Posted on Thursday 14 October 2010 byUlster Business
The agri-food sector is worth more than £3bn a year to Northern Ireland’s economy, but some of the key players in the industry believe there should be greater recognition of its potential for growth
As we emerge from the Comprehensive Spending Review various industry sectors will make a case for why they should be prioritised over other parts of the economy.
In the case of Northern Ireland’s agri-food sector Stormont should be well aware of what the province’s farmers and food and drink processors bring to the table.
DARD’s most recent statistics put the sector’s contribution to the economy at over £3bn, almost 20% of our total manufacturing sales, 17% of external manufacturing sales and 25% of manufacturing employment.
Even in these recessionary times our local food sector has continued to increase sales, increase employment and expand exports.
A survey this month by Goldblatt McGuigan for the Northern Ireland Food and Drink Association (NIFDA) found potential to create up to 15,000 new jobs over the next 10 years and to increase sales to £4.5bn annually.
And yet Declan Billington, managing director of animal feed suppliers John Thompson & Sons and President of the Northern Ireland Grain Trade Association, says that as money from Central Government diminishes, a greater focus needs to be put on the sector.
“As the cheques coming from London get less and less what we have to do is sell more abroad. Therefore the focus should be on growing export industry. If you sell something abroad it generates new money. If you grow export industries like agriculture you are beginning to replace that money we’ve lost,” he said.
“The big issue is government recognising the value and policy supporting it. If you generate additional exports from agriculture it falls in the rural communities. When a government is producing a policy for the economy and you’re listening to how you are going to grow IT, going to grow financial services, what they are actually saying is how are we going to grow the city jobs and jobs for graduates.
“What they are not saying is how are we going to grow every region of Northern Ireland? In my view they need a plan for a mixed economy. They also need to recognise that in a mixed economy exports generate new money and agriculture generates new money for the rural community.”
Trevor Lockhart, chief executive of the Fane Valley Group and chair of the agri-food Industry Advisory Panel (IAP), also believes more understanding from Government would allow the sector to maximise its potential.
“It is important that the Executive and key Government Departments recognise the central role played by the food sector in contributing to the wider Northern Ireland economy,” he said.
“The food sector however is not convinced that the multiplication effect of the food supply chain in the economy is fully appreciated. If we are to capitalise on the opportunity which exists for food to be a strong contributor to economic recovery Government must create an environment which allows business to grow and prosper.
“This means providing the necessary business development supports; having a strategy to address our uncompetitive energy costs and it means having an efficient Planning Service.
“The over-arching challenges are to improve productivity, sustainability and competitiveness to ensure there is a strong and resilient food sector capable of growing and competing within the competitive environment which exists in both the domestic and international marketplace,” he added.
The Department of Agriculture and Department of Enteprise, Trade and Investment this summer launched a joint strategy called ‘Focus on Food’ which also involved the Department for Employment and Learning, Invest Northern Ireland and the IAP.
The key objective, the departments said, is to establish Northern Ireland as one of the most sustainable and successful food producing regions in Europe by encouraging and assisting companies to focus resources on innovation.
Minister Arlene Foster acknowledged at the time that food and drink “has weathered the economic downturn better than virtually every other sector” and “continued to generate wealth for this community by increasing sales outside Northern Ireland and through a commitment to new product development”.
Mr Lockhart says the Focus on Food initiative, which updates the strategy for the Northern Ireland Food Industry, achieves a number of firsts.
“For the first time Government and industry have agreed high level performance indicators which will facilitate measurement of the impact of our collective efforts. Also, for the first time targets have been set against each of these Key Performance Indicators which will help focus resources on those activities which make the greatest contribution to the over-riding strategic objectives. Focus on Food can and should make a positive difference to the sector but it will only be achieved if the fine words in the strategy document are matched by the resources necessary to make it happen,” he said.
Should the ‘fine words’ be backed up with policy Mr Lockhart believes there is a huge opportunity for further growth in Northern Ireland’s food businesses.
“Having achieved £3bn of annual sales there is no reason why we should not seek to surpass £4bn by 2020. The growth opportunities are primarily in mainland UK and Europe but many Northern Ireland companies are increasingly penetrating markets further afield,” he said.
Mr Billington, a former chairman of the CBI in Northern Ireland, notes however that while there are massive opportunities in markets as close to home as England, there is also serious competition for local firms and this makes it essential that barriers to growth such as uncertainty in the planning system are removed.
“Scotland and the Republic of Ireland both have big growth plans for their agri-food industry. Scotland plans to grow its industry by 60% by 2017, the Republic plans to growth theirs by 40% by 2020. Clearly our competitors see growth opportunities and I see growth opportunities for here. If we were to grow our industry by 40%, we’d have 15,000 more jobs in Northern Ireland,” he notes.
“If we don’t invest in our industry we will lose market share to Scotland and to the Republic. There are opportunities and threats. The problem is that policy does not recognise the benefit to the rural community or the value to the economy. Policy is being driven by growth of other sectors. Why shouldn’t we grow by 40% if the Republic can? We have some good advantages, we are a sterling currency country, we tend to have a lower cost base and we are more efficient.”
But he added: “Short term we have commodity issues and there is going to be squeeze on businesses in Northern Ireland for the next 6-8 months as they get squeezed on raw materials. That will unwind itself in due course. The real question is for our politicians and is about getting policy that backs a sector that has grown through the recession.”
We will reap what we sow
We sometimes take food for granted without thinking of the processes or the industry behind it. In Northern Ireland this means over 50,000 employed in NI contributing in food processing alone to almost 20% of our manufacturing sales.
Agri food, from primary production/farming through to manufacture and supply of food products across the island of Ireland is characterised by a diverse range of business operations from small family-owned enterprises to large scale international organisations. It is a dynamic, technically complex sector with rapidly changing market and consumer demands.
The recent report “Focus on Food- A Partnership Strategy for the Food Industry in Northern Ireland” (May 2010) highlights the importance of this sector and have identified key priorities over the coming years.
While the report recognises that a cohesive and collaborative approach is required in order to ensure successful delivery on the recommendations for this critical market sector, one of the key areas is capability and BluePrint, as specialist recruiters for this sector across the island, feel that we must work together in order to ensure that the menu is complete.
We must promote this sector and its opportunities to job seekers- both current and those entering the market from school leaver upwards, and work with our food industry clients to attract talent and build capability through identifying those critical skills shortages.
Indeed the Focus on Food report specifically highlights this issue of “availability of talented and appropriately skilled people” and a “continued emphasis needed on training and upskilling the workforce, at all levels from factory floor to the Boardroom” with efforts continuing to “promote career opportunities across the industry.”
In Ireland, the picture is no different with a requirement for the knowledge base to continuously improve and an on-going need to attract the best people to this sector.
On a strategic level BluePrint are currently working with and exploring initiatives with industry body partners to enhance the level of attraction of this sector.
The seeds we plant now in terms of “growing” talent will definitely achieve this. As an economy, the report indicates that these plans can definitely bear fruit - meaning a financial reward but also enhanced skills and further employment. So let’s work together to place us on the international stage.