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Northern Ireland (Agriculture)

Volume 886: debated on Thursday 20 February 1975

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11.30 p.m.

I wish to draw to the attention of the House the difficulties and problems confronting the farming industry in Northern Ireland. The difficulties of the farming industry in this country during the past few years have, of course, been many and varied, including rising costs and the weather. Since I came to London a year ago I discovered that people only think they have wet weather.

There is the problem of Government policy—or, rather, the lack of long-term Government policy—over a long number of years. It was with great pleasure that I received an answer today from the Minister of Agriculture which indicated that discussions have been taking place to draw up a long-term farming policy for the nation and that he hopes soon to be in a position to announce the conclusions that have been reached.

Many indeed are the problems of our farming community in Northern Ireland, and I should like to deal with them one by one so far as I can tonight. The first is the problem in the milk industry. It is, I think, the most favoured at the moment, but that is a position which could swiftly change. I welcome the fact that the increased grants which were given to the milk industry in October have been confirmed in the price review and that a further small increase has been granted. Nevertheless, I ask that this matter be kept under continual review because the costs that the industry faces have not stopped rising. Indeed, we can only conclude that they will continue to rise.

I further welcome especially tonight the fact that there is now to be a decision to calculate the terms for meat producers in Northern Ireland separately from the rest of the United Kingdom. This is something for which the Ulster Farmers' Union and hon. Members from Northern Ireland such as myself have been pressing for a long time. It is long overdue.

I should like the Minister to tell us exactly what the exact effect of this change in policy will be. What will be the standard premium that will be paid throughout the year? What is to be the variable premium? How will it be assessed concerning Northern Ireland, and how close does the Minister think that it will keep prices in Northern Ireland to those of the rest of the United Kingdom? The Press release states that returns will be kept
"in reasonable relationship to those for Great Britain."
The word "reasonable" can mean many different things to many different people. I should like to think that "reasonable" means that returns will be kept as close as is humanly possible to returns in the rest of the United Kingdom. Our costs in Northern Ireland are not less but, rather, greater due to our difficulties with transport. I trust that they will, as the Press release states, be kept under constant review.

I must confess that I and the farming industry in Northern Ireland were most seriously perturbed to find in the price review no mention whatever of the grave difficulties of the suckling herd owners. After the unmitigated disaster of last year, why was no help given to these people? Why was nothing done to try to put a floor to their price? Why must they wait until next October before the help which has been given to the beef producer works through to help the small and very poor farmers who produce so many of the suckling calves that are necessary for the future welfare of the beef industry in Northern Ireland? No doubt the Minister is aware that this branch of the farming industry has greatly expanded. The fact that the Government gave advice that it should be expanded was in no small measure responsible for what eventually happened.

Fatstock disposals in Northern Ireland between April and November 1974 rose by some 60,000. Practically all the 60,000 were cows and heifers. If that trend continues—it has continued during January this year—it can have nothing but the most serious consequences for beef production in the future. The farmers' demonstrations with which we have been confronted in Northern Ireland are the surest sign of the dissatisfaction and the dangers inherent in the present conditions. The Minister is no doubt aware that in 1972–73 the gross margin from hill cows was £80 and that in 1974–75 it has fallen to about £18. From the figures which have been produced by the farmers in Northern Ireland, there can be no doubt that many have made a net loss.

A further grave problem which concerns not only Northern Ireland but the rest of the United Kingdom—but Northern Ireland in particular—is the problem created by the "green pound". These arrangements have invariably meant difficulty for us because of the differential between the Eire pound and the £ sterling. At present the Eire producer has a 5½ per cent. advantage. While this is not perhaps showing very clearly in beef production at present, it will show in the future. I believe that it will mean the most serious difficulties and could cause grave unemployment through the closure of meat plants in Northern Ireland if the problem is not dealt with firmly and decidedly.

At this time last year, pig factories in Northern Ireland were handling 35,000 bacon pigs a week. They are geared up now to take 40,000. But they are getting only 15,000. When I became a Member of this House last year, all the problems in the farming industry were buried under the problems of pigs. These problems have been solved by the pig herd in Northern Ireland alone falling from 120,000 to 69,000. The problem concerning the bacon factories has been further aggravated by the low throughput and the 5,000 pigs being smuggled at present every week across the border into Eire.

