Seanad Special Committee on the Withdrawal of the United Kingdom from the European Union díospóireacht -
Thursday, 18 May 2017

Engagement with Ulster Farmers Union

Chairman

Apologies have been received from Senator Mark Daly.

I remind members of the committee to ensure that their mobile phones are switched off at this point.

Today is a very busy session for this committee, a vitally important one in our work and indeed the ongoing discussions that we are having. On behalf of the committee, I welcome the president of the Ulster Farmers Union, Mr. Barclay Bell, and the chief executive, Mr. Wesley Aston. It has become clear quickly from our meetings so far, especially in agriculture, that our two economies are intertwined and linked in very fundamental ways, with daily transfers across the Border and back again of milk products, cattle, pork and so on. For some products, the raw material goes from one side of the Border to the other for processing. Before I invite our guests to speak, I want to welcome them again. My late grandfather farmed cattle on the Cavan-Fermanagh border for many years, as Senator Joe O'Reilly knows. I would not say he was cattle-rustling at the time, but many products went back and forth seamlessly many years ago. Before we begin, I would like to read out a note on privilege.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses, or an official, either by name or in such a way as to make him or her identifiable.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

With all that out of the way, I welcome the witnesses and ask them to speak.

Mr. Barclay Bell

I thank the Chairman. We appreciate the opportunity to come and present here this morning.

I will start by saying a little about the Ulster Farmers Union. We have between 11,500 and 12,000 members. There are 25,000 farm businesses in Northern Ireland, so we are a key player in the North. I think all the members of the committee have a copy of our presentation. We will start on the second slide, which addresses the matter of where we are now. It mentions the political situation in both Northern Ireland and the mainland UK. At present, when we do not have devolution, we do not have anybody sitting at Stormont and we do not have anybody in London right now, we feel somewhat exposed as an industry in that we do not actually have anybody to talk to. Hopefully there will be somebody by the end of June. It could be a longer process up at Stormont. As far as the Ulster Farmers Union goes, our process has been a case of consultation. We started off the week after the referendum and tried to identify ten key goals and what was going to be important to the farming industry. Since then, we have started to develop our thinking, and, just last week, we launched a discussion document on possible support arrangements for the industry going forward. That is all happening and live at present.

I think the biggest issue here is probably the uncertainty. There is no real clarity anywhere at the minute. Article 50 has been triggered. After the general election in the UK, we will maybe start to get a bit more clarity. From the Ulster Farmers Union's point of view, we had ten key goals. Those were identified in the first fortnight after the referendum, and we are focusing on four main themes. They are trade, agriculture support, regulation, and labour. We liaise closely with our counterparts in Scotland, England and Wales, as we do with the Irish Farmers Association here as well. When we looked at the four themes, the one which we identified as being key in all of this was the issue of trade. Trade and trade deals will affect everything else. While there seemed to be some doubt around whether the UK was leaving the customs union or not, in some recent discussions we had just last week, at our premier show in the North, we got an indication from the Secretary of State that we would be leaving the customs union. The term "a deep and special partnership" is used, which we want. The definition of that is important.

Trade North to South is one of our key issues. I am sure members of the committee are all aware of the statistics about milk. Probably 30% of our milk pool travels up and down on a daily basis. Probably upwards of 40% of our lambs are processed here in Southern meat plants. Conversely - I am not sure of the exact figure - many pigs head north for slaughter and processing.

The logistics of crossing the Border on a daily basis must be worked out. There is no doubt that flexible and imaginative solutions will be required. Procedures that slow down the transportation of milk and lambs to the South and pigs to the North would have a major impact. The extent of trade and trade deals will have a major impact on the level of support needed by farmers.

The agriculture sector in Northern Ireland receives approximately £300 million per annum from the United Kingdom. We have been given an assurance that this level of support will be guaranteed until 2020. Our big fear concerns what will happen after 2020.

Some farmers voted to leave the European Union as they had become very frustrated with the current regulations under the Common Agricultural Policy. We like to think there will be an opportunity to draw up an agricultural policy for the United Kingdom which would be fit for purpose and move the industry to a different level. The key to this is the government not taking Ulster farmers over a cliff edge. Agriculture and agricultural industries will need a transitional period. A new support system must be focused on productivity, under which the farmer producing the goods will be rewarded, there will be environmental sustainability and some level of regionalisation. We hope a devolved government will be back in place. There have been some suggestions of a UK agriculture Bill. We would like to see legislation to give certainty to the industry and, possibly, ring-fence a pot of money in an agriculture Bill. Noises have come from Whitehall in that regard and we will watch with interest to see what happens.

