Official Report: Minutes of Evidence

The Chairperson (Mr Butler): I welcome the following representatives to brief the Committee and answer questions from members: Ms Liz Kelly, general manager of the Mushroom Producer Organisation, Mr Andrew Mulligan, a member of Commercial Mushroom Growers UK, and Mr David Dallas, technical manager at Northway Mushrooms.

Thank you so much, and we apologise for running a bit behind. We appreciate your being here today. I open the floor to you.

Mr Andrew Mulligan (Commercial Mushroom Growers UK Ltd): Thank you. Chairperson and Committee members, we thank the Committee for inviting us back and giving us the opportunity to further discuss the Agriculture Bill. We would also like to thank the Minister and his Department for providing some clarity about the continuation of the fruit and vegetables aid scheme (FVAS) in Northern Ireland, and we welcome the extension of the scheme. We acknowledge that the Minister has recently been to visit a Northern Ireland mushroom farm and understands the complexities and challenges that our industry faces at this time.

We believe that a number of issues still need to be addressed in relation to the Agriculture Bill. On clause 1, we continue to be concerned about the term "discretionary". That term means that the future funding for horticulture will not be ring-fenced, which leaves the sector vulnerable. We propose an amendment to the Bill that ring-fences the funding, set at a baseline of 4·1% of value of marketed production (VMP), above which the Minister and his Department can exercise discretionary powers.

We are also concerned that clause 1 states that eligible claims would not be required to be funded. The fruit and vegetables scheme is an essential support mechanism for improving the economic and environmental sustainability of our members in Northern Ireland. It is the only support mechanism available for the sector, and that statement provides no security and suggests that funding could be withdrawn at any time. The Northern Ireland mushroom sector competes with the Republic of Ireland (ROI) for market share, and, given the level of support that ROI receives, the risk that that support mechanism could be suspended without notice is a major concern to us, and it could have a detrimental effect on the Northern Ireland mushroom sector.

In clause 5, the term "repeal or revoke" causes concern. We propose that the scheme could be repealed or revoked only once a suitable co-designed replacement scheme is in place for the industry, with the same baseline support that is available under the current fruit and vegetables scheme.

There are still some significant operational issues as to how Northern Ireland growers will be able to benefit from the continuation of the fruit and vegetables scheme in Northern Ireland due to the complexities of the current rules and regulations of the existing scheme and the timelines involved.

The extended scheme is open only to growers who are members of a producer organisation (PO) registered in Northern Ireland. Currently, there will be no PO registered in Northern Ireland as of 1 January 2026, as Northway Mushrooms Ltd is to cease trading at the end of 2025 due to ongoing financial issues. The only option available for Northern Ireland mushroom growers is to form a new PO that is registered in Northern Ireland, and that has its own limitations and complexities, as you heard from John in the previous session. Some of those relate to the fact that a grower cannot be a member of two POs at the same time. The majority of NI growers are currently members of English-registered POs. If growers who are currently part of an existing PO have to leave that PO and join the newly formed PO, they potentially forfeit all grant funding for 2025 and may have to refund grant funding from previous years under the existing rules. Time pressures to meet the required deadlines are also a problem, as you heard.

We are working with DAERA and the Rural Payments Agency (RPA) to seek guidance and clarification on a number of points. However, until we have clear instruction from the RPA, with which we have requested a meeting, it is difficult to move things forward. Any help that the AERA Committee could provide with that would, obviously, be greatly appreciated.

We ask the Committee to consider our concerns and proposals regarding clauses 1 and 5 of the Agriculture Bill and to support us in trying to resolve the obstacles that I have mentioned so that we can secure the future for our members.

The Chairperson (Mr Butler): Thank you very much. Forgive me if you have covered this in your briefing, but we are at the point at which we need to understand the technical nature of this and the impact that it is going to have on mushroom growers and the PO as it exists. For clarity, for me — I do not know where members are in this regard — the assessment is that the Minister has made a significant move in not closing the FVAS at the end of the year, as it had been planned. That has been pretty well welcomed and accepted. Your paper states that:

Is that due to the uncertainty around the FVAS? Or, are there other matters outside of that?

Mr David Dallas (Northway Mushrooms): No, it is not. As well as being a producer organisation, Northway Mushrooms has run a large substrates yard in Ballygawley. That has been a primary reason for the company hitting financial difficulties, being in administration and, most probably, ceasing trading at the end of this year. I stress that the producer organisation was a success and was in no way linked. Producer organisations are set up in such a way that they are linked to your trading company, and, unfortunately, if the trading company ceases, the producer organisation has to cease as well, because it is intimately linked to the trading company. Therefore, as is the case with English-registered POs, our growers would have to reapply as a new company and producer organisation. I am afraid that that is one of the complexities that exists. The producer organisation legislation is UK legislation: it is not Northern Ireland legislation. Unfortunately, one of the issues is that we cannot extract the PO from the trading company.

The Chairperson (Mr Butler): Have you been in communication with the Department about this specific matter? Was the Department aware of that in its deliberations? Had it any bearing on the extension of three years by the Minister to allow for the reapplication of a newly constituted business?

Mr Mulligan: I do not know. You would need to ask the Department.

Mr Dallas: The North has only a limited number. Yes, there are a certain number of Northern Ireland growers, but the majority are outside Northway Mushrooms. I do not know if it was a significant —.

The Chairperson (Mr Butler): Our previous presentation recognised that mushroom producing is a significant part of the business and value of our horticulture exports. We are very aware of that, and any nervousness in that would have our attention.

I will come back to you with a question, if that is OK, because I know that Declan and John have indicated that they wish to ask a question.

