Groceries Supply Code of Practice

Ben Lake Excerpts

Monday 22nd January 2024 Westminster Hall

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to serve under your chairmanship, Mrs Murray. I thank the hon. Member for Neath (Christina Rees) for securing this important debate and the petitioners for bringing it to the attention of the House. It is also a pleasure to follow my friend, the hon. Member for Totnes (Anthony Mangnall). I was struck by the constructive point he made about how, in the spirit of cross-party consensus and co-operation, we can address many of the concerns in rapid order. It is in that vein that I make my own remarks this afternoon.

The strengthening and broadening of the scope of the groceries supply code of practice is necessary; as has been rehearsed already by those far more eloquent than I, it is also very timely. It is important to emphasise at the outset that our farmers, including those in Ceredigion, find themselves in a situation of severe uncertainty. We have already heard quite a bit about the impact of inflation; I do not need to rehearse the statistics, other than to say that the spikes in input and production costs have been severe.

Although inflation in terms of many of those input costs has come down, they are not reducing—there has not been deflation. Many of our farmers are still struggling with heightened input costs. This is also a time when unfair and quite extraordinary trading practices have been exercised by too many of the large grocery industry businesses. As the hon. Member for North Shropshire (Helen Morgan) mentioned, there has been a pincer effect on many of our farmers, who find themselves vulnerable. It is timely that we should be debating some of these changes this afternoon.

Farmers across the United Kingdom, and specifically in my own constituency of Ceredigion, value certainty. The businesses are built on long-term models, due to the investments required in agriculture and the growing and production cycles. So, yes, as we have heard, farmers are particularly vulnerable to inflation spikes but also to the extraordinary and unfair trading practices that arise from the severe power imbalance that many Members have described in detail this afternoon.

The fact is that the buying power of the groceries sector affords it a significant ability to apply short-term pressures on suppliers and producers, without much understanding of the long-term consequences. We have seen that power dynamic play out to disastrous effect over the past 18 to 24 months, particularly in the horticultural and poultry sectors. Other sectors also complain of severe practices being aggressively applied by some of the larger companies. It is quite appalling to hear about people being told at the very last moment that they are no required to produce as much, and the hon. Member for Neath mentioned lettuces. Others are finding that their contracts or verbal agreements are being changed with little notice. Indeed, some growers find out the price they will be paid for their produce only when they come to harvest. For an industry that is so dependent on certainty and long-term planning, these practices are simply disastrous, so it is right that we debate ways to address them and to restore some balance of power across the supply chain.

The right hon. Member for, I believe, Vale of Clwyd—

[Mr David Jones]

Clwyd West.

--- Later in debate ---

[Ben Lake]

I hope the right hon. Gentleman can forgive me—Clywd West is the better of the Clywdian constituencies. He mentioned how dominant the larger grocery retailers are and that the UK food retail market is dominated by the nine to 14 largest supermarkets. They are the ones that seem to be deploying the most aggressive practices, but we also need to remember that consolidation in the processing sector over a decade or more means that it has an important role when it comes to buying directly from farmers. Many farmers in my constituency will not have a direct relationship with the supermarkets; they will sell their produce to an abattoir or to other processors, so it is important that those are also brought into scope. That link in the supply chain should be covered by regulation, so that we can ensure that some of these unfair practices are not deployed there as well.

I refer Members to the example of the dairy industry, where many people have suffered from consolidation. Consolidation in the processing sector has its benefits, but one downside is that it often leaves primary producers with less choice about whom to sell their produce to, and the problem is particularly acute in the dairy industry. If we were to extend the code, as many Members have called for this afternoon, it would not only ensure that we have a greater balance of power across the supply chain, but help to balance some of the risks throughout the supply chain—something other Members have mentioned.

Why should we be so concerned about this issue? The fact of the matter is that many of these awful practices are causing such strain for farmers across the UK that far too many are considering whether they have a future in the industry. Some 25% of dairy farmers are considering whether they will still be milking in a year’s time. The impact that that has on not just our productive capacity but our food security is quite severe. I agree with the hon. Member for Totnes that this should be a cause for real concern for Members of all political parties because, in a world with a changing climate, many growers and producers overseas will not be in a position to fill the gap if we lose our domestic productive capacity.

