(6 years, 5 months ago)
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Baroness McIntosh of Pickering
To ask Her Majesty’s Government what are their plans for future farm support.
Baroness McIntosh of Pickering (Con)
My Lords, I welcome this opportunity to pay tribute to those who till the land and battle the elements to put food on our tables. I refer noble Lords to my entry in the register of interests. I have the honour of chairing the Environment, Food and Rural Affairs Committee in the other place and, as well as being an MEP, I practised European law in Brussels.
In preparation for the debate, I have consulted widely with farm organisations, other NGOs and environmental groups. I thank them for all they do to support farmers in the rural community. The hills are alive with the sight of lambs and calves, sheep and cattle, many of which are tended by tenant farmers, some on common land. They lie at the heart of the rural economy yet they face many challenges, not least the weather and a lack of good broadband access. Market towns and rural communities thrive when farmers prosper, yet farming confidence has fallen in the past two years. European Union membership currently provides a market of 505 million consumers as well as support for British farmers. The UK exported more than £13 billion-worth of food and non-alcoholic drinks in 2016, 71% of which went to the EU and 28% to non-EU countries. Farming is the UK’s largest manufacturing sector, generating £109 billion in value for the UK economy, while our farmers maintain over 70% of the UK land mass.
Support for farmers currently takes the form of direct farm payments and environmental stewardship schemes. Brexit means changes on a scale we have not seen for over 40 years. There could arguably be put forward a scheme similar to that of deficiency payments which existed before 1973. Alternatively, the Government could look to loosen the link between support and food production, and reward farmers for environmental schemes that benefit the local community such as planting trees, temporarily storing water on their land or improving the natural habitat and soil.
I took the title of Pickering not least because Pickering’s “Slow the Flow” scheme could be the model for such schemes providing public good. Work is ongoing to set a price on certain activities by recognising and putting a value on the natural capital of the countryside. I welcome my noble friend the Minister to his place and I look forward to his summing up. I ask him that when the natural capital may eventually lead to payments for ecosystem services, those will have been properly tried, tested and piloted before being rolled out. What is certain, and I am sure that my noble friend will agree, is that hill farmers and others farming in the uplands and less favoured areas will continue to need support or to be encouraged to produce more food to stimulate greater consumption at home, substituting imports where possible.
Currently, the UK has a negative agri-food trade balance of £22.4 billion and is a net importer of food. Surely the emphasis must be on greater self-sufficiency at home and generating more exports as well as food security. Going forward, a key factor will be continuing to have access to a regular supply of EU workers post Brexit. In terms of the sustainability of food production at home, we must ensure that a large raft of land will not be lost to a massive housebuilding programme, thus taking it out of food production.
The most obvious support is cost free: boosting trade and learning from our near neighbours how to export more. Denmark, with a population of under 6 million, has an export level far higher than ours and has long been exporting to emerging markets such as China, which we are only beginning to enter seriously now. We can also learn from the Danish Co-operative Movements, specifically Arla and other such models. I pay tribute to the role of the agricultural attaché working out of Beijing, which has substantially boosted exports of food to China. I am delighted to be associated with the export from Malton of pigs’ trotters and other pig parts which we do not currently enjoy in this country, but are a major delicacy in China.
Live animal exports are important to north Yorkshire and elsewhere, contributing significantly to the local economy and ensuring vibrant futures and steady incomes for hill farmers, yet the agriculture Secretary has stated that he wants to ban the export of live animals. These exports are currently small in number and highly regulated compared with the trade in carcasses. Lambs from north Yorkshire and other upland areas are fattened and finished in France every spring. Around 70% of UK pigmeat exports go to the EU. These are predominantly cull sow carcasses as there is no market for them in the UK. World Trade Organization tariffs would render such exports unviable, so the prospect of no-deal Brexit would leave pig producers and others very exposed to being treated like any other third country as exporters to the EU.
The ability to move fresh produce unhindered across European borders after Brexit is essential to prevent the loss of perishable goods because of hold-ups at customs, but regulations have yet to be put in place to ensure that imports meet our high animal health and welfare standards. Increased prices of imported machinery and tariffs on pork imports could jeopardise the sale of pork. Post-Brexit there will also be a need to ensure that animals can travel to other EU countries for breeding, horse-racing and other purposes—not to forget pets, which currently benefit from pet passports.
