figure on it. In Northern Ireland, we pride ourselves on the high genetics and how good our quality of stock is, and we have basically put a handbrake on that.

Mr K Buchanan: I have one final question, gentlemen. I do not know whether you have asked your 24,500 farmers if the Northern Ireland protocol was of benefit to them or whether it was a positive or a negative, but, if you were to do so, what would the response be?

Mr Brown: Unfortunately, as is in all aspects of life, we tend to focus on the negative. At a farming level, with the protocol it is probably the negatives that are to the fore. If I go to any of our committees in the different sectors, they will all name off the top of their head the things that they see as negatives because they have stopped them doing this or doing that.

On the other side of that, in answer to Matthew's question earlier, because we are continuing to trade with the EU or ROI in the same manner as we did, they do not see that as a positive, if you understand where I am coming from. It was what we always did. The negatives are much more evident and are what we are challenged on and what are raised with us as we are asked, "Are you not going to get this sorted out?".

At the highest possible level, our president had the opportunity earlier in the year to talk to Šefcovic and Michel Barnier and people like that. If I wanted to be optimistic, the one positive thing that I would say is that, in recent EU responses to, for example, the UK extending the grace periods, there has not been that angst or volatility, and maybe that is to create space. I hope that it is, but, in truth, I wonder how much longer it can go on, because, ultimately, the issues that we face are very real. That guy who was growing the carrots for example, who initially raised with us the issue of the spray, made the point that, without the use of that plant protection product, aphids would destroy the crop. To plant a carrot crop costs thousands and thousands of pounds per acre. In reality, it is a massive risk, and he said, "I will not take that risk if these things are not available to me", so we will not grow those carrots, and we move towards importing more of that stuff.

In answer to your question, if you ask the farmers, they will say, unfortunately, that they see the negatives and probably have not appreciated the fact that they, unlike their GB counterparts, are still able to trade.

Mr K Buchanan: Thank you, gentlemen.

Ms Dolan: Thank you, David and James. Before I ask my question, I should declare that my father is a small farmer. I have one question. Will you outline how replacement CAP and other EU support funding will work?

Mr Brown: Going back to the last Westminster election, the indication from Boris Johnson's new Government — it was in their manifesto — was that they would continue to provide the same pot of money for the devolved regions. You are probably aware that there are discussions ongoing about how that money will be distributed. Substantial change will come from the move made in England. The current Agriculture Minister is working on what future arrangements will be in Northern Ireland.

The pot of money is only guaranteed until 2024, Jemma. Beyond that, there is no certainty. Fundamentally, the indication from DEFRA is that money will still come. It will move towards environmental measures and providing benefits for wider society and public good — those are probably the favoured words — so there will still be a level of funding, but, as a Fermanagh farmer — Keith, I do not know what your dad keeps — keeping suckler cows and beef cattle down here, I expect the benefits for productive agriculture to be on a reducing scale.

Mr McCluggage: I will come in there. We will not see any significant change in agricultural policy, as David says, until 2024. Things could be trialled in 2022-23, but there will be no significant change until 2024. Discussions in DAERA have started on what future agricultural policy will look like, which UFU is part of, along with the Northern Ireland Agricultural Producers Association (NIAPA), the Dairy Council, the Northern Ireland Meat Exporters Association (NIMEA), the Northern Ireland Food and Drink Association (NIFDA), and Northern Ireland Environment Link. Work streams are looking, at a very high level, at agri-environment schemes, capital support, generational renewal, supply chain and coupled support. We know — just to confirm it — that, under article 10(2) of the Northern Ireland protocol, the maximum level of agriculture support that we can get is £382·2 million. We

[Inaudible owing to poor sound quality]

a minimum percentage of that is to be compliant with the World Trade Organization (WTO) green box. Basically, some 17% of that, which equates to about £50 million of that, could be put into something like coupled support, etc. That is all under article 10(2) of the protocol.

The Chairperson (Dr Aiken): There you have it, Jemma.

Ms Dolan: That is the story. Thank you.

Mr McHugh: Tá fáilte romhaibh uilig. Gabhaim buíochas libh as bhur ráiteas. You are welcome here, and thank you in particular for your statements. I want to go back to the question of whether the protocol is a mechanism for resolving difficulties. There are difficulties there, and everyone can identify what difficulties exist at present as a result of Brexit.

