Official Report: Minutes of Evidence

The Chairperson (Mr Butler): I welcome the following representatives to the meeting and invite them to brief the Committee: Mr Daryl McLaughlin, chief executive of the Northern Ireland Meat Exporters Association (NIMEA); Mr George Mullan, managing director of APB Food Group; and Mr Neil Swann, site manager at Dunbia in Northern Ireland. Thank you very much for being here. You look to be an awfully long way away. I am not saying that the view has improved, but please feel free to brief the Committee. Thank you.

Mr Daryl McLaughlin (Northern Ireland Meat Exporters Association): Thank you, Chair. I will make some opening remarks. Thank you for the opportunity to brief the Committee, which is not something that we normally do. The two issues are sheep classification and price reporting. We were also asked to comment, if there was time, on wider issues. We are more than happy to do that and to take questions from members. I will pass to George and Neil in a second, but I had intended to lay out a wee bit of background about NIMEA. We can then go on to the subject matter and talk about some of the wider issues. After today's meeting, I will be happy to share with the Committee the briefing paper that I prepared for members. I am more than happy for the Clerk to share that with members.

I am not sure whether George or Neil wants to make any opening comments before we start, but, if you are happy enough —.

The Chairperson (Mr Butler): Yes, you crack on, if that is OK. That would be useful.

Mr McLaughlin: Grand. I will say a wee bit about us and provide some helpful context. NIMEA is the representative trade body for beef and lamb processors. Our sector directly employs about 5,500 staff, which is about a quarter of the total number employed in the food and drink sector. We support about 18,000 to 20,000 farmers in the supply chain. NIMEA members serve retail food service customers throughout the UK, the European Union and the rest of the world. Northern Ireland operations include primary process and deboning. They also include packing, and our members source the majority of raw materials for that in Northern Ireland but also have key sources of supply from GB and the European Union, predominantly Ireland.

The food and drink sector has, as you know, a turnover of about £7 billion in Northern Ireland, and the latest figure for the red meat sector, which was in 2023, was about £1·7 billion. We will probably get a revised set of figures shortly. It is clear that, given the direction of trade over the past couple of years, the £1·7 billion figure can only increase. The beef, sheep and dairy sectors combined account for just over 50% of the gross total turnover. However, it is important to note that the red meat processing sector is a low-margin, high-volume business.

The beef and sheep sector has the highest value added of all subsectors, at about £219·5 million, which is approximately 20% of the total. Great Britain remains the strongest destination for beef sales, followed by the EU and then the rest of the world. The sheep sector is slightly different. Northern Ireland sheep sales are about 50% to the UK/GB mainland and about 50% to the European Union. It is important to point out the context of the Northern Ireland aspect, given third-country imports to the UK from New Zealand and Australia.

Chair, those are my opening comments on behalf of NIMEA, touching a bit on trade. I am happy to talk a bit further about sheep carcass classification and price reporting. We are then more than happy to discuss other issues. Are you happy that I continue on that basis?

The Chairperson (Mr Butler): Yes, carry on, please.

Mr McLaughlin: Thank you. As I said at the start, we are more than happy to provide some initial feedback to the Committee and to provide a bit more detail, and I am sure that we will get into that in the discussion as well. We have responded to this legislation twice, in January 2022 and in June 2024. It is fair to say that we probably made similar comments on both occasions. We have had various discussions with DAERA officials about the policy and the policy development, and it is right to thank the officials for facilitating conversations with us and meetings on that.

At the outset, however, I should say that we do not agree with the mandatory approach. Northern Ireland has had a voluntary arrangement in place for many years. It is probably one of the only parts of the British Isles to have a simple process and a voluntary arrangement for dressing spec, classification and price reporting. Therefore, we feel that we have a system that is not broken, and we are more than happy for that current voluntary system to continue. The bottom line is that nothing is broken, so what are we trying to fix?

It is fair to say that the demand for this legislation was probably understandable to some degree in Great Britain because there are so many meat plants there and there is much verification on specifications. There has been a bit of a mishmash in GB, but that certainly has not been the case in Northern Ireland. As you will know, there are three large part-time processing plants in Northern Ireland, with a number of smaller sites doing some throughput with a small number of sheep. Given the pressure on the industry with regard to the cost of doing business, the cost of labour and the constraints on labour, we do not see this in any way as a priority.

