DEFA Minister Clare Barber has written a heartfelt open letter to farmers which acknowledges, and apologises for, the recent problems with wool payments and ‘recommits’ to a closer working relationship between the department and the farming community.
Mrs Barber writes: ‘When en I became Minister for the Department of Environment, Food and Agriculture I was clear that one of my ambitions was to improve the relationship between the Department and the farming community, and to support the agricultural sector to secure a positive and sustainable future. I believe DEFA should be working with farmers, for farmers.
‘I was aware, upon entering the role, that many farmers have felt let down by the department over recent years, and I have learnt since, that many officers work tirelessly and with great dedication to support the sector the best that they can.
‘The question I continue to ask myself is why the disconnect?
‘Over the past 18 months I have taken time to listen to our farming community and build relationships with stakeholders such as the Manx National Farmers’ Union (MNFU), while also listening to the teams in my department and working with them to challenge how we can do more to offer support and how we can improve access to that support.
‘Over the past 18 months we have achieved many things, including: conducting a full independent review to inform the agriculture strategy and food security plan; working with MNFU and UCM to introduce agriculture focussed courses with DEFA financial support; resolving challenges around slurry storage and Red Tractor accreditation, and appointing a new managing director of the meat plant, recognising its critical role within the agriculture sector.
But I recognise there remains much more to do.
Given the scale of work within the Agriculture and Food divisions, and the Forestry, Amenity and Lands divisions, we have taken the decision to split these to ensure that a sufficient focus can be placed on both areas, with recruitment now underway for the new post of agriculture and food director, a role that will report directly to the chief officer of DEFA.
‘Government misled Farmers’ was the headline in a recent paper, and I am keen to respond to this now that I am able to. A headline, such as this, makes it clear that I still have some way to go to achieve my goal, but I wanted to take this opportunity to reply and to recommit that ambition, and to set out some of the facts of the position around wool.
‘As a government department we have been in a contractual relationship with Brannach Olann, and for legal reasons we have been extremely limited on what information we have been able to share. Today I am pleased to now be in a position where I am able to give a full update.
‘In 2020 officers in my department, supported by stakeholders, actively participated in discussions with wool producers regarding the delivery of wool marketing services.
‘Following these discussions government procurement procedures were followed to appoint a contractor to provide the management of the grading and presentation for sale of the Isle of Man’s annual wool clip.
‘For contracts awarded under the value of £100,000 financial regulations state that the opportunity is advertised on government’s procurement portal and the “quick quote” process is used.
‘This process was followed and Brannach Olann were selected as the successful party, with the Attorney General’s Chambers awarding the contract on the procurement portal.
‘I think it is important to highlight here that the exchange of a signed contract would not be standard in this process, for the avoidance of doubt the contract was made up of the standard IoMG terms and conditions together with the quick quote and quick quote response. The use of IoMG terms and conditions is standard in the vast majority of quick quotes.
‘Within the first year of the contract, officers in DEFA became aware that the wool contractor was encountering difficulties in fulfilling the contract. Initially this came from Covid-19 movement restrictions and then from challenges in obtaining the necessary details to enable payment to some farmers.
‘The MNFU was also highlighting to officers the difficulties being faced by farmers in receiving payment. Whilst action has been taken to address the challenges, on reflection my department could have, and should have, responded much earlier to addressing these issues and for this I do sincerely apologise.
‘As part of the response from the department in rectifying the situation, last February officers worked with the wool contractor, to address firstly the matter of outstanding payments. To overcome the barriers to payments being made to all producers, it was agreed that the wool contractor would provide the outstanding money they owed from the 2021 clip to DEFA, and DEFA would then make payments to the remaining producers.
‘The wool contractor provided the department with records of the processed wool’s weight and the total outstanding amount from the sale of the 2021 wool clip. Using this information, an average value for the unpaid wool was calculated, adjusted based on values from the 2020 clip to account for different wool grades. In cases where weight information was missing, payment calculations were made using data from the 2020 and 2021 censuses.
‘This was a complex process and so I thought it best for officers to write to all affected producers to detail the payment calculation, and to provide an opportunity to accept or challenge this calculation (eight out of the 89 producers had their payments increased following the provision of additional information).
‘I accept that this situation was not ideal, but officers worked to find the most appropriate and fair solution to make the outstanding payments with the limited data provided by the wool contractor.
‘The wool contractor has now paid all the producers for whom they had bank details for the 2022 clip, and last week supplied DEFA with a list of producers for whom they lack the necessary information to make payment.
‘They have now also transferred the outstanding funds to DEFA, and the department has notified the 70 affected producers about the proposed payment for the 2022 clip. The data provided for 2022 is much more comprehensive and I am hopeful that this will make the process for finalising payments from DEFA to producers easier, although as a courtesy we have again offered an opportunity for producers to challenge the calculations.
‘It should be noted that in line with contractual requirements the department maintains liability for underwriting the contract and must step in and pay in the event of non-payment. In this circumstance, the department would pursue costs through the legal route.
‘Upon the transfer of information and funds, the Department has terminated the contract with Brannach Olann and on the June 23 an advert was placed on the procurement portal for the provision of wool marketing services for the 2023 clip onwards. Our timeline would see the new contractor appointed by July 23, with the intention to open the wool clip by September 1 at the latest.
‘Throughout all of this I assure you I have had the agriculture sector at the forefront of my mind, fully cognisant of the difficulties being faced by the industry and keen to resolve the situation and bring forward a far better arrangement. I have, at times, been unable to provide full answers to the questions asked of me due to the legal implications, and this has added to the uncertainty and frustrations felt by many.
‘I am sorry that this has been the situation, it is certainly not one that I want. I am very pleased that I can now share the full position and would like to apologise for the concern caused to all involved.