Today’s debate will give the Minister the opportunity to update noble Lords on the Government’s current thinking on future farm support, their policy on live animal exports, and specifically the status of the tripartite agreement between Britain, France and Ireland for racing purposes. The lead-in time for farm products, including livestock, cereals and dairy, is a minimum of 12 to 18 months. Decisions for 2019, therefore, must be made by March 2018 at the latest. The Grocery Code Adjudicator must be given more powers to investigate breaches in the supply chain before we reach Brexit and should apply to the indirect as well as the direct supply chain, such as dairy. After Brexit, I hope that the Secretary for Environment, Food and Rural Affairs, Michael Gove, who is rightly committed to maintaining our high levels of animal health and welfare standards when we leave the EU, will ensure that these measures are not entered into unilaterally but in step with other producer countries. It is also hoped that the farm-assured Red Tractor scheme should also apply to all food sold in the UK and that food sold through retailers here should carry mandatory country-of-origin labelling.
We must learn from the sow stall and tether ban in the 1990s when, regrettably, the UK unilaterally imposed tough new production standards on home pig producers yet allowed imports from other countries producing pigs to lower welfare standards. As a result, more than half of UK pig producers went out of business. Equally, post-Brexit imports under new trade deals must also meet high British standards of animal health and welfare. There should be no place for substandard imported poultry from Brazil or chicken and beef from the USA and elsewhere. Alternatives to securing more exports are challenging in different ways. I believe that it was a mistake to drop the idea of remaining in the single market and customs union before starting negotiations. The 40-plus existing free trade agreements that we currently enjoy through membership of the EU will no longer apply to the UK post-Brexit. New agreements to replace them will take years to negotiate.
Farmers are looking to export to new markets outside the EU free trade agreements through relationships with African, Caribbean and Pacific countries and with new countries such as Vietnam. These markets, however, do not compare in size with the current EU market of 505 million consumers. The World Trade Organization’s most-favoured nation arrangement would be dire for farmers. In any event, the principle of applying equivalent standards must remain. There must be arrangements for new entrants and the trading arrangement with the UK must become apparent now.
In conclusion, any new arrangement must be based on equivalence and reciprocity, and we must know, in the event of disputes—I hope the Minister will explain this today—what the dispute resolution mechanism will be if it is not to be the European Court of Justice. What will the UK’s future relationship with the EU be? What will farm support look like from 2022 when the annual £3 billion ceases? These are real issues that are causing great concern in the uplands and elsewhere. The Minister is in the right place to respond to them today.
The Earl of Caithness (Con)
My Lords, I thank my noble friend for introducing this important debate. It is so good that agriculture has been debated more regularly in this Session than, I think, during the combined past three Sessions. It will continue to be debated because it is a key industry—probably the most affected industry, for those involved with it, when we exit through Brexit.
Although I voted to remain in the EU, Brexit cannot come soon enough for our environment and our farmers. The sooner it comes, the better. The common agricultural policy has been bad for the environment: birdlife on farms has halved since we have been in the CAP, and biodiversity is in constant decline. The common agricultural policy also made the fundamental mistake of separating farming from the rest of the environment, and it has been bad for taxpayers’ money because that has been untargeted. It has been bad for farmers because it has given them the wrong sort of support, restricting their ability to innovate and their opportunities. It has also kept bad farmers in a living when they should have gone, and put the future of our grandchildren at risk.
I say that because farmers need three key ingredients; air, water and, most importantly, soil. It is soil that has not had enough attention. In the UK, we have lost 84% of our soil since 1850. There are, at the most, 100 harvests left. We are losing at the moment between one and three centimetres of topsoil every year, and it takes 1,000 years to create three centimetres of topsoil. If we continue with the way we have been farming under the CAP, there will be no farmers—not even, I say to my noble friend, in Yorkshire. There will not be any in Caithness even with global warming, which is not going to help them. We will have to look at other models.
The recent Chatham House report, published earlier this month, sets out four models. The first is the sector protection model, which has trade barriers and subsidies. This is the model employed by Japan, Norway and Switzerland. The second is the decoupled subsidy model, which is the disastrous EU model that I have referred to. The third is the insurance model, where payments are made to farmers if prices or incomes fall below a certain level, which is the policy employed by the US and Canada. The fourth is the market-oriented model, which is low in subsidies and in barriers to imports. That is the one employed by New Zealand and Australia.
I do not advocate fully that last model, although it has been touted by some. My reason is that it does not take long for the farmer to go from being the hero to becoming the villain. That is the case in New Zealand, where the mistake the New Zealanders made—which I hope we will not make—was to divorce farming from the rest of the environment. The farmers, who were widely praised for improving their productivity, as we need to do, and for competing on the world stage, as we need to do, forgot the environment. The pollution from the farmers has now made them the enemy of the people.
We are hugely lucky in this country that we are 75% self-sufficient in our indigenous foods, which is a great bonus. My noble friend is lucky to have that as the backdrop to producing the 25-year environment plan. I would say to him: please tell us that the plan will include farming and other rural matters. The whole lot is integrated and farmers cannot be looked at on their own any more.