Our concerns now are about divergence between the classification systems. We do not understand the rationale for the current situation. GB now has two specifications: its own one and the one that Northern Ireland is progressing with. Having two specifications will, obviously, lead to divergence.
Ireland does not have a mandatory classification nor price reporting, but it will follow suit similar to what Northern Ireland is doing. We believe that Northern Ireland will have a very different regulatory environment, and we must emphasise that to you.

In 2025, 231,726 sheep were exported to the Republic of Ireland for direct slaughter and 31,228 were sent for breeding production. There were 47,537 sent to GB for direct slaughter and 111,224 exported to GB for breeding production. That is a total of 421,715. There were 404,578 sheep slaughtered in Northern Ireland. You can see from those figures that Northern Ireland is now killing fewer than 50% of its sheep. NIMEA believes that further divergence will only lead to further negative and unhelpful challenges for Northern Ireland sheep processing plants, which can also affect the cattle processing side. We ask the Committee to note that concern. NIMEA believes that a voluntary approach to sheep carcass classification price reporting can be maintained and can deliver the same outcome, as it has been doing.

We felt that the aim of all of this was to have a single, standard regulation across the UK nations. However, our farmers and processors have clear visibility on whether the outcome that was desired has been achieved. It was our understanding from the consultation that the aim was to have a single, standard regulation. However, we now have three specifications — two are the same and one is different — in the United Kingdom, and Ireland has its own ability.

NIMEA believes that businesses must have the ability to vary dressing specifications to allow for processing efficiency and/or customer requirements. If the mandatory approach goes ahead, it is only fair to ask that all sheep processors will have to comply and that there should not be a throughput figure of 1,000 per week as an annual average. NIMEA has concerns about the new proposed dressing standard, which is the carcass presented without the head, the feet, the tail, the udder, the genitals, the liver and the pluck, and we believe that there are significant practical challenges in delivering that, particularly the tail aspect. Members have significant concerns about that, and, as I set out earlier, NIMEA strongly disagrees with the proposal being mandated.

As we said in our previous correspondence, this is not a simple task. It will require skilled operators, slow the line down, and add unnecessary additional costs. Customer expectations also need to be carefully considered: our members do not want to disrupt them, because they are paramount. Officials have noted that the tail can be removed post classification. However, we believe that, for the hygiene reasons outlined, it is not as simple as it is made out to be.

Sales of carcasses to EU member states are important for the Northern Ireland sheep sector. Not all sheep are completely deboned and sent to retail. Carcass sales remain an important part of trade, as do the relationships when it comes to sales, particularly to EU member states such as Germany, Italy, France and Belgium. The legislation is not mandated in all those member states, nor, as I said, is it mandated in the Republic of Ireland, so we believe that there would be a competitive disadvantage here as well. That should be fully considered.

Chair, those are my opening remarks on the overall strategic position. As I said, we are happy to take questions. Other panel members are more expert on some aspects than I am. Thank you very much.

The Chairperson (Mr Butler): Thank you. Are there any other points that you want to add, gentlemen, before members ask questions?

Mr Neil Swann (Dunbia): No, I have nothing to add.

Mr George Mullan (ABP Food Group): Nothing in particular. I am sure that whatever we need will come out in the Q&A. We can address it then.

The Chairperson (Mr Butler): No problem. The legislation has been presented to us as a way of improving alignment with the UK, which is the predominant export market for our red meat products. That is how it looks in the departmental papers. You are presenting it as the opposite of alignment. However, the Department is looking at it directly from the perspective of UK representation. Are you saying that that is not the case?

Mr Swann: I will comment briefly. Alignment was probably the expectation, but what has come out in the wash — the detail — is not aligned. GB has two specs. It has the EU-aligned specification, which it is running with, and its own GB spec. In Northern Ireland, we are not given an option —.

Mr Mullan: Neither of them is this spec. What you said about exports is not the case for sheep meat. More than 70% of our sheep meat is exported outside the UK; it is different for beef. In the main, however, sheep meat is shipped outside the UK.

The Chairperson (Mr Butler): To the EU?

Mr Mullan: To the EU and beyond, depending on what we debone etc.

Mr Swann: A lot of what goes to the EU markets is carcasses rather than primals, whereas most meat from the outside of the sheep that goes to GB is primals.

Mr Mullan: Absolutely.

Mr Swann: That is the big difference.

Mr Mullan: The carcass form states that the specification will be noticed, primarily by the customer receiving it. What will happen is this: we will have a differently trimmed carcass going into the market compared with others. Pieces will be left on it that others do not leave on, and we will end up getting a lesser price in the marketplace as a result.

