Official Report: Minutes of Evidence

The Chairperson (Mr Butler): I welcome the Northern Ireland Mushroom Growers Association (NIMGA) representatives, Mr John McArdle and Mr Martin McKee, who will brief the Committee and answer members' questions. Thank you, guys, for attending once again. The previous session went on a bit long, which has compressed our time a little, so apologies for that, but we have covered quite a bit of ground to date. Members may be interested, in particular, in the move by the Minister and what that means for you, and whether there have been more recent developments, pressures or issues that you want to bring to the attention of the Committee.

Mr John McArdle (Northern Ireland Mushroom Growers Association): Thank you for the invitation to appear before the Committee today.

The fruit and vegetables aid scheme is the only substantial means that the industry has of accessing support. It is worth up to £1·6 million to the mushroom sector. The removal or unmanaged adaptation of the scheme would further destabilise the industry. As a return on investment, the fruit and vegetables aid scheme is really good value for the Executive. For an investment of £1·6 million, it supports a farm gate of £41 million, plus a £25 million supply chain. Minister Muir has confirmed that the fruit and vegetables aid scheme in Northern Ireland will not close at the end of December 2025. NIMGA welcomes that confirmation and the Minister's commitment that DAERA will develop a new scheme in a co-design process with the sector. DEFRA has confirmed that the fruit and vegetables aid scheme will close to English producer organisations (POs) on 31 December 2025. In Scotland, First Minister John Swinney has confirmed the continuation of the fruit and vegetables aid scheme to ensure ongoing support for the sector.

As the Committee is aware, NIMGA has been calling for additional support for the sector more generally. Any proposal to reduce the existing level of support would be devastating for our industry, which is already under pressure due to a lack of access to workers. Any change to the fruit and vegetables aid scheme, which is the main source of support to the mushroom industry in Northern Ireland, should, at a minimum, protect — and, possibly, enhance — the existing scheme. There is potential to grow the industry and economic output, as 10% of all mushrooms and 50% of all organic mushrooms that are sold in the UK are grown here.

Our key ask on the fruit and vegetables aid scheme is contained in our response to the call for evidence, where we highlight the fact that clauses 1 and 5 are problematic. We ask for clause 1 to be amended n order to retain the 4·1% contribution to all eligible claimants as the baseline above which the Minister would exercise discretionary powers.

We ask that the proposal in clause 5 to repeal the scheme be removed, or replaced with a commitment to replacing it with at least the same level of support as was available under the fruit and vegetables aid scheme, with the new scheme having been designed in consultation with the mushroom sector or fruit and vegetables aid scheme beneficiaries. We recommend that the commencement date be immediately after the revocation of the existing scheme. We understand that clause 5 is a common enabling clause. As stated, we welcome the Minister's commitment to working with the sector to develop a future scheme. However, given the timescales involved, we remain concerned that the sector will be exposed if the transition to new arrangements cannot be completed in time, particularly due to factors beyond our control.

We appreciate that any secondary legislation using the powers to modify would require Assembly approval, given that it would be subject to affirmative resolution, following further scrutiny by the AERA Committee. Given that this is the only opportunity to amend the legislation, we ask the Committee to explore, in your discussions with the Bill Office, any or all changes to the language that could be made to deliver these outcomes: retention of, at least, the 4·1% contribution — the same level of support that is available under the fruit and vegetables aid scheme; a new scheme, designed in consultation with the mushroom sector, that starts immediately after revocation of the existing scheme; and transitional arrangements to ensure that there is no disruption to the support available.

We have set out suggestions for how the scheme could be enhanced in the future. The replacement scheme should be developed using a genuine co-design process, with principles agreed in advance to inform decision-making and ways of working. The ownership of capex items should sit with primary producers once they are purchased through the PO. There should be a seven-year option to allow for long-term planning and offer a level of security, especially with automation. There should be incentives for environment and R&D actions similar to the 80% offered by the EU scheme. Automation and robotics should be 80% funded. There should be greater flexibility and higher support levels for promotional activity. Given that it is a Westminster issue, we ask the Committee to work with the Minister to advocate for DEFRA's changing the recognition required to start a PO, including regarding the number of members and the value of marketed production (VMP).

Thank you for your time.

