Farmers, Supermarkets and Food Supply Chains

(Limited Text - Ministerial Extracts only)

Tuesday 16th May 2023 Westminster Hall

[The Minister for Food, Farming and Fisheries (Mark Spencer)]

It is a pleasure to serve under your chairmanship, Sir Mark. I thank my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) for securing this important debate. I draw attention to my entry in the Register of Members’ Financial Interests, which is a matter of public record.

Food is part of our local and national identity, and farming is vital to our country. The food and drink industry contributes £30 billion to our economy and employs over 4 million people. As the Secretary of State has said, we want to support our farmers and fishermen to grow their businesses and to help our rural communities grow and thrive. I have just returned from the Prime Minister’s UK Farm to Fork summit in No. 10, which brought together the Government and the whole food supply chain. It was a great opportunity to boost co-operation and promote all elements of our world-renowned farming and food industries.

I recognise that this has been a challenging year for farmers and consumers alike. Russia’s illegal war in Ukraine, aftershocks from the pandemic and a historic outbreak of avian flu are having a global impact. That is why we are supporting our farmers by reinvesting £2.4 billion per year into the sector through new farming schemes, and by paying direct payments in England in two instalments—the next one is due in July—to help farmers with their cash flow.

Responding quickly to global challenges, we continue to provide support through the energy bills discount scheme, and we have announced 45,000 visas for seasonal workers in the horticulture sector next year, to give security to those in the sector so that they can plan their business for the next 12 months.

[Helen Morgan (North Shropshire) (LD)]

It has been widely reported by farmers in North Shropshire, particularly dairy farmers, that although their input prices are astronomically high, for all the reasons the Minister has mentioned, they are being squeezed by supermarkets and their milk prices are starting to come down. Does the Minister welcome the announcement by the CMA this morning that it is going to look into price gouging by supermarkets, which the Liberal Democrats have called for over the last few weeks?

[Mark Spencer]

We will look with interest at what the CMA finds. That is something we have looked at closely ourselves. It will require food producers and farmers to come forward with evidence to support the CMA, but that is why we launched our own investigation into the dairy sector. We are due to come back any moment with our findings and recommendations for how to support dairy farmers.

We have also indicated that we are going to support the pork sector and ensure that contracts are fit for purpose. Once we have delivered on that, we will be keen to look at the horticulture sector and the egg sector to ensure that the marketplace is working fairly for all in the industry. That demonstrates how seriously the Government take these challenges and issues. We will step in when we feel the market is not working equitably for all involved.

Last June, we published the Government food strategy, in which we set out our vision for a prosperous agrifood sector that ensures secure food supply in an unpredictable world and contributes to the levelling-up agenda through good-quality jobs all around the country. In the last year, farmers have continued to put great-quality food on our plates. The UK Farm to Fork summit is the next step in growing the thriving food and drink sector, with the aim of seeing more British produce on supermarket shelves in the UK and around the world. The summit focused on how Government and industry can work together to bring great British food to the world, build resilience and transparency across the supply chain, strengthen sustainability and productivity, and support innovation and skills—many of the things that my hon. Friend the Member for Sittingbourne and Sheppey called for.

The Prime Minister has been clear that growing the economy is one of his top priorities, and growing the food and farming sector is key to that.

[Gordon Henderson]

Does the Minister accept that farmers will only be able to help grow the produce if they are making a profit? Does he also accept that farmers are frustrated at retailers that too often force farm-gate prices down so that supermarkets can maintain their margins in the shops? We have to address that.

[Mark Spencer]

I understand my hon. Friend’s statement. It is right that we have a sharing of risk and responsibility in the supply chain and that primary producers get a fair price for their products. We also have to bear in mind that our consumers and constituents want to enjoy reasonable food prices. We do not want to drive food price inflation through the market, so it is important that we co-operate and work with retailers and those who manufacture in the food sector.

My hon. Friend referred to the Groceries Code Adjudicator and hoped that we would commit to keeping that as a separate authority. I can tell him that the Prime Minister announced this morning that we will keep the Groceries Code Adjudicator as a separate authority and it will not become part of the CMA, which I think is an indication of how important the sector is and that it requires its own Groceries Code Adjudicator.

Farmers should be paid a fair price for their produce. We have introduced new powers through the Agriculture Act 2020 to support the sector. We have made great progress in our reviews of the pig and dairy supply chains. We have recognised the impact of global events on the sectors in recent months, and the next reviews will take place in the egg and horticulture sectors, as I have already mentioned.

We can confirm, as I have said, that the proposed merger of the GCA will not go ahead. My Department has championed precision breeding, as my hon. Friend the Member for Sittingbourne and Sheppey indicated, through the Genetic Technology (Precision Breeding) Act 2023. Building on the successful passage of the Act, we will convene a working group to bring plant breeders, food manufacturers and retailers together to agree an approach that enables precision-bred products to reach the shelves as soon as possible.

We will also improve future support for horticulture by replacing the retained EU fruit and vegetable producer organisation scheme when it closes in 2026 with an expanded offer, which will include controlled environment horticulture as part of our new farming

schemes. We will help the controlled environment horticulture sector overcome barriers to accessing future support and make it easier to build new glasshouses through changes to national planning policy.

[Robin Millar]

I welcome the support that the Minister is outlining, including that farmers should be paid a fair price. Right now in Aberconwy, upland farmers are being told that their land is no good and that it would be put to better use if planted with trees to help the environment. They are being told that meat is not a good part of the diet and that they should not raise livestock. Does he agree that meat does form part of a balanced diet, that raising livestock is among the best of upland farming practices, and that supermarkets have a role to play in talking about that because they occupy a privileged position right next to the customer?

[Mark Spencer]

I hesitate slightly because agriculture is a devolved issue, so it would probably be better for my hon. Friend to lobby the Welsh Government, although I acknowledge what he says. The beautiful landscapes on Dartmoor, Exmoor and the North York Moors are created by the sheep that graze those uplands. We as consumers can play our role in eating the view, as it were. The view that we see is directly related to the food that we consume. If we want to eat beautiful, top-quality Welsh lamb, we must do our bit to support beautiful, rolling landscapes such as the Brecon Beacons—I call it the Brecon Beacons because I have no idea how to pronounce the name that it is now called.

Recent global events facing growers and the wider food sector underline the importance of working together at every stage of the food system, from farming to manufacturing, distribution and retail. Following productive conversations at the summit, I am pleased to say that food security is still at the heart of the Government’s farming agenda. Fulfilling the Prime Minister’s priority on economic growth, we will continue working with the industry to champion UK food and drink at home and abroad, helping more businesses to invest in domestic production and innovation.

I am grateful for hon. Members’ contributions to this important debate. It has been a stimulating debate and I am grateful for the support, comments and questions. Together we will support our great British farmers.

Question put and agreed to.