Declan Billington, Chief Executive of John Thompson and Sons Limited, was elected President of the Northern Ireland Grain Trade Association at the annual general meeting this week.
A native of Holywood, Co Down, Declan is a graduate of Queen’s University and a Fellow of the Institute of Chartered Accountants in Ireland. Originally qualifying with Price Waterhouse (now PricewaterhouseCoopers), Declan worked as a manager within its corporate recovery and insolvency department for a number of years before moving out into industry.
Following three years working in the meat processing industry he moved into the engineering sector, spending several years with Copeland (NI) Ltd, based in Cookstown, a subsidiary of the US multinational Emerson Group, rising to the position of Plant Director. During this period Declan led an impressive business improvement programme and sustained profitable growth through lean manufacturing techniques and a team-focused culture. In October 2005 Declan made the transition back into the agri–food sector by joining John Thompson and Sons Ltd, based in Belfast.
Over the last seven years he has been heavily involved with the Northern Ireland region of CBI, including Chairman of its Economic Affairs Committee 2003- 2005, and acting in the capacities of Vice Chairman and then Chairman of CBI Northern Ireland 2005-2008. Declan also chaired the Skills Sub–Group of the Economic Development Forum, 2005 – 2007, a stakeholder body that advised the DETI minister on policy.
Declan has been a member of the Executive Committee of the Northern Ireland Grain Trade Association for a number of years and is NIGTA’s representative on the Board of AIC (Agricultural Industries Confederation), NIGTA’s sister organisation in GB.. He has been actively involved in many of the Association’s activities, including lobbying at UK and European levels, encouraging and facilitating quality assurance schemes, responding to government consultations, and providing expertise and information to the farming and food chain.
Married to Francesca, Declan has three children, 2 boys and a girl (Declan aged 12, John aged 10 and Ellen aged 6). He states that he has no time for hobbies as work and family fill his daily routine.
Claudine Heron was elected Vice President with David Malseed re-elected as Honorary Secretary. Michaal Moreland stepped down after giving sterling service for many years as Honorary Treasurer and this post has now been filled by Stephen Burrell.
Tributes were paid to the outgoing President, Garth Boyd, who gave up so much of his personal and family time for NIGTA business and who steered the Association through the dioxin crisis in addition to lobbying on aspects such as GM approvals which could add so much cost to farmers feed bills. Garth finished his Presidency on a very positive note whereby an all-Ireland risk based sampling system is already in the planning stages.
NIGTA AGM 2010
Dairy farmers would need at least 21 to 22 pence per litre in summer and 25 to 26 pence per litre in winter to enable them to stay in business and make the necessary investments for the future, Graham Furey, President of the Ulster Farmers Union told the Northern Ireland Grain Trade Association at their quarterly meeting.
Graham went on to outline the various stages of the UFU’s Dairy Industry Recovery Map stating that the aims in the EU sector of the map regarding export refunds, intervention and aids to private storage had some success.
At the meetings with the retailers the UFU had outlined the Belgian example whereby an extra 14 cents per litre was paid by the retailers for milk going to the liquid market. The Belgians spread this extra payment across all of the milk supply. Their situation is similar to Northern Ireland in that 15% of their milk goes to the liquid market. If the same exercise was carried out in Northern Ireland it would equate to a penny per litre or a total of £20 to £25 million and would benefit all dairy farmers.
Another phase of the Recovery Map was meetings with the milk processors where payment on compositional quality, more emphasis on added value products and rationalisation were the topics.
The fourth item on the map was the milk auction. The UFU was not keen on option milk, as in their opinion, it had the potential to sway the market in the wrong direction. The one month auction has been a help.
Graham Furey agreed that farmers could play their part as well since the costs of production of a litre of milk varied from 14 pence to almost 30 pence per litre. Farmers were also facing an increase in the order of 4 to 5 pence per litre in finance charges. Some will be facing the decision of going out of milk production or restructuring.
Commenting on the grain harvest Graham said that winter barley which had been trading at £140 per tonne last year was £102 this year. Barley coming off the combine was actually better value than silage.
He went on to say that the GM situation in Europe was worrying due to the slow approval process for new varieties. This had had a serious effect on the corm gluten market two years ago and was now threatening soya. He pointed out that some member countries automatically vote against these approvals because they misunderstand the situation. The EU is not asking them to approve GM varieties for growing in their own countries but to approve them for imported raw materials which are in short supply in Europe and without which European livestock production could not survive.