I will end by reiterating the call from the petitioners and the Riverford farming campaign not only to strengthen the Groceries Code Adjudicator so that it is empowered to take effective and, if needs be, punitive action against those committing unfair trading practices in the supply chain, but to extend the groceries supply code of practice to intermediaries as well. It beggars belief that we are here debating the importance and urgency of enshrining the simple principle that retailers should give suppliers certainty that they will buy what they agreed to buy, pay what they agreed to pay and pay on time. If we could make swift progress on this issue, it would go some way towards addressing a key concern for many of our farmers, and especially those in Ceredigion, about the future. In so doing, it would ensure that we have the productive capacity in the United Kingdom to safeguard our food security for the future.

Fishing Industry

Ben Lake Excerpts

Thursday 29th June 2023 Commons Chamber

[Anthony Mangnall]

My hon. Friend is absolutely right, and she was far more diplomatic than I was during the meeting, which probably means that her career in the Foreign Office is likely to be far greater than mine. I tabled a question in the House on this subject to ask how many people in the past four years had died at sea or had a serious injury from a medical condition. The response was that not a single one of the deaths or emergency responses was down to a medical condition; they were down to poor practice and poor equipment. We are putting in legislation that causes huge horror and difficulties. We must think about why we put in such things. If we want to change the practice and make sure that it is safer on vessels, let us do that and we will work hand in glove with people. However, to think that this will not impact small boat owners and small inshore fishermen on our coastal waters is just nuts.

[Ben Lake (Ceredigion) (PC)]

The hon. Gentleman makes that point exceptionally well and echoes some of the concerns and arguments of the Welsh Fishermen’s Association. He mentioned the lack of evidence. Does that not perhaps reflect the fact that those who drafted the regulations foresaw the potential for exempting smaller vessels by giving the Secretary of State the power to do so?

[Anthony Mangnall]

The hon. Gentleman makes the point perfectly. If the exemption is there, let us use it. It takes nothing other than the Minister standing at the Dispatch Box to say that regulation 14 will be used. I get the sense that there may be some cross-party support on this issue.

Animal Welfare (Kept Animals)

Ben Lake Excerpts

Wednesday 21st June 2023 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

I wish to concentrate my remarks in the brief time that I have on the very worrying issue of dog attacks on livestock. In that regard, I commend the hon. Member for North Herefordshire (Sir Bill Wiggin) for his remarks. He was right to point out how serious this matter is for rural communities. I also applaud his commitment to introduce a Bill if he is successful in the private Member’s ballot. That is an important commitment to make and one that I have also made. I just hope he has greater luck in the ballot than I have had, because that is legislation that needs to be brought forward.

I will not pretend that I am not disappointed that the kept animals Bill has fallen, because the measures included in it to address livestock worrying now face great uncertainty. It is a tragedy of the situation that we now must depend on the luck of the draw of the private Member’s ballot to see whether those measures get on to the statute book.

As anybody who represents a rural constituency will know, one of the most horrific experiences that anyone can witness in life is the aftermath of a dog attack on livestock—primarily sheep, but also other livestock. In the last few weeks alone, I have spoken to three different farming families in Ceredigion who have suffered attacks on their livestock by dogs. Together they have lost about 40 sheep completely, with a further dozen or so on life support, as it were. The photographs are gruesome. We cannot underestimate how traumatic it must be for the animals to suffer such gruesome attacks and to die in such a horrible way.

We need to make sure that the measures that were included in the Bill to address the deficiencies of the current legislation, the Dogs (Protection of Livestock) Act of 1953, are brought forward in haste, because that Act is not fit for purpose as it stands. Police desperately require greater investigatory powers in order to bring more instances of dog attacks to prosecution and to serve as a deterrent to other dog owners, so that they make sure that they keep their animals under control.

I am not going to pretend that the measures included in the Bill were perfect. I would have liked it to have gone further; I was on the Bill Committee and I argued that we should make it a necessity for dogs to be kept on leads when livestock are nearby. However, the Bill was better than nothing. That is why I hope, for the sake of those farming families and the sheep and other livestock in my constituency, that the relevant measures will be brought forward in haste.