I come back to that question because, a couple of years ago, I visited LacPatrick — formerly Leckpatrick — Dairies in the village of Artigarvan, where there was a major investment in the end product. They produced milk, exported it to the Republic of Ireland, put it through a process, brought it back to the North of Ireland and then exported the dried milk product throughout the world.

That is why I appreciate your comment when asked whether the protocol is a good thing or a bad. People are inclined to identify the negatives rather than the positives. However, I asked the chief executive how they were affected by Brexit rather than the protocol per se. He expressed the view that they were quite capable of working round it or through it. How typical is that of the experience of other producers in the agriculture industry, given the different kinds of production? They involve not just livestock but other products too. They have dealt effectively with the immediate problems; whereas additional difficulties can only be resolved through one of two ways: the protocol or by the British Government and European Union addressing the issues directly.

What are your opinions on that?

Mr Brown: I will come in first and give James a moment. In all the processing businesses, regardless of the sector, there is a degree of resilience. They are like the farmers. Their biggest difficulty was the extremely short notice. That probably reflects what the haulage guys said earlier, although I did not hear all their presentation. In truth, those companies, including the one in Artigarvan, have found a mechanism for working through the documentation and paperwork over the past months.

I do not want, for one minute, to underestimate the additional cost that that has incurred for businesses in filling in documentation, SPS checks, and lorries having to wait to get sanitary and phytosanitary checks. In that respect, there is a cost. As primary producers and farmers, we know that, for a lot of the produce that we sell, there is a world price. Milk is an example,

[Inaudible]

produce heading into Europe or wherever. We are not going to get more for it because there is more cost. Unfortunately, that cost will go in only one direction. Brexit, the documentation, customs checking and all the rest of it have brought about that cost, yes, but it inevitably is passed back down the line. That is the fundamental difficulty that we have as an agriculture industry: the cost of all this is borne at grassroots level by the farmers on the ground.

James, do you want to add anything?

Mr McCluggage: Yes. When the profits are recorded by the companies, it will be interesting to see whether they have borne the cost themselves or whether it has come off the litre of milk or the price per kilo of beef or lamb etc that they have paid the farmer.

That will be the interesting one. It will more likely be the latter, coming off the price per litre of milk and per kilo of beef and lamb.

Mr McHugh: Finally, do you feel that the agriculture industry is a net beneficiary as a result of remaining in the single market?

Mr Brown: At the very outset, when Brexit was being discussed, we made absolutely clear our desire to stay and to be able to export, but that was to export both east-west and North/South, if we want to take the European side. In truth, within the island of Ireland, we have a very integrated agriculture industry. I have cited the dairy sector a few times, and I will not go over it again. Equally, there are other parts, but we do not want to lose sight of the fact that the vast majority of produce in Northern Ireland — over 50% of it — goes across to GB. In some sectors, such as beef, that could be between 80% and 90%. We have heard during the discussion on climate change about the fact that Northern Ireland is effectively the breadbasket that is feeding quite a large part of the population in GB. That is true of all of Ireland, because the Southern Irish supply the GB market as well. What is described as "unfettered access" to the GB market I would not necessarily recognise as being entirely unfettered. You have just talked to the haulage guys and the people who have to deal with the documentation, and there is a cost to all of that, as I have said.

I have to recognise the fact that, in some ways, the agriculture industry has specific issues, and I named half a dozen of them at the outset of our presentation. There are others, and, unfortunately, as the months pass, we discover new ones. The expectation was that each one of those issues would be taken one by one. The sheep one was there. We knew that in December, so before 1 January. There was an expectation and a hope that those things could be, and would be, discussed and resolved. That has not happened, but, ultimately, being able to trade into the single market is vital. It is, however, also vital that we do not have hindrances in our working relationships, because, as has been mentioned, we get a lot of the supplies of machinery, parts and such things from GB, and farms operate, as the haulage guys said, on the basis of just-in-time deliveries. My son-in-law is the store manager of a machinery business, and if a part were needed for a machine, generally speaking, in the past, the business would be fit to get that within 24 hours. In other words, if it were ordered before noon today, he would have it tomorrow morning. Those are things that farmers have grown not just to expect but to need.

Mr McHugh: Go raibh maith agat. We are still able to export west to east no problem. The only difference now is that we have to eat home-grown sausages as opposed to sausages coming from east to west. That is a boost to producers here in Ireland.

Mr Brown: It is ironic that the sausages get the headlines while the other issues that I listed never get mentioned, but that is where we are at.

