Leaving the EU: Poultry Producers

Ian Paisley Excerpts

Monday 13th March 2017 Commons Chamber

[Ian Paisley (North Antrim) (DUP)]

I declare that I am a member of the British Veterinary Association. It is a pleasure to introduce this Adjournment debate tonight, especially after the landmark Brexit Bill has finally passed both Houses. As we will be debating the effect of leaving the EU on the UK’s poultry meat sector, that is an important landmark.

I shall put the scale and importance of the poultry industry into some perspective for the House. UK agriculture contributes £46 billion to the economy, and for every pound invested in farming we generate £7.40. Poultry is a key part of that offering. The recent Oxford Economics report on the economic impact of the poultry meat industry included the following important facts. The poultry meat industry supported £4.6 billion of gross value added contribution to gross domestic product, which is the equivalent of 0.2% of the United Kingdom’s entire economic output. For every £1 million of economic activity that the industry generates, it supports a further £1.33 million elsewhere. In total direct and indirect employment, it supports 84,500 people throughout the entire United Kingdom, or 0.3% of the total UK workforce. The industry directly employs 37,300 people, and it supported £1.1 billion in tax contributions in 2014, or 0.2% of all tax receipts collected that year. If I were to say it is an important industry, I would be a master of understatement.

In Northern Ireland, we contribute to the vast industry I have described. In fact, one in every four chickens consumed is produced or processed in Northern Ireland. Moy Park is one of Northern Ireland’s largest employers; it is a major employer in our country. Of the 37,300 employees in the sector throughout the UK, 11,750 are employed by Moy Park. Of the £4.6 billion the industry contributes to GDP, Moy Park contributes £226 million in staff costs—a significant contribution given that Northern Ireland has a population of only 1.7 million. Of the 2,500 farms in the UK that produce poultry meat, 800 are contracted to the Moy Park supply chain. Northern Ireland accounts for more than a quarter of the 19 million birds that are slaughtered in the UK each week—in other words, 5 million birds a week.

[Jim Shannon (Strangford) (DUP)]

I thank my hon. Friend for bringing to the House for consideration an important issue for my constituency. Is he aware that the poultry sector does not receive any moneys directly from the common agricultural policy? Does he therefore feel that, post-Brexit, there is an opportunity for the poultry sector to grow, not only throughout Northern Ireland but particularly in Strangford?

[Ian Paisley]

I intend to come on to a number of challenges for the industry, but will also offer the Secretary of State for Exiting the European Union and the Secretary of State for Environment, Food and Rural Affairs the opportunity to address some of the issues. My hon. Friend the Member for Strangford (Jim Shannon) is absolutely right: most people think that the CAP supports every aspect of farming, but of course there are many areas that it does not, and that is why we need a new, British agricultural policy, tailor-made to the needs of farms across Great Britain and Northern Ireland. I look forward to that opportunity, which this House has helped to create through the legislation that was passed today.

Moy Park, which I mentioned, invested £27 million in its business in the last financial year to make it better, stronger, and more efficient and effective. Poultry is a safe, nutritious, affordable and enjoyable food, and is part of the UK’s staple diet. It also gives us the important luxury of food security: we know where it was raised and slaughtered, and how it gets from farm gate to plate. That food security gives us an important aspect of agri-food protection that we should cherish and encourage, and it is imperative that it be a priority in the Brexit negotiations that will follow the triggering of article 50. The purpose of this debate is to signal poultry’s importance and outline the challenges, which I want to address one by one.

The first challenge is the labour market. Of the industry’s 37,300 employees, 60% are non-UK workers. They make an obvious and valuable contribution to the United Kingdom and to the rich tapestry of the culture here. They will require certainty about their contracts. They are not employed in some low-skilled or semi-skilled industry; they are well educated, contribute to the towns and villages in which they live, and are employed in a sector to which it is difficult to attract our local, home-grown workforce. That sector will have a turnover of about 6,000 jobs a year going forward. It is important that the industry addresses that and ensures that it has access to a vibrant workforce. If the industry grows, more workers will be required, so the challenge must be met head-on. The Government must look at a favourable visa and immigration scheme that stabilises the situation and ensures that need is met in the coming years.