Before I sit down, I plead with the Minister, when she addresses the debate, to explain whether there will be another consultation on that measure. Do we need to go through that whole process again, or is it something that can quickly come onto the statute book by means of a private Member’s Bill? I know for certain that there will be MPs across the House from rural constituencies who will be keen to work together to get it into law.

Farmers, Supermarkets and Food Supply Chains

Ben Lake Excerpts

Tuesday 16th May 2023 Westminster Hall

[Gordon Henderson]

I can only assume that my hon. Friend has been reading my speech, because if he is patient he will find that I will come on to that point.

British growers want to deliver on the Government’s vision for climate-friendly and sustainable land management, but there is a significant risk to our shared endeavour if we do not address market risks in parallel. Only profitable businesses can be sustainable and continue to invest in productivity and environmental outcomes. It is critical that retailers support British farmers and growers to be sustainable, achieve meaningful environmental gains, and invest in innovation and new technology. Food producers should have an equal stake in the value chain, with food processors and retailers sharing risk, data on performance and value gain.

Farm costs are a significant driver of food price inflation. According to the results of the 2022-23 NFU farmer confidence survey, farmers’ primary concern over the next 12 months is input prices, with 88% expecting negative effects. Data released by DEFRA in March shows that agricultural inputs have risen almost 42% since 2019. Inputs closely related to energy have seen the biggest inflation: energy and lubricants are up 58%. Although wholesale energy prices are falling, they remain one and a half times higher than normal. Fertilisers and soil improvers are up 161%, and animal feeds are up 50%. That is directly linked to the disruption caused by the war in Ukraine.

In recent months, the pressures in the horticulture supply chain have led to supermarkets rationing fresh fruit and vegetables. Soaring energy costs and the continued lack of people to pick crops pose a serious threat to the future of the UK’s fruit and vegetables industry. As a result, the industry is not able to mitigate the current supply chain shortages.

A report by Promar International in 2022 found that growers’ production costs increased by as much as 27% in the preceding 12 months, and that products such as tomatoes, broccoli, apples and root vegetables were most affected. The main drivers are energy, fertiliser and workforce costs. Farmers and growers across many sectors are doing what they can to mitigate rising costs, but they cannot be expected to absorb the additional pressure and risk in the supply chain alone.

[Ben Lake (Ceredigion) (PC)]

I am grateful to the hon. Gentleman for making such an important speech on what I consider to be a matter of strategic importance to the UK. He is right to point out that farmers and growers cannot continue to absorb the input cost increases. Does he share my concern about the fact that, according to the latest NFU survey, 40% of beef farmers and 36% of lamb farmers have already said that they expect to reduce production in the light of the rising input costs?

UK Food Shortages

Ben Lake Excerpts

Thursday 23rd February 2023 Commons Chamber

[Dr Coffey]

This urgent question is about food shortages and I have set out pretty clearly to the House what has happened in the supply chain, what the Department is doing about it, what the sectors are doing about it and my expectation that this will be a two to four-week element.

The hon. Gentleman talks more broadly about food prices. This country has for a long time enjoyed the competitiveness provided by the supermarkets, but I am conscious of the fact that that has also had impacts on some of the contracts that have been signed by farmers; a lot of them have involved fixed prices. However, it is important that we continue to support our domestic food production, which this Government clearly do. It is important that we continue to try to support people with the cost of living, which this Government are absolutely doing. It is important, as the Prime Minister set out in our top priorities, to be halving inflation. We are taking short, immediate approaches as well as longer-term approaches, such as getting energy security. Those are the ways not only to get sustainable inflation, but to act on the food strategy we set out last year. We will continue to make sure that farmers produce in this country and that there is no reason why people do not have food on their dinner plate every night.

[Ben Lake (Ceredigion) (PC)]

Declining self-sufficiency over the past 30 years has left the UK increasingly exposed to shocks to global supply chains. Brexit trade barriers hinder attempts at sourcing alternative supplies and the Government’s own food security report identified that climate change is likely to have a significant impact on production in the countries from which we import a lot of our fruit and veg at present. What are the Government going to do to support and incentivise greater domestic production to avoid a repeat of these shortages?