If we wanted to align with the UK specification, the problem would be that the UK requirement to take the kidney and the kidney fat out of the carcass is missing from this spec. The UK takes out a sizeable proportion of the carcass that could weigh in at upwards of 1 kg, which we do not take out of our carcasses. If we are to align, why do the regulations not insist that we take that out of our carcasses?

The Chairperson (Mr Butler): I understand what you are saying about lamb carcasses for export, because I used to work with them, and they always came into the shop and were presented with that inner part — the kidney and the kidney fat — removed. The regulations would mean that that is removed and, therefore, —

Mr Mullan: No.

The Chairperson (Mr Butler): It will be left in, but —

Mr Mullan: The kidney fat and kidney will be left in.

The Chairperson (Mr Butler): — you cannot export it; that will interfere with the market.

Mr Swann: It will interfere with the market. You can export it, but, as George said, if you go into a market that includes lamb from different countries, there will be a lower price for NI lamb because it has fat in it.

Mr Mullan: It will have a piece of tail, and the neck will not be trimmed as well as it would be if it came from another country.

The Chairperson (Mr Butler): I get the commercial sensitivity point, because, if you are paying for something that you cannot sell or which has less value —.

Mr Mullan: Yes. Those things would go to waste. They would have to be cut off.

The Chairperson (Mr Butler): If the statutory rule (SR) were to be made, what investment would be required? You have talked about a technical issue to do with where the tail is docked in relation to the vertebrae. I imagine that that change would not have a financial impact in the longer term, because it is about reskilling the butcher, or is it about mechanics?

Mr Swann: It is more of an operative thing; where to cut the carcass is not an automation or mechanics issue. If you leave the tail on going over the scale, you will pay for it. When it goes into the boning hall, for example, and you do your primals, it will be waste. When you have paid for it going over the scale and it then becomes waste, from the processing point of view, you have been charged twice.

The Chairperson (Mr Butler): Have you done any analysis of the financial impact?

Mr Mullan: The financial impact is somewhere around £1 or £2 per head; that is my opinion. However, there is another side to it. When you dress the animal in the way that is suggested in the regulations, there is a much higher risk of contamination, because, in doing so, you deal with the two ends of the gut of the sheep, meaning that you make the situation at the tail, as well as at the neck, less clean. It was implemented in the UK in January, and the Food Standards Agency (FSA) and veterinary staff in the UK are not happy with the Rural Payments Agency (RPA), which is the classification body across the water, because they have contamination issues.

The FSA and the vets are there to make sure that contamination is zero. To butcher them correctly is a problem. If there is contamination, you end up having to take the tail off completely and dress the neck. The classification people may come in behind and say, "You're not dressing that correctly" or come to us with the compliance people and say, "You're not compliant". On one side, there is the veterinary staff and the Food Standards Agency, which is a much stronger body. There is no doubt that I will follow what it says. Regardless of what is said, food safety has primacy over classification.

We could be prosecuted for not dressing lambs to specification, even though that may not be possible. I will try to help people to understand: the tail of a lamb is not just as flexible as an eel — I say that, given where we are meeting. We all know, for example, what the tail of a dog looks like. When we take the pelt off the animal, we pull it through, as you would take off a sock. The tail flicks at the end, because it is under pressure: we pull and pull, and then the tail flicks with the dirt going on either side of the carcass, so it all becomes a bit messy. We now cut maybe a third of the tail off before starting. [Inaudible.]

The Chairperson (Mr Butler): Yep.

Mr Mullan: I am preaching the converted. That process works, whereas this other process will prove problematic.

The Chairperson (Mr Butler): I have a final question. You said that this classification came into operation in GB — Scotland, Wales and England — in January, but they have two —

Mr Swann: Two specifications.

The Chairperson (Mr Butler): — and therefore, it is not —

Mr Mullan: It is not aligned.

The Chairperson (Mr Butler): It is not aligned, and, given that they have the choice, it is not mandatory. What is the option that they have there between either scheme?

A Witness: It is the food business operator's decision —

Mr Mullan: To go with one or the other.

A Witness: — to go with whichever spec they feel fits their needs.

Mr Mullan: The bigger slaughterhouses must go with the new specification imposed on them.

The Chairperson (Mr Butler): I suppose that that is what they are trying to do here. That would make sense. I am not sure —.

A Witness: From the tail —.

Mr Mullan: Again, it is not a similar specification, because kidney fat and kidneys are to be taken out in the UK.