I will identify a number of key solutions that I hope that the Brexit Secretary and the Minister will have on their desk and will keep referring to as the United Kingdom’s Brexit negotiations go forward. I have mentioned one of them: a simplified work visa system that allows in workers who are needed in particular areas, such as the poultry sector, so that those workers’ rights are taken care of and they are provided with opportunities.

A UK food and farming policy that supports the promotion of UK farming at school and a greater focus on apprenticeships will encourage UK labour into the sector. It is clear that local workers will not go into the sector; we must encourage them by educating and training them, and by providing them with the opportunity to get into the sector. A UK food and farming policy that puts British food at the centre of public food procurement is also a necessity. Our hospitals, schools and prisons should serve British food; that is essential. We must have dedicated Government support for opening third-country markets to trade, supported by a strong British food brand. Government support for British food and farming, through focusing support on infrastructure and the regeneration of rural areas, should form part of the new British farm policy in a post-Brexit world.

We need a UK food and farming policy that backs UK food security and increases the self-sufficiency of the poultry meat sector—the only sector that could scale up quickly to meet food security demands. We are not producing enough poultry; demand for poultry is increasing. That creates a viable opportunity for a country that can clearly grow and harvest poultry, and efficiently and effectively process meat that the consumer likes. That is an opportunity that we should seize.

As I wish to leave the Minister with some time to respond to my points, I have just a few brief points to make on trade access. The major component of poultry costs is the feed. Feed is a commodity that is globally traded. The EU currently controls the tariffs, but that could change after Brexit to protect EU feed compounders. How the UK responds to those changes will impact on production costs one way or another. It is important that the availability of feed remains unrestricted. That will be a huge challenge for the Ministers in the future, and it is an area on which they must focus. We cannot have feed supplies being increased so much that it makes our poultry sector unviable. I hope that that will become a significant focus in the days ahead.

We also know that the imports of some poultry meat are essential, because our demand is so high. That creates an opportunity for us to increase production. If we are to import white meat, there is an issue with regard to tariffs. We hope to continue to trade with the existing nations in the EU after we leave. If the UK decides to increase the cost of purchasing white meat from the EU, this would be an opportunity for UK producers to increase production and provide a substitute for those imports. I hope that that opportunity will be considered.

We also export a lot of our dark meat and other co-products. I hope that we are allowed to continue to do that. When the UK is outside the EU, the UK wholesale prices of chicken could increase, making it difficult for local exports to compete with the unrestricted access available to EU members within the internal market without reducing their basic costs to remain competitive.

In addition to our dark meat exports, co-products represent almost 50% of our revenue sold offshore. We rely on Europe and other key global markets to trade the balance of our co-products and we face significant competition, thus the need to have a spread of sales channels at our disposal. Every support will be of the utmost importance to ensure that we have ready access to key global markets well beyond the EU.

Asia, and particularly China, hold great potential as a trading partner, and the Government should prioritise steps to open trade with this market for poultry products. Getting into the far east is absolutely critical for us.

I wish to make two other points before I sit down. America, both north and south combined, is one of the largest poultry exporters in the world. We must be able, in a post-Brexit environment, to compete in that world, which means that that we must also engage very heavily with America, both north and south, to be able to compete in that new global world.

The issue of environment and energy is very specific to Northern Ireland. Our poultry litter disposal includes a project where we export most of our poultry litter, a byproduct of poultry production, to the Republic of Ireland. Poultry litter can be exported to the Republic of Ireland for use in producing biogas in an anaerobic digester. Similarly, feathers are transferred from Northern Ireland to the Republic of Ireland for processing as there is no such facility in Northern Ireland. That means that we have something in common with the Republic, and an opportunity to ensure that, once again, the frictionless border that people talk about is properly addressed.

Finally, we wish to secure the best possible environment after we exit the EU. We support our Government wholeheartedly and wish them well in those negotiations. The terms that we secure should be equal to, if not better than, what we have in the EU. I know that our trade, our labour and our food security and finance will form a very important part of that negotiation.

The relative importance of the agri-food industry in Northern Ireland, which is at least twice that of the rest of the UK average by gross value added and percentage total employment, and the presence of a unique land border with the EU, emphasise the need for the region’s interests to be given due consideration and, therefore, to engage fully with the Northern Ireland representatives here who understand the industry and want to ensure that it is given fair wind.