Motion: Areas of Natural Constraint 3 March 2020

Mr Poots (The Minister of Agriculture, Environment and Rural Affairs): The Assembly will be sick of looking at me. Nonetheless, since my appointment as Agriculture, Environment and Rural Affairs Minister, I have had a number of calls to introduce the areas of natural constraint scheme and have listened to concerns that the closure of the ANC scheme had, in some way, brought disadvantage to farmers in severely disadvantaged areas (SDAs). I welcome the motion, as it affords me the opportunity to provide the facts around the closure of the scheme and the real impact that it had on farmers, and it allows me to again put on record that, going forward, I want to devise support schemes that are good for all our farmers, including those farming in the SDAs.

SDA farmers work on land that was classified as “severely disadvantaged” back in the 1970s, and around 485,000 hectares of agricultural land was classified as SDA. It makes up just under half of all agriculture in Northern Ireland and is farmed by just under 10,000 farmers, mostly beef and sheep farmers. The SDAs are concentrated mainly in the mountain areas of Mourne, the glens of Antrim, the Sperrins and most of Fermanagh. Those farms are so important to our ecosystem, to our environment and to the production of quality goods that are often finished elsewhere. The biophysical characteristics of the SDAs dictate that there are limited agriculture opportunities beyond cattle — that is, suckler cows — and sheep production. I am also aware that the economic viability of suckler cows and sheep production in the SDAs is vulnerable.

The ANC scheme formed part of the EU rural development programme 2014-2020 and was worth £20 million per annum in 2016-17. At that time, Minister O’Neill programmed the scheme to run for two years because she felt that that was all that was affordable, and a review of the ANC scheme was then to take place to determine the next steps. That was a review that Minister O’Neill asked for.

I should say that, when Minister O’Neill introduced the ANC scheme, the business case for it did not stack up. It was done by ministerial direction; it was not done on the basis of an identified need that was supported by a business plan.

Mr O’Dowd: Will the Minister give way?

Mr Poots: Yes.

Mr O’Dowd: The Minister has long experience of being a Minister in various Departments, and he always strikes me as a Minister who makes decisions rather than awaiting Civil Service advice or allowing civil servants to make the decisions. Will he not agree with me that, one, it is appropriate for a Minister to ask for a review — that does not mean that you will end the scheme — and, two, in some cases, a Minister stepping forward and making the decision, rather than simply following Civil Service advice, is often the best way forward?

Mr Poots: I was criticised by one of our local newspapers for taking a ministerial direction to give money to the Northern Ireland Hospice and Mencap some years ago, but I suggest that it was the best money that was ever spent by the Department of Health. Those are two wonderful facilities, and I recommend that Members go there to see the support and care that they provide to people in that arena. We have to take cognisance of the issues that are put before us, but civil servants give advice and Ministers make decisions. I am not afraid to do that.

It was recognised that the redistribution of the basic farm payment scheme pillar 1 fund since 2015 had given an uplift to the SDA farmers that equated to an additional £18 million. At the exchange rate that was used for direct payments by 2019, the uplift was at least comparable to previous ANC receipts in 2016 and 2017. For example, for ANC farmers in Fermanagh and South Tyrone, the net uplift was £3·8 million. For those in West Tyrone, which covers the Sperrins, the net uplift was £4·3 million. For those in North Antrim, which covers the glens, the net uplift was £3·2 million. For those in Mid Ulster, which also covers the Sperrins, the net uplift was £2·6 million. All those areas have had an uplift as a result of convergence.

Mr McAleer: Will the Minister take an intervention?

Mr Poots: I will give way in one moment.

Some in the ANC scheme have lost out. The busiest livestock farmers lost out as a result of convergence. In general, however, ANC farmers have benefited from convergence. I will give way.

Mr McAleer: Does the Minister accept that the so-called uplift that he talks about happened only because farmers in the SDAs had been labouring well below the regional average for years and years?

Mr Poots: It is interesting that the Member raises that issue, because I know that one of his colleagues took the issue to the Equality Commission. The commission did not see any issue of equality in it, and it was thrown out. I have heard quite a number of Sinn Féin Members refer to equality in the debate, yet they did not refer to the fact that Sinn Féin had raised the matter with the Equality Commission and lost its case.