[Dr Coffey]

The UK Government have already set out their approach. We also have a strong trade agreement with the EU. I am very conscious that some of this is connected to a particular shortage of supplies that come into most of our supermarkets, in a part of Morocco and southern Spain. I am also aware that the hon. Gentleman represents a Welsh constituency and this is a devolved matter, so he might want to ask the Labour Government in Wales what they are doing to provide support.

National Food Strategy and Food Security

Ben Lake Excerpts

Thursday 27th October 2022 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to follow the hon. Member for The Cotswolds (Sir Geoffrey Clifton-Brown). I agreed with a great deal of what he said, and I should like to elaborate on some of the themes of his speech, particularly his exhortation for us to grow more of our own food in the United Kingdom. That is not only good for UK farmers and growers, but good for the health of people across these islands. It will also help us to reduce our climate footprint when we lessen our dependence on imports and global supply chains.

I do not want to labour the point, but this will be the focus of my speech. I believe that self-sufficiency plays an important part in food security, and we need to concentrate on that. A DEFRA report on food security published in 2021 stated that the UK was about 75% self- sufficient in foodstuffs that could be produced domestically. The actual consumption of UK-produced food was about 54%, which means that we were importing some 46% of the food that we consumed. When I first came across that statistic, I was interested and, indeed, shocked by the discrepancy between the two figures, but it makes much more sense when we recognise that there is a considerable variance in the level of self-sufficiency in different types of food. For example, we are 100% self-sufficient in oats and barley and lamb. That is an important statistic for me, as a proud Member for a Welsh constituency. It then goes up to 90% self-sufficiency in wheat—we heard from the hon. Member for Hendon (Dr Offord) about the real contribution that wheat growers on these islands have made in the past year—and 80% in oilseed. However, the figure stands at only 54% for fresh vegetables and 16% for fresh fruit. In discussing food security, we need to consider the foodstuffs—fruit and vegetables in this particular example—of which we clearly need to grow more.

The dependence on global supply chains for so many of our imports means that, as the hon. Member for The Cotswolds (Sir Geoffrey Clifton-Brown) explained, we are vulnerable and exposed to shocks—be they geopolitical, climate, production or logistical—that are completely beyond our control. This Parliament has perhaps experienced a few unprecedented global shocks, the first being the covid pandemic, which wrought havoc on a lot of our food production and imports, and then, more recently, the Russian invasion of Ukraine, which has had a significant impact not only on grains, wheat and sunflower oil, but on many of the import costs for domestic production—I will talk more about that.

When we look to the future of our food security, increasing climate change poses a significant risk. I mentioned that we are self-sufficient to the tune of only 16% of the fruit that we consume. DEFRA’s food security report notes that:

“There are concerns about water availability for fruit and vegetable production in many of the countries on which the UK currently depends”,

particularly on the equator, but also in the Mediterranean region.

When we discuss food security, we need to think about growing more of our own. Other Members have mentioned the shocking impact that food inflation is having on families across the country. I do not wish to labour that point further, but for a number of foodstuffs, the problem could be alleviated to some extent if we had greater self-sufficiency in the categories that they relate to.

The hon. Member for The Cotswolds, who I hope will forgive me for referring to him so often—I thought he made an excellent speech—mentioned the Groceries Code Adjudicator and the power of the supermarkets. It is not right for them to balance their books, or indeed to profit, on the backs of the nation’s poorest families. We know that some of their increasing costs are not being fed back to the primary producers. As we have discussed this afternoon, rising import costs—particularly for fertiliser and feedstock—and high fuel and energy costs are having an impact on primary producers, who are not getting higher prices for their goods from the supermarkets and their suppliers. The Government need to look again at how they can make the system fairer.

Personally, I think there is much to be said for moving away from the more globalised food system to a more local one. In that regard, I recognise that a great deal of work needs to be done to reinvest in the processing facilities that were once very local but have now been lost, such as mills, abattoirs and the like. They were once a feature of every village in rural areas; now, they are seldom found.

The rising costs on farmers are being fed through the system and, in turn, into shopping bills, but are not being recompensed by the major supplier and supermarkets. That is a serious issue that could be addressed by greater self-sufficiency. The food strategy is an opportunity to consider a holistic way of ensuring that more of the food that we consume is produced on these islands.