The big question my noble friend and the department are facing is the balance that is needed to have an agricultural sector which operates at world-class standards of productivity and world-class standards of animal welfare and transport, as well as protecting the environment. Behind all that is the old adage coined in 1906 by Alfred Henry Lewis, which was used by the noble Lord, Lord Cameron, the other day:
“There are only nine meals between mankind and anarchy”.
Lord Whitty (Lab)
My Lords, I also thank the noble Baroness, Lady McIntosh, for initiating this debate. I have five minutes in which to make five points. Contrary to the noble Earl, my first point is: do not rush this. Broadly speaking, the Government have already committed themselves to paying under the present system until 2020, although I think that we should take a little longer going into the transition period. That is because it takes time for farmers to adjust and we can phase it in over a longer period once we know what we are doing.
Secondly, let us remember the inexorable relationship between the nature of our agricultural industry, trade and the pattern of support which is desirable. As has been said, 70% of our trade is with the EU, so we need a new relationship with the Union. If it works, that is fine, but if it does not, we will have a different form of agriculture in this country. If there are barriers between ourselves and the EU, substantial parts of our upland livestock will disappear because the EU is the main market. On the other hand, if we have, as some advocate, a global free trade area with virtually no barriers to the world, we will have very cheap and less-well-regulated imports from Brazil, the US and Australia. Again, significant parts of our agricultural sector would be eliminated and much of our consumer protection would be challenged, to say the least. We could opt for an autarkic “Fortress Britain” structure, which Mr Chris Grayling MP seems to think will lead to quadrupling our agricultural output. It certainly would do wonders for self-sufficiency, but unfortunately it would also increase costs and ensure that consumers have less choice. It would almost certainly drive lower regulatory standards and would probably stop us doing any deals whatever with anyone else in the world. So a support system that is appropriate will depend on the trade system that we have adopted.
Thirdly, we should remember that there were originally multiple objectives in the CAP which we are attempting to replace. The original treaty of Rome effectively saw protection and uprating the productivity of agriculture plus increasing the income of farming communities as its objectives. Added to those over time have been environmental objectives, although quite often they are seen as constraints rather than objectives. I will applaud Michael Gove for trying to ensure that whatever form of agricultural support eventually comes out of all this will in effect be a greener Brexit. We need more detail about the objectives in order to be clear.
The key inputs to agricultural production are the quality of the land, particularly of the soil, as the noble Earl said, and the quality of the labour applied. Unfortunately, the quality of both have rather suffered over the 50 years of the common agricultural policy in one way or another. Yes, productivity has increased through better breeding and more science being applied, but it has also led to the over-application of chemically based fertilisers and pesticides, and of course we have suffered the effects of development and therefore our soil has been degraded over time. It has also polluted our rivers and threatened our biodiversity, some of which the industry itself is dependent on, most obviously the bee population.
We also need to look at the quality of labour. The system needs a modernised, land-based workforce. We need to change from the overdependence of some our agricultural sectors on migrant labour and, at its most extreme, seriously exploited labour in a way that gives the whole of the industry a bad name. We need to eliminate extreme exploitation and control and reduce the dependence on gangmasters. Where imported seasonal labour is still needed, we need a properly regulated replacement for what was once the SAWS system.
I believe that most of our labour could be recruited from the settled population here, but we need to ensure that those workers are better paid and better trained. On the latter, it is unfortunate that agriculture spends less money on training than any other sector in the economy. On the pay and conditions side, since the abolition of the Agricultural Wages Board, wages in agriculture have fallen relative to average wages in the economy, even in a period of low or negative growth in real wages generally.
On the management of land, we need to develop a holistic system of managing land, soil, water, wildlife and forestry. I think that is the way Michael Gove is moving but we need to be clearer about it. This cannot simply apply at the individual holding area level. We need co-operation between landowners and land managers. I see that the CLA is proposing a new land contract, but that has to be mandatory in form and not voluntary, although it may have voluntary elements. It needs also to be less bureaucratic, not more, than the worst features of the CAP.
We need to have clear sight of our objectives and to determine the quantum and not be dominated by the Treasury. We need to allow for a period of engagement, not only of farmers and the rural community but of the whole of the food chain and the rest of us. We have an opportunity, but let us get it right.
Baroness Wilcox (Con)
My Lords, what are the Government’s plans for future farm support? I am already beginning to hear things that I had not really thought about. I hear a great deal from the noble Lord, Lord Whitty, because we are both on the European Select Committee, which has good cross-party coverage. I will not talk again on the points he raised so as to give everybody a bit more time.
I start by saying that my noble friend Lady McIntosh, who was a bit worried about making her speech today, should not have worried. It was an excellent speech which set us off on the right way. My noble friend Lord Caithness frightened me to death, as he often does. However, he talked about other models entirely and reminded us of the ways in which we are lucky. What the noble Lord, Lord Whitty, said was quite worrying too. I feel I must cheer us all up a bit, because we have lots to do.