Given budgetary constraints at the time, it was not possible to source a new funding stream to continue operating the ANC scheme from Executive funds. The only alternative was to transfer money from pillar 1 — direct support payments — to create the necessary budget, and the clear message from the consultation that took place and the responses that came back was that that was not an acceptable option. I understand that Mr Catney wants to take money away from farmers in Lagan Valley and give it to farmers in the ANC area. Mr Blair wants to do that in South Antrim and give the money to farmers in other constituencies. Mrs Barton wants to take money from Mr Nesbitt’s constituency and give it to farmers in hers, and so it goes on. The truth is that farmers who had already benefited from convergence would then be dipping into the funds of other farmers who had already been disadvantaged as a result of convergence, and to do that would put those farmers into greater hardship.

The ROI has not moved as quickly as Northern Ireland towards convergence and a flat-rate pillar 1 payment per hectare, and payments are still more based on production. Those are key factors that everybody needs to take into account. Ms Dolan said that Sinn Féin does not agree. Not agreeing is one thing, but we have to look at the facts. Facts are stubborn things from which it is hard to get away. Scotland was mentioned in the debate: Scotland pays out £128 per hectare. Wales pays out £243 per hectare. England and the Republic of Ireland have managed to reach convergence, and they both pay £261 per hectare. Lo and behold, Northern Ireland pays £333 per hectare. Therefore, the farmers who own large swathes of land that is more in the hills than in the lowlands have benefited most and benefit more than any other farmer in these islands. Consequently, Minister McIlveen decided that the scheme would operate for just one additional transitional year on a budget of £8 million. Without that decision, the scheme would have ended in 2017.

Taking that on board, I can say that SDA farmers, as a whole, have increased the value of their total payments from the CAP, despite the ending of the ANC scheme. While there will always be winners and losers at an individual level, at a regional level there has been no negative impact on SDA farmers. I want to make it clear that I do not intend to introduce an ANC scheme this year: I cannot. It is simply not possible. It would be possible to introduce an ANC scheme under the new Agriculture Bill, but the Bill’s provisions will be operational only from 2021 onwards.

These provisions have been designed so that the House and the Minister have flexibility to make such decisions, but I have to point out that, in order to introduce an ANC scheme, the funds would have to be provided by scaling back direct payments to all farmers, which would result in that transfer from farmers who have already yielded money towards the ANC areas having to yield further funds to some of the constituencies that I mentioned. That has to be seen in the context of the £18 million on an ongoing annual basis that has already moved into the SDA. Rather than reintroducing a second area-based payment, I will focus my time and effort on devising schemes and support measures that are good for all farmers, in particular younger people who want to come into farming, younger people who do not own large swathes of land, who have to rent land and who want to make a living off farming and make a go of it, as opposed to the people who already sit on amounts of land and are not properly utilising it.

The United Kingdom has left the European Union and the CAP, and the most significant policy change affecting the agri-food sector in over 40 years means that our policies do not have to be constrained by the existing CAP pillar 1 and pillar 2 construct. We need to move to something new that better addresses the needs of Northern Ireland agriculture. In 2018, my Department undertook an engagement exercise on a potential future agricultural policy framework for Northern Ireland, and, in that proposed framework, my officials, in conjunction with key food, farming and environment stakeholders, identified four desired outcomes and a long-term vision for the Northern Ireland agri-food industry. The first of those is an industry that pursues increased productivity in international terms, closing the productivity gap that has been opening up with our major suppliers. An ANC scheme does not do that. The second is to have an industry that is environmentally sustainable in terms of its impact on and guardianship of air and water quality, soil health and carbon footprint and diversity. ANC does not do that. The third is to have an industry that displays improved resilience to external shocks such as market volatility and extreme weather events, which have never been more frequent and to which the industry has become very exposed. Again, ANC does not help with that. The fourth is to have an industry that operates with an integrated, efficient, sustainable, competitive and responsive supply chain with clear market signals and an overriding focus on high-quality food and the end consumer. ANC does not assist with that.

