Farming

Ben Lake Excerpts

Monday 4th March 2024 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to participate in this important and timely debate, and a particular pleasure to follow the right hon. Member for Camborne and Redruth (George Eustice), who made a very considered speech, as ever. He is very learned in this policy field, and I would like to elaborate on his point about food security, and especially the emphasis on horticulture and re-shoring some production in the UK. Food security does not always get the attention it demands in this place—or, indeed, in wider political debate. It is a matter of life and death, and it warrants more parliamentary scrutiny and debate in future.

I begin by considering the current state of affairs. In that regard, the UK Government’s food security report is incredibly useful. It sets out the situation regarding food production and consumption, as well as exports and imports, and I was taken aback by some of its findings. For example, the UK’s production-to-supply ratio in 2020 was 60% for all food, and 76% for indigenous-type food. Perhaps more relevant and more widely understood is the figure for consumption of UK-produced food, which stands closer to 54%, as some food products are exported.

The point is that statistics are hard to interpret and can sometimes tell a whole array of different stories. One thing I would say about the 54% of UK-produced food being consumed here is that that compares with a 1984 figure of 78%. Changing dietary preferences, a changing climate and different consumer habits have a heavy bearing on this story, but the trend is quite important. From a peak in the mid-1980s, the production to supply ratio declined into the early 2000s and has remained quite stable ever since.

Food security is not a simple matter; it is multifaceted and has various contingent factors. The Government’s “United Kingdom Food Security Report 2021” includes a useful definition, which I think conveys the complexity. It notes that food security

“encompasses the state of global agriculture and markets on which the UK is reliant; the sources of raw materials and foodstuffs in the UK and abroad; the manufacturing, wholesale, and retail industries that ultimately bring food to shelves and plates, and their complex supply chains of inputs and logistics; and the systems of inspection that allow consumers to be confident their food is safe, authentic, and of a high standard.”

If we consider that definition for a moment, as detailed as it is, a few risks to food security immediately spring to mind. We have already heard some of them in this debate, including that the surge in input prices and the cost of commodities has had a big influence on the viability of farm businesses. We have also heard about the changing climate in the UK and the way in which flooding has had a significant impact on agricultural production here.

It is also important to bear in mind that a changing climate will also have an impact on those markets abroad from which the UK imports so much of its food. Especially relevant here is the fact that, as the right hon. Member for Camborne and Redruth outlined, different sectors will be more exposed to those foreign import markets than others. Let us take the fruit and vegetable sector as a case in point, as we depend quite a bit on foreign markets for our fruit and veg. The UK produces over 50% of the vegetables consumed domestically but only 16% of our fruit, and 93% of domestic consumption of fresh vegetables is fulfilled by domestic and European production, while fruit supply is more widely spread across the EU, Africa, the Americas and the UK. Some of those foreign markets are in areas of the world that we know will suffer from climate change, and their ability to produce much of the food that we import will be impacted by that.

We must also consider the unknown impacts that geopolitical instability will have on some supply chains. The war in Ukraine has already been mentioned, but we need also to remember that some of these shocks are unexpected and cannot be anticipated, such as the recent disruption of the Red sea trade routes. For that reason, I very much welcome the Government’s commitment to monitoring food security through the new statutory index. I believe that this would warrant an annual debate to coincide with updates of the index so that we could properly scrutinise this important matter. If we consider all these facts and potential threats and risks, it leads us to the conclusion that we need not only to maintain domestic food production but to increase it so that we can gain greater self-sufficiency in many of the food products that UK consumers eat.

Our focus so far has been on some of the external factors, but we need to bear in mind that many domestic factors have an impact on domestic food capacity. I am afraid to say that a combination of factors is conspiring to force many farmers in Wales out of the industry. Domestic agricultural support policy, for example, has a big part to play, in addition to the public procurement of food contracts, which has already been mentioned. The financial position of Welsh farms underlines the vulnerability of the sector in Wales and the importance of direct Government support payments.

The Institute of Biological, Environmental and Rural Sciences at Aberystwyth University in my constituency produces an annual farm business survey of farm incomes. The most recent survey, detailing the 2022-23 out-turns, paints a worrying picture of the state of many farms and farm models in Wales. It notes how hill cattle and sheep farms made a profit of some £24,000 after rent and finance, but excluding the cost of unpaid labour, in that financial year. That compares with the average basic payment scheme payment for those farms of £26,000. Hill sheep farms have a similar story. They made a profit after rent and finance of some £24,000, versus a direct support payment of £31,577. The point I am trying to make is that direct support from the Government—through the basic payment scheme in this instance—has served an incredibly important role in keeping many of those farms afloat. My concern is that if there is any reduction to that profit, many will find themselves unviable.