[Jo Gideon]

Does the hon. Gentleman agree that consumers also need to be re-educated on the fact that strawberries do not grow for 12 months of the year, for example, and supermarkets will inevitably have different offers of our own produce at different times of the year?

--- Later in debate ---

[Ben Lake]

I entirely agree. We should set an ambition not only to be self-sufficient in the food that we produce, but to move down to a more local and seasonal food system. One of my peeves is that it is still possible to buy fresh strawberries on Christmas Eve—consider the environmental cost, if nothing else. We as a society are sadly ignorant to that, and we need to learn it again.

I am conscious that I am running out of time, so I will finish with a warning to the Government: in our move—I hope—to becoming more self-sufficient in our food production, we must remember that we need producers to do the work on the land and, as the right hon. Member for Orkney and Shetland (Mr Carmichael) said, in our seas. I am afraid that in a recent survey, NFU Cymru found that of the 700 farmers it spoke to, 71% intended to reduce production in the next year, and a significant number of them were also questioning whether to continue farming in the years to come, as a result partly of higher costs, yes, but also of the cumulative impact of many years of not getting a fair deal from some of the larger supermarkets for the price of the goods that they grow and rear.

Finally, I am very concerned—I think the Government can return to this—about the need for proper land-use planning and consideration. I know that the administrative burden would cross the four nations of the United Kingdom, but we know exactly the types of land that we have, down to the field level. At the moment, I fear that when it comes to certain carbon-offsetting schemes, prime agricultural land is being sold, often to corporations that intend to greenwash their own emissions rather than contributing to the nationwide effort to reduce our carbon footprint.

Even the Green Finance Observatory has expressed concerns about the current UK emissions trading scheme system. It states:

“The elephant in the room is that offsets are fundamentally not about mitigating climate change, or even about removing past emissions, but about enabling future emissions, about protecting economic growth and corporate profits.”

Too often—and, I am afraid to say, in Ceredigion—too many farms that were prime agricultural productive land have been bought by such corporations not to reduce their emissions, but to greenwash them so that they can continue business as usual. In so doing, they reduce our own productive capacity.

Sewage Pollution

Ben Lake Excerpts

Tuesday 6th September 2022 Commons Chamber

[George Eustice]

It is not the case that nothing will be done until 2035. Indeed, investments are happening right now to improve more than 800 priority storm overflows. We will see a reduction in discharges across the country of around 25% by 2025, and then we will go further out until 2035. The estimated average increase in water bills for those actions, the £56 billion package that we have set out to 2030, will be in the region of £12 per year. Were we to go further, it would be around 10 times higher than that every year.

[Ben Lake (Ceredigion) (PC)]

We have heard this afternoon of the ecological impact that many of these sewage discharges have on rivers and coastal areas, as well as the public health concerns that arise from them. It bears repeating, of course, that there is also an impact on local communities and businesses, especially in coastal communities. Does the Secretary of State agree that, as part of his plans to tackle the problem, perhaps compensation should be considered for those communities impacted, which might well prove an incentive to those water companies to speed up some of their work?

[George Eustice]

Obviously, the issue is devolved; the action we have taken is in respect of England and it is for the Welsh Government to tackle some of the challenges they have in their own area. The approach we have taken is essentially to require and allow unlimited fines against companies that breach their permit conditions. We are bringing record numbers of prosecutions and we believe that that is the right way to bring those water companies back into compliance.

Agricultural and County Shows

Ben Lake Excerpts

Thursday 21st July 2022 Westminster Hall

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to serve under your chairmanship, Dr Huq, and it is a great pleasure to follow the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), who gave us a wonderful picture of just how important county shows and the smaller shows are to rural life and to the fabric of communities in Preseli Pembrokeshire.

I join the right hon. Member in congratulating the hon. Member for North West Durham (Mr Holden) on securing this very important debate. He has timed it perfectly, as it comes at the end of Royal Welsh week. However, I congratulate him primarily on a tour de force of a speech, which covered the county agricultural shows in his constituency, their long history, and the importance of agriculture and rural life to his communities and parishes. He eloquently described in great detail how integral these shows are to the social and economic fabric of the communities and parishes that he represents. It will not surprise hon. Members to hear that I will make the same case for the importance of agricultural shows in my constituency of Ceredigion.