Those four outcomes complement each other and are broadly supported by the stakeholders. Our focus now needs to turn to how we can deliver those outcomes. I want, in particular, to mention the suggestion in the document around a basic farm resilience support as one possible option, moving forward, and the relevance to the debate today is that a basic farm resilience support payment could be designed to take into account issues such as natural disadvantage based on soil and climate factors, as well as targeting productive farmers. I have tasked officials to flesh out those ideas as quickly as possible.

That is only part of the solution. We need to help farmers, no matter where they are, to become more efficient and maximise sustainable returns so that they can achieve from the assets at their disposal. Those assets include the environmental assets on the farm, and SDA farms are well placed to play a major role in delivering more of the environmental outcomes that the citizens want and that we owe to future generations. Farmers should be properly rewarded for delivering those environmental outcomes, and it offers a way forward.

In summary, the role of SDA farmers, like all farmers, will evolve as we move forward. No industry can afford to stand still or, worse, go backwards. How we have done things in terms of convergence and all of that has not helped the industry to go forward and be more efficient and encourage young people into the industry. Most importantly, I want to devise the appropriate schemes and measures beyond 2020 that are good for all farmers and provide the basis of a sustainable and profitable future.

Mr Deputy Speaker (Mr Beggs): I call Philip McGuigan to wind up the debate. You will have 10 minutes.

Mr McGuigan: I thank my party colleague for bringing the debate before us. I thought that the discussion was very good and very useful. My party colleague Declan McAleer, who proposed the motion, talked about the North’s reliance on agriculture.

He tabled the motion in the context of the Westminster Bill and stated that the ANC payment was at the discretion of the Minister and that we need to tailor our agriculture policy here to suit the North. He hoped that the Minister would use his discretion to reintroduce an ANC payment. He went on to talk about the farmers in those areas of need and that the payment created a leveller with other farmers. He talked about the history of ANC support being enacted and subsequently withdrawn in 2016. In my biased opinion, I thought that he made a great case for its introduction.

William Irwin acknowledged the difficulties of hill farmers, but he wanted that to be addressed as part of a UK solution. He said that support was needed, but he was not conclusive about what future support would look like. He went on to say that new arrangements should be based on production rather than area-based payments. He laboured that point. He felt that an ANC is not the best mechanism.

Pat Catney talked about the importance of agriculture and farming to our economy and landscape. It is a part of life here in the North. He told some very interesting stories about his childhood, particularly about gathering potatoes. It brought me back to my childhood. I miss gathering now that modern technology is used. Young people do not get the opportunity to gather spuds the way that we used to. He talked about 70% of the land in the North being in less-favoured areas. We need to encourage and promote environmental use of the land. He supported the motion.

Rosemary Barton talked about the quality of our produce and the environment here. She said that there had long been support through many years for hill farmers in various guises. She mentioned £100 per hectare and said that they were worse off than in lowland farms. She said that 10,000 farms were impacted as a result of no ANC payments. She detailed the impact that that has had in her constituency of Fermanagh and South Tyrone.

John Blair said that he supported the motion in principle. He said that small farmers are vital. Over and above the issue of farming, they are vital to the conservation of our landscape, tourism potential and protecting the coastline in some cases. He said that there was an opportunity for the Minister to introduce a new scheme of natural constraint.

Maurice Bradley talked about the uncertainty for farmers post Brexit. He welcomed the debate in the context of the Assembly getting to debate it from the North’s point of view. He asked whether a land-based payment was good value for money and said that policy needs to be tailored to our market demands. Again — this theme flowed through all the DUP Members’ contributions — production seemed to be the best way forward.

I congratulate Emma Sheerin on her maiden speech. I was born and raised in Swatragh, so I agree that Mid Ulster is a great place to live, particularly the Derry part of the constituency. She talked about the importance of agriculture to her constituents. She is the daughter of a sheep farmer in the Sperrins, so she understands the problems in working with the land in those particular circumstances. She said that an ANC payment was not a top-up that was spent on luxuries but was needed to pay bills or to invest in the local agriculture economy.

