The agri food industry needs to embrace change in order to turn change into success, according to John Henning , Head of Agriculture, Northern Bank.

Garth Boyd, left, president NI Grain Trade Association and Owen Brennan, past President, debate the future of the agri food industry with John Henning, Head of Agriculture, Northern Bank
Garth Boyd, left, president NI Grain Trade Association and Owen Brennan, past President, debate the future of the agri food industry with John Henning, Head of Agriculture, Northern Bank

John was speaking at a lunch organised by the Northern Ireland Grain Trade Association where he challenged the industry to embrace change and overcome resistance from ‘change fatigued’ people within the industry.

John’s presentation certainly gave NIGTA members food for thought on the outlook for the agri food industry with terms like ‘perception agriculture’, ‘benchmarking data’, ‘increased transparency between producer and retailer’, along with an upbeat and positive outlook for the industry, despite some of the concerns which exist at present,

John highlighted the importance of the agricultural industry to the economy of Northern Ireland, assessed the current financial health of the industry, and identified some of the challenges facing the industry - both at farm and industry level.

He emphasised the necessity for farmers to achieve profitability, which must be sustainable, and the need for greater use of management accounts and benchmarking data.

David Malseed, left, and Gary McGuigan enjoy a joke with John Henning, Head of Agriculture, Northern Bank at the NIGTA lunch
David Malseed, left, and Gary McGuigan enjoy a joke with John Henning, Head of Agriculture, Northern Bank at the NIGTA lunch

He went on to highlight the importance of addressing the issue of supermarket power and the need for increased transparency between producer and retailer to encourage producers to move further down the food supply chain.  

The big challenge for the industry is to embrace change in order to turn change into success, especially overcoming resistance from change-fatigued people within the industry.

'Perception Agriculture' was a new term to NIGTA members but the philosophy behind it was familiar - farmers and the industry could, at little or no cost improve the 'image' of the farming industry, through animal welfare concerns, environmental issues and quality controls.

Declan Billington and Willis Mackey emphasise a point to John Henning, Head of Agriculture, Northern Bank at the NIGTA lunch
Declan Billington and Willis Mackey emphasise a point to John Henning, Head of Agriculture, Northern Bank at the NIGTA lunch

John outlined the role Northern Bank has played in supporting the agricultural industry in NI, during the good and bad times, which has contributed to its dominant position in the market place and pointed out that Northern has a large team of dedicated agribusiness managers who operate right across NI.

His outlook assessment for the industry could be described as upbeat and positive, despite some of the concerns which exist at present, and he concluded by pointing out, very appropriately, in the words of Dwight D Eisenhower, that "farming looks mighty easy, when your plough is a pencil and you're a thousand miles from the corn field"

A cheque to assist PIPS (Public Initiative for the Prevention of Suicide and Self-harm) in the building of a Centre of Excellence was presented by the President of the Northern Ireland Grain Trade Association, Gary McGuigan this week.

It is difficult to imagine that these two derelict houses will eventually be a Centre of Excellence for PIPS but the organisation has already raised half the money needed and to assist with the other half. Gary McGuigan, President and Doris Leeman Executive Secretary, NI Grain Trade Association present a cheque to PIPS Co-ordinator, Jo Murphy.
It is difficult to imagine that these two derelict houses will eventually be a Centre of Excellence for PIPS but the organisation has already raised half the money needed and to assist with the other half. Gary McGuigan, President and Doris Leeman Executive Secretary, NI Grain Trade Association present a cheque to PIPS Co-ordinator, Jo Murphy.

Gary said “ Each year the NIGTA President has a chosen charity and I decided to support PIPS due to the number of suicides within our province especially amongst young people.”

Gary went on to say that the amount of support needed for those in crisis and those bereaved is enormous and PIPS have a really wortwhile support system in place. The organisation is also doing sterling work in raising awareness and education of the public regarding suicide.

Jo Murphy, PIPS Co-ordinator thanked the NI Grain Trade Association for their donation and explained that PIPS was at present in temporary headquarters and was renovating two adjoining houses in Duncairn Gardens, Belfast to provide a Centre of Excellence, which will have all of the facilities required to support those in crisis and families and friends who have been affected by suicide and self harm.

The new centre will cost £350,000 and support from various organisations and friends has enabled PIPS to raise half of this already.

Europe could run short of food; - consumers will suffer from food price increases and will be forced to buy imported food from sources where production is not as well regulated as within Europe.

