According to DAERA’s recently published figures, turnover within the food and drinks’ sector fell back during 2015 and 2016.
This development brought to an end 15 successive years of positive growth within the industry. But it wasn’t all bad news as, despite this ‘setback’, employment levels within food and drink continue to increase.
I haven’t seen the actual detailed breakdown of the DAERA figures. But I sense that the downturn in food and drink turnover may have been, at least, partly caused by the meltdown in global dairy markets that took place during 2015 and 2016. This, in turn, had a major impact on farmgate milk prices, one which many local dairy farmers are still recovering from.
Back in the spring of 2016 the word ‘volatility’ was on all our lips. This was the ‘V’ factor which the experts told us would continue to haunt the dairy sector for many years to come. So concerned were the Ulster Farmers’ Union and Dairy UK that they hosted a bespoke conference on the subject, gathering ‘international volatility experts’ to tell us what we could expect and how local dairy farmers could plan to cope with the ups and downs of the markets moving forward.
We even had both the organisations behind the conference committing to come up with a bespoke plan for Northern Ireland, where dairy volatility is concerned. Yet, 15 months on, we have seen little or no evidence of white smoke from either the Union or the Dairy Council on this matter. Yes, milk prices have improved in the meantime. But this had nothing to do with any actions taken by either of aforementioned bodies.
The plan – if you could call it that – last time around was to let the banks soak up the initial pain and then have these ‘august’ bodies re-distribute the discomfort back down the line to farmers by way of interest and capital repayments plus the usual hefty charges that are now associated with the additional loans, overdrafts and other lending facilities agreed with producers at the height of the milk crisis. I sense that such a plan will not work next time around.
We never seem to learn from history. Who knows when we might be facing the next income crisis within the dairy sector? But it is coming. So, it would be incumbent on all the various stakeholder groups within dairy to keep their word and come up with a long term, farm-gate stabilisation plan for the industry. And the clock is ticking.
It’s time to look forward: By my reckoning, the UK and EU authorities have only a few short months to sort out their Brexit arrangements, assuming the March 29th, 2019 deadline remains the target date for the big split.
Within the grand scheme of things, this is a minuscule amount of time. I am now deeply concerned that agriculture may well be dealt as a matter that is thrown into the fray at the very last minute. But even more worrying is the fact that, as yet, we have no real Brexit strategy in place for agriculture in Northern Ireland.
I also get the sense that some opinion formers hold the view that Brexit is a jolly good idea altogether. Essentially, it will deliver a UK market that is undersupplied in food while we here in Northern Ireland take up the slack. However, this only works if the British government commits to trade deals which ensure parity of esteem for local food companies, when it comes to them competing against imports. And there is also the small matter of London maintaining the current level of direct support to local farmers well beyond 2022.
Moreover, the aforementioned outcome is only one of many Brexit scenarios that could unfold over the coming months. I don’t think that playing the lottery with the fortunes of an industry that is worth £4 billion to the local economy is a good thing. Hence, my genuine concern at what seems to be the genuine lack of urgency in getting a clear Brexit strategy for farming and food put in place.