Mr McHugh: Go raibh maith agaibh. Thank you once again.

Mr Allister: Thank you, gentlemen. The supply issues of which you speak, which, of course, are core to the operation of any business, arise from the absurdity that, under the protocol, our main market is treated as a third country. If that were not so, you would not have those supply problems, would you?

Mr Brown: No, we would not.

Mr Allister: There has been a belligerent declaration by the EU chief vet that there will be no flexibilities, which is another version of "rigorous implementation". In the context of there being no flexibilities, what are the differences, if any, of substance between the standards applying to food in the United Kingdom and the standards applied by the EU?

Mr Brown: The first thing to point out, Jim, is that, on 1 January, there was absolutely no difference, and I would say that, in the vast majority of those areas, there is still no difference in the standards eight or nine months later. Of course, we hear discussion in GB about particular aspects that will, over time, diverge. They have not diverged yet. Fundamentally, what is going to apply in GB is its obvious desire to resume trading, or at least to continue to trade, with the EU. If the EU has standards that GB is going to have to apply at farm level, they are no different from the standards that we in Northern Ireland have had and will continue to have.

Mr Allister: What we are suffering is the consequence of an ideological purism from the EU in circumstances in which, practically, there is no detriment to the single market to protect: is that not right?

Mr Brown: I cannot put a percentage on it. The point was made earlier by some of the haulage folk that 75% of the stuff coming into Northern Ireland remains in Northern Ireland and that 95% of it should never have needed checks at any point, because of the standard of what we are bringing in. If it is going to go on to ROI, the EU is stipulating that it needs to be checked. The reality, however, is that we are checking stuff that is being consumed and used here in Northern Ireland on a whim. At the end of the day, it is a political decision.

Mr Allister: Of course it is. We are checking stuff that meets exactly the same standards as the area that we are checking it for, so it really is an absurdity. You heard the RHA people talk about the chicken coming in from, I think, Thailand through Rotterdam, through the island of Ireland and into GB, all unfettered, because it was already checked at Rotterdam, yet if that chicken, having been processed, comes back to be sold in Ballymena, it has to be checked.

Mr Brown: Yes. I could give you countless examples.

Mr Allister: I am sure that you could.

Mr Brown: I think of one. Soft cheeses sent by a dairy company in France across to GB could no longer come to Northern Ireland. Despite the fact that we had just left the EU, the company did not, because of the small market in Northern Ireland, have the logistics in place to send the cheeses directly from France, so it sent them through its distribution centre in GB, but they could then no longer come into Northern Ireland. There are countless examples like that one.

Mr Allister: You talked to us about blackface sheep, the absurdity of the tagging etc. I want to ask you about the compounds for our feedstuffs and our fertiliser supplies. From where do those compounds primarily come?

Mr Brown: I will hand over to James in a minute rather than do all the talking, because he is as well informed as I am. A lot of the compound feed that we bring in comes from outside the EU. James, do you want to comment on that?

Mr McCluggage: The compound feed comes from a variety of places. As I mentioned earlier, there are issues when it comes from GB. There is now extra bureaucracy and paperwork, especially for the milling, for feed coming into Northern Ireland, and that does put suppliers off. Where that happens, you may see a distribution of trade now.

Mr Allister: A diversion of trade?

Mr Brown: Yes.

Mr Allister: If you do not see a diversion of trade, what is going to be the impact on feedstuff prices?

Mr McCluggage: We are seeing that at the moment, I suppose. David, do you agree?

Mr Brown: Yes.

Mr Allister: Tell us a little bit about the impact on prices of the bureaucratic burden being imposed as a consequence of that no-flexibility attitude.

Mr McCluggage: How much of it can be attributed to the protocol? There are labour issues etc in factories, and those have caused the significant cost. Last week, there was another increase, of £15 a ton. I would need to do a quick calculation in my head of what the percentage increase has been on this time last year. The price of grain or meal concentrate that comes on-farm is now a significant input cost for farms. It is needed on a lot of farms in Northern Ireland, and the price of feed is putting serious financial pressure on farms here at the moment. There is no question of that.

Mr Allister: If the compound suppliers in GB say that it is not worth the hassle and decide to sell to where it is easier, where would that leave us with our feedstuffs?