There has been a considerable level of activity by the Ulster Farmers Union in the past couple of months and it will ramp up throughout the summer.

The conversion of EU law into domestic law will result from the great repeal Bill and we hope to see regulation evolve over a period of years. There will be an evolution of regulation and we hope it will be science based and that we will see advocacy first and regulation second. We have seen a few examples of this model working in the North. We believe advocacy first and regulation second is sometimes a better way of working.

Labour is a significant issue. Upwards of 65% of the workforce in the agrifood industry and meat processing plants are migrant labourers. A major concern for the wider industry is access to labour. The Ulster Farmers Union and the four UK unions believe this is an issue the British Government could sort out quickly. It is not only in the agrifood industry that there is a requirement for labour, it crosses many industries in every MP's constituency. There is a need for a statement on the supply of migrant labourers. As I said, this is an issue that could be sorted out quickly by the British Government.

The Ulster Farmers Union believes farmers need the best possible access to European markets and that they need to secure additional trade agreements outside the European Union. The fear when the United Kingdom enters into trade deals will centre on whether the food imports are produced to similar standards to those applying in the United Kingdom. Farmers could not accept product produced to lower standards being imported into the United Kingdom. A key point is that anything that would disrupt the existing trading relation between the North and the South could have very damaging effects. We have high animal health and plant health standards in Northern Ireland and want to see them maintained. There are no borders when it comes to animal and plant health.

I will compare the level of growth in exports from the food and drink sector in the years from 2005 to 2014. A strategy report from three or four years ago identified the potential of the agrifood industry in the North. Since 2005 the percentage increase in food and drink sector sales was 96% to Great Britain, 114% to the Republic of Ireland and 135% to other EU member states. Milk and milk products, as well as beef and sheepmeat, are the significant contributors to this growth.

The rates of food self-sufficiency in the United Kingdom have been highlighted in the past seven or eight months. The United Kingdom is only 61% self-sufficient in food production. We have a table that shows that the United Kingdom has a self-sufficiency rate of 55% for pork and 75% for beef. There is room to supply product to the UK market. We have another table in which we compare imports and exports that shows the UK trade imbalance by commodity. There is a major trade gap, with a significant level of imports of poultry products. It extends right across the board to beef, lamb, dairy and pork products, but the difference is less marked in the case of eggs.

We have set out in tabular form alternatives to EU membership.

Members will see from the tables there is not much change at the top but if they then go right down to the two free trade agreements and to the figures for the World Trade Organization, right down at the bottom, they will see a lot of red boxes and many things that would change. At the moment we are looking at all these alternatives. There is much talk about the Norwegian model and reference was made to the Cypriot model. Currently, we are trying to look at all the different scenarios going forward. This presentation has been a quick overview. Trade, labour, regulation and agriculture support are the four key areas that we as an industry are trying to get our heads around in order to move the whole debate on, and in the absence of any political stability in the North.

Chairman

I thank the witnesses for the very detailed presentation. The accompanying documentation is very useful.

Senator Paul Daly

I welcome the two representatives and I thank them for their comprehensive report. I wish to tease out a little more information to get to the kernel of the issue and for report purposes. I am on the record as saying - I do so on a weekly basis with the different groups who appear before us - that we are all hoping for the best but we must think and plan for the worst case scenario. With this in mind, from a farming perspective, during the campaign one of the selling points of the side canvassing for Brexit was the crippling EU standards and red tape that farmers have to meet. I am a farmer and I know there are days when it is frustrating. Northern Ireland farmers would not have to maintain those standards if the UK went on a solo run, to coin a phrase. If the farmers in the North intend to trade with any other EU country, tariff-free or otherwise, their product will not be accepted unless it is to an equal standard at least. What do the witnesses think of this? The farm sector may maintain the standards but it will be policed by a different body even if it is not policed by Brussels or Strasbourg. While the process may be identical and if things get tweaked on paper to have, in theory, better standards going forward, it may not be recognised as such within the EU. I would like to hear the thoughts of the Ulster Farmers Union on that issue.

