Downturn brings our supply chain structure into focus

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I recently returned from the special Agriculture Council meeting in Brussels which discussed the current challenges facing our agri-food sector and what the European Commission can do to help.

The current downturn also brings into focus our local supply chain structure.

Farming and food are an inherent part of the north, of our landscape and our people, and it is in everyone’s interests to see a vibrant and sustainable agri-food sector.

The current crisis is caused largely by factors beyond our shores and outside of our control, but the scale of their impact can, in some measure, be influenced by what we do and how we do it.

We produce world class food and drink, but that is not to say that there aren’t things that we can do better to ensure we are rewarded for the quality product we have to offer.

Supply chains have become fragmented. This leads to insufficient margins spread across the supply chain. I want to see all players in the agri-food sector sharing equitably in the risks and rewards for their hard work. Without this, the result can be financial hardship, job losses and emotional pressures. This will cause long-standing damage to our agri-food sector and isn’t sustainable.

There is a need to revisit the traditional understanding of a supply chain: to build strong relationships between producers, processors, retailers, the food service industry and other key players, such as banks and feed merchants; to improve transparency and communication; and to rebuild trust and confidence across the supply chain.

We have a clear strategy for the future of our agri-food sector – Going for Growth. That strategy centres on the premise of a single supply chain; one which is integrated, sustainable, and profitable, focussed on delivering the needs of the market.

It calls on government and industry to work together to overcome barriers, to deliver integrated business models and to develop customer focussed supply chain solutions. Going for Growth is not about increasing production across every sector; it’s about adding value across the supply chain by meeting the customers’ needs through sustainable and integrated production. This requires a new approach, a new mindset even, to ensure that all players work more closely together to deliver on our aspirations.

The local market is limited. Therefore sustainable income for producers will predominantly arise from securing exports in new and expanding global markets. My department continues to open up new markets for our produce, but to make the most of these opportunities, the industry must ensure that the demands of these markets are met, with high-quality, safe and traceable food.

We need to produce the right food, at the right time for our new customers. The only way that this can be done is by ensuring that all parts of the supply chain know what they are supposed to be delivering. If we want to get to a stage where a businessman in Beijing is sitting down to steak from Tyrone, the local farmer needs to know what kind of animal he needs to produce, when and why he needs to produce it that way.

This will only be achieved through enhanced communication – from our customers to our processors; from our processors to our finishers; and from our finishers to our producers. Communication of the needs of the marketplace must be transparent, total and continual.

For this to work effectively, we must be receptive to the information we receive from the marketplace. Communication is worthless if we do not hear what is being communicated.

We cannot expect to sustain an industry in an increasingly competitive marketplace by standing still. Our competitors are finding new ways to increase efficiencies in their production whilst also meeting the demands of the market. Our industry, from retailers and exporters, right down to farmers and growers, needs to be responsive to what our customers want. Just because we’ve always produced food a certain way, doesn’t necessarily mean that it is the right way to do it in the future.

With the need for a better-functioning supply chain, I have tasked the Agri-Food Strategy Board to establish a Supply Chain Forum covering the entire sector focussed on supporting the industry in developing a sustainable future, through enhanced collaboration and effective communication.

The AFSB is putting the finishing touches to its plans for the Supply Chain Forum and I would encourage all those invited to participate. I will be a strong advocate of this work and fully intend to be closely involved.

Further afield, the Commission has recently announced plans to establish a High level Supply Chain Group at EU level to look at issues, such as risk hedging instruments for agricultural products. It will be important that local representatives are plugged into this work so that our industry can benefit from any lessons learned or new initiatives emerging from the group.

Be in no doubt, I am committed to the long-term sustainability of the entire agri-food sector. Farmers and primary producers here can depend on me as a locally accountable Minister to ensure that their interests and needs are prioritised ‎as we reach further into a growing global market, proudly showcasing our high quality produce.

I am working hard to open up the new markets that our local industry wishes to target. I have secured the largest ever Rural Development Programme funding which will provide farmers with the skills, training and investment they need to improve how they produce; and provide processors and SMEs with financial support to innovate within their business models.

Outside the RDP, I continue to promote and represent the interests of the sector, whether at home or abroad.

As we prepare for the Year of Food in 2016 I will be championing our local product and those who bring it to market, loud and proud!