A Challenging Year
I would like to start off by congratulating you all for making it here this year as we have just gone through one of the toughest trading periods that any of us have ever experienced. Our businesses have done so by continuing to provide a high level of service to an ever increasing level of trade assurance.
For those of you who use the social networking sites, what would my speech say if it was a 140 character tweet on twitter?
“Dioxin crisis and threats from GMO approval process strengthens resolve of Northern Ireland Feed and Food chain participants.”
Since I joined the trade in 1990 there have not been many years where major change or a crisis has not been top of the agenda for any President.
This year is a bit different as we have a MAJOR opportunity. This opportunity has arisen because of the dioxin crisis pre-Christmas.
WHY is it an opportunity you may ask? Your initial reaction may have been like mine when at the FEFAC Dioxin workshop in February the Deputy Director General of DG SANCO, opened the discussions by congratulating and thanking the Irish for saving the European Pig Meat industry. After picking myself up of the floor, and as I recovered from my state of shock, I began to see where she was coming from.
If the Irish or the EU, whoever actually made the decision to recall 3 months of production, had not done so, then almost certainly major trading blocks around the world would have banned EU exports.
Now, we all have our own versions of the “truth” of how this whole incident occurred: The Key points being
•A Food recycling plant, processing bakery waste
•Involving direct flame drying
•and Changing fuel sources
How could one insignificant operation in the south east of Ireland push the EU Pig Meat industry to the point of extinction and possibly threaten large sections of the 150 million metric tonne EU animal feed market?
In the few weeks after the 5th of December, each of our businesses and the key agricultural industry bodies struggled with the communication process with the rumour mill running riot;
was it pork?
was it beef?
were we testing for PCB’s or Dioxins?
Was Lord Lucan cash selling the bakery waste?
Although none of our businesses were directly involved, we were having bi-lateral meetings trying to work out how this could have happened, and what were the systems and checks that should have prevented it? For a while we felt like Oliver Herford’s description of that one of God’s creatures that has formulated the perfect philosophy in life, the CRAB. “Whenever he is confronted by a great moral crisis, he first makes up his mind what is right and then goes sideways as fast as he can.”
The next few months for me were a bit of a personal journey, having meetings with industry bodies, going on fact finding missions such as the Dioxin workshop and subsequent meetings with government bodies. At the Dioxin Workshop it was interesting to note how different Member States were interpreting the food and feed legislation that had been updated in 2005.
For the Belgians who had experienced a major dioxin related problem 10 years ago, they appear to have run a major fact-finding project and now have the knowledge to inform their businesses of where the potential problems are, but have not gone further legislatively. Alternatively the Germans wrote to the EU Commission in 2006, as they are entitled to do, informing them that the EU laws were not strong enough with regard to Direct Flame Drying plants and that they were putting in controls and an approval process over and above those of the EU.
So travelling back from this workshop my views on the potential solution to this problem were clear, the Germans had run their HACCP on direct flame drying plants and decided that further controls and an approval process were the only solution. Why try and re-invent the wheel, legislation was the way forward!
Well it was until a stakeholder meeting with DARD and FSA, when it was indicated that there would be no gold plating of current legislation.
I must admit I had great trouble with this; why would we not legislate for something that had proved a few months earlier to have the potential to take down an EU wide industry?
Well, for this answer I went back to the ‘books’and found three important points that needed to be considered; the work of Geert Hofstede on Cultural Dimensions and his Uncertainty Avoidance Index, the Civil Libertarian Principle and the Competitive Enterprise Ethic.
Firstly; Geert Hofstede states in his work that Uncertainty Avoidance cultures try to avoid ‘different from usual’ situations by strict laws and rules, and it hence comes as no surprise that the Germans score thirty points higher than the British and the Irish on the index.
Second; The Civil Libertarian Principle, is a basic principle of our society and states that the only reason for exercising political power over a person is to prevent harm to others. Harm which a person may do to himself is no grounds for action.
Third; Our economy is based on the Competitive Enterprise Ethic which is essentially an ethic of individuals taking calculated risk. In essence, opposition to personal choice and to risk taking, is opposition to the free enterprise system.