Eire eats about three-quarters of the pigs produced there. Northern Ireland exports three-quarters of the pigs it produces. The Southern factories are not tied to a single price and are capable of dealing in the open market. It would appear, from what pig producers and unions hear in Northern Ireland, that the pig factories in the South of Ireland at present are paying a higher price for smuggled pigs than they are being paid for the home-produced pigs. This is purely and simply to maintain throughput and employment and to safeguard the future welfare of their people in that respect.

On the other hand, pig factories in Northern Ireland pay the United Kingdom prices. Because they are controlled by the Pig Marketing Board, they cannot raise their prices. They cannot have a differential in times of shortage. As a result, pigs go south and employment falls away. Even worse, the effect of the green pound means that heads we lose and tails the Eire producer wins, or, rather, the Eire factory wins.

The price of bacon in the South of Ireland at present is the highest in Europe. We are the direct sufferers. The aim of the MCAs was to keep prices in member States unchanged in local currency terms. I am afraid that concerning the North of Ireland and the South, this is not the case.

Nothing was produced in the price review which will help our pig producers until at least the month of July, and perhaps not even then, because Heaven alone knows what will happen between now and July. If present trends continue, however, and if factories have to close, it will be a political decision, which the Government must be warned about taking. It is the Pig Marketing Board which controls production and directs where pigs are to go. Which factories do the Government intend to close if they fail in their duty now?

A further problem is arising, not only in Northern Ireland but throughout the United Kingdom, through the importation of French eggs. I have read all the answers to Questions recently asked in the House. Nothing can be learned from them. There is a great mist around the whole matter, and no one seems to know the hard facts about French egg production. In Britain, costs to the farmer are 25·5p per dozen compared with an average market return of 18·2p per dozen. One large co-operative concern in Northern Ireland sent me figures for hens housed in the last year or so. The first two batches were housed on 5th November 1973 with an average of 3,732 hens. The end result was a deficit balance of £3,041, a loss of about 80p per hen. The second lot was larger. Twelve thousand hens were housed on 8th December 1973 and showed a deficit balance of £6,860. There are many more such examples. The farmers have all lost money and the problem is far from solved.

All this means bankruptcy for many farmers. While the British producers are capable of supplying the complete market, about 2 per cent. of the eggs are being imported. That 2 per cent. depresses the market price by up to 7, 8 or even 9 per cent. If this continues there will be very few home-produced eggs in nine months' time and the million boxes of imported eggs last year will seem as nothing in comparison to what will be imported in the years ahead.

There is a problem in Northern Ireland over 25,000 tons of potatoes. A similar problem that arose last year was solved in a fairly satisfactory manner. The problem is reappearing this year. Has the Minister made any decisions about how it will be dealt with? Potatoes are the most unpredictable crop the farming community can plant. We shall be unable to maintain supplies unless we are always prepared to deal with a surplus when it arises.

I turn now to the problem of farming grants, especially for capital expenditure for new buildings. These grants have been eroded not only by the decrease in the percentage payable on standard costs but by inflation as well. With its capital-intensive nature, the industry in Northern Ireland cannot survive unless the capital input is maintained. That is not happening at present.

Another problem has recently arisen and the farming community has drawn my attention to it. It seems that a severe restriction is being imposed upon the issue of gun certificates in Northern Ireland. Farmers are pretty well overrun by foxes in some areas. Farmers have problems with carrion birds and vermin of all types. They need their guns. Why have the fees been raised to the present unrealistic level? It is no use the Minister saying that this is to meet extra costs. The fees have trebled or quadrupled. Why should farmers be denied something they need?

The situation for the farming community is difficult. That state of affairs has persisted for some time. We want to know what is proposed specifically for Northern Ireland and exactly how the Government intend to carry out what they have already proposed. What do they want the Northern Ireland farming industry to do? Do they realise that some farmers ended last year with only half the income they had earned the year before?

How is that terrifying situation to be avoided in the future? Costs have risen and the price review made no attempt to cover the increases which, it was announced, were £692 million for the United Kingdom overall. The price review was supposed to maintain the standard but has failed to do so. What do the Government intend to do for the industry in the future?

11.46 p.m.

I am grateful to my hon. Friend the Member for Londonderry (Mr. Ross) for initiating the debate tonight on agriculture. This matter affects every section of the community in Northern Ireland.