The Chairperson (Mr Butler): It is not linear; it is not like for like.

A Witness: It is not the same spec, no.

A Witness: The tail aspect is the same, Chair, but the kidney-in/kidney-out aspect is different.

The Chairperson (Mr Butler): We are kidneys in, and they are kidneys out.

A Witness: Yes.

A Witness: Yes.

The Chairperson (Mr Butler): That is a negative, because there is that weight, and the purchaser will obviously not want to —.

A Witness: Yes.

The Chairperson (Mr Butler): And they have to be left in, according to the scheme?

A Witness: According to the scheme, yes.

Mr Mullan: We brought that up at the time. We asked, "If you are aligning, why are you not aligning properly?".

The Chairperson (Mr Butler): Yes. If you are going to align, align.

Mr Swann: Yes. If you are going to align, align.

The Chairperson (Mr Butler): That makes sense. Thanks. I am glad that you came in. [Laughter.]

Mr Mullan: Are you, really?

The Chairperson (Mr Butler): No, really, I am. This is right up my street, I assure you.

Mr McAleer: Am I right to say that you would prefer to leave it as a voluntary scheme?

A Witness: Yes.

Mr Mullan: The scheme is not broken.

Mr McAleer: Does that give you flexibility to process the carcass in a way that is aligned with different markets? Is that right? Is there a standardised way that it is done? Is there a different requirement in the EU compared with that in Britain, for example?

Mr McLaughlin: I will jump in here. What is being done has been done in the same way for many years. There has not really been a change from doing what they are doing currently, which involves, for example, the tail being cut off quite short. That has been compliant as part of customer specifications and has been what members' export customers have been looking for and selling for many years.

As I said earlier, the voluntary arrangement is not just on the dressing spec; it is also on the price reporting. That is why it is important that the voluntary arrangement is understood in the context of both dressing spec and price reporting.

Mr Mullan: And we do price report.

Mr McLaughlin: Yes.

Mr Mullan: You have to price report voluntarily, but you have to price report to a specification. We are price reporting to the current specification, because, for it to be an effective price report, the specifications have to be the same.

Mr McAleer: Is there a clear explanation or any scientific justification for changing the required location for the tail removal under the proposed mandatory scheme? What is the argument for it?

Mr McLaughlin: We are trying to answer that question ourselves.

Mr Mullan: We are at pains to find out if there is any, to tell you the truth.

Mr McAleer: Across these two islands, we are, in effect, looking at having four different arrangements, because there are two in Britain, one in the South that is not mandatory, and what is being proposed for here.

Mr Mullan: The South's is not mandatory at the moment.

Mr McAleer: It is not; it is voluntary.

Mr McLaughlin: Yes. Therefore, while it is an EU specification, it is not mandatory.

The Chairperson (Mr Butler): It is not mandatory anywhere? It is an EU specification.

Mr McLaughlin: I am not aware of any other member states where it is mandatory. It might be, but I am not aware of any. It is similar to bovine electronic identification (EID). You can have bovine EID at high frequency, low frequency and ultra-high frequency. The EU has a specification that, if you use it and you mandate, you must use a particular frequency. It is low frequency in the European Union. It is a bit similar in that you have flexibility to do your own thing. However, if you want to do it, here is the specification to which you must adhere. That is an example of how it is.

Mr McAleer: Have you any assessment of whether it will put us at a competitive disadvantage if those mandatory requirements come in here but are not mandated across —?

Mr Mullan: Something will be left on our lambs that will not be left on lambs from other places. Therefore, you will be paid less in some shape or form because the customer will have to tidy that up when they receive it or they will ask us to do it and we will have to pay a lower price to the producer.

Mr McAleer: I have a clearer picture of it now.

The Chairperson (Mr Butler): I have just looked at the UK scheme. I think that you are right about the UK mandatory piece, George. They are talking about it being mandatory for those processing over 2,000 sheep per week. The difficulty for me here is that it is mandatory, but it is different. You can have a mandatory scheme, but it is mandatory only for yourself because the scheme is slightly different.

Mr Mullan: That is right.

The Chairperson (Mr Butler): If there is value to it, I have no objection to it at the end of the day.

Miss McIlveen: Thank you very much for your presentation. I suppose that this is being sold to us as allowing for consistency and transparency and ensuring that the producer knows exactly whether he or she is getting a fair price for their product. It is similar to the system that is applied to the beef and pig sectors. Those looking on are probably asking why there is objection when many of you are already applying those rules in the beef and pig sectors. Why not do it for sheep?