This was the warning issued by Robin Irvine, President of the Northern Ireland Grain Trade Association when he met Michelle Gildernew, Minister for Agriculture this week. He emphasised "This is not just the view of our Association, I am repeating the warnings issued by Markos Kyprianou, the EU Commissioner for Food, and Marianne Fischer Boel, the EU Commissioner for Agriculture."

The irony of the situation is that the food that will have to be imported will be produced from the crop varieties which are denied to European farmers.

To clarify some misconceptions, Robin explained "Some people see this as an argument about the pros and cons of Genetically Modified (GM) materials. This issue is not about GM, - biotechnology is already here, - Europe has approved many GM crop materials and these are widely used in food and feedstuffs. A further 90 varieties are with the European Food Safety Authority (EFSA) for assessment but the delays now occurring in the process are putting the survival of our food industry at risk.

Robin added "The EU system of approval for new varieties of crops is totally out of sync with the rest of the world. While food production in other countries enjoys the benefits of new science and technology the European system plods along several years out of date. This failure of the approval system has has led to the loss of 1 million tonnes of feed materials in Ireland alone and has inflicted a massive cost penalty on local livestock producers.

"We are concerned that the new varieties of soyabean which are currently being developed in the USA will meet with the same delays in Brussels.

Our pig and poultry industries are totally dependent on imported soya with 35 million tonnes of this material imported into the EU every year from North and South America. This disruption in international trade is devastating for our livestock producers and will be damaging for consumers.

"Europe is out of step, in that it takes two years longer than any other region to approve new varieties and is in danger of making local food producers so uncompetitive that many will be forced out of business – consumers will be denied an affordable local product, produced to a very high standard and will be dependent on imported food produced under a much less regulated regime – using practices which would not be permitted in Europe."

Food supplies are tightening around the world - the developing countries such as China and India are increasing their consumption and the energy industry is competing with food processors for the worlds' grain supplies. Global grain stocks are lower than they have been for a generation and a number of food exporting countries are limiting exports to ensure sufficient supply for their own population. The reality is that European food security will be put at risk if we fail to maintain a competitive local agri-food sector.

Marks & Spencer never compromise on food sourcing with all poultry and red meat, sourced within the UK or Ireland, according to Stewart Nisbet, Head of Foods for Ireland.

Stewart was the guest speaker at the quarterly lunch of the Northern Ireland Grain Trade Association and outlined how his company works closely with select suppliers, growers and farmers to manage the quality of the food they source. They have built up long relationships with many of these, several in excess of 40 years.

Stewart went on to point out that Marks & Spencer has been trading in Northern Ireland for the past 40 years and currently employs over 2000 people. Substantial quantities of products from their Northern Ireland suppliers are exported to GB stores.

M&S still plans to modernise and develop its business through substantial capital investment. It also has a very positive business developing through franchise partners in Eastern Europe, the Middle and Far East.

According to Stewart there are many opportunities for the food industry in Northern Ireland focussing on added value products and this will bring challenges for the Irish food industry. The organic market also has potential which has not been fully exploited or developed in Ireland.

The company has focussed on clarity of information for the consumer and has adopted very clear nutritional labelling incorporating both RDA and Traffic lights. The latest development is clearly identifying which products have been air freighted, allowing customers to make their own choices on these products. The aim is to become carbon neutral throughout all M&S owned operations by 2012.

An interesting and informative conclusion to the presentation was a summary of some the M&S Christmas products. Five hundred new lines are developed for the Christmas market each year. The company will sell 20,000 tonnes of mince pies and chocolate biscuits, 500,000 litres of champagne, 1,000 tonnes of Brussels sprouts and 750 tonnes of carrots and parsnips. In addition all free range whole turkeys sold on the island of Ireland this year will be Northern Irish.

The address concluded with a lively question and answer session. NIGTA President, Robin Irvine, thanked Stewart for taking the time to address the Association and for the company’s interest in the agri food sector in the province.

Two special guests were welcomed to the lunch. Fred Charters of Scotts Feeds and John McAuley from John Thompson and Sons who have recently retired from the trade but who were both active members of the Association with John McAuley having been a previous President.

The labelling of animal feed was one of the topics discussed when the NI Grain Trade Association met MEPs Jim Allister and Jim Nicholson. The NIGTA delegation was accompanied by Judith Nelson, Head of Feed Sector, Agricultural Industries Confederation (AIC) , which is NIGTA’s affiliated organisation in GB.