[Robin Millar (Aberconwy) (Con)]

The hon. Gentleman will know well that the Labour Government in Wales are currently planning a subsidy scheme—a sustainable farming scheme—that by their own independently commissioned estimates will lead to roughly a 10% drop in livestock and a £122 million drop in revenue. Farmers in Aberconwy tell me that that income is simply the difference between them having a future and not, so what message does he have for his Plaid Cymru colleagues in the Senedd who are propping up the Welsh Labour Government through a co-operation agreement? Does he agree that tomorrow afternoon’s budget vote might be a good opportunity for them to reconsider that co-operation?

[Ben Lake]

The hon. Gentleman is right to state the fears of his farmers, which are very much aligned with those expressed to me by farmers in Ceredigion, that the potential change in this policy is, frankly, a matter of life and death for their businesses. He tempts me to comment on the plans of my colleagues in the Senedd. I will resist that temptation, but I will say that it is important, given the gravity of the situation facing the Welsh agricultural industry, that the sustainable farming scheme should be changed. I would suggest that it should be paused to begin with, so that we have time to devise a proper policy that is fit for the 21st century. If my colleagues decide that they need to use every possible lever, I will say all power to their elbow, and if that means the demise of the co-operation agreement, I will certainly not be mourning its passing.

The point is that direct support for many of our farm businesses is crucial. The hon. Member for North Herefordshire (Sir Bill Wiggin) said earlier that much of the reality of that support is to ensure that the price of food on our supermarket shelves is controlled in a manner.

[Richard Foord (Tiverton and Honiton) (LD)]

The hon. Gentleman is talking about direct support to farmers, and on that subject I want to ask him about direct support for local planning authorities, given how vital it is that farmers get quick answers from those authorities. My experience in Mid Devon and East Devon is that they are earnest in their desire to prevent agricultural pollution from affecting our streams and rivers, but I have one farmer who has waited 20 months for a decision on a planning application in relation to the construction of a slurry store. Does the hon. Gentleman agree that we need the Westminster Government also to help local planning authorities so that our farmers can get rapid answers?

[Ben Lake]

The hon. Gentleman is quite right. That is something we face in Wales as well, where some farm improvements and developments, sometimes involving changes to comply with regulations, find obstacles and delays in planning. It is only right that planning authorities should be sufficiently resourced to ensure that none of those obstacles is put in the way of progress.

I want briefly to turn to some of the wider issues that impact on domestic production, including the weaknesses of the current grocery supply code of practice and enforcement regime, and trade policy. I do not need to remind the House about this because I can see so many learned Members here this evening, but farming is a long-term industry, and these decisions have to be made on a very long-term basis. When it comes to the way in which the grocery supply chain operates, I am afraid that many retailers have found themselves in a position where they can exert undue influence and have an impact on farmers and growers to shift short-term risk on to their shoulders—much to the detriment of the wider industry.

It was stated in last month’s Westminster Hall debate that 95% of the food consumed in the UK is sold by just 12 retailers, which affords them a dominant position in the supply chain. This means that farmers and growers receive a paltry margin compared with the margins enjoyed by many retailers. Again, that point was made far more eloquently by the hon. Member for North Herefordshire. In addition to short-term inflation spikes and rising import costs, farmers are currently exposed to unfair trading practices arising from this imbalance.

Last month, many Members present debated a petition started by the Riverford farming campaign, calling on the Government: to strengthen the Groceries Code Adjudicator by empowering it to take effective and punitive action against those committing unfair trading practices; to lower the turnover threshold so that the code applies to a greater number of retailers; and to enshrine the simple principle that retailers should give suppliers certainty that they will buy what they have agreed to buy, that they will pay what they have agreed to pay and that they will pay on time. That basic fairness would more evenly spread out across the supply chain some of the risks and profits inherent in the food supply system.

The impact of trade policy has already been mentioned, so I will not go into detail. Concerns have been raised about the impact of the Australia free trade deal on the sector in Wales and the UK. All I will add is that, in their approach to future trade policy, the UK Government should urgently establish a set of core production standards for all food consumed in the UK to ensure that our farmers and growers are not disadvantaged by any future trade agreements. These standards could safeguard high-quality, climate-friendly markets that are open to imports from countries whose standards may differ from our own.

In addition to the food security index, the Government could look to establish an annual free trade agreement assessment to quantify the cumulative impact of free trade agreements on trade balance, sourcing, standards and domestic food production. The farming unions in Wales would very much support such a measure.

Food security is a challenge with which we will soon need to grapple. By not only maintaining but increasing domestic production, so that we gain greater self-sufficiency, we will in turn gain greater resilience to climate change and to shocks in a very uncertain world.