I serve on the European Select Committee, where everything is done on a cross-party basis and we all get on with everybody very well. For this particular piece of work, we realised that there was a lot for us to learn. We submitted our Brexit: Agriculture report to the Government, and no doubt the Minister will speak to that when he gets up to put everybody at ease. He will respond today on the Government’s plans for the future, and so I felt that the best thing I could do was to take some recommendations from our European Select Committee report and remind us exactly what was said on your behalf.
Many farmers rely on Pillar 1 and Pillar 2 funding to keep their businesses viable. Any substantial reductions in the level of support would have a significant impact on both the agricultural sector and the wider rural economy. We felt that the Government should clarify as much as possible their intention regarding financial support post 2020 to provide the certainty required to make the investment decisions that are needed.
Brexit provides an opportunity for the Government to evaluate not only the level but the objectives and structure of financial support to farmers, and to design simpler support schemes which are effective in the context of UK agriculture. This could include support for the rural economy or those in less-favoured areas, such as hill farms; investment in technology; the improvement of productivity, as we have heard about today; environmental protection; or ensuring that UK farmers are not at a competitive disadvantage compared to their EU counterparts. We encourage the Government carefully to review the needs of the agricultural sectors across the UK and consult with the industry to ensure that any future support is targeted and effective.
There is a case for continuing to provide financial support to farmers after 2020 to correct market failures and deliver public goods, such as environmental protection and ecosystem services that would not otherwise be paid for. We recognise that agriculture will be competing with many other sectors for public expenditure. The agricultural sector will have to make a strong case to maintain financial support at the same or similar levels to those provided under the CAP. WTO rules may hinder the design of support schemes tailored to UK objectives. The Government should factor these constraints into their post-Brexit agricultural policy and negotiate a share of the EU’s amber box allowance to maximise their options for designing an effective post-CAP support scheme. They should also consider how to support the provision of public goods through agriculture in the event they do not secure such a share.
There we are. I believe we are on our way to a much better life. I listened to the noble Lord, Lord Whitty, trying to frighten us, but in among it all we could hear that he too is excited about where we can go when we come out of the common agricultural policy. The Government have a manifesto commitment to maintain the same cash total in funds for farm support until the end of this Parliament. That commitment should help to provide stability for farmers over time as we develop a new agricultural policy working closely with the devolved Administrations and those affected. The decision to leave the European Union provides an opportunity to design a new agricultural policy from first principles most effectively to support the agricultural sector.
Lord Cameron of Dillington (CB)
My Lords, in thanking the noble Baroness, Lady McIntosh, for introducing this short debate, I declare my interests as a farmer and landowner. We will undoubtedly see much change in agriculture over the next 10 years. In that context, I have four points to make.
First—here noble Lords will see I am on the side of the noble Lord, Lord Whitty, rather than that of the noble Earl, Lord Caithness—we should change the current system slowly. Anyone looking to alter their customer base or marketplace knows that the first requirement is to ensure that you do not lose your old customers before you have properly embedded your new sales programme. So if farmers are reckoned to become new customers of Defra on Brexit, providing a variety of services, it is important they are given time to change and understand where they might fit into this new marketplace. In other words, the current system of single farm payment should be gradually diminished over, say, five or eight years. It has never been a good system and provides little reward to society, but we do not want a cliff edge.
Secondly, farmers are unlikely to come out of Brexit well. The Brexit discussions will involve multifaceted trade negotiations of all sorts—financial services, cars, steel, whisky and wine, et cetera—with agriculture somewhere at the bottom of the heap. I suspect that France, Germany and Italy will be keener to protect their farmers than the UK Treasury. On the basis that non-EU countries currently have to pay 40% to 50% tariffs on food coming into Europe, this could be seriously bad for UK farmers, most of whose current exports go to the EU. Our only hope is that we can achieve some form of import quotas into the EU—even if on only a temporary basis—as near as possible to our current trading quantities.
Thirdly, post-Brexit trade deals are unlikely to improve matters. Again, these deals will be multifaceted and multicommodity and UK agriculture will be only a small pawn on the chessboard. Bear in mind that cheap food is usually a good vote winner for any Government, so cheap Australian and US beef or even chicken will be knocking on the door along with other products from hotter climes where labour is cheaper and the regulatory regime looser. Our farmers will not be able to compete. Our only hope is to ensure we impose high standards on all food from whatever source and, above all, retain very good traceability on both domestic and international products.