Jemma Dolan supported the motion. She said that 92·5% of her constituency of Fermanagh and South Tyrone is severely disadvantaged, and she compared it with the Minister’s constituency, where 2% is the case. She talked about the ANC allowance helping many farmers who are struggling. She is a border constituency MLA, and she put it in the context that the lack of an ANC payment put farmers along the border at a disadvantage to their neighbouring farms across the border. She talked about the importance of convergence through flat rate and expressed her disappointment that that convergence has been halted.

Daniel McCrossan —

Mr McAleer: I thank Philip for taking the intervention. I should have made a point of order earlier, but, in relation to the EQIA, that has not been tested by the Equality Commission because the date between the decision and the complaint being made to the Equality Commission exceeded 12 months. It did not pass that threshold. The decision was made, and it was only some time later, through the Department’s own statistics, that it was realised that 67% of people in ANC areas were from the Catholic community. Religion is a protected category under section 75 of the Northern Ireland Act. That is the reason.

On the €333 per hectare, I can tell you that, up in the hills, people do not get near that. You are talking about entitlements of £100 or, maybe, £80 per hectare. That does not stack up across the North. I also think, and hopefully the Member will agree, that pitting areas against each other is very divisive and not a very helpful way to proceed.

Mr McGuigan: I completely agree with the sentiment. Yes.

Daniel McCrossan said that we need to send a clear message to all farmers that they will not be left behind because of Brexit. He also said that many farmers are struggling and need support and that he wanted to hear that support coming from the debate. He talked about the dedication and sacrifice of our farmers and their world-class produce. He went on to detail the flooding that had affected farmers in his constituency, and he said that they still have not been properly compensated for that. He also said that he has no faith in the British Government keeping the same level of funding offered by the EU after Brexit.

Clare Bailey gave her support to the motion. She put it into the context of the Agriculture Bill setting new policy for years to come and said that we need to get this right. She said that we need our own plan that meets our needs and that farmers in areas of natural constraint need to be given certainty. She also agreed that there should be specific and targeted economic interventions.

Jim Allister is always worth listening to. He agreed that hill farmers make an important contribution, but he went on to say that we need a policy that takes account of a limited pot of money. I hope that he will forgive me for paraphrasing him when I say that he was not a big fan of the flat-rate payment plus an ANC scheme. He seemed to be a lone figure in suggesting that Brexit will be good for hill farmers, as there will be fewer restrictions. He also pointed out that he had heard lots of whining. I repeat that: he heard lots of whining. My colleague intervened and gave him a promotion midway through the debate. According to him, the ANC hinders hill farmers.

Moving on, the Minister —.

Mr Allister: Will the Member give way?

Mr McGuigan: Yes.

Mr Allister: I am sure that it was entirely unintentional that the Member would distort what I said

but I point out that my criticisms were that the ANC was brought in, in part, because of EU regulations that restricted the farming methods and choices of hill farmers and dictated how much stock they could have on the hills, what type of stock and the dates that they could have their stock on the hills and matters such as that. The ANC was supposed to be an antidote to EU smothering of the choice of local farmers. I said that we should get rid of the smothering and liberate the farmers and let them make their own decisions.

Mr McGuigan: I was not wanting to distort the Member’s comments. A lot of hill farmers will be surprised to hear that they will now be better off because they have left the EU and have lost the ANC payment.

The Minister wanted to, in his words, introduce schemes “that are good for farmers”, including those in SDAs. He said that the ANC scheme was worth £20 million. He said that it was implemented by Minister O’Neill. John O’Dowd corrected him when he talked about the scheme ending in two years and said that there would be a review after two years.

Mr Deputy Speaker (Mr Beggs): Will the Member draw his remarks to a close?

Mr McGuigan: Sorry?

Mr Deputy Speaker (Mr Beggs): Will the Member draw his remarks to a close.

Mr McGuigan: Sorry. I did not get to make my own remarks. [Laughter.]

Everybody else spoke so well, and it was so interesting.

In conclusion, I support the motion. Our farmers need this payment.