Mr Swann: We are already doing it for sheep — that is what we are saying — when we price report under the voluntary arrangement. Part of that regulation was so that the farmer could see what the price of lambs was in Northern Ireland, Scotland and England. However, you cannot do that when you have three different specs.

Mr Mullan: For cattle, we take the tail off completely.

Miss McIlveen: OK.

Mr Mullan: You are dealing with exactly the same. You are dealing with the gut from top to bottom, so you tidy up the neck as well. The thing is, as Neil says, lambs in England will be price reported with kidney fat and kidneys out and ours will be reported with kidney fat and kidneys in. Therefore, the prices will not be comparable.

Miss McIlveen: Yes. I understand that, now that we have had this conversation, which I have found really enlightening, I have to say.

Mr McAleer: Same here.

The Chairperson (Mr Butler): It is fascinating.

Mr Swann: Just to be clear: from a Northern Ireland farmer's perspective, they have that visibility if they are selling their lambs in Northern Ireland under the voluntary arrangement.

Miss McIlveen: I suppose that the challenge will be from those looking in on it saying, "Well, big industry is basically objecting to that mandatory process". That will be the criticism.

What proportion of sheep are you processing compared with the smaller processors?

Mr Mullan: I suppose that you are looking at 90%.

Miss McIlveen: Ninety per cent. OK. When you had the conversation with the Department, was there flexibility added or change made to the legislation as a result of the consultation?

Mr McLaughlin: Not with regard to tails, no. There have been conversations to work through other pieces of the specification, such as the dressing spec. Those have been constructive.

There is a significant difference of opinion on that issue.

Mr Mullan: You said that it is about big industry refusing something, and so we have something to hide. We have been doing it voluntarily for years, so we are an open book. Our sheep farmers understand that.

Miss McIlveen: Do not take that as a criticism, by the way. I understand exactly how you work. I am just saying that those outside the industry may make that observation.

Mr Swann: George says, but our biggest concern with this is hygiene. There are negative commercial implications, but it is about hygiene, first and foremost.

Miss McIlveen: In your presentation, Daryl, you mentioned the whole issue of third-country imports. Can we talk about that, and the impact that it has?

Mr McLaughlin: The DAERA statistics on trade are combined for beef and sheep, and they are predominantly GB. However, that is not the case for sheep meat, as we said earlier. Importantly, there is a UK free-trade deal with New Zealand and Australia, so there is more of that product on the market. If that is more competitive, and Northern Ireland is less so due to additional regulatory barriers or some compliance issues that increase costs for business to do or comply with, we are weakening our hand for our own doorstep trade. That is why it is important: Northern Ireland could be at a disadvantage in its own marketplace, compared to third-country imports, for which a quota is there to be utilised.

That is a generic comment, but it is worth bearing in mind. I do not know whether any of the members —.

Mr Mullan: You are talking specifically about sheep.

Mr McLaughlin: Yes; sheep meat.

Mr Mullan: At the moment, it is coming up to Easter, which is lamb leg time. Large volumes of New Zealand lamb legs are being imported into the UK, Europe and Northern Ireland, which will feed into the Easter trade. At present, they are two thirds of the price of a British lamb leg.

Miss McIlveen: That is quite significant for the consumer, particularly given the current climate that you are working in.

The Chairperson (Mr Butler): From a busman's perspective, there is little enough on a lamb without losing bits of it. Everybody, from the farmer right through to the shop, finds it hard to make money from a lamb.

Mr Mullan: For sure.

The Chairperson (Mr Butler): I very much recognise the pressure from the New Zealand lamb. John, do you want to come in?

Mr Blair: Yes. Some of this has been covered. Thanks to all three of you, by the way, for what you have shared with us so far. I get that, from a consumer and public perspective point of view, alignment and a mandatory process might be seen as being a desirable things in principle, and I suspect that you do as well. Regarding the issue of having two systems in GB — the GB spec and the one that is being proposed — are you aware of any winding down of the GB spec? Is it possible that there will be a move towards a more unitary system with this proposal?

Mr Mullan: What do you mean by "unitary"?

Mr Blair: There are two systems in GB. Do we know whether there is an intention to move to one? There has been no mention of it in any briefings that we have had.

A Witness: Not that I am aware of.

Mr Blair: So, as far as you are aware, it will continue to operate two systems for the foreseeable future.

A Witness: Yes.

Mr Blair: OK.

Mr Mullan: Neither of them is the same as this one. If we were asked to do mandatory price reporting on the existing specification —.