I acknowledge the points raised in regard to the break-up of the Northern Ireland Assembly. It must be very frustrating for farmers with no assembly, no Parliament and no Government at the moment. Where do they go with their concerns? I would like to know where the Ulster Farmers Union was in respect of lobbying before the breakdown of the Assembly. The Irish Farmers Association - the UFU sister group here in the South - will appear before the committee later today and I will ask it the same question. I would like to know what level of contact both organisations have with each other, how closely they are working together and how intertwined are the approaches.

Aside from the trade aspect, for my sins I have a small interest in breeding pure-bred Aberdeen Angus. At the Carrick-on-Shannon show, which is the biggest one, more than 50% of the cattle on show and for sale are from Northern Ireland. Have we gone that far down the line if there is a hard Border? How will events such as this be affected? Will the breeders and farmers from Northern Ireland be able to show their stock in Ireland? How will the different standards affect this? Trade aside, the Ulster Farmer's Union might look at the overall picture of an all-island activity. Some would consider this to be a hobby or a sport. While it is within the farming remit, farmers are not in it to make money, they are in it for the love of it. This is just one example. How badly will events such as this be affected with a hard Border?

Senator Joe O'Reilly

I join my colleagues Senator Daly and the Chairman in welcoming our guests today. I am delighted they are here. I thank them for the accessible documentation they provided to the committee. It is very clear and easy to deal with. Before going into specifics, in a general sense, is the Ulster Farmers Union contemplating a special deal for the island of Ireland within the overall deal? Are Northern Ireland's farmers contemplating the special trading arrangement that might emerge from the possibility of using a combination of the Good Friday Agreement and our relationship with the EU that could result in east-west trading between Ireland and England, which would facilitate trade if at all possible without customs and tariffs? Are the farmers contemplating that sort of solution or is that too pie in the sky?

I live in County Cavan and I am very conscious of the specifics that have been raised such as the 30% of milk being processed in the South, the 40% of lamb and the numbers of pigs that go North. A local co-op has a processing plant in my own town. Lakeland Dairies is a substantial employer in the area and accesses quite an amount of its milk north of the Border. It is processed in Bailieborough and in Lough Egish. It was said that we need imaginative supports and I presume the witnesses are speaking of customs being electronic or involving minimal physical delays. There would be costs associated with that. Would this make it an unviable option for an organisation such as Lakeland Dairies to continue that arrangement and would it be unviable for the pigs to travel to the North in the event of a customs union? This raises another question. From their meetings or from anecdotal evidence, does Mr. Bell or Mr. Aston believe there is any chance that we will get a return to anything akin to free trade between the UK and the EU, although that prospect may have receded a bit lately?

Subsidies are a very serious issue, obviously. I presume that the Ulster Farmers Union sees the source of subsidies of food as being the domestic UK Government after the transition period post-Brexit. Are the witnesses concerned about the political factors that will be at work there? The political factors and the strong lobbyists must surely concern them. There would not be a strong farmer lobby in an overall UK context but there would be a need for food and relatively cheaply produced food. One would have to look at how the second consideration would work.

With regard to food and the veterinary area, are the farmers in Northern Ireland advocating for the veterinary standards, about which Senator Daly spoke earlier? Will veterinary standards, traceability and food standards for hormone-free food all be maintained at current levels whatever the regulatory body is? Are they of the view that food could not come in from other outside countries - Commonwealth or otherwise - that would be sub-standard? Is the Ulster Farmers Union advocating strongly on that issue? I would be interested to hear its views on it.

The labour aspect is very interesting. From talking with people at all levels in the UK - public and private individuals - the big issue in determining the Brexit referendum vote appears to have been immigration. It is clear from what the witnesses have said, and I agree with them as I know it to be the case in Ireland also, that there will be a need for labour to come in from outside. I would like the union representative to elaborate more on this. How does the Ulster Farmers Union see this objective being achieved in the context of the controls wanted by Brexiteers? Keeping control of immigration was their number one issue. The labour issue is a practical reality that may not have dawned on everybody. It would have dawned on people at the witnesses' level but ordinary punters wanted to vote out aspects of immigration they perceived as troublesome. They did not realise the downside to that.