Mr Brown: I get you. I see that James is smiling at me. It goes back to what the normal, traditional supply-chain issues had been and, in particular, to the grains, of whatever variety, that come from the GB marketplace or from other parts of the world. In reality, all of that has been distorted to an extent. I agree with James that it is hard to quantify how much of it is specific to the protocol. A lot of those prices are world prices. Fundamentally, if you get a good harvest in another part of the world, the price drops. If you get a poor harvest, it goes up. It is difficult to determine exactly how much of it you can put down to the protocol.

In truth, again, the haulage guys are pretty well placed to indicate the level of bureaucracy that affects them now for anything at all that they bring in. It is not just the haulage guys. Online companies and all the rest are affected. Anybody who is sending anything from GB to Northern Ireland knows that there is an associated cost. To be honest, Jim, I could not quantify how much of that cost is specific to the SPS checks, as opposed to world prices.

Mr Allister: My final point is this: we are in a situation in which, so long as the protocol pertains, the rules of the game can be changed by the EU on a whim so that we, without any input or ability to change anything, are subject to EU governance and legislation on all those matters. Just as we recently had the nonsense about the pesticide for carrots, so, tomorrow, we could have some other madness affecting us that is beyond our control, because we have surrendered sovereignty and control to foreign governance. Is that not right?

Mr McCluggage: May I come in on that one, David? The big thing that we have to adhere to now in Northern Ireland is the EU animal health law. There are concerns about what we will have to apply to and what farmers will have to apply to under that law. As of April of this year, we have been under the EU animal health law, and, unfortunately, we have no say on how that affects us.

Mr Brown: An example of that, which is specific to that animal health law, is the pre-movement TB testing. It will have a cost burden for farmers, because DAERA has indicated clearly that, if it is to apply that, it will not cover the cost.

You are quite right. That Teppeki spray arrived on our desks at the end of a week, and we were then scrambling at the beginning of the next week to see what the solution might be. In many of these things, the reality is that there is no solution. There is no way in which we can say, "What about using that?" or "What about importing this?" and do something completely different that would solve it. Fundamentally, all those things either create difficulties for the ability to grow the crop, raise the animal or whatever, while, on the other side, the cost of doing so is increased. In most instances, it is the increase in cost that has been evident from the outset: from 1 January. From a UFU perspective, we lobbied to see whether a solution to that increase in cost could be found, with the sheep situation being an example. No solution, however, has been brought forward. Although we have good intentions in Command Papers and from words spoken, we have not had action.

Mr Allister: If one side is saying belligerently that there is no flexibility, that does not give you much hope, does it?

Mr Brown: Look, that was earlier in the year. There was a pretty adverse reaction to a unilateral decision that the UK took in the early part of this year. Perhaps, with the extension of grace periods and so on, that reaction has been a little muted more recently, but, as I said earlier, extending grace periods is not a solution, and a solution is what we need.

Mr Allister: I agree with you there.

[Pause.]

Mr McGuigan: Chair, it always takes a few seconds for me to unmute myself after you call me. [Laughter.]

Thank you, James and David. I appreciate your coming along. The information that you have passed to us has been interesting and useful. As Jemma did, so should I declare that I have family members who are farmers.

I represent North Antrim. The first issue that you raised was that of blackface sheep. That issue is prevalent in the north Antrim hill-farming community. In fact, a couple of constituents contacted me recently about it. It is disappointing that there has not been some movement on the issue as we move towards October, because people will be wanting to import ewes from Scotland for breeding season. I am right in saying, David and James, that you were able to attend a meeting with Maroš Šefcovic when he was here. I assume that that issue was raised or that you are pushing hard for. Do you get a sense, within the mechanisms of the protocol, that your voice is being heard and that there can, and will, be some movement on issues such as blackface sheep?

Mr Brown: I was probably more positive and hopeful about that in January. The fact that the situation has not been resolved, some eight or nine months later, has led me to a level of despair. You are right: this is having a direct and severe impact on what those farmers whom you represent, and whom other parties also represent, have done for many years as part of their business. Farmers buy replacement sheep. Having gone through the debacle that they experienced last autumn, they will not be buying them this autumn. Last autumn, they had an expectation that they would be able to bring them over here in January or February, but they were not. Some of those sheep were sent for slaughter, which is regrettable, because they were good breeding-quality sheep, but other farmers held on in the hope that the situation would be resolved.

