Agriculture: Egg Industry

Lord Lexden Excerpts

Monday 14th November 2011 Lords Chamber

[Lord Lexden]

My Lords, I am a newcomer to the important matters highlighted in this debate, for which we are indebted to the noble Earl, Lord Shrewsbury, who introduced it—the first of two Earls to speak in this debate, which lends it a splendid distinction.

I wish to speak briefly about the effect this directive will have on the egg industry in Northern Ireland, a part of our country in whose well-being—all aspects of it—I am always deeply interested, as I have pointed out before in your Lordships’ House. I do not believe that the existence of a devolved Assembly should preclude the discussion of Northern Ireland issues in this House, particularly where a wider UK dimension exists, as it does with this issue.

It is estimated by the Ulster Farmers’ Union, a long established and highly regarded voice of rural interests, that the Northern Irish egg industry is worth some £50 million a year to the Province’s economy. This directive was published in 1999. Many of the problems foreseen then by the UFU and their colleagues in other parts of the country have still not been resolved, although the European Union has had 12 years in which to put in place measures to ensure that compliance does not entail a competitive disadvantage for our farmers, as other noble Lords have already stressed. They have also stressed that fairness—a level playing field, in today’s well loved jargon—for poultry farmers is absolutely essential, given that in the United Kingdom in particular this industry historically has not enjoyed direct government support.

My friends in the UFU estimated in 1999 that 1.8 million birds in Northern Ireland would need to be moved to the new “enhanced colony cages”, at a cost of around £10 a bird. The average cost of conversion to the Northern Irish poultry farmer has been estimated at £300,000—or more, should they decide to convert to free-range production rather than the enhanced colony cage systems. Farmers south of the border in the Republic of Ireland have been eligible for financial help amounting to roughly 40 per cent of the cost per bird of conversion. Despite helpful discussions with United Kingdom Ministers, no similar assistance has been forthcoming to help farmers in Northern Ireland, who compete in the same geographical market.

Those more familiar than me with the farm modernisation scheme will know it to be a heavily oversubscribed fund, with no specific remit to help the poultry sector in particular, and will be unsurprised to hear that it has been of little help to the Ulster farmer looking to convert. The £300,000 cost is coming in the form of bank loans which will require repayment in the harsh economic circumstances in which we find ourselves, and amid a price war among the major supermarkets, which is preventing producers from raising the prices of their product. Several UFU members considered the costs too great at the outset, and ceased production. Small-scale, family-run farms, vital to Ulster’s important rural economy, have been replaced by major industrial producers, and others are at risk.

It is also worth bearing in mind that while the EU itself has had more than a decade to deal with the problems this directive might cause, farmers themselves have enjoyed no such luxury. A report due in 2005, but not published until January 2008, set the standards for these enriched colony cages, and farmers in Ulster prudently waited—they are extremely prudent, for the most part, in Ulster—until they could read this report before undertaking major financial risks. This was an excellent decision on their part, as it turns out that a farmer who converted to what might have been called an industry-standard enriched cage system in 1999 would have found his cages declared non-compliant after 2008. Farmers have therefore had just four years to raise the funds and complete the transitional process. This makes it all the more impressive that Northern Ireland expects to be fully compliant with this directive on 1 January 2012, in line with other parts of the United Kingdom, while other countries, as we have heard, have made public that they will not be compliant in time, if ever.

There was particular concern in Ulster arising from the fact that, under this directive, food manufactured using eggs from caged hens could still be tradable across the European Union. So we are back once more to the much invoked level playing field. Farmers in Ulster are looking for an assurance from the EU that products that use non-compliant eggs are at the very least clearly labelled as such for import and export so that farmers who invested in compliance are not at a serious disadvantage. There was a real risk that eggs from caged hens would continue to be used in the manufacturing of goods that could then be sold right across the European Union, pricing eggs from compliant farms out of the market.

For many farmers in Northern Ireland, as elsewhere, much is at stake. I ask the Minister to ensure that there is close communication between his department and the Northern Ireland Executive as these matters advance to a conclusion.