We have already heard an interesting point that I had not considered before coming to this afternoon’s debate. The origin and purpose of a number of these agricultural societies and agricultural shows was not only to showcase farmers’ wonderful produce and stock, but to exchange best practice and techniques. That was an important endeavour, and it played such an important role in the agricultural revolution. As a rural MP, I think the importance of the agricultural revolution is often downplayed when we consider the history of the United Kingdom; as the hon. Member for North West Durham said, without the agricultural revolution, the industrial revolution would not have followed.

The Cardiganshire Agricultural Society was established in 1784; the right hon. Member for Preseli Pembrokeshire told us that the Pembrokeshire Agricultural Society was founded then, too, so there was something in the waters of west Wales in that year. I am afraid to say that it was not Mr Knox who founded ours, although I note that he was an Under-Secretary of State for America, so in 1784 he perhaps had a bit more time on his hands, after the 1783 treaty. However, the purpose of that society was to promote agricultural techniques and to share best practice. I am pleased to say that it continues in existence, and continues to meet regularly. I have a fond memory of attending one of their annual dinners in Lampeter some years ago, when I was a relatively new Member of Parliament. It is fantastic that their sharing of best practice continues to this day. Such bodies are of integral importance. They represent broader networks of societies, both at parish and village level, but larger towns would also hold an annual agricultural show.

The first Cardigan county show was held in 1854, so there was a bit of a gap after the society was established. I am pleased to say that we have continued to have annual shows, except during the covid pandemic and in a few other instances over the decades. It is a staple of the local calendar. We have missed it for the past two years; perhaps I underestimated just how much I would miss agricultural shows—not just my home show of Lampeter, but all the other shows that we Members of Parliament have the privilege of—well, a convenient excuse for—attending.

I am pleased to say that in Ceredigion, we have the best part of 20 agricultural shows. Despite the two-year gap forced by covid, they are all back up and running. The first one started in June, and they will continue through to the beginning of September. Obviously, produce and livestock is on show, but they also serve as important social hubs for rural communities. The larger county shows that we have in Cardigan and Aberystwyth are really impressive spectacles and feats of logistics—I am in awe of them—and they are made possible by the committees of volunteers who are in charge of them.

The smaller shows also serve an important function. The right hon. Member for Preseli Pembrokeshire mentioned the number of challenges that agriculture faces. In Wales, there are changes to agricultural policy, the disruption of covid-19 and Brexit to some extent, and the challenge of losing large tracts of agricultural land to planation for forestry and offsetting schemes. Our farmers come under the cosh, whatever direction they face. Farming is, as I am sure hon. Members know, a lonely profession at times, so the local show is a great opportunity for local farmers to take the day off and socialise with each other. They go to shows to share problems and advice, but also to enjoy each other’s company. We have missed that for two years, so I am pleased that this year we will have the whole host of shows again in Ceredigion.

Some shows have merged; they have had to change quite a bit. We now have a great variety of displays and attractions. If anybody needs a holiday suggestion this year, I invite them to Ceredigion. We have it all. We have the core elements of an agricultural show, livestock displays and goods—vegetables and preservatives, you name it—but we also have speed shearing events, which are fun. The hon. Member for Ynys Môn (Virginia Crosbie) may wish to attend a few of those events in Ceredigion before she tries her hand at shearing at the Anglesey show later in August. We also have the harness racing—several racing events, as it happens—vintage displays and tractor runs, and of course we have the Barley Saturday celebration in Cardigan. If Members have not been able to attend that yet, I very much recommend that they catch it next year.

These events are a celebration of our rural heritage, but they also look to the future, and allow us to share techniques and technology. Perhaps most importantly, shows allow young people, especially at the local show level, to try their hand at showing animals, or exhibiting vegetables, fruits or preservatives. They given them a chance to compete. I pay tribute to the Ceredigion Federation of Young Farmers Clubs, or YFC Ceredigion, the county organisation for the young farmers clubs; the opportunities they give to our young people are second to none. YFC Ceredigion had a good time of it in the Royal Welsh Show this week, where it won the display competition. I believe YFC Ceredigion is playing rugby later against Brecknock in the final; I do not think the match has kicked off yet. I wish the team the very best in that endeavour. YFC Ceredigion also managed to win the after-dinner speaking category of the competition run by the National Federation of Young Farmers’ Clubs.