I am very heartened to see the destination of Northern Ireland's food and drink sector sales and growth over the last years and the trading relationship between the Republic of Ireland and Northern Ireland strengthening.

It would be a shame that anything would thwart or change this. I ask the witnesses to comment on this. It is great that a delegation from the Ulster Farmers Union is present because we want to hear from it, and then put the same questions in a converse way to the IFA to see if we can arrive at an overview.

Senator Niall Ó Donnghaile

I welcome my fellow Ulsterman who are with us today. It is good to see them. We can all appreciate the detail in the report and the presentation given to us this morning. For me it is quite stark because it indicates just how much of a disaster Brexit has the potential to be for our economy, North and South. I am struggling, with the greatest respect, to see any positives for the agriculture or agrifood sectors or for anyone else. We do not want the British Government to take us over a cliff edge and, unfortunately we are dangling very dangerously close to the edge at present. We have highlighted some points on the issue of trade, and I am sure that witnesses have seen the reports on the front page of the Irish News today that potentially one in 12 vehicles will be stopped. This comes in light of the fact the Irish Government has conceded it is scoping out sites for customs checks along the Border at present. There is the issue of labour and more than 65% of workers in the food and meat producing sector are migrant workers, which I believe is a significant figure when we consider the ethos of the Brexit lobbying and campaign. Senator O'Reilly covered much of what I had intended to ask. I hope we can expand on the issue of funding support, which it is indicated will be maintained to 2020. What engagements have the witnesses had with the British Government on it meeting and matching its commitment on EU subsidies and other EU funding sources and streams? What indications have they had from the British Government? Prime Minister Theresa May launched her manifesto this morning. I do not know whether it featured, but I could be corrected.

Senator Michelle Mulherin

I welcome Mr. Bell and Mr. Aston and thank them for their presentation. Many questions have already been put. I am struck by the statement, which we know to be the case, that there is dissatisfaction among Northern Irish farmers with the CAP. Malcontent with the CAP is no news down here either. Overregulation was cited by Senator Daly and there is also a perceived unfair distribution of the funds. There is always a running battle about how the pie should be divided up and who is more worthy. In reality, is this a significant factor in the decision of those who wanted to leave? How do the witnesses envisage conducting their farming differently if they are not subject to the CAP? What difference will it make in how they do their business? I am speaking about what people are trying to get away from by removing themselves from the European Union. It follows from Senator Daly's question. How will it tally with farmers doing business with the European Union and the standards to which they will need to adhere?

Is it not a fact that many of the ills of farming can be more attributed to international factors, such as the commodity prices of milk and beef and the price of inputs, such as fertiliser and fuel, which we know are volatile? Is this reality? We are where we are, in that the vote has happened, but I am interested because it is a recurring theme here. We are looking at it with regard to areas of natural constraint and the distribution of funds. Do the witnesses have concerns about the possible importation, or the liberalisation of the importation, of meat and other foodstuffs from South America? What assurances have they received? What feedback have they received from the British Government on this? What are the witnesses asking? Are they stating this will not be acceptable or will they state they will lower their regulatory standards? How do they see this panning out? Where will they be on this?

Senator Gerard P. Craughwell

I thank the witnesses for travelling here today and for their presentation. I wish to focus on certain comments that have been made and then ask questions. With regard to agricultural supports, people from Westminster who came before the committee recently made it perfectly clear it was their desire that any outstanding funds due to the EU to 2020 would not be paid and as far as possible it would be a cut and run. If it is a cut and run, the £300 million, I assume, is tied up in the 2020 agreement. Given the size of the agricultural lobby in the UK, if the UK does not live up to its commitment to the EU do the witnesses see the £300 million disappearing well before 2020? This would be detrimental to the farming sector in Northern Ireland.

The figures produced by the witnesses on growth in Northern Irish products are impressive to say the very least. However, I would like to know how much of this the witnesses attribute to the all-Ireland marketing of agrifood products. There is no doubt we are on the premium side of agrifood, and I assume this is as much in Northern Ireland as it is in the Republic. Like Senator Mulherin, I am concerned that in certain parts of England cost would drive the market rather than quality. We can expect that in the south-east high quality will still be in high demand, but in some of the other parts of England cost will probably drive it.

