MPs warn of threats to family run dairy farms

South Down MP Margaret Ritchie and Upper Bann MP David Simpson both took part in a dairy debate in Westminster earlier this week.

Mr Simpson called on the UK Government to take pro-active measures to ease difficulties within the dairy sector.

During the debate he outlined the concerns that farmers have raised with him and the need for a long term strategic programme at a regional level.

Mr Simpson told Farming Life: “Many farmers in Northern Ireland are struggling to comprehend how they will pay for the necessary bills to care for their families. The continuous cycle of dialogue without substance must stop, we need action. Unfortunately, there are a number of factors that we have no control of - the effects of the Russian ban, quotas and the fluctuation of the Euro.

“Our agri-foods industry plays a huge role in our local economy with the employment of over 100,000 people, many of whom are working within the dairy sector. Over the last 5 years the DUP have ensured that Northern Ireland has a 7 year transition to a flat rate. During this same time period we have also overseen the investment of over £30 million into rural broadband – a service that is becoming ever so crucial in the day to day running of a dairy farm.

“Managing volatility within this industry is a stemmed process that requires intervention and recommendations from Government, processors, retailers and the farmers themselves. We cannot accept that a future of uncertainty is inevitable – we want a vibrant industry that has a vision to grow and take advantage of opportunities that are out there.”

During the debate the SDLP’s Ms Ritchie said the challenges that the dairy sector faces in Britain are even greater in Northern Ireland, where they are amplified by our reliance on the export market and the lower prices Northern Irish farmers tend to get for their produce.

She said that in the very short term, processors must ensure they do not make the crisis worse by reducing the prices they are paying farmers.

Ms Ritchie added: “As well as that, the Government must hold all the national retailers to account on the prices they are paying farmers. There are still big retailers who claim there is a sound justification for paying different prices in different areas - these stores must come forward with their reasons for doing so.

“At the very least, these retailers must commit to ensuring every farmer is paid a reasonable price that gives some return on the cost of production in their area.

“This will require better co-ordination between Defra and the devolved administrations – we cannot allow poor dialogue between central and devolved government to leave us ‘caught out’ by retailers that make their decisions at a national level.

“Looking forward, I believe raising the intervention price for dairy products remains the most powerful tool we have for securing the future of the industry, and I believe we as Parliamentarians should not give up on calling on change from the European Commission.

“However, even without a change in the intervention price there is still more that can be done to create a more stable industry. The British Government must seek to bring to Britain and Northern Ireland a scheme that the European Investment Bank has already trialled in the south of Ireland,” the MP said.

“Under this scheme, the EIB would allow Defra and the devolved administrations to act as guarantors for loans made to dairy farmers. This added level of security would allow banks to make loans on much more favourable terms.

“For instance, in Northern Ireland a bank loan made to a dairy farm typically has a payback period of 15 years – well below the average in Britain, owing to the difficulties I have already discussed.

“The UFU believe that with government acting as a creditor, banks could offer loans with payback periods of 30 years, doubling the time farmers typically have today.

“This would make farmers much more resistance to external shocks, help ease many of the cash-flow issues impacting the industry and enable farmers to engage in better long-term planning. However, the onus is now on the Government to take this forward, and I hope they will with all due haste.

“Alongside this, the Government should work with industry to establish a futures market for dairy products, as has already been achieved for Feed Wheat.

“When the EFRA Select Committee questioned the Minister of State for Food, Farming and the Marine Environment (George Eustice) during our report on Farmgate Prices, we were informed that there were technical and informational issues holding back the industry from setting up a future market.

“If that is still the case, I would urge Defra to do everything it can to resolve these issues, and urge twice as loudly for the Department not to leave behind the Executive in Northern Ireland in this work – after all, it is in Northern Ireland where price stability is needed the most.

“I believe action on price inequality, more favourable loan conditions and a growing futures market will help give us the outcome that we all want – a fair and reliable income for our dairy farmers,” Ms Ritchie added.