So, initially, we may not like to be told by our authorities, that they don’t want to be seen to be gold plating legislation, but that will be the fact because of our cultural programming and the basic principles and ethics of our society in relation to risks of this nature. In effect, by not taking action our authorities are promoting the free enterprise system and we should be thankful that they do not want to get any deeper into our businesses than they already are.
So what does this mean for those of us competing with businesses or trading entities that may not be complying with legislation and are not working to the standards within the most recent trade assurances schemes? Really, just another day at the office, as Judge Baron Bowen of Colwood put it:
“The rain it raineth on the just And also on the unjust fella: But chiefly on the just, because The unjust steals the just’s umbrella”
So why then do we participate in the trade assurance schemes? If we go back to the aftermath of BSE, it was the prospect of the large retailers facing litigation under the Food Safety Act which gave the impetus to the development of these schemes. Hence by participating in the schemes we not only comply with all of the latest legislation but we also protect our shareholders and our customers businesses, whilst preventing each of the major retailers from having their own scheme and the penal costs of complying with such.
So, this is the opportunity I referred to a few minutes ago, the people and the industry bodies represented in the room this evening have been provided a great opportunity to work together to develop strong efficient supply chain solutions that will benefit all stakeholders, and marginalise the effects of any non compliant traders on our industries. None of us need to be reminded that our milk and meat sectors export 80% of their production, hence the integrity of our supply chain has got to be such to impress the most discerning of our export customers, probably someone with a high Uncertainty Avoidance score such as the Japanese or the Germans.
The other areas I would like to cover briefly are fertiliser and the joint topics of GMO’s and the EU’s zero tolerance policy which has now become part of the President’s job description.
On the linked theme of legislation, discussions have also been taking place with AIC on the Fertiliser Industry Assurance Scheme (FIAS), which was commenced in response to security issues surrounding Ammonium Nitrate in Great Britain. Referring again to the Civil Libertarian Principle, this issue is one where an individual or group of individuals can bring harm to others and hence is deserving of government legislation. As such Northern Ireland has had legislation in place for almost 40 years, legislation that is much higher than in Great Britain and most other parts of Europe including, believe it or not, Germany which is the other main C.A.N market. So just in case anyone was thinking that it is assurance schemes for assurance schemes sake, our position with AIC is firmly one of a legislative answer and to make it slightly more challenging, on an all island basis.
Last year, the President mentioned, in his speech, about the effect of the chinese farmer using one more bag of fertiliser being equivalent to total European demand. Well what a difference a year makes! The issue now seems to be what happens if the Chinese farmer uses 2 bags less. On the local front the NIGTA Fertiliser committee has been meeting with the Countryside Management Branch of DARD, exchanging information and agreeing on joint press releases; a massive improvement in relations from those days a few years ago when the battle lines were firmly drawn on the nitrate and phosphate directives. I would like to take this opportunity to thank Nicholas Morrsion and Tony McIvor for their input over the past year and for helping to widen the focus of the association.
On the issue of ASYNCHRONOUS APPROVALS for GM, earlier this year we had the fast tracking of approval for the Roundup Ready 2 event. This provided the trade with a bit of breathing space, whilst waiting for progress on the LOW LEVEL PRESENCE issue.
Earlier this year I was fortunate to accompany representatives from IGFA, FEFAC and COCEREAL to a meeting with DG SANCO Cabinet Members Ms Spanou and Ms Pinho. During the discussions we explained that the extra costs resulting from the zero tolerance policy were being borne primarily by 4 out of the 27 member states and that the people paying for it were those least able ie. the farmers within those member states. Nearing the end of the discussions Ms Spanou informed us that if the issue was kept to feed only, and food was not included, then a proposal would be issued from DG SANCO prior to the Greek Orthodox Easter. This timeline has slipped, probably due to the high political profile of this issue, and is now most likely to be discussed with the new Commission as from October.
So there is some light at the end of the tunnel on Low Level Presence, although certain elements from the food side may understandably be unhappy if a ‘feed –only’ solution is adopted.
One insight I have had over the last 7 months since taking on the Presidency is the level of co-operation between stakeholders within the greater agri-food industry, plus the serious amount of graft that goes on behind the scenes to ensure that our voices are heard and our needs are understood at all levels of government whether it be Stormont, Westminister or Brussels. I would like to take this opportunity to say a few thank you’s:
•To the MEP’s for their continued help on GM issues and all things in relation to DG AGRI.