It is interesting to note that hon. Members of the United Ulster Unionist Party are present. All too frequently we see other hon. Members from Northern Ireland during debates on other matters, but when it comes to the basic industry of Northern Ireland, which is agriculture, these Members are conspicuous by their absence from this important debate.

I should like to put three important points to the Minister. The first concerns the common agricultural policy as it affects the farmers of Northern Ireland. Is the Minister aware that the Government of the Republic are using their powers to list areas around the borders of Northern Ireland which will benefit from the EEC subsidy while the Minister and his Department keep strictly to the rules? In other words, the Government of the Republic are breaking the rules to obtain more benefits for their farming community while we stick rigidly to the rules, which are now telling very much against the interests of the farmers of Northern Ireland.

Is the Minister also aware that the farming community is enraged at the present situation which has developed in the farming industry? Is he aware that never before in the long history of Northern Ireland has the farming community been in such a state as now? Is he also aware of the many demonstrations throughout the whole of the Northern Ireland farming community about the plight of the suckling herdsmen? It is not enough for the Minister to tell us that the payments due in October will be made in March. That is not enough. Something more must be done for the suckling herdsmen. The Minister must pay special attention to that.

My colleagues and I are glad that at long last we shall have the opportunity, together with the Secretary of State for Northern Ireland and our constituents, to meet the Minister of Agriculture in the House of Commons and to put some of these problems to him. However, I should like to voice my protest that so far we have not had the privilege of direct contact in the House with the Minister of Agriculture because of a Northern Ireland Office ruling.

I wish to give credit where it is due. We are glad that at long last variable premiums will be calculated separately with regard to the position in Northern Ireland. I trust that the Minister will give us full information on what it is meant by the Press statement, which was emphasised by my hon. Friend, which referred to a "reasonable" calculation of this matter. I ask the Minister to take note that the farmers in Northern Ireland are different from farmers in the rest of the United Kingdom in that they are mostly smallholders and, as a consequence, suffer from great difficulties. Will he tell us what is his policy?

As I understand it, the Minister operates the present restrictions on the licensing of guns for the farming community. Is he aware of the serious nature of the situation arising among the farmers of Northern Ireland when the guns which they need to keep down the various pests on their land are being taken from them? Is he aware of the alarm now being expressed on this issue by the farming community?

11.50 p.m.

I am pleased that the hon. Member for Londonderry (Mr. Ross) has taken the opportunity of tonight's Adjournment debate to raise a number of questions relating to the agriculture industry in Northern Ireland. He will be aware that my noble Friend Lord Donaldson is primarily concerned with these matters, but I shall do my best to answer the points that he has made.

The Government attach a great deal of importance to agriculture in Northern Ireland because it forms a large part of the economy of the Province. It provides employment on farms for almost 10 per cent. of the working population—about 7 per cent. more than the generality of the United Kingdom—and a further 4 per cent. in ancillary processing and supply industries. It is, therefore, of great importance. It is also based on a somewhat narrower agricultural sector than farming in the rest of the United Kingdom. For example Northern Ireland is not, generally speaking, suited to arable cropping and is much more reliant on beef, pigs and eggs than is Great Britain. Therefore, I fully understand why these matters figured so large in the hon. Gentleman's speech.

The hon. Gentleman asked us to keep the milk industry and its costs in Northern Ireland under general and continual review. Of course we will do that.

The hon. Gentleman wanted to know about the Government's thinking concerning the beef industry. In particular he wanted to know how the premium which was announced by my right hon. Friend at the beginning of the week, following the EEC negotiations, will be calculated.

In Northern Ireland the gross output from beef production and cattle rearing is almost as great as that of most of the rest of agriculture production put together. Therefore, beef is important to the extent that although only 2 per cent. of the United Kingdom's population lives in Northern Ireland, it produces about 15 per cent. of our beef production.

There is no doubt that there have been considerable difficulties during the past year and that, although they have not been confined to Northern Ireland, they have had a significant impact there. The Minister of Agriculture, Fisheries and Food has obtained agreement in Brussels to the adoption of measures in the United Kingdom which would previously have been considered contrary to the common agriculture policy, so it cannot be blamed for any improvements in the situation which might take place in the coming year. I am referring to the additional £10 per head calf subsidy announced in March last year, the slaughter premiums which applied from last July, the variable premium system which came into operation on 18th November, in which the hon. Gentleman is particularly interested, and the hill cow and beef cow subsidies. The calf subsidy and the hill cow and beef cow subsidies are of great importance from the point of view of the suckling herds.