Mr McAleer: There are two issues. Andrew, you said in your presentation that forming a PO is complex and that Northway Mushrooms will cease at the end of 2025. I appreciate that this meeting is about the Agriculture Bill, but it would be remiss of me not to mention the fact that all of us got correspondence about ongoing environmental and odour issues in the Cabragh/Killeeshil area. What impact will it have on addressing that environmental issue if Northway ceases to exist after 2025?

Mr Dallas: The compost yard has been sold. It is a completely different company now: Sawgrass Substrates. Unfortunately, therefore, I cannot make any comment on that. It is no longer an issue with Northway Mushrooms.

Mr McAleer: Sorry, I appreciate that the briefing is about the Agriculture Bill, but it would be remiss not to mention Northway Mushrooms, because the issue was raised with the Committee.

Mr Dallas: Yes, I understand.

Mr McAleer: Will the new company be responsible?

Mr Dallas: Yes.

Mr McAleer: What are the complexities of starting a PO?

Mr Mulligan: The current scheme is an EU legacy scheme, which is made up of a set of rules. Those rules do not allow certain things to happen. As you heard, one of those things is that you cannot be a member of two POs at the one time. At the moment, we have two POs that are registered in England. If a member of an English-registered PO wanted to join a PO in Northern Ireland, they could not do that. If you leave a PO, you forfeit that year's money — 2025 — and there can be other penalties going back for a period of five years. Six or seven years ago, there was a precedence in Southern Ireland under the same EU rules. A PO was allowed to form, and all the donkey work was done, such as the applications and approvals, but it did not kick in until 1 January of the following year. If there is an appetite to do that, it could be done, but that is part of our problem.

Ms Liz Kelly (Mushroom Producer Organisation): Andrew is saying that, realistically, we have to wait for DAERA, DEFRA and the RPA to give us the go-ahead to allow some of our members to start a new PO, whilst still being in our POs in order to be able to avail themselves of the 2025 grant funding and to not have to refund previous years' grant funding on top of that.

The Chairperson (Mr Butler): What you have said about the workaround makes sense. Are you happy, Declan?

Mr McAleer: Thank you.

Mr Blair: I highlight the fact that more than half of this year is left to do that. We have to make that point. I am happy to take any feedback on the time frame that might be applicable.

Separately and for clarification, following Declan's question, although the company Northway no longer exists, the site is still operating, and production is probably not affected. I do not expect you to know the finite detail of that. However, there is every chance that the production and everything that happened there before is continuing and that there may be no impact on the overall production of mushrooms or the associated issues that have been flagged with the Committee. We can deal with those issues separately. Am I correct in saying that, even though a producer has ceased to exist, there is still production there?

Mr Dallas: Northway Mushrooms, as a company, is still in existence.

Mr Blair: Is somebody else doing it on the same site?

Mr Dallas: The company has been in administration since June last year, and there are various ongoing discussions. However, as part of the administration, the substrate yard facility was sold to recover payment.

Mr Blair: I am not concerned so much about the detail, because we all know that government policy cannot be based on the financial circumstances of any individual company. That would be completely improper, and nobody is suggesting otherwise. However, I want to be clear about this: there was mushroom production there before, and there is still mushroom production on that site. Is that factual?

Mr Dallas: Yes. That site produces mushroom substrate, which is supplied to various producers in Ireland and the UK. That is still in operation and supplying Northern Ireland's sector or growers with contracts in place.

Mr Blair: OK.

The Chairperson (Mr Butler): Are there any other questions from members? Are you happy enough? OK. You are getting off quite lightly.

Mr Mulligan: The conversation got sidetracked a little bit, but the important thing for us is the 4·1% that John spoke about. We do not want to lose that, and John explained why it needs to be ring-fenced. We are underfunded, and there is nothing else if we lose that basic support. It is important that we do not lose focus. We moved on to other issues, but that is the key reason why we are here today.

Mr McAleer: Patsy.

The Chairperson (Mr Butler): I am in charge, Patsy. Declan was in charge this morning. [Laughter.]

I am only joking. Go ahead, Patsy.

Mr McGlone: Apologies for being late. I had another place to be this morning.

We heard from the Department, and you have probably been watching all the toing and froing with the Department. It said that it has been in regular contact with mushroom producers to talk through the options. Is that the case? What is the outcome, to your mind, of those discussions, if they have taken place?

Mr Mulligan: We have been in active discussions with the Department for the past 12 to 18 months. A lot of it was largely around reviewing the scheme at the time. It moved to conversations about the Agriculture Bill and to the extension of the scheme. The last meeting that we had was to discuss some of the complexities around moving forward.

In the Department's defence, it needs some guidance from the RPA to agree how to do it. That has happened. The onus on us is to meet the RPA as well, which we have tried to do, but it is a slow burner. It is three weeks or so since that announcement came, and we are not a lot further on, but we have started the process.

Mr McGlone: You have put your finger on it there. Do you feel that anybody is listening?

Mr Mulligan: I do, but it is difficult. The Department needs guidance on its side as well. DEFRA in England has made a decision not to continue the scheme, so the RPA will need guidance from DEFRA, which will have to give guidance to DAERA, which will both have to give guidance to us. That is what we mean when we say that it is complex. It is not straightforward.

Mr McGlone: Did you get any information from the Department on the issue being discussed with DEFRA and whether there was any latitude or movement from DEFRA? Maybe you do not know.

Mr Mulligan: We did not get information on the RPA from DEFRA, but the RPA has had some initial discussions with DAERA, and it is planning to have more in the next week or two.

The Chairperson (Mr Butler): Thank you. I appreciate that. Everything that you have said will form part of the Committee's findings and deliberations on the legislation. Thank you for your time today. I apologise for keeping you late.