In an ideal world if the witnesses were told tomorrow morning by Theresa May and the European Union they can write their own deal what would they want? How would they see it work? Do they see a benefit in us marketing Ireland as the island for agrifood? The Border is a bit of a joke when we speak about agriculture because farmers in Northern Ireland can have their cattle in the North in the morning and in the South in the afternoon. The Acting Chairman and I were in Brussels, where we were told to bring a solution and do not mind how ridiculous it might sound because they might just take it. The witnesses have been given a free canvas to write their own solution and I ask them to tell me how they would do it.

Senator Michael McDowell

I welcome the witnesses and thank them for their presentation. I want to broaden it to the strategic. As I understand it, the 2020 guarantee is not very significant. The CAP is coming up for review in 2020. We are now in 2017 and Article 50 has been triggered, which will bring us up to 2019. The 2020 horizon will be on us very soon. The real question is what is Britain's policy on agriculture and food thereafter. Is it the view of the Ulster Farmers Union that the UK will pursue a low-cost agricultural system from now on? If the UK as an economy is pursuing low-cost food prices and unsubsidised agriculture then given the prevalence of world prices, it clearly has very strong implications as to what can be done on an all-Ireland basis, especially if Europe is going in one direction under a revised CAP and the UK is going towards a cheap food policy, with imports from South America and New Zealand.

Secondly, in that context, I can see from the Ulster Farmers Union charts that the United Kingdom is a net importer of food. Therefore if it is isolated as a unit, and if there were tariffs and an expanding market at current prices, it feeds into the first question. If Britain regards itself as free to pursue a cheap food policy, can Northern Ireland agriculture go along with this? Can it benefit from it?

The farmers' union members, like us all, are looking in a crystal ball, but what are their views? Westminster seems to have been engaged in a decade long series of public expenditure cuts. Do they see it taking over the process of subsidising agriculture beyond 2020 at current levels? I would be interested to know where Mr. Bell sees Ulster farmers' interests being protected and how that would be done in terms of the UK strategy.

Mr. Barclay Bell

I may bring the chief executive in at different times. There is quite a range of questions.

Senator Daly touched on regulation. We only have to ask some of our producers in, for example, the vegetable sector, who is driving the regulation. They will say that it was not the EU regulation that really bothered them, but the regulation from the retailers. Some of our farmers got hung up about regulation, that there was going to be a bonfire of regulation, but we would see this more as an evolution of regulation. Some of the regulation that has perhaps come out of Brussels has been very difficult for farmers to understand. It has not been science based. What we are saying is that any new regulation has to be science based and there might be a change in the delivery of the regulation, but we are adamant that regulation is here to stay. Retailers will drive regulation. We will have to satisfy that regulation and there is a full recognition out there that if we want to export product into the EU, we will have to meet those standards. It might be more the case that there will be a simplification of the regulation and its delivery. Commissioner Hogan has indicated that he wants to try to continue to simplify the regulation within the EU.

There was a question of how we were getting on with Stormont before it fell. We were making good inroads. The worth of the agrifood industry to Northern Ireland is recognised across all political parties in the North when one considers this is an industry worth over £4.5 billion to Northern Ireland. In the wider agrifood industry, including processing, over 100,000 jobs are hooked on the industry. We are convinced that our politicians in Northern Ireland fully understand what the agrifood industry is all about, but the bigger fear is whether that message gets through across the water in Whitehall. That is why, along with everyone in the North at the moment, they want to see Stormont back up and running. We need representation there, fighting our corner. We are in a good place on recognition around the importance of the agrifood industry.

We have strong links with the Irish Farmers Association and we meet on a regular basis. There is a recognition that the Border is a key issue in all of this when one considers that we may well have farmers who are farming North and South because their lands straddle the Border. We are told there are 250 or 260 roads crossing the Border, never mind all the little farm tracks. I do not think anyone wants to see us going back to a hard border, but there will have to be a lot of thinking on how we find imaginative solutions. We have good relations and meet regularly; we attended the IFA's big event in Goffs recently. We meet Joe Healy and the team in Brussels quite often too. There is a good line of communication there.

What was Senator Daly's exact question on trade? Was it about the Aberdeen Angus?

Senator Paul Daly

Yes, on trade, like the farmers straddling the Border.

