“The headline of the recent Budget announcement from the Chancellor of the Exchequer was the raising of £40 billion in additional taxation. Taxes the Labour Party repeatedly claimed they would not be raising throughout the General Election campaign. The impact of this on farmers is what I want to speak about today.
It is worth remembering when we talk about agriculture it is worth 6 billion pounds to the Northern Ireland economy. It is our largest manufacturing sector and is a fundamental cornerstone of our local economy. It is also worth noting that around 36% of our population lives in the countryside. There are around 26 000 active farm businesses in Northern Ireland employing about 51 000 people. Any decision of the magnitude of last week will have a potentially devastating impact on those who live and work here.
The Chancellor hit the agricultural sector with a triple whammy last week: the weakening of Agricultural Property relief; the removal of ring-fencing for the agriculture and fisheries budget; and the inflation-busting increase in the National Living Wage.
So far this term we have highlighted pressures already being faced by our local farmers: the ammonia regulations choking development; proposals to stop MV in sheep imports; Bovine TB not being addressed; the real term reductions in the basic payment scheme over the last ten years; the huge inflationary and wage costs accruing over recent years; the devastating impact of the winter storms on last year’s potato crops and so on.
The weakening of agricultural relief will heap further pressure on the future of family farms. This will accelerate the breaking up of farms and drive more young people away from farming at a time when more are needed. This will affect our food security going forward. A £1 million cap sounds high to the layman but there are few viable farms worth under £1 million and even those would not be high earning. A viable farm is not necessarily a wealthy farm - many farmers do not even pay themselves.
Previously, agriculture and fisheries funding was a ring-fenced addition to our budget. The Chancellor has announced her intention to include it in our block grant. This will mean it has to compete against the big beasts of health and education. When we have been raising the problems being faced by the sector with the Minister, he has not been exactly forthcoming in his support for the farming sector. When he could not stand up to his officials to give support for potato farmers last winter, how can the farming sector rely on him to fight for them when it comes to budgetary allocations when there is no ring fenced budget?
These problems were compounded in the same budget with an inflation busting rise in the national living wage. With farm income already down by 46%, an Employers National Insurance hike, threats to the agriculture budget and the weakening of agricultural relief, it is hard to see how farmers are going to meet these challenges without raising food prices massively, which will hit all of us especially hard-pressed families.
Now more than ever, all of us, not just the farming sector, need our Agriculture Minister to finally step up.”