A Witness: No problem.

A Witness: It is there anyway.

The Chairperson (Mr Butler): The support across the water came about because the NFU was pushing the issue in a significant way. It saw it as a boon. It was in and around the price reporting, and it was to give confidence to farmers. However, what we have is just a little piece of that. The tail is wagging the lamb here at the moment, pardon the pun.

Mr Blair: I also acknowledge that it is not mandatory for everyone, because there is a threshold that a person has to pass, and, therefore, consumers are —.

Mr Mullan: We are asking why that should be. Why should there be different standards? It makes it easier for them to process, or whatever.

Mr Blair: Public/consumer perception is key in that.

Some of the stuff that I have written down has already been covered by other members. Are there any ongoing conversations with the Department, or is this now the final —?

A Witness: We have had the conversations.

Mr Blair: Is this the final position?

Mr Mullan: In fairness, Neil took a delegation around his factory and showed it the process. I do not know whether it reported back on that.

Mr Swann: It was just to show them some of the challenges. This is where we are at today with the issue of the tail. As Daryl said, the tail aspect has not been changed since the consultation, so it is still at the sixth or seventh vertebra.

Mr Blair: Neil, when did you host that visit, if you do not mind my asking?

Mr Swann: I think that it was back in October or November. It was before Christmas, anyway.

Mr McLaughlin: Just to add to that point, I have spoken to our members, and those members have spoken to some of their other organisations in GB. They have looked at how they might do this, and at what the practicalities look like. Some of the trials that they have done have revealed challenges. In our correspondence, we mention the skilling of the operators and the requirement to have updated SOPs. Staff would have to be retrained, and there are issues with cost compliance. There are questions around whether your kill line is fit for purpose, or whether you have enough room to do the new skill. There is a range of stuff there that adds to the complexity and the cost of doing business. That needs to be put in the context of what is currently being asked for.

Mr Mullan: When we are shipping carcasses to the continent, we go through a selection process. If some of the lambs are not butchered that well, or if there are a few blemishes, we will decide not to send those, because they have to go into a shop window. We think that we will have to drop off another percentage of our lambs, based on having to implement this. Therefore, the selection process is going to be more awkward for export.

The Chairperson (Mr Butler): When it comes to the tail aspect, there are food safety and veterinary concerns.

A Witness: That is the big thing.

The Chairperson (Mr Butler): That is the big thing. I want to go slightly off-piste with something that is a bugbear of mine. You said earlier that 50% of sheep are slaughtered before they are moved. Is that figure reducing? Live animal exports would not be —.

Mr Mullan: I do not think that it is a reducing figure. A reducing figure in what way?

The Chairperson (Mr Butler): Reducing the wrong way, from my perspective.

Mr Mullan: No, I do not think so. I think that the statistics from last year show that a few less lambs went South.

A Witness: I think that it is slightly down.

Mr Mullan: What we are finding very much at the moment is that, with the growing ethnic community in the UK, there is a bit of a trade developing for live shipments of lambs to the UK, because those people prefer to slaughter their own, using their own methods, according to their religious beliefs and so on.

The Chairperson (Mr Butler): Now that you have opened that up, I take it that halal slaughter is not something that we do in Northern Ireland.

Mr Mullan: No.

The Chairperson (Mr Butler): That is OK. Good.

Mr Mullan: We do not do what you would call "raw halal slaughter". We have a pre-stun situation for those animals. That is why there is a bit of a live trade developing for lambs to the UK. We have just passed Ramadan, and quite a few lambs were shipped across live.

The Chairperson (Mr Butler): We will not go down that road today. I know that it is a business decision for people, and animal welfare is, obviously, a concern for a number of people here.

Mr Mullan: Absolutely.

The Chairperson (Mr Butler): Do members have any other questions about that? This has been a very worthwhile discussion, and I am disappointed that some members could not hear it. I am told that the SR is likely to be debated on 20 April. We have one further Committee meeting before that. I will not be putting any questions to members today as to where the Committee sits on that, as we do not have a quorum for decision-making. Are members content?

The Chairperson (Mr Butler): Thank you so much; that was really useful.

Mr Mullan: All right.

A Witness: Thank you.

The Chairperson (Mr Butler): Do you want to raise something else?

Mr McLaughlin: You asked about the wider issues in our correspondence. Perhaps you do not have time to deal with those.

The Chairperson (Mr Butler): We have a little bit of time. We will take a few questions on that.