Mr. Barclay Bell

In that situation, animal health and plant health requires an all-island policy. The Border does not recognise TB or whatever issue. There has to be that sort of freedom that animals can cross. When one thinks back to when there was a hard border, animals moved fairly freely when one thinks about the number of cattle that would have come up to the North for finishing or whatever. There was a fairly free movement of cattle then but, as we outlined in our initial presentation, there has to be some thinking done around how we can have an all-island plant and animal health programme in the future. If my colleague, Mr. Wesley Aston, wants to butt in at any stage, he should do so.

Senator O'Reilly mentioned the possibility of a special deal for Ireland and how that arrangement might look east-west or North-South, for that matter. There has to be some imaginative thinking around that. The east-west arrangement is as important as the North-South arrangement. There does not look to be any clear thinking about that now and perhaps that cannot move on quickly until our own local politicians get involved. All this relates to there being a political vacuum at the moment and we find it difficult to talk to the right people. So far, in London, we have spoken to the Department of Exiting the EU and to Andrea Leadsom in the Department of Environment, Food and Rural Affairs. We have not yet had access to Liam Fox. The National Farmers Union in England and Wales has had access to Liam Fox and the Department of International Trade, but at this stage we have not had access to Liam Fox. He is a man we would like to get to talk to and this goes back to the point regarding what they are thinking about international trade and trade deals. Are they going to rush off to sign deals with other countries, maybe other Commonwealth countries? It is key that we get some insight into the thinking around international trade.

The Senator mentioned milk. Was it around the costs?

Senator Joe O'Reilly

Yes.

Mr. Wesley Aston

In relation to some of these points, I will just touch on this one at this stage and then come in again if the president leaves anything that he has not touched on.

In terms of trade, the issue, in particular in relation to the North-South movement of products and animals at present, is not even necessarily the customs rates. There are tariffs. It is all sorts of things, such as the non-tarriff barriers. That is going back to this issue of equivalent standards and ensuring we have the veterinary checks and everything put in place. That is the bigger concern because that has to be done over and above the normal traditional customs posts. That is why we are always keen to minimise any disruption between the North and the South in terms of trade. That is why, while one could argue about a special deal, we have been told clearly in Brussels that it is not special status that we are going for. It is encouraging, from our point of view, that any time we have been in Brussels there is a clear recognition of the issue on the island of Ireland. However, in relation to Senator McDowell's point, it does not go as far as recognising that there is an east-west issue. There is a North-South issue on which it is very focused. It does not necessarily see east-west as being its problem and I can understand that. That is a very important issue.

We do want to minimise any potential trading barriers, whether it is tariffs or non-tariffs. Non-tariffs could actually be a bigger issue.

Mr. Barclay Bell

The Senator also mentioned subsidies and asked if there is the political will in the UK Government to continue with subsidies. It comes back to the point about food security and to the point that the UK is only 61% self-sufficient and all indications are the British consumer wants food produced to a high standard. It is very much a red line issue, as far as the farming unions go, that we cannot accept that there would be food coming in to the UK produced to lower standards. I suppose one has to think of whether a trade deal should be struck with the US. There is the hormone-treated beef and the chlorinated chicken. Those are the sorts of issues. That is really a red line issue for us. We all recognise, both in the UK and Ireland, that we are producing food to some of the highest standards probably in the world. Why should that be jeopardised and why would one even consider exporting an industry to some other part of the world where, maybe, on welfare grounds or on environmental grounds, they cannot come up to the standards that we have to satisfy? That maybe covers the Senator's point around veterinary, that is, about such matters as the hormones and chlorinated chicken.

We still believe the issue of immigration and labour is one that the UK Government could sort out fairly quickly. This is low-hanging fruit that affects a huge range of industries right across agrifood, hospitality - you name it. The labour requirement is huge. One need only ask some of our agrifood processors if they were to try to employ local labour whether they could they get it. The answer is simply "No." The labour issue is a big one.

Senator Niall Ó Donnghaile also mentioned the labour issue. We made the point that it is one of the first issues that could be sorted. I suppose it is right up there in the top three. Michel Barnier has indicated that both the Border issue and the labour issue have to get sorted fairly quickly. We feel this is one where we need a clear statement from the UK Government.