My fourth point is about the opportunities presented by Brexit. It amounts to a question of how much and for what the Government are prepared to pay land managers for services to society. Bill Bryson once said that apart from producing good, healthy food, the unique feature of the English countryside is that the English people love it to death. Indeed, they have much to be grateful for to our farmers and landowners, and I believe that they—the taxpayers—will not mind paying for environmental land services of all sorts. But there must be profits allowable in the scheme or schemes. Cost-price services, as at present, simply will not do. As I have explained, there will not be many other profits around for farmers, so the state must ensure that farmers are properly rewarded for what they do.
My main point, in summary, is that by hook or by crook we must ensure that our farmers can survive on the land. My last speech on this subject focused on harnessing an improved and diversified economy to keep farming households in place in all parts of our countryside. If we lose those households, we risk losing that hugely important and well-loved heritage asset that is the English countryside, created and nurtured by our forebears from Roman times to modern day and, as I say, still greatly loved by our nation. Of course, it changes and will continue to change, but it will always need nurturing by those who know and love its every fold and stream.
Lord Kirkhope of Harrogate (Con)
My Lords, this is the first time that I have had the honour of appearing in this particular location. I am very pleased to be here to support my noble friend in her debate. I have nothing relevant to declare on the register or elsewhere, other than my deep respect and support for our farmers and the rural communities that support the enterprises around farming. There is a bit of a Yorkshire mafia here today. I had the pleasure and privilege of representing Yorkshire in the other place and in the European Parliament for getting on for nearly 30 years before I came here. The importance of farming to the economy of Yorkshire, as to the rest of the United Kingdom, should never be underestimated.
I have two things to say. First, planning is essential in most of the things that we are involved in, but it is particularly important for farming communities. While, of course, five-year, 10-year and 25-year plans are more likely to be seen in socialist state-controlled economies, nevertheless the Government a little while ago was talking about a 25-year plan for agriculture. That is a long time; it is an awful lot longer than the plan we have in place, or are putting in place, for leaving the European Union. That just underlines a simple fact—that farming cannot plan for two or even five years, because it is all about things such as crop rotation, inheritance, viability, diversity, food prices, volatility in marketplaces, and trying to determine how to invest to keep your farming successful. It is a profession; it requires the adoption of interest in farming by young people, through the education system as well as through their families. Keeping young people on farms is now a particularly difficult problem. I was interested to hear my noble friend Lord Cameron speaking about communities and keeping farming on the land—and enough farmers. I fear that that will be an even greater problem if we cannot give sufficient certainty to farming communities that they will continue to receive not only financial but political support in the years ahead.
In that sense, I mention a social aspect. Farming is a highly pressured occupation, even without some of the uncertainties to which I refer. I pay tribute to the National Farmers’ Union for its support of the farming community, but I pay tribute too to the Farming Community Network, a charity set up to support farmers who have such pressures. Interestingly, mental illness and those sorts of things are much more prevalent in rural communities than in urban ones, and therefore that support seems very worthy, as is the Royal Agricultural Benevolent Institution, which has stepped in on many occasions to give good and useful advice to farmers when they have had pressures—mostly of a financial nature but nevertheless pressures. The Addington Fund and other organisations have been involved as well. I hope that a similarly friendly and beneficent approach can be continually adopted by our banks. I hope that it can also be adopted and maintained by our Governments.
Great challenges lie ahead. One is simply to make sure that the children in our cities start to know that when they eat meat, it has something to do with farming and animals. Surprisingly few do. Support for farming has to come from an understanding of it and its contribution to our economy both by the Government, as I have said, and by society as a whole. I hope that in our debate we will make that quite clear and that my noble friend will be able to respond to those social aspects of farming, which, in many ways, are just as important as the financial ones.
Baroness Redfern (Con)
My Lords, I too thank my noble friend Lady McIntosh for tabling this important debate. I am sure that we will have more debates on agriculture as we go through the transitional period.
I have worked in agriculture for more than 30 years and I understand how important it is to the economy. I was out walking with Daisy and Ted, my two dogs, at the weekend, enjoying the countryside while listening to the gaggle of geese flying over in their distinctive V shape towards the Trent Valley, and looking at the very diverse farming around me, recognising how much it contributes to the welfare of our communities and business sectors. Therefore, regarding future farming support, I am pleased that the Government have already responded to the period of withdrawal from the EU and I welcome their commitment to continuing to guarantee CAP Pillar 1 until 2020 with a future guarantee of CAP Pillar 2 funding to include agri-environment schemes. I hope that Defra will bring forward as quickly as possible further policy options to reassure the farming and agricultural communities about the need for continued clarity and certainty as the Government go through the process.
It is very important that the agriculture Bill sets out a clear framework, not only with a sustainable direction accompanied by agreed timescales, particularly in the early stages, but with a commitment to continuity and certainty while giving confidence to farm businesses. When we leave the EU, we need to avoid costly and disruptive customs checks for our export markets, as delays will have a significant negative impact on the agri-food sector, in which products are often perishable and food supply chains are highly integrated.