A Witness: That is OK. We were asked to come to speak on the specific issue, but we were also asked about some of the wider issues. I will put some considerations to you. There are a number of key themes.

Mr Mullan: If we go through them properly, it might take a couple of hours. [Laughter.]

We will have to ask Daryl to rattle through them quickly.

The Chairperson (Mr Butler): We will bring you back.

Mr McLaughlin: I will take them in a couple of bits.

The Chairperson (Mr Butler): I will put 15 minutes on this, guys. We have until 11.15 am.

Mr McLaughlin: That is grand; thank you.

First, I will touch on future agricultural support. The ring-fenced support is vital, particularly for beef and sheep farmers, who rely on a basic payment to make up a section of their farm's income. Obviously, we want that to continue to be ring-fenced as part of the three-year budget. We would like to see the continuation of the beef carbon reduction schemes for beef and suckler producers. Those farmers are now on a journey because those schemes have taken off. The suckler cow scheme is in year 2, and the beef finishing scheme is in year 3. Obviously, it is only a short business case. We want the Department to continue those schemes, because they are having an impact on greenhouse gas reductions etc. From an environmental and sustainability point of view, those schemes are doing what they set out to do. They might not be moving as quickly as was intended, but, overall, it is a good thing, and they are moving in the right direction. We would like those schemes to continue.

We would like to see a targeted support scheme for primary producers in the sheep sector. We are part of the stakeholder group, where we continue to have discussions. However, progress has been quite slow, and we would like to see more advances in that regard.

Mr Mullan: At the moment, we do not have any sheep support schemes. There is diversification in the marketplace. There is a sheep support scheme in Southern Ireland, which is worth €8 to €10 per ewe. That diversification is not good for the sheep.

Mr McLaughlin: There are two schemes in the Republic of Ireland, but I will not get into the individual schemes because we could spend the whole day debating them.

We, as an organisation, support the Areas with Natural Constraints (Payments) Bill. However, our position mirrors the position that the Ulster Farmers' Union set out in its public correspondence: the money for it should be found outside of the ring-fenced agriculture support. Since the areas with natural constraints (ANC) scheme stopped in 2017, there has been an overall reduction in the ewe population. We know that 70% of sheep are in less favoured areas (LFA). We feel that it is important to support the private Member’s Bill because of the argument about the circular economy. People who live in rural areas often work in abattoirs etc, and we believe that it is important to support them.

On Farming with Nature, we welcome the development of nature-type schemes. However, we want to ensure that money goes to the primary producers for environmental improvement. We certainly do not want to see money from an environmental-type scheme being spent on the running of organisations. The money should go directly to the primary producers for environmental improvements.

We, as an organisation, certainly support the direction of DAERA's big data projects, such as those on soils. We advocate for the upcoming carbon footprint programme, and we support the bovine genetics scheme. We are also part of Sustainable Ruminant Genetics (SRG) Limited.

The next big issue is the nutrient action programme (NAP), including ammonia and planning. As you know, NIMEA attends the NAP stakeholder task and finish group.

I cannot really get into any questioning about that process because those meetings are currently being held in confidence, but we hope that we are moving in a positive direction, and that, in due course, we will come to a better position. We also hope that we are not too far away from moving forward with consultation etc. That is about as much as I can say in that regard.

We are very concerned about the current state of play with planning policy. It is significantly holding back investment and, in our opinion, environmental improvement. That is important. Talks are ongoing between officials and stakeholders. We want those to be enhanced, because the issue is very much linked to NAP policy. We are still waiting on an announcement about a farm investment grant scheme for farmers to take up, which would help with environmental improvement. I am sure that slurry mitigation measures will be part of that. We would like the Department to move a bit faster to try to help there.

We could spend another day discussing bovine TB. I have broken it into three areas, with policy development being the first. We are an active participant in the DAERA stakeholder group. We recognise that there are three parts to dealing with TB: cattle, wildlife and people. We welcome the progress to date, but the policy needs to move faster. We would like to see the development of calf-rearing units and specialised finishing units in order to help with the eradication of bovine TB. We would welcome the immediate implementation of animal health law around pre- and post-movement testing and additional interferon gamma testing without any undue delay. You will know that, over the past 12 months or 16 months, more than 20,000 reactor cattle have been taken off. That is an obvious concern for the farmers affected, and for the public purse. It is also an issue that is affecting the throughput of prime cattle.