Obviously, I agree there are concerns around customs posts and how this would work out. That will build costs into the system. It will slow down the transport of product to the South. I refer to anything that will build costs into the system, if there are to be some sort of customs checks. In any of our discussions with officials from here, there seems to be electronic methods to get around some of this but, as I stated, on costs or those sheer logistics on a daily basis, we have got so used to just driving up and down the road that nobody wants to go back to where one would have to stop or whatever.

On funding support, as farming organisations right across the UK, we have a major job to convince the UK Government that this is an industry worth supporting. We have to go right back to the fact of food security. Food security is important to any government. Why would one consider exporting an industry to somewhere else in the world? Over the past ten years, we have seen the issue of horse meat and some of the food scares there have been. That tightened everything up in the UK. There was this big focus on short supply chains. Those are some of the points we have to hammer home, as well as the fact that currently 30% of our payment is linked to environmental stewardship of our farms. We fully accept we have a responsibility to deliver such environmental stewardship and that is something we can demonstrate. Anyone would say that if one takes the farmers out of the countryside, one will soon see the countryside completely changed. Therefore, farmers have to be kept in the countryside. It is not only about producing food. It is about the wider rural communities. If one takes the farmer out of the countryside, rural communities will suffer big time in all of this.

Senator Mulherin mentioned the unfair distribution within CAP and how we might see a new model of delivery. We have a discussion document, which, as I said, we are happy to share with the committee, that the 15 committees within Ulster Farmers Union considered. What we are suggesting is that any new delivery model has to be geared towards those who are being productive, who are active and are looking after the countryside, but key to all of this is that they have to be productive. We are suggesting that there would be some sort of baseline payment which would satisfy baseline environmental standards. That baseline pot of money would also deliver around education and training. It might deliver around marketing. For the farmer who really wanted to move his business on, I suppose there was this thinking that the old system of subsidies did not incentivise anyone to be efficient, to be productive and to move one's business on. We are saying that, on top of this baseline, one would then have these different pillars or modules, or call them what one may. Should that be possibly a capital grants system to assist one in driving efficiencies on? Should it be, for example, producer organisations? There would be a pot of money for that. There would also be a pot of money if one wanted to raise one's animal welfare or plant health to a higher standard, if one wanted to really go for that.

There could be another pillar for those wishing to reach higher environmental standards. One could broaden the range of issues to include rural broadband and diversification. Take tourism, it is not for everybody but if there was money available it would allow people to make choices. There should be something for everyone. The farmer has to decide whether he wants to make himself more proficient and his business more efficient, more productive and more sustainable. We would try to put forward a policy to drive that sort of thinking in the industry.

The document was only released last week. We intend to canvass our members and the wider industry in the next number of months to get their opinions on it. I think part of the problem with the CAP is that it does not reward the person who wants to be productive and efficient. This is a way that we would see agriculture moving forward.

The British Government may decide that it wishes to import low-cost product from the rest of the world, but it goes back to the point that we cannot accept imports from countries, where the product is produced to a lower standard. I think that is a red-line issue for us and I think it is a red-line issue for the four UK unions. Why would one consider such a proposal? We are strong on that issue.

On the issue of unsubsidised agriculture, it is always a threat. The Secretary of State for Environment, Food and Rural Affairs, Ms Andrea Leadsom, and Ms Theresa May have played their cards reasonably close to their chest. We do not know what will happen after 2020 at this stage. We hope that under the changes we will still get continued support. Change takes time. If there are proposed changes in agriculture, there must be a transition period. We cannot go over a cliff edge. We all know that farming is a cyclical business. There is a lead-in period so we cannot change overnight. That is a fear for the farming industry.

Some of the indications from Brussels are that the pot of money for reform of the CAP will be under pressure. When the UK leaves the European Union, there will be a big hole that must be filled in some way or other. Some of the conversations would suggest that the money will start to move east to some of the less productive countries in the European Union in the next round of CAP negotiations. There are those considerations.

Chairman

I apologise for interrupting Mr. Bell, but proceedings have overrun. We have used five minutes of the time allocated for the next session. I ask him to conclude and if he has further comments he could submit a supplementary written submission. I thank Mr. Bell for coming before committee.

Mr. Barclay Bell

I thank the Chairman and members for offering the Ulster Farmers Union this opportunity. We are available at any time.

Chairman

I thank Mr. Bell.

Sitting suspended at 11.05 a.m. and resumed at 11. 15 a.m.