•To Malcolm McKibbin and his team at DARD. We have always had a good working relationship and I am sure it will go from strength to strength as we work through some of the issues resulting from the Dioxin crisis.
•To the AIC for the continued help on a raft of issues on the feed side
•To Gerry McCurdy and his team at FSA Northern Ireland.
•And to Deirdre Webb from IGFA for our joint lobbying work and the invaluable direct line into Brussels.
In conclusion, to the representatives of Northern Irelands meat and dairy sectors sitting here this evening, we must take the opportunity afforded to us by the Dioxin crisis and close any loopholes that are in our supply chains. We must learn from experience. A father never wakes up his second baby just to see it smile!
Distinguished guests, Past Presidents, Ladies and Gentleman. Thank you very much for your attention and enjoy the rest of your evening.
NIGTA Annual Dinner 2009
The NI Grain Trade Association elected Garth Boyd, as its new President at the annual general meeting this week.
Garth has worked for 19 years in the feed and agri supply industry, initially in the compound feed manufacturing sector and then in the importation of feed materials. In 2002 he returned to the compound feed trade and is currently Chief Executive of United Feeds Ltd.
A past pupil of Regent House Grammar School, Newtownards, Garth holds a BSc Honours in Medical Biochemistry from Queens University and an IoD in Company Direction.
In addition to his role in United Feeds and NIGTA, Garth is also Vice Chairman of the Food and Drink Sector Skills Council and Business Representative on the NI Drainage Council.
In addition to all of these roles Garth has wife, Heather and their three very young children ( including a set of twins) at home. To say that he will have a busy year ahead is very much an under statement.
The new vice president of NIGTA is Declan Billington, while David Malseed was re-elected Honorary Secretary and Michael Moreland was re-elected to the position of Honorary Treasurer.
Grain Trade Plans To Introduce Risk Based Sampling
Although the ASSURED animal feed industry has not been involved in recent
Food scares they plan to add further protection for the future of the food and
farming industry.
As a first step, both the Northern Ireland Grain Trade Associaton and the Irish Grain And Feed Association have plans in place to introduce risk based sampling of imported raw materials.
This was one of the recommendations made by Professor Patrick Wall, Associate Professor of Public Health, University College Dublin and former chairman of the European Food Safety Authority when he spoke at the Irish Grain and Feed Association's annual dinner in Dublin last weekend.
Professor Wall spearheaded the review of the dioxin incident in Ireland and stated that his recommendations included a review of sampling of imported feed, implementation of feed and food safety management systems, a system of monitoring risks identified internationally, and written assurance regarding specifications for fuel sources used in drying processes.
These are only a few of the recommendations of the very detailed report but speaking after the dinner, Garth Boyd President of NIGTA said "The animal feed trade both North and South of the border have launched an all-out campaign to take feed, and thus food, safety measures to a new league in order to protect the consumer and help avoid what could be an entire close down of food production in the island of Ireland, if another major incident was to occur."
He continued "In spite of the fact that the feed assurance schemes which both organisations are involved in, have protected not only the farming industry, but also the food processor and ultimately the consumer in recent food scares, we will not 'rest on our laurels' but are still going to carry out a full review and risk based analysis of the entire chain from importation of feed materials to compound finished feeds. Risk based quality assurance schemes are vital across the entire feed and food chain from producer to processor, and should be fervently supported at all levels in our industry as, to date, it is only in times of crisis that people appreciate their value."
Garth Boyd added "The food processors are anxious to support this project
Ulster Bank keen to grow Market Share
Ulster Bank is keen to grow its market share across the agri food sector in spite if the increased cost of funds “ Cormac McKervey, Head of Agriculture, told a meeting of the NI Grain Trade Association this week.
He said “ While base rate remains low, the cost of 'buying in' money, the so called LIBOR rate remains higher. This is turn has increased the cost of borrowing. However Ulster Bank remains competitive, is open for business and keen to grow its market share across the agri food sector”
Commenting on the various sectors Cormac said “ The lack of profitability in milk production has certainly caused cash flow problems on many farms but the bank is working with its customers as best they can. Other sectors are performing well with good prices buoyed up by both the effect of currency and the relative lack of supply of product.