The delegation commented on various aspects of the draft report from Mr Graefe zu Baringdorf the Raporteur for the EU Agriculture Committee. One aspect which is causing a lot of concern is the requirements for labelling animal feed. The information being requested is not only an infringement of each company’s intellectual property but it would also hinder research and development by the industry,

Judith Nelson told the MEPS “The patents approval process does not require this information and it would not be possible to progress a patent application if this information had to be disclosed”

The clear de-markation between pre-mixes and complementary feeds is necessary as the current proposal could mean that home mixers and farmers buying a pre-mix would have to be HACCP trained thus adding more cost and red tape to their business.

The GM approvals system and the zero tolerance on new GM varieties will cost the food industry and the consumer dearly according to the NIGTA delegation. They pointed out that while food scarcity is the hot topic at the moment the EU is ignoring the fact that its stance on these matters is likely to decimate parts of the food industry within Europe. The GM approvals process for maize had already cost NI farmers £50 million but if it is applied to soya imports then it would be disastrous for the intensive sectors. A zero tolerance on unapproved GM varieties means that shippers will not bring the material to Europe as they cannot afford to take the risk. Yet consumers are already eating imported food where the animals have been fed on these varieties.

It is ironic that the EU may follow the same pattern regarding plant protection products. The current proposals could remove 15% of products and this would mean serious losses in cereals and potato yields.

Both MEPs were supportive of NIGTA’s requests and questioned the delegation closely on the details of their presentation. They also indicated areas where they could lend their support to try and help to sustain a vibrant agri food industry.

Agriculture to Feed and Fuel the World

“Agriculture, in the next decade must produce as much food as was produced in the last thousand years to feed all the mouths” David Caffall, Chief Executive of Agricultural Industries Confederation (AIC), guest speaker at the annual dinner of the Northern Ireland Grain Trade Association told members and guests.

Gary McGuigan, President, Northern Ireland Grain Trade Association with his wife Catherine, Mother Veronica and Father William at the Northern Ireland Grain Trade Association Dinner in Holywood.
Gary McGuigan, President, Northern Ireland Grain Trade Association with his wife Catherine, Mother Veronica and Father William at the Northern Ireland Grain Trade Association Dinner in Holywood.

He added “ Worldwide we are not only seeing a credit crunch, but a food crunch. Last week three news items referred to political unrest driven by food shortages, with actual riots breaking out in two African states as food supplies ran short, and India has banned rice exports this week.

“The agricultural industry is once again entering a period where it is seen as vital after a period of being taken for granted – it is easy to criticise farming with a full mouth. Agriculture is perceived as holding the key to both feeding and, more controversially, fuelling the world.”

Agriculture may hold the key but life will not be straightforward, environmentalists can capture consumer attention with accusations about fertilisers and pesticides. Green lobbies, especially in some Mediterranean countries oppose innovation on grounds of political dogma rather than scientific fact. Markets are increasingly volatile and forcing rapid change, so farm prices remain inadequate, grain farmers struggle with energy versus feed markets and the horn versus corn battle re-emerges.

The challenge will be to achieve a sustainable industry and that means the whole chain from inputs to retail shelf . The industry must continue to work to get across the fact that technology is ensuring we feed the world, and must ensure that regulators and policy makers do not needlessly restrict progress.

David Caffall emphasised “We need to ensure there is not over-reaction or false messages transmitted on key issues. In the myriad of facts being bandied about, the critical need is to establish real hard facts! “

He went on to say that the challenge is too big for any one organisation but the entire industry must co-operate to lobby and stand up for decisions to be made on sound, independent scientific facts.

“The agri food industry and the consumer must ask questions and look for balanced views, and play their part in communicating them. We are entering a very volatile period with lots of change and opportunities. However there are very big issues which no individual or trade organisation can solve alone. Together we can feed the world, may help to fuel the world and even save the planet.”

Food Quality and Safety in Jeopardy!

Misguided political decisions in Europe and at the WTO agreement coupled with retailers resistance to paying a fair price for quality food supplies could deprive European consumers of the high standard of food that they currently enjoy” Gary McGuigan, President of the NI Grain Trade Association told members and guests at the Association’s annual dinner.

Gary went on to point out that consumers in Northern Ireland are especially privileged in that they have an industry which provides wholesome food with quality guarantees and full traceability and which also takes account of animal welfare and the environment. The loss or reduction of this food source would mean importing food from areas which do not have the same standards of production.

The farming industry and food production have always been available and have therefore been taken for granted so consumers are not fully attuned to the current message. He said “Food, like agriculture has been around since the beginning of time. While the rise of the celebrity chef has made food sexy, agriculture and most of the agri-food sector remain very un-sexy to the general public.

“George Bernard Shaw said that there was no love more sincere than the love of food. The current demand for food and especially the food in our Western diet has meant that food security is now top of the agenda around the world.”

