Ferry freight costs hitting farmers, says minister

The Sea Services Agreement was introduced in early 2020

Freight charges on Manx ferries prevent food producers from exploring business opportunities in the UK, the environment, food and agriculture minister has said.

Contributing to a review the Sea Services Agreement (SSA), Clare Barber said some firms had chosen to reduce production rather than pay export costs to expand.

The Tynwald committee was also told the island's producers were paying a higher price than those in similar jurisdictions over similar journeys.

Responding to the comments, the Isle of Man Steam Packet Company said it was "committed to the success of the Manx economy".

The SSA, which was drawn up in 2020 and is due for its five-yearly review in January, includes conditions on fares, routes and the frequency of sailings.

The government-owned ferry firm is run at arms-length by a board of directors, with the Treasury as its only the shareholder.

'Frustrations'

Chief officer for the Department of Environment, Food and Agriculture Scott Gallacher said he had spoken to business that were deciding not to invest the community or "explore live market opportunities" due to ferry costs.

He said while some were able to access discounts that were part of the agreement, the department had heard "overwhelmingly" from farmers and businesses they were not able to benefit from them.

Ms Barber highlighted "significant frustrations" among food producers with regards to discounts and the "unpredictability" of the tariff structure.

It was "really important" to understand what the barriers might be if the government's aim was to "increase local production of food", he added.

In a statement, Steam Packet managing director Brian Thomson said the firm already provided "significant discounts to support the farming community", and would "always work with enquiries to develop new business".

However, he said the "reality of a small island" was that "economies of scale are so often against us".

That was a matter for the department to deal with in terms of "public policy towards support for the agricultural sector", he added.

The committee has previously heard evidence from representatives of the ferry firm, the treasury, and the infrastructure and enterprise departments.