Because of the lower market prices in Northern Ireland, producers there have received an additional 70p per live hundredweight on the variable premium, but that still left what the Government considered to be too large a gap between the Northern Irish and the Great Britain prices. The system that my right hon. Friend is to introduce for the United Kingdom will be better than that. In the next three months we are aiming at a target price of £21 per live hundredweight to begin with, moving up to £23 per live hundredweight.

The aim in Northern Ireland will be to ensure the payment of a variable premium which will keep prices there approximately £1 per live hundredweight lower than the prices I have indicated, so that there will be an allowance for transport costs. For instance, if a farmer in Northern Ireland sold his cattle to the British market he would be getting a return of approximately £1 per live hundredweight less than his opposite number in the rest of the United Kingdom because he would have to pay extra transport costs of about £1 per live hundredweight. I trust that is clear. That is the way in which the variable premium will be worked.

Suckler herd owners in Northern Ireland obtained low prices for their calves last autumn, and I accept that they will not benefit substantially from these new arrangements until they get their present crop of calves next autumn. There is not a great deal that the Government can do to ease this problem. That has to be faced. However, these owners have benefited from the increase of £10 in the calf subsidy since the autumn of 1973 and they have benefited, too, from the bringing forward from next autumn to this winter of the hill cow and beef cow subsidies. In total, during this winter hill cow owners will have received the equivalent of £66·50 per cow in subsidies while a lowland beef cow owner will have received £45·50 per cow. That is substantial assistance, but we accept that in the immediate future, if one discounts all kinds of assistance, the suckler herd owners will not get any benefit from the new arrangements until next autumn; but that is something which should have an effect on their economies.

The green pound issue arises because calculations in the Common Market are all done by reference to units of account. The Eire pound is devalued in respect of the Common Market units of account to a greater extent than the United Kingdom pound, yet the Eire pound can be used to purchase goods and services in certain parts of the United Kingdom. The gap is about 3 per cent. In other words, the Eire green pound is devalued by about 3 per cent. more than the United Kingdom green pound. That has been the position since last September, and when the current changes have worked through we consider that the green pound will be about 5½ per cent. less in value than the United Kingdom pound.

It is accepted, on present trends, that the consequences to which the hon. Gentleman referred will come about. Whether they will be as disastrous as he predicted is something about which nobody can be dogmatic, but the Government would not want to disagree with the broad picture he painted. A bacon pig in the South will be worth about £1·60 more than in the North under the new system, and a 10-cwt fat bullock in the South will be worth an extra £10.

There is evidence that substantial smuggling of pigs is taking place to the South, and this is leaving Northern Ireland bacon factories short of throughput. There is a fear that fat cattle may be moving south for processing, particularly during the spring and summer months. We are keeping a close watch on the problem and will do our utmost to make sure that undue difficulties do not arise in Northern Ireland as a consequence of this situation, but I am not in a position to go further than that tonight.

The hon. Gentleman mentioned the question of pigs. The pig industry has always been an important part of Northern Ireland. It was based originally on relatively cheap grain imports from North America and provided good employment in the Province. Substantial farm businesses were built up on relatively small acreages. The main difficulty now is that relatively cheap supplies of foodstuffs are no longer available in world markets, and in particular from North America. Tht greater part of the feed requirement is imported either from Great Britain or from France. Experience has shown that, as a result, prices of feeding stuffs in Northern Ireland are higher than in Great Britain, and this is because of transport costs.

The hon. Gentleman is no doubt aware of the story that a ship recently sailed into Lough Foyle, discharged half its cargo in Eire, then sailed 10 miles up Lough Foyle and discharged the rest of its cargo into Londonderry, at a difference of several pounds per ton to the dealer in Londonderry.

I cannot provide an answer to that, but the Minister responsible for agriculture in Northern Ireland, Lord Donaldson, is aware of it and is reviewing all aspects of the problem with considerable urgency.

The Question having been proposed after Ten o'clock, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Twelve o'clock.