“Suckler, beef farmers in particular are seeing a return to profit this year while pig farmers are significantly reducing bank/merchant debt and in some cases seeking to expand the business further. The poultry sector too is expanding both for meat and eggs.
Discussing the farmer’s vulnerability to market fluctuations Cormac said ““The major issue going forward is the sheer volatility in markets as Brussels withdraws its market management tools. While these are available for milk products it is clear how reluctant Brussels is to support markets. Any risk associated with farming now rests with the farmer as any safety blanket which was there in the past is slowly being removed. The boom/bust cycle normally reserved for pig and potato farmers is now evident sector wide.“
The setting up of an integrated production operation and the penetration of premium markets for a speciality veal product was the success story outlined to the Northern Ireland Grain Trade Association at their annual general meeting.
Frank Foster, Supply Chain Manager with Linden Foods, Dungannon told the meting how the company wished to find a system of investing in the calves from the dairy herd which were exported from the province. They also wished to investigate the possibilities of a niche market product which would command a premium and an animal welfare friendly system of producing that product.
The final result has been a unique veal product, Banquet Royale Rose Veal, which is produced in an integrated production system on selected farms throughout Northern Ireland.
With the aid of a power point presentation Frank outlined the unique rearing system with excellent housing and facilities pointing out that the farmers who manage the units must adher to a strict management routine which includes all veterinary treatments etc.
The benefits of this development are that farmers have a guaranteed price and market for their product, while inputs such as feed and veterinary requisites are bought at a discount by Linden Livestock and calves which would normally have left the province are now retained to provide an enterprise for local farmers and to supply a premium food outlet.
Looking to the future Frank stated that the aim was to develop an integrated supply chain in order to have complete control of the enterprise from the calves are 10 days old until they reach the retailers shelf, thus guaranteeing a consistent supply and quality. They are constantly investigating new markets and are currently looking at the potential for 8 months veal in the UK market.
The lobbying efforts by both Dairy UK and the Ulster Farmers Union to urge the reintroduction of export refunds were outlined by Mike Johnston, Chief Executive of Dairy UK when he addressed a recent meeting of the NI Grain Trade Association. He said “Dairy UK and UFU have been lobbying local, national and EU politicians to urge the reintroduction of export refunds as a means of trying to put a floor in markets that continue to fall. Unfortunately the EU has not so far accepted the case for export refunds, and as markets continue to fall, the outlook is for continuing market volatility and uncertainty.”
Mike also gave a detailed background to the current situation in Northern Ireland and in European and world markets. He pointed out that from 2000 to the end of 2007, milk production in Northern Ireland increased by 21%, compared with a fall in overall UK production of 4%. Current milk production is running at around 5% below 2007 levels, whereas milk production in other countries has been increasing. This has been most noticeable in USA, Argentina and New Zealand.
Milk utilisation in Northern Ireland differs significantly to the rest of the UK. In Northern Ireland, the liquid market accounts for 20% of production that is processed locally, although a proportion of this is exported to the Republic of Ireland as pasteurised milk. Of the remainder, over 50% is manufactured into milk powder, and over a quarter goes into cheese. In the UK as a whole, 50% of milk is used in the liquid market, with only some 12% being manufactured into powder, and almost 30% going into cheese. This means that Northern Ireland is much more dependent on export markets compared with the rest of the UK, and, indeed, other parts of EU.
Since 2001 global milk production has been increasing, and in parallel, demand for dairy products has also been increasing. In 2003, however, supply and demand came into balance, and for the next 3 years demand outstripped supply, with the result that global stocks of dairy products decreased significantly, and in some areas, such as the EU, disappeared. The result was upward pressure on prices during 2007. During 2008 this position reversed, with demand falling and supply continuing to increase, and stocks of dairy products increasing, causing downward pressure on prices. Evidence of this is most stark in the prices yielded for milk powder in Fonterra’s auction. Introduced in July 2008, the auction price for whole milk powder was $4395 per tonne, but by December the auction price had fallen by almost 50%.
Although milk production in many EU member states is falling, demand for milk powder is poor, and this is being reflected in falling prices. Unfortunately, at present, the outlook is for continuing market volatility and uncertainty.
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