There is a close link between large shows and the network of local, smaller shows at which young people first experience competing in a whole range of categories and codes. Those shows feed up to the counties and ultimately the Royal Welsh Show. We have heard a little bit about the Royal Welsh already. It is a fantastic event —a really impressive week—and I pay tribute to the organisers, who even managed to provide air conditioning for some of the livestock sheds in this week’s warm weather. The hon. Member for Brecon and Radnorshire (Fay Jones) perhaps will not thank me for reminding the House that the first ever Royal Welsh Show for agriculture was held in Ceredigion, back in 1904, although I am willing to concede that the present location in Builth Wells is just as good for the animal event. Without the smaller shows and the county shows after them, the Royal Welsh would not be the great success that it is.

In closing, I thank the scores of volunteers who serve on the committees of these small shows, ensuring that everybody is registered in time, that the information and entries are in order, and that the insurance is sorted out. It was a particular challenge this year to secure marquees for the produce tents. Those volunteers do it year in and year out, often without seeking any thanks or celebration, but it is a great pleasure—once again, I thank the hon. Member for North West Durham for giving me the opportunity to do so—to place on record how much we appreciate their efforts. Without their tireless work to make sure that small and county shows go ahead, the rural community could not come together every year to share and celebrate our rural heritage, and to keep a little bit of that social fabric intact. I am sure that all rural MPs will agree that there is a real and specific type of community spirit in rural areas, and rural agricultural shows make an invaluable contribution to the endurance of that spirit.

[Dr Rupa Huq (in the Chair)]

From Wales to Yorkshire: Andrew Jones.

War in Ukraine: UK Farming and Food Production

Ben Lake Excerpts

Wednesday 20th July 2022 Westminster Hall

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to serve under your chairmanship, Dame Angela. I congratulate the hon. Member for City of Chester (Christian Matheson) on securing this important debate. Having spoken in other debates with him recently, I know just how passionate he is about UK agriculture and food production, and I thought that he conveyed that, and his understanding of the sector, very well.

It is also a real pleasure to follow the hon. Member for Wirral West (Margaret Greenwood), who eloquently emphasised how much the cost of imports has increased, and the different impacts that is having across different sectors of the agriculture industry. That is presenting a challenge not only to farmers but further down the line, through food inflation, for household budgets, which is pertinent to this debate.

Today’s debate is very timely. Across the UK, over the decades, we have perhaps become a bit complacent when it comes to our food security and self-sufficiency. Members have already set out how the UK’s self-sufficiency has declined. It is worth repeating that, at the moment, UK agriculture produces some 60% of domestic food by value, and some 45% is exported. We import some 46% of the food that we consume. That compares unfavourably to the situation back in 1984, when we were 78% self-sufficient. The hon. Member for Wirral West detailed how that figure has declined over the ensuing decades.

I am willing to acknowledge that part of that reduction is a result of our changing dietary preferences and habits, and it is important to reflect that in the debate. We now enjoy a lot of foods that are not produced in the UK, or cannot easily be produced in the UK, and we want to consume them out of season. I may return to that at the end of my speech; it is a particular bugbear of mine.

It is worth pointing out that the self-sufficiency percentage is a general figure, which does not really tell us the story for different types of food produce. It would be remiss of me, as a Member of Parliament from Wales, not to point out that we produce more lamb in the UK than we consume. We also produce more milk than we consume, for that matter. Although we are still well below self-sufficiency in the fruit and veg sectors and the poultry sector, as has been mentioned, it is important to reflect that our self-sufficiency has increased somewhat in recent years even in those sectors.

Russia’s invasion of Ukraine has a massive impact on UK food production as well as global food production. We are interlinked: pressures on the global level are felt at the farm gate in Ceredigion, as well as in other parts of the UK. That is particularly challenging after two years of covid-19 and the disruption of the pandemic, not just for food producers but for the associated supply chains, and after a turbulent period before covid-19 for farm-gate prices in a whole range of sectors. We come to this debate at a time of unprecedented immediate pressures, having recently suffered another unprecedented shock to the global food system on the back of difficult and lean years before that. The UK food production industry is in a challenging and precarious situation.