The Chairperson (Mr Butler): Thank you very much for your presentation. There may be a few questions from members. The Committee has moved into its examination and scrutiny of the legislation.

I want to reaffirm the importance of the mushroom sector to horticultural output. I know that there are some queries about the overall output figure that has been provided.

Mr McArdle: Yes. The recent statistics had mushrooms at £26 million. Mushrooms are, in fact, worth £41 million. Pro rata, we represent close to 50% of horticulture, whereas, beforehand, we were at 40%. The stats that are produced by DAERA are not accurate. The 4·1% contribution is vital to us. That is not money that is given to us for doing nothing. We have to improve our quality; our environmental and energy efficiency; and our productivity. Those are all ways in which we can improve our business. Horticulture is completely underfunded. The minimum contribution that we need to survive, and to try to compete with our Southern neighbours, is 4·1%. The rest of agriculture gets the equivalent of 10% through farm sustainability payments. There is £2·5 billion of farm gate, and £260 million is given out. We do not get any of that. The fruit and vegetables scheme is the only support that we have.

The Chairperson (Mr Butler): OK. Thank you for that. You covered some of this in your presentation, so, forgive me, but the Minister made an announcement a number of weeks ago about the extension of the scheme. We have already asked questions about the certainty of that, and what the impacts would be if there were a new scheme before the three-year period runs out. Other than taking clause 1 — the discretionary piece — which is where the real pressure comes from, out of the Bill completely, are there assurances that could be given to give you enough confidence to support the Bill?

Mr McArdle: Yes. We would like to see clause 1 amended so that the 4·1% contribution is guaranteed, rather than its becoming discretionary. Anything over and above a 4·1% contribution can be discretionary. There could be changes to the model on the number of growers. The process could be streamlined. I have heard talk about the red tape involved in the scheme.

We are happy enough for all that to be improved. The likes of ownership of capex items and the marketing of our products could be tinkered with to try to draw more members in to the producer organisations. The 4·1% is key for us.

The Chairperson (Mr Butler): For clarification, it is match funding.

Mr McArdle: It is match funding.

The Chairperson (Mr Butler): That has to be matched by the producer in order for them to avail themselves of it.

Mr McArdle: Yes.

The Chairperson (Mr Butler): Do members have any further questions for NIMGA?

Miss McIlveen: I have a couple of questions that relate primarily to clause 1. You presented us with proposed amendments in February. That predated the Minister's decision to extend the support. Are there any changes to those?

Mr McArdle: No, we would still like to have those amendments. There are a number of different reasons for that. We do not know what is next. A new Minister could come in with a completely different idea from that being proposed by the current Minister. We would like an assurance that that 4·1% will be there for all eligible items to help us meet all our targets when it comes to our environmental productivity etc. It is key to have that amount of money available to us. Like I said, we are underfunded. We get two and a half times less funding than the rest of the agriculture sector. The rest of the agriculture sector does not have to go through what we have to go through to get that funding. There is an awful lot of work involved, from our point of view, to try to get that funding. We are not entitled to any other entitlements. To make it discretionary, we see the need to improve the scheme. That was highlighted at one of the other Committees that I sat and watched one night on YouTube, because I had nothing else to do. The EU scheme is changing. The damage caused by the storm cost our industry half a million pounds; it cost me £80,000. The EU has put powers in its new scheme to allow the funding available for natural disasters to be increased. That is in the EU scheme and has just been brought in. That support, had it been in place here, would have been vital for us, because there is nothing out there to help us in the North.

Miss McIlveen: OK. When you were with us before, you outlined the issues with the schemes that are being proposed and said that there was nothing in those for you. Since your presentation, have you had any discussions with officials about what you, as a sector, need?