The engagement that we have had has probably not come about through the mechanisms of the protocol, but through Copa-Cogeca, the EU body in which all agriculture communities and representatives — presidents and deputy presidents — have a voice. Northern Ireland has been allowed by the EU to remain part of that. Through that mechanism, our president, Victor Chestnutt, has had the opportunity to speak to Michel Barnier and those folk, albeit on Zoom, owing to COVID, as he has had to speak to Maroš Šefcovic in meetings when he has come across to here. I was not there, but I am sure that Victor raised the issue again at the most recent meeting with Šefcovic. In reality, we were raising the issue from the first week of January. We knew in December that it was going to be an issue, and, unfortunately, it still is.

Mr McGuigan: The opportunities for exports were raised earlier, and we have covered some of the issues and problems. Potential wins and more opportunities should be explored. How does the UFU view the potential for wins and more opportunities in the agri-food sector?

Mr Brown: I will let James come in on that in a moment. Ironically, the positives that we have heard from UFU members are coming not from those in Northern Ireland who are exporting but from those who have replaced the people who were sending stuff into Northern Ireland. Some of our artisan food producers, for example, have sought out and found opportunity in Northern Ireland to supply locally, where that food was perhaps previously being sourced from GB or elsewhere. The opportunities for export are more difficult to tie down at this stage. The real concern is that Westminster's movement towards trade deals across the rest of the world is more likely to be a threat to us than an opportunity. At the same time, farmers have always looked for, sought out and created opportunities. The processing businesses that we supply to are out there and seeking those markets. James, I am not confident about identifying any additional export opportunities. As I said, the opportunities are more to do with supplying to restaurants and businesses here in Northern Ireland.

Mr McCluggage: The opportunities are more domestic. Take trade deals that have been done. We are not even on a listing to be able to supply red meat to Australia as part of that trade deal, because of old BSE cases. Our red meat sector therefore does not have an opportunity there. Being able to cater for the domestic market is the main opportunity at the moment.

Mr McGuigan: OK. I have one final point, Chair. David mentioned the export deal with Australia. How worried are the UFU and its members about the potential damage of that deal in particular, not to mention other deals that the British Government may force through, to our market and to opportunities for local farmers, given that we may see imports from Australia of beef and other products of a lower standard? How worried are you about the potential impact of trade deals on the agri-food sector here?

Mr Brown: We are very concerned about particular aspects of the trade deals and about the more recent discussion about removing the some of the climate-related elements from the Australia deal. There seems to be a headlong rush to get trade deals over the line. On the one hand, that may be to prove a point, and, in one respect, that is fair enough. On the other hand, however, given that the UK is somewhere in and around 60% self-sufficient in food production, the real risk and danger, if domestic production is not protected, is that that self-sufficiency will be reduced, and we will end up importing more produce from further and further afield in order to feed the nation. The cost base in Argentina, Brazil or wherever is completely different from that of our small family farms.

The other aspect concerns extending the grace periods. They were supposed to end in June, then it was to be October, and now it may be the middle of next year. Currently, if we, or GB for that matter, export to the EU, we have to fulfil all the requirements and checks, yet, on the other side of the equation, there is no restriction whatsoever on EU businesses selling produce into the UK. That, I believe, is fundamentally because the Westminster Government recognise that, if they were to put restrictions in place, they would have serious problems with empty shelves. James, do you want to add anything?

Mr McCluggage: To go back to it, as an organisation, we are extremely disappointed about how the UK Government handled the whole Australia trade deal. The Trade and Agriculture Commission made 22 recommendations at the time, and the Government did not respond to it right away. We are shocked at how much access the UK granted to Australia in the trade deal. Yes, tariff rate quotas are in there, but they take effect only after a surge in something coming in. At the moment, trade with Asia is good, so we are unlikely to see the immediate effect of the Australia trade deal, but, if trade with Asia were to drop, yes, we could see displacement by products coming into the UK. I mentioned that UK beef is not listed as a third-country import for Australia; rather, it is a one-way deal on red meat. We highlight food security as a major reason to be against that trade deal.

Mr Brown: And environmental issues, Philip.

Mr McCluggage: Yes. Other safeguards need to be put in.

Mr McGuigan: Absolutely. Thank you, gentlemen.

The Chairperson (Dr Aiken): OK. Thank you very much indeed, David and James, for your comprehensive evidence. I look forward to seeing both of you, hopefully, next Wednesday at the show. No doubt, you will be looking for me, and I will be looking for you, as we normally do.

Mr Brown: Thank you, Chair.

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