The second issue regarding TB is the impact of condemnation to slaughter. Those are not animals that are taken off farms as part of the TB reactor programme; those are found on the clean cattle line. More than 2,000 cattle per year are found with lesions at routine slaughter. That is almost 40 cattle per week — sorry, per month. Taking the example of an average carcass weight of 340 kilograms at £6·37, which was last week's Livestock and Meat Commission (LMC) reported price, that is £2,165. If that is multiplied by 40 animals a week, that is more than £86,500. Over 12 months, that is more than £1 million that is being disposed of.

Mr Mullan: It is 40 cattle a week. You corrected yourself incorrectly.

Mr McLaughlin: It is 40 per month.

The Chairperson (Mr Butler): It is 40 per week. It is 2,000 per year.

Mr McLaughlin: Sorry, it is. More than £1 million is going in the bin for disposal. That does not count disposal costs, loss of throughput, time, loss of carcass value and impact on the farmer. I just want to point that out.

The measures that we talked about, such as pre-movement testing and specialised units, are important for moving forward. It is costing the industry a lot of money, and it is not sustainable from an environmental perspective.

The last point on TB relates to the regionalisation project. We certainly welcome it. We were at the ministerial launch in County Donegal just a few weeks ago. While it is a bespoke scheme, we welcome the joined-up, all-island approach. We know that there will be benefits from it. It will be slow, but measures such as pre-movement testing and additional interferon gamma testing for everybody will significantly help farmers in that area and make things easier for them. That is why feel that it is interlinked, to some degree. We know that the farmers in the area will get additional, more targeted advice, which has to be welcomed. The project should not hold up general TB policy across the region. We know that that is not the Department's intention, as some people fear, and we welcome the fact that there has been a good uptake in the area.

The final issue is the cost of doing business and the impact of the situation in the Middle East. That includes the rising cost of employment, with the tax and National Insurance that the Chancellor put on businesses, which is having a significant knock-on effect. It also includes annual inflation, regulation and the cost of compliance. We have talked a lot about what we have to do for compliance, which is an issue.

We welcome the UK-EU reset support, and we support the urgent need for an EU sanitary and phytosanitary (SPS) veterinary agreement. We know that conversations are ongoing; we are part of some of those.

Oil, gas, electricity, shipping surcharges and fuel surcharges, in particular, have all increased significantly in the past couple of weeks. That will have an impact on food inflation. I hope that we will not end up where we were a few years ago, when "foodflation" was 18% or 19%, but I think that, come the autumn, we will see it increase. It has to, given the way that things are going. We will look to the UK Government to do what they can to mitigate that as much as possible. There is also the issue of business rates.

The final thing is FSA annual charging. We received correspondence this week indicating that fees have not been made public, or, at least, not to us or our members. It will probably come in May or June, but the charges will be backdated to 1 April. That is not an ideal situation. It is quite normal for that to happen, but it is not ideal. I will just note that. We welcome the FSA discount consultation. The red meat sector receives about £1 million in the discount that is factored in. There will hopefully be flexibility for Northern Ireland Ministers around that. We hope that they will support that and continue with a discount-type scheme.

I am happy to provide the briefing for members, and I am happy to take any further questions.

Mr Mullan: I will make one final point on it all. We owe it to ourselves and the whole community to think about food security. The more that we do not focus on agriculture — on the producers, on the farmers and on giving them aid to remain in business — the more that food security is at risk. All countries in the world give grant aid to farmers; that is known. A geopolitical situation is going on at the moment. People who own boats do not want to load them with food. They do not want to send certain things here. If that happens, and New Zealand does not want to send lamb legs here and we no longer have a flock of sheep, we will not have lamb. We should keep such things uppermost in our minds. We need to support our local agriculture.

The Chairperson (Mr Butler): Absolutely.

It is just after 11.15 am. Whilst I would love to ask lots of questions, I know that, if I do, we will end up eating into the rest of our time. I encourage you to send the briefing paper to the Committee. You also have the option of reaching out individually to members, as their parties' spokespersons, outside of the Committee. There is lots of stuff that the Committee is alive to at the minute; if you want to talk to us about any of that, you can contact us, and we will try to fit you in.

I am conscious that you have gone out of your way to come here today. Thank you for your time. We really appreciate it. Members have plenty of stuff to chew over.

Mr Mullan: And vice versa: if any member wants to reach out to us, we are more than willing to help.

The Chairperson (Mr Butler): I am sure that Declan is very grateful that you gave his Bill a wee shout-out in the middle of that briefing. Thank you.

Mr Mullan: Thank you for having us.