It is important to stress the need to present as an opportunity the securing of a decisive break from the CAP and to establish our own ambitious and environmentally responsible policies so that we can achieve a sustainable future for agriculture. Unfortunately, experience in the past has shown that bold CAP reform decisions have often been implemented in a rush, or in the absence of policy certainty, creating significant delivery problems for agencies and delaying payments for farmers. The ambition for the sector would be to focus on restoring our natural heritage while building resilience and supporting production that is sustainable, innovative and humane.
There is no doubt that the CAP is outdated and very complicated, with about £2.5 billion per year used for direct subsidies based on land acreage. Unfortunately, the decline in biodiversity has affected many farmland birds and wildlife—in particular, as the noble Lord, Lord Whitty, said, bees and other pollinators, which play an important role in natural habitats and feed supply by pollinating crops and wild plants. This area needs to be supported and to play an integral part in the future agriculture Bill.
The goal for the UK is to create a world-leading food and farming industry which supports farmers in adapting to climate change, increases energy efficiency and helps reduce farmers’ exposure to volatility in prices of fertilisers, pesticides, labour and energy. Investment in IT and digital solutions will help them to drive competitiveness. Whether directly or indirectly, we have a unique opportunity to include as many organisations as possible in discussions during the implementation of the 25-year environment plan and to consult widely.
Families and young people wanting to settle, work and grow in rural settings are being priced out of areas they have known all their lives because of the lack of affordable housing. That puts a huge strain on rural economies, populations and vital community services. We have witnessed village pubs, post offices and rural schools closing because of ageing and dwindling populations. Evidence tells us that high-quality and affordable new homes can transform rural communities.
At this moment, the UK has a negative agri-food trade balance of £22.4 billion, making it a net importer of food with a self-sufficiency ratio of 61%. The question is how we can grow better, sell better and export better in supporting the UK to lead the way. With our reputation for high animal welfare, we must ensure that imports meet these high standards so that UK farmers are not placed at a competitive disadvantage. It is imperative that welfare standards are embedded in any future trade agreement
Farming matters to the UK. Farmers are the stewards of our lovely countryside.
Lord Grantchester (Lab)
I thank the noble Baroness, Lady McIntosh of Pickering, for introducing this timely debate. She has set its parameters excellently. I also thank all other noble Lords who have contributed today. Time may preclude me being able to mention them by name, but I hope that I will echo many of their remarks. The debate will perhaps underline for the Minister what he has got right in the Government’s forthcoming agriculture Bill, what he may be doing ill-advisedly, and what he may have forgotten about. I declare my interests as a farmer in receipt of EU funds and having been involved in food businesses beyond the farm gate.
There is universal approval for the view that farm support involving public money must be given only in exchange for public benefit. Bearing in mind how fundamental to the well-being of many sections of agriculture is farm support, we wish the approach to be consistent and stable in securing farming’s future according a long-term economic plan. This is not what the farming community is hearing from the Government at the moment. Admittedly, agricultural policy, like most other policies, is not easy when the Government have many competing objectives. I trust that the Minister will outline which of his department’s priorities and choices the Government will commit to undertake in the agriculture Bill, and assure us that they will not be undermined by another Minister in the Brexit negotiations.
As part of public benefit, future farm support should reward responsible land use. With this being undertaken by farmers, it is recognised that stable support is needed against the rising volatility of market returns. Responsible land use also includes stewardship of the countryside and the environment and the welfare of animals. Fundamentally, responsible land use means protecting and enhancing our soils for future generations and for healthy foods. Measures are needed to improve soil nutrients and soil structures. The science around glyphosates needs careful attention so as to promote minimum tillage and least soil compaction from modern heavy machinery. Hedges, wildlife corridors and the biodiversity of songbirds and pollinators need significant measures in this respect. I would be grateful if the Minister could outline how this formulates into land management contracts and targeted stewardship schemes. What it must translate into is a strategic food policy that takes account of the diverse food chain to produce stable prices for consumers and enables the market to support the delivery of good food. I urge the Minister to look at policy measures that reward the value-added element of food products throughout the food chain. That should include the farmer and not merely reward the farmer as an ingredients supplier. I urge the Minister to insist on fair practices that will outlaw the transfer of risk down the food chain being borne by the farmer. These are elements key to lessen the dependency of agriculture on safety net measures.
The competitiveness of UK agriculture and a level playing field of food standards and regulation has been underlined by many noble Lords today. In this regard, support measures are needed to encourage food innovation, including innovation of processing, in the food chain. Research as well as knowledge transfer involved in training are consequentially important. However, we must not lose sight of the fundamental approach of maintaining a level playing field of food and environmental standards. Any industry is rightfully aggrieved to have to compete against lower standards that are cheaper or competition that is structured unfairly. I have a fundamental question for the Minister: post-Brexit, will the Government maintain parity of food standards between food imports and the standards that have to be maintained by the UK supply chain? This is of importance to both consumers and farmers.
