Edwin Poots has called on ‘supermarkets to step up to the plate’ and pay farmers more for the food they produce.
The Northern Ireland Department of Agriculture, Environment and Rural Affairs caretaker Minister was speaking during a breakfast he hosted at this year’s Balmoral Show.
Sinn Fein Vice President Michelle O’Neill, her party colleague Conor Murphy, DUP MLAs Paul Givan and Gordon Lyons sat together at the event, which also included industry stakeholders, academics and civil servants.
Mr Poots used his speech to highlight the “major squeeze” farmers, fishers and food producers are currently experiencing as a result of the “unprecedented rise in cost of energy, feed and fertiliser which simply cannot be absorbed by farm businesses”.
The DUP South Belfast MLA told those gathered he has written to retailers to “voice my concerns” and has urged George Eustice, UK Secretary of State for Environment, Food and Rural Affairs, to provide “financial assistance for UK farmers to get through this crisis”.
“If the economic viability of the primary production and domestic supplies of agricultural goods are to be sustained, we need supermarkets in particular to step up to the plate,” Minister Poots said on Thursday.
“Our agriculture sector is currently facing financial pressures, future rising interest costs.
“Feed, fertiliser, fuel and other costs have risen 30%, 200%, 50% and 8% respectively from last year.
“Over the space of the year these prices saw an extra £556 million cost incurred by the sector, £136m per quarter which is more than the total outcome from farming of £501m in 2021.
“These calculations are based on current market developments and the outlook for the rest of the year is uncertain and potentially volatile.
“Unfortunately end markets for agricultural produce and food are currently responding too slowly to offset these rising costs causing a major squeeze in cashflows and also profitability.
“This is undermining confidence throughout the industry and will inevitably result in a contraction in production due to mounting losses if the situation is not corrected very soon.
“This correction must come in the form of increased farm-gate prices.
“I have written to retailers to voice my concerns regarding farm-gate prices for primary food producers.”Since it’s a UK-wide problem, Minister Poots said he has also shared his concerns with George Eustice, urging him to provide “financial assistance for UK farmers to get through this crisis”.
“The UK must prioritise food security and food supply security in going forward,” he continued.
“The notion that we can outsource our food production is neither sustainable or in the best interests of the people we serve.
“I am all too aware of the difficulties farmers, growers and our fishermen face – and the need to provide the industry with some confidence in the coming months.”
Caretaker Economy Minister Gordon Lyons spoke of the importance of NI’s agriculture industry to the wider economy and the department’s 10X economic vision, with the latest DAERA figures suggesting it “was worth some £1.67 billion in 2020”.
“Recent increases in energy costs, linked to geopolitical volatility, clearly illustrates the need to accelerate the roadmap to energy decarbonisation and self-sufficiency,” he said.
He also said farmers, processors, retailers and everyone else in agri-foods need to work together to deliver recommendations, such as an industry-led sustainability body, outlined in Sir Peter Kendall’s Independent Strategic Review of the Agri-Food sector.
‘All we want is a fair price,’ say UFU
The Ulster Farmers’ Union recently warned NI’s pork industry could be “completely wiped out” if supermarkets don’t do more to support producers.
Their comments echoed similar calls from the National Pig Association.
UFU pork and bacon chair Glenn Cuddy said: “We’ve been engaging with processors and retailers in a bid to get the prices paid to pig producers closer to the costs of production.
“Most recently, we met with Tesco who unlike the other retailers, were unable to discuss any plans they have to support our members through the most difficult period of trading ever endured.
“All we want is a fair price for the high-quality pork products our members produce.
“It was recently reported that Tesco profits trebled last year citing ‘meaningful negotiating power’ with suppliers as a reason.
“We urge Tesco to remember that they’ll only be able to continue exercising this ‘meaningful negotiating power’ whilst our members continue to produce pigs.
“Time is running out fast for our local pig producers and it’s extremely hard to swallow when one of the biggest retailers they supply, has the ability to ease the pressure… but instead, continues to sit on the side lines.”
An Aldi Ireland spokesperson said: “We have been working closely with our suppliers and have already provided significant cost support across our supply base in recent weeks, reflecting the cost challenges our farming and food production partners are facing.”
Sainsburys said they have received the letter from Edwin Poots, adding: “Through working with suppliers to understand their concerns, we recently increased the amount we pay farmers for milk, announced an additional £2.8 million in support for our pork producers, enabling them to align all pigs supplied to Sainsbury’s to a fixed price for a 12-week period from 13 March to 5 June and we are working with our egg suppliers to make sure they receive a price that reflects the increasing costs they are facing. This is based on real time factors, such as the cost of feed.”
Tesco and Asda did not respond to our request for a comment before publication.
Andrew Opie, Director of Food & Sustainability at the BRC, said: “Retailers have long-standing, established relationships with their suppliers and know how important maintaining these are for their customers and businesses. Supermarkets source most of their food from the UK and know they need to pay a sustainable price to farmers but are constrained by how much additional cost they can pass onto consumers in this very difficult market.”
Agri-food firms can thrive by going green
Meanwhile, the chief executive of Northern Ireland’s leading dairy co-op, Dale Farm, has said he believes agri-food firms could thrive by ‘going green’.
Nick Whelan, Group Chief Executive of Dale Farm and Chair of the Northern Ireland Food and Drink Association, called for a new era of collaboration between industry and government to help agri-food firms fulfil their green ambitions and reduce carbon emissions.
He was speaking at the Ulster Bank lunch in the show’s President’s Lounge, as part of a panel that also included Moy Park’s Justin Coleman and Ulster Bank Senior Agriculture Manager Cormac McKervey.
Mr Whelan said: “The biggest challenge we must face as an industry in the years ahead is the need to continue to feed a growing world population in the most sustainable way.
“Innovation, investment and data gathering will be key to ensuring the industry plays its part in achieving UK net zero. It will also require a new era of collaboration between industry and government, and we look forward to engaging with the new Assembly on these issues.”