Gary emphasised that this can be especially seen in countries where governments are imposing export taxes on the agriculture sector or zeroing duties on imported agricultural products. Food security in some of these countries is a real threat and politicians are fearful of the consequences of soaring prices and limited availability.

In the developing world people are eating more meat. In countries like India and China a lot of their diets were grain based, as their tastes change and more meat is consumed then we need more grain to feed this demand. It takes 7kg of grain to produce 1kg of meat!! This demand, coupled with demand from the green fuel market and the influx of money into commodities from hedge funds has sent prices of agricultural commodities soaring.

Our local agri-food market is becoming more and more influenced by markets across the globe. The increase in the demand for Iron Ore from China has soared due to their construction boom. The ships that are carrying the Iron Ore are the same ships that carry our Soyameal, Corn Gluten and Palm Kernal. China’s demand is pushing the cost of sea freight to levels not seen before. This is just one of the many costs that have soared within our trade, we are all well aware of our crippling energy bills!

Our fertiliser industry, another key member of the agrifood sector, is also seeing huge challenges ahead. Prices here are also soaring and the supply of material is shrinking. To put things into perspective; farms in China do not use large amounts of fertiliser so there is scope for them to increase production by increased fertiliser application. If each farm in China only used one more bag that would equate to more than 22m tonne which is half the requirement of the European market.

However our farming industry is a world class one and with co-operation from the processors and retailers we can continue to produce quality food cost effectively. It will not be the price that the consumer has been become accustomed to as the era of cheap food produced under European subsidies is long gone. We must educate the public that the problems facing us are their problems also.

However there is a ticking time bomb that no amount of efficiencies at farm level will defuse. The EU is currently lagging behind the rest of the world in the time it takes to approve new GM varieties. I hesitate to mention this subject as it can cause so much confusion and an automatic outcry about the benefits or otherwise of GM technology. Let me state from the outset that the NI Grain Trade Association is neither for or against GM crops. We believe in consumer choice, so we provide all types of feed material whether that is GM, GM free, organic etc. This argument is not about technology it is about availability of feed materials.

These approval decisions, or lack of them, are made solely on a political basis and the people making them are ignoring the independent advice given to them by the European Food Safety Authority.

If the EU does not bring it’s approval process up to speed with other countries then we will have a ban on Soyameal imports into Europe while the rest of the world uses this product freely. That is 35million tonne of very important material that cannot be replaced and could spell the end of the pig and poultry enterprises within Europe. To put that into perspective the 500,000 people currently working in the poultry industry alone will lose their jobs while we import food from animals that will be fed on the very soya that the EU is considering for approval!!

Looking to the future Gary said “ If we have a level playing field with other food producing countries we can compete. Perched on this westerly point of Europe and having to import most of what we need we have always had to be more efficient than most of our counterparts. These efficiencies have enabled us to become a world class industry that should prosper in the years ahead. The increasing demand for food from the developing world could help our industry grow but we must have a level playing field with other food producing countries and retailers and consumers must acknowledge the fact that the gold plated article, albeit a bit more expensive, is still very good value for money!! “

The threat to the agri - food industry posed by global grain prices was the main topic for discussion at a meeting of the Northern Ireland Grain Trade Association and the Irish Grain and Feed Association held in Dublin last week.

Pictured at the North/South meeting of the NI Grain Trade Association and the Irish Grain and Feed Association on 4 October 2007, are, front row: Deirdre Webb, Director, IGFA; Robin Irvine, President NIGTA; Jerry Clifford, President, IGFA. Back row: Ronan Huges, IGFA; Gary McGuigan, Vice President, NIGTA; Seamus Power, IGFA; Joe Connolly, Chairman of Feed Committee, IGFA.
Pictured at the North/South meeting of the NI Grain Trade Association and the Irish Grain and Feed Association on 4 October 2007, are, front row: Deirdre Webb, Director, IGFA; Robin Irvine, President NIGTA; Jerry Clifford, President, IGFA. Back row: Ronan Huges, IGFA; Gary McGuigan, Vice President, NIGTA; Seamus Power, IGFA; Joe Connolly, Chairman of Feed Committee, IGFA.

NIGTA's President, Robin Irvine, outlined his Association’s efforts to impress upon the rest of the food chain the impact that increased feed prices would have on livestock farmers. Beef, pig and poultry producers cannot absorb the scale of these increases and will be forced out of business unless the industry responds quickly with better returns to the primary producer.