Mr McArdle: We are in discussions with Elaine McCrory and John Terrington from DAERA about the schemes going forward. Our concern about the schemes is the timeline. You cannot be a member of two producer organisations at the same time. Our members who are in an English PO at this time cannot switch to a Northern Ireland PO until 1 January 2026. We have to apply for an operational programme to get the funding. The application has to be in by mid-September this year, but you cannot put in an application until such a time as a producer organisation is set up. There are transitional problems with that element of it. The Department has said that the ball is in the POs' court. Representatives from the POs will be in after us, so they will talk more about that. Really and truly, the POs cannot do anything until they know what they are allowed to do. If we set up a new PO for mushroom growers in Northern Ireland on 1 January 2026, can we put in an operational programme for that? At this time, we cannot do that. If we leave a producer organisation early, will we be liable to pay back money to that producer organisation? We do not have the answer to that. They say that the ball is in our court, but we need guidance and assurance from them on what we need to do to get the ball rolling. Again, time is ticking. We are in April now, and this has to be done by September. It is not a lot of time in which to manoeuvre.

Miss McIlveen: Thank you. Perhaps, we could get some clarification on that.

The Chairperson (Mr Butler): I think so, yes.

Mr McAleer: Recently, the Irish Government announced a €19 million package, which is a scheme of investment aid for the development of the commercial horticulture sector. I know that there is a tier differential. What do you see as being the main planks of the pillars of support that they have in the South compared with what we have up here?

Mr McArdle: Obviously, they have their producer organisations and the fruit and veg aid scheme in the South, which allows for greater support when it comes to environmental issues, R&D and the likes of robotics. They get 80% on that. They also have a horticulture capital scheme, which is worth about €3 million out of that €19 million. It opens and closes at certain times every year. When the storm damage happened, they opened it again so that applicants could change their applications to cover some of the damage that was caused by the storms. That was from 40% up to 50% if you were a young grower or organic grower. I am an organic grower, so I would have been fit to avail myself of 50% of the costs of the damage. It is quite a jump.

Obviously, there are also the costs that are involved in the labour aspect of it. We have been in front of you on that issue previously. They have visas of up to five years, whereas we are restricted to six-month visas. Recently, we met Minister Muir and Minister Fleur Anderson on that issue. Again, we ask that you continue to lobby the Home Office on that element of it, because it is massive for us. It will cost us £8,000. Under the new rules that are coming in, we will have to pay workers' flights and visa costs. We will have to do that twice a year. Over a five-year period, that will cost us £80,000, whereas it is costing growers in the South £6,000.

Mr McAleer: There is a differential.

Mr McArdle: There is a huge differential there.

That having been said, there is demand for mushrooms from here. When it comes to food security, only 40% of mushrooms in the UK market are grown in the UK; 10% from here and 30% from the mainland. Then, 30% comes from Ireland and another 30% comes from Europe. Those are rough figures. There is an appetite for home-grown produce to be sold here. However, we found out that one of our members filled his final house last week. That is because we have been asking for assistance for two, three or four years and the only thing that we have got so far is the fruit and veg aid scheme that is already there, which the Minister will not take away from us. I am not even 100% sure whether he could take it away from us, given the fact that, unless that legislation comes through, it could carry on for next year anyway. We have had no help from any direction.

Mr Martin McKee (Northern Ireland Mushroom Growers Association): The 80% environmental grant is a massive thing in the South as well. We use a lot of coolers in the industry to keep the mushroom houses at a certain temperature. There are new, more efficient coolers on the market now. If you can prove that your new cooler will be more efficient than the one that you have in now, the South will give you an 80% grant. That goes for refrigeration, cooling, fans — is it 80% on photovoltaics (PVs) as well?

Mr McArdle: Yes.

Mr McKee: It is 80% on PVs and battery operated systems.

Mr McArdle: That is through the fruit and veg aid scheme. They also have the horticulture capital investment scheme. Earlier this week, we met our officials about the new scheme that will replace the farm business investment scheme. It is a competitive grant, as you know. We are competing with the likes of the dairy and beef industries. It will be environmental, but their environmental impact is a lot greater than ours. Our carbon footprint is just over 1 kg, whereas theirs is 20 kg and 30 kg. There is a huge variance there. When it comes to capital investments in agriculture, we are going to be away down the list, whereas, in the South, they have it specifically for horticulture. That is what goes towards growing horticulture.

Mr McAleer: Thank you, John.

The Chairperson (Mr Butler): Do members have any other questions at this point? No.

I hope that the session was useful to you. It was important to bring you back. Thank you for your time, thus far, in helping the Committee with its deliberations. We appreciate it, and we will be in touch over the next wee while. Thank you very much for your time, gentlemen.