My noble friend Lord Whitty spoke well and convincingly about the labour situation on farms and I echo his remarks. Your Lordships’ EU sub-committee has highlighted that agriculture is a devolved matter whereas trade policy is a reserved matter. Can the Minister update the House on aspects of trade tariff splits and support measures between the Government and the devolved Administrations in a still-to-be-determined amount of post-transition period farm support? Will the split between the nations in the UK be satisfactory to their farming characteristics and on a continuing percentage division? On governance issues, time prevents me from asking anything other than: have the Government firm plans to set up UK structures to replicate the EU institutions that currently underpin the regulatory system?
Outside the EU, the UK Government will still need to be mindful of WTO oversight of trade policy in relation to whether or not aspects of trade are distorting. They must be mindful of the long decision-making horizons of agriculture, food production and trade. My experience of re-engineering businesses tells me that two years for a transition period is likely to be very inadequate for changes in trade and agriculture practices to be made. I urge the Government to make incremental and progressive changes to safeguard jobs, communities and businesses.
We must keep two other key elements in mind. First, we must address the challenge of climate change and do all that we can to reduce and lessen its impact. Secondly, antimicrobial resistance—
Baroness Stedman-Scott (Con)
With respect, we need to make sure that the Minister has time to respond.
Lord Grantchester
I understand. I am sorry to go over by a minute. I was trying to close my remarks by saying that antimicrobial resistance is also a long-term issue to which we must pay attention.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, I agree entirely with your Lordships that we should congratulate my noble friend Lady McIntosh on securing this debate on agriculture and farm support. I declare my farming interests as set out in the register.
As we leave the European Union, the Government are clear on establishing a strong and productive agriculture and food industry which promotes great British food, strengthens rural communities and maintains high animal welfare standards—all while enhancing our environment. As your Lordships have said, we have a world-class food and farming industry generating more than £100 billion a year for our economy. More than 70% of UK land is farmed. The production-to-supply ratio of indigenous food is 76%, as we heard from my noble friend Lord Caithness. I also agree with my noble friend Lord Caithness that farming and food production are the very backbone of the countryside—and in my view of the country. Farmers have an essential role in ensuring that we leave our environment in a better state than we found it. After all, earlier generations of farmers and landowners, as the noble Lord, Lord Cameron, said, were the architects of our extraordinarily beautiful landscape. A vibrant agricultural sector and the enhancement of our natural environment are entirely complementary. Given the salutary lessons from New Zealand, as outlined by my noble friend Lord Caithness, I need not say much more. So leaving the common agricultural policy provides us with an opportunity to ensure that future agricultural policy supports farmers to grow, sell and export more great British food, as pointed out by my noble friend Lady Redfern.
We are actively engaged with farmers and farming organisations as we develop policies that we believe will provide support more effectively than the CAP does. As highlighted by the noble Lord, Lord Cameron, we must ensure that we have a system of agricultural support that respects the work of farmers and rewards environmental protection and enhancement. That means support for natural capital and ecosystem services, referred to by the noble Lord, Lord Whitty, and my noble friend Lady Wilcox, such as woodland creation and tree planting, encouraging biodiversity, and high standards of animal welfare. By using public money to reward environmentally responsible land use and activities that enhance the countryside and protect landscapes, we provide the taxpayer with better value for money.
The Government absolutely understand that clarity is required in the farming sector at this time of great change. The noble Lord, Lord Cameron, rightly raises the importance of how a smooth transition for farmer is required. That matter was also referred to by the noble Lord, Lord Whitty, and my noble friend Lady McIntosh. We have therefore made a commitment to maintain the same cash total in funds for farm support until 2022 and to honour agri-environment agreements made while in the EU, provided that they align with domestic priorities and our future farming vision.
The noble Lord, Lord Whitty, and a number of your Lordships mentioned labour. Defra is considering the latest data and working closely with the industry and across government to monitor labour demand and supply, including the seasonal workforce. We want to enable farmers to develop new markets and provide vital public services. We must therefore support the adoption of new technologies and techniques to improve productivity in food production. In 2013, the UK Government agri-tech strategy was launched, with £80 million invested in four world-class centres of agricultural innovation to support the adoption of innovation and technology in the food and farming supply chain, while improving biosecurity. Last week, at Harper Adams I observed the benefits of precision farming and the importance of such centres in bolstering young farmers’ expertise. In response to my noble friend Lord Kirkhope, the enthusiasm of this next generation of farmers, and their appreciation of the intrinsic interdependence of food production, the environment and animal welfare, was one of the most evident features of my visit. Further to this, as my right honourable friend the Secretary of State announced, the Government have allocated £40 million to the countryside productivity scheme to help farmers improve productivity through investment in innovative technology. Indeed, the Government’s industrial strategy further commits to boosting the adoption of technical precision farming.