Speaking after the meeting Robin Irvine said "We agreed that it is vitally important to ensure that the necessary price increases to the consumer are passed back to the farmer without any time lag.

Local food is produced under highly regulated food safety and animal welfare conditions – it is a premium product and should provide a reasonable return for each link in the food chain." Failure to deliver this will put the whole food industry at risk and would have serious implications for the economy on both sides of the border.

Both organisations have had meetings with their respective Ministers of Agriculture, their MEPs and the EU Agriculture Commissioner’s special advisers.

He added "We welcome the discussions that our Minister of Agriculture, Michelle Gildernew and the Ulster Farmers Union have had with the retailers and will be monitoring the situation as will our colleagues in the South."

Lack of decision making in Brussels is putting EU food production, and the entire livestock industry at risk. If the delay on approvals of GM soya mirror those of US maize then the impact on feed prices could be as much as 25% by 2009 with even larger increases to follow as new GM varieties come on stream according to a report from the Director General Agriculture in Brussels.

The European Food Safety Authority has pronounced the GM maize trait Herculex safe for import for both animal and human food and safe for the environment - it is already in use in eight different countries around the world – Australia, New Zealand, Canada, Japan, Korea, Mexico and the US – yet it is still pending approval in the EU.

Briefing food processors and retailers on the threats to their industry this week , Robin Irvine, President of the Northern Ireland Grain Trade Association said 

“The decision in Brussels to ban the import of maize by-products including Maize Gluten and Distillers grains will impact severely on livestock producers in Ireland and the UK.

“The new Herculex maize variety has been given a clean bill of heath by Europe’s top scientists and food safety experts but the officials led by the “Green” lobby in Austria and Ireland rejected their recommendation and failed to give the necessary approval to allow its use in the EU.

“Close to 1 million tonnes of these materials are imported into Ireland every year and they provide a cost effective alternative to expensive cereals. The loss of these ingredients at a time when cereal prices have rocketed to record levels has contributed to a £40 per tonne increase in ruminant rations since last autumn.

“Gluten and distillers formed a major part of many beef and cattle rations and they are difficult to replace in the formulations” says Robin. “There is no single ingredient to take their place but we can use combinations of products such as cereal, rapeseed and citrus pulp to achieve the same nutritional specification. There is however a significant impact on price per tonne and beef producers in particular may struggle to absorb the increased cost of production.”

The irony of the situation is that the move will not protect consumers – it will actually expose them to even greater risks. By imposing such heavy penalties on local production and making our producers less competitive they are actually encouraging imports from regions which are much less regulated. In the parts of the world where genetically modified feeds are not restricted, where meat and bone meal can be fed to animals and where antibiotic growth promoters are still permitted - meat can be produced at a much lower cost.

As European producers are forced out of business local consumers will be increasingly reliant on food from these sources.

“Our politicians need to be challenged with the reality of what is happening and we are making every effort to highlight the damage inflicted on our industry” says Robin. “Consumers need to be made aware that they are losing the option of a competitively priced, safe and well regulated local food supply”.

The science is being ignored by the Green lobby who are totally ignoring the economic impact of their policies. The rest of the world is actively embracing new technologies to improve production efficiency and for a region like Northern Ireland which is dependent on exporting food to be denied these benefits means we will be totally uncompetitive in the global marketplace.

This is just the start of a process which could be devastating for the European food industry and we have arranged a series of meetings with politicians and with our partners along the food chain to explain the full implications of what is happening.

The maize by-products have been lost for a couple of years at least and our dairy and cattle producers will suffer. New Soya varieties are now in the pipeline and with the current approach to approvals in the EU we may well see a ban on soya products in the next two years – that will have major implications for the pig and poultry sector.

Robin Irvine concluded “ The NI Grain Trade Association is not anti GM free feed materials, our members are involved in supplying GM free feed , organic feed and other speciality feeds for the markets and consumers which demand those products. The lack of decision making in Brussels penalises the whole of food production within Europe”

The situation can only worsen as GM crops are increasingly cultivated in the major exporting countries. Further GM maize traits and GM soya are in the pipeline for approval. At present the EU takes a minimum of two and a half years to authorise new GM plant materials while the average in the US is 15 months.

A report by DG Agriculture in Brussels points out that unless the authorisation of GM materials in the EU is brought in line with authorisations in the US, Brazil and Argentina, the result will be:

* Dramatic reduction in EU livestock population;

* Significant job losses

* An increase in the price of locally produced food

* Decreased competitiveness of EU food exports on the world market

* Increased EU imports from countries where food safety standards are not as stringent as in the EU .

* Knock on effects on consumer choice and food safety.