EU farmers to receive €500 million in aid

Colette Fitzgerald, who heads up the European Commission’s representation in Northern Ireland, accepts a letter of protest from Gary McHenry, Charlie Weir and Kyle Savage, members of the Fair Price Farming NI group.

Following the decision by Europe’s farm ministers to agree a support package for the agriculture industry, Richard Halleron rounds up the reaction of those at the heart of the matter locally.

Europe’s farm ministers have agreed a €500 million support package for agriculture, the most significant component of which will be the provision of specific dairy aid envelopes to each of the 28 member states. But it will take a number of weeks for the full scope of this measure to be agreed in Brussels.

Other elements within the ‘crisis response’ measures include the earlier payments of direct support monies to farmers – October as opposed to December – the introduction of enhanced aids to private storage (APS) arrangements for dairy and pork products; giving farmers access to cheaper money through the European Investment Bank and a commitment by Brussels to significantly ramp up the promotion of European dairy products outside the European Union. The European Commission will also seek to investigate the feasibility of introducing stronger codes of practice for EU food retailers.

But, significantly, the package of measures does not include a commitment by the European Commission to enhance dairy intervention support, the key demand that had been made repeatedly by farming organisations right across Europe in the run-up to September’s farm summit in Brussels.

Speaking after the September council of ministers’ meeting in Brussels, Northern Ireland’s Agriculture Minister Michelle O’Neill said: “The Commission’s response falls short of the immediate meaningful action I have been pushing for strenuously regarding raising the intervention price. Instead we have a commitment to funding of €500 million.

“While this funding is welcome, my concern is how far it will stretch across 28 member states and how it will be apportioned within our member state to help those farmers in greatest need. Our dairy prices are down 36 per cent on last year, more than double the figure of 17 per cent for Britain and the north of Ireland together.

“The particular circumstances facing our local farmers were recognised in the Council Chamber today. My job is to make sure that our share is based on need and reflective of our vulnerability given the amount of product we export.”

In contrast, Dublin Farm Minister Simon Coveney welcomed the tenor of the agreed aid package for agriculture.

“It is certainly welcome news that the European Commission is prepared to make half a billion in funding available from the EU budget to support hard-pressed farmers,” he said.

“This includes the use of substantial EU budget funds to provide a 70% rate of advance payment payable under the direct payment schemes, the introduction of APS for cheese and pig meat, with better conditions for APS for other products and the introduction of additional promotional measures.

“I am determined to ensure that these funds are used for measures that provide targeted and fair support for Irish farmers.”

Ulster Unionist MEP Jim Nicholson said that that the EU aid package does not contain enough measures to tackle the immediate problems facing aspects of the agricultural industry in Northern Ireland.

“The headline grabbing €500 million targeted aid for farmers will not amount to much once it is subdivided across member states – but we must get our share of this,” he said.

“The new private storage scheme for pig meat will provide some relief to pig farmers who have seen markets tumble in recent months.

“Crucially, the European Commission has not committed to a review of the dairy intervention prices. This is hugely frustrating given that current levels are totally out of date and are as a result ineffective.”

The weeks running-up to the announcement of the farm aid package in Brussels saw farmers taking to the streets across Europe, all demanding better prices for their produce. In Northern Ireland, these protests had been spearheaded by a new grouping – Fair Price Farming NI. Claiming a membership that extends into the hundreds, the new organisation has been to the fore in organising protests outside supermarkets and, in addition, demonstrating in significant numbers at the door of the European Commission Office in Belfast.

All of this activity has severely annoyed the hierarchy of the Ulster Farmers’ Union, who believe that demonstrating in this way runs the risk of upsetting members of the general public, whose custom the farming and food sectors are very dependent on.

In response to this accusation, the leading members of the Fair Price Farming group claim that it was their initiative and resolve that brought ASDA to commit to a 28 pence per litre purchase price on all liquid milk sold in their retail outlets. A war of words between both groupings, much of it carried out in the public domain, has since ensued.

All of the leading members within the new grouping claim membership of the Ulster Farmers’ Union, yet assert that they will remain in place as a long term lobby group, irrespective of the farm aid package deal that has now been struck in Brussels.

The future uncertainty of the Executive at Stormont adds another twist to the unfolding challenges now confronting agriculture in Northern Ireland. If Michelle O’Neill finds herself out of a job, her responsibilities will be assumed by a direct rule minister. Westminster has a very simple policy when it comes to dealing with Brussels. It can be summarised in two very simple words: ‘cut costs’.

So the likelihood of direct rule delivering enhanced levels of support for Northern Ireland’s hard pressed arming sectors is extremely remote. Another factor to be considered in this regard is the close working relationship that currently exists between Belfast and Dublin. Despite their political differences, O’Neill and Coveney get on quite well together.

Specifically, they have strived to bring a more realistic all-island dimension to many of the problems that have confronted the farming and food industries over recent times. In the event of a direct rule minister taking over at the helm of agriculture in Belfast, that person will always seek to have a London perspective brought to bear on all matters of importance.

Many economists believe that the EU’s €500 million support package for agriculture is akin to a sticking plaster being used to stem the flow of blood from a serious wound. The only solution to the genuine crisis impacting on Europe’s farming sectors at the present time, particularly dairy, is better market prices.

And, in this regard, the first ‘green shoots’ of recovery may now be apparent. Recent global dairy trade auctions in New Zealand have recorded a significant strengthening of rices, albeit form a very low base.

These developments have managed to put a floor back under international milk markets, according to Lakeland Dairies’ CEO Michael Hanley.

“But there remains a total disconnect between what’s happening here in Europe, where prices are still falling, and the rest of the world,” he said.

“However, if the New Zealand auction was to deliver a series of positive results over the coming months, this would send out a positive signal to the dairy markets as a whole.

“World dairy markets will turn. And we may be seeing the start of this process already. There is a bright future for dairy farming in Northern Ireland. And this must be based on a scenario which sees farmers getting a realistic return for the milk they produce.”