When we leave the EU, we will remain global leaders in environmental protection and animal welfare standards, maintaining our high-quality produce for British and international consumers. Noble Lords have rightly raised the importance of trade. We are a trading nation; we always have been and always will be. I was most grateful to my noble friend Lady McIntosh for referring to the work we are undertaking with our food counsellor in China and the other work going on overseas.
For the first time in more than 40 years, whatever our views on last June’s result, we have a golden opportunity to negotiate trade deals with the world. Around 60% of UK agricultural exports currently go the EU, as noble Lords have mentioned. Therefore, our focus is on securing the best deal for farmers in our negotiations, transition and readiness for day one as we leave. We are conducting a rigorous analysis of the full range of trade scenarios on UK agriculture to ensure the best possible trading future for our farmers. My noble friend Lady Wilcox asked about the WTO arrangements. We are currently considering what tariff rate quotas and amber box allocation the UK should create as part of our detailed work in preparation for the draft of the UK’s independent WTO schedule. My noble friend Lady McIntosh also asked dispute resolution in regard to which conflict resolution procedure will apply when we leave the EU. This issue will form part of our negotiation with the EU, as one would expect.
We should be proud that we have some of the highest animal welfare standards in the world. Let me be clear to your Lordships: there will be no reduction in our welfare standards, our food security standards or our environmental protections as we leave the EU. The Government have committed direct funding to research programmes with the Animal Health and Welfare Board for England, the Farm Animal Welfare Committee, the Animal and Horticultural Development Board and research councils. Only this morning, I was having a discussion with the chairs of those boards and that committee about advancing knowledge on welfare.
I should clarify my noble friend Lady McIntosh’s remarks regarding the live export of animals. Once we leave the EU, and in line with our manifesto commitment, we can take early steps to control the export of live farm animals for slaughter. This has been widely welcomed but I want to clarify that traditionally we have also exported live animals because their breeding standard is of the best. I particularly want to refer in the short time that I have to equines. I am fully seized of the importance of this, as the passports currently used for the travel of thoroughbreds used in racing and breeding, as well as other sport horses in the tripartite agreement, is tremendously important. The TPA will be the subject of negotiations when the UK leaves the EU and the Government will seek the best deal possible, as exemplified in the new TPA that was signed off in 2013. Indeed, I have been in correspondence only this morning on these matters.
Our partnership and ongoing engagement with a wide range of stakeholders will ensure that we have a farming and environmental land management policy which supports current and future generations of farmers to follow the best approaches to soil health management. A number of your Lordships raised this crucial point. The policy will also support them to adopt advances in agri-tech, produce quality food and enhance our natural environment. We recognise that future policy must work effectively for all UK agriculture—the noble Lord, Lord Grantchester, and my noble friend Lady Wilcox spoke of this. The Secretary of State meets devolved Administration Ministers regularly to discuss the importance of co-operative working and future frameworks. We are committed to continued flexibility in how the devolved nations manage their future farm support subject, we believe correctly, to preserving a single internal market and compliance with our international obligations.
The European Union (Withdrawal) Bill will convert the existing body of EU agriculture law into UK law. We will introduce an agriculture Bill and we intend to consult widely with interested stakeholders ahead of publishing plans for that Bill. The Secretary of State has signalled his intention to consult in the new year and I hope that the noble Lord, Lord Grantchester, and all of your Lordships will participate. Our proposals for the future agricultural policy will reflect the Government’s aim of securing a better future for agriculture and food production, while enhancing the environment and rural communities. As my noble friend Lady McIntosh mentioned, we must support farmers across the UK, from the uplands to the lowlands. I agree with my noble friend Lord Kirkhope and, as a member of the NFU and a supporter of the RABI, I share his remarks as to the social pressures and challenges of farming. I also know and understand that farming is exposed to great degrees of volatility, so we must develop a system that helps farmers to face the future.
Our vision for British agriculture is based on a sustainable, productive and competitive industry. This will be set out in our 25-year environment plan, which I hope will please my noble friend Lord Caithness. A great deal of work is under way on what our future farming policy will look like. This is being undertaken through active engagement with all farming interests. We are committed to supporting agriculture, food security, high- quality food and, essentially, the British farmer.
Baroness McIntosh of Pickering
My Lords, I congratulate my noble friend on the success of the Beijing consultant. Will the Government be minded to look at other such in other countries?
Lord Gardiner of Kimble
My Lords, we are looking at a global trade situation, so I am sure we will be looking at all parts of the world.