I was struck by the definition of food security in the Government’s food security report, which reflects the fact that it is a complex concept. It states 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.”

I will not touch on all those aspects, although it is important to note them, but I will say that the shock that we are experiencing now, with the price of farm imports in particular, risks destabilising many of the other dimensions encompassed by food security.

The most pressing issues are import prices and the significant increase in the price of raw materials. We have already heard how the war in Ukraine has had a massive impact in that regard. That is reflected in the agricultural price index, which show that in the 12 months to April, the price for agricultural imports increased by 28.4%. A further assessment by the independent consultant Andersons suggests that the most recent estimate of inflation in agriculture is 25.3%.

We recently had a debate in this Chamber on some of those challenges, but it is worth repeating that the rate of general inflation is running slightly below that of agriculture inflation. Agflation is an acute problem and I am sure that other hon. Members share my concern not only that that is putting immense pressure on our farmers, but that it may well feed into further food inflation and pressures on household budgets down the line.

In my remaining time, I will focus on the way that price hikes in the immediate term pose a serious challenge to our production in the longer term. Having spoken to many farmers in Ceredigion, I fear that the true impact on the UK agricultural industry of Russia’s invasion of Ukraine will not be truly felt until next year. As has been mentioned, a lot of that has to do with farmers having to plan their future feed and import fertilisers at the moment, many of which are on onward prices. Farmers are having to make difficult decisions that will have an impact on their productive capacity in forthcoming years.

Let us look at fuel and energy. The hon. Member for City of Chester mentioned the impact of the price of red diesel on farmers. Indeed, if we compare the average price per litre from January this year with the most recent average price from the end of June, it has increased by 25p. We know that Russia is a major supplier of oil and gas to the European market, which has seen an almost fourfold price increase since the invasion. That in turn is having an impact on fuel costs and, more specifically, fertilisers.

Other hon. Members present today were here for a previous debate in this Chamber in which we discussed the real challenges that increased fertiliser costs pose for farmers. I will not repeat myself, other than by noting that the increased cost of fertilisers is forcing farmers to make difficult decisions about their business models and practices. I acknowledge that the impact might be felt quite differently in different sectors of the agriculture industry—it might be different for certain arable farmers and livestock farmers.

It is also worth pointing out that, at least at the outset of the invasion, many arable farmers may well have been covered for their fertiliser requirements for this year, and may not have had to expose themselves to the price hikes that we saw thereafter. As I mentioned, however, farmers have to plan ahead, and I know that many—even in the arable sector—are looking ahead and thinking, “Do we need to carry over some of our fertiliser for this year and therefore use less in the current season, so that we can buffer ourselves a little bit for what promise to be very expensive prices next year?” It is a real headache for other sectors—livestock and beef in particular—and many farmers have told me that their fertiliser bills have increased from £200 to £700 per tonne before VAT. Of course, if we add VAT on top of that, it is an eye-watering sum.

The tragedy of the situation is that these price hikes have come after a turbulent period, with covid-19 and a decade of rather difficult times for farm-gate prices. Although prices have increased for some produce in the last few months—it is fair to say that dairy prices have increased significantly, and I am told that the lamb price is holding up fairly well, as is the price for beef—certain farmers will not have the reserves to shoulder and absorb a lot of these costs in the long term. I am worried that farmers and growers are having to adapt to higher costs and anticipate the impact of a prolonged period of turbulence, which they have to assume will be the case, by taking very difficult decisions regarding their farming practices, which in turn will have an alarming impact on UK food production.

NFU Cymru recently conducted a survey of more than 700 farmers in Wales, and it found that 71% intend to reduce production in the next year. To break that down into different sectors, 54% of beef farmers said that they will reduce stock numbers in the next 12 months, which will result in an estimated 10% cut to the beef herd. Some 46% of sheep farmers also said that they will reduce their stock in the next 12 months, and 39% of arable farmers said that crop production levels will reduce over the next year. That is already happening, and those decisions will probably have been made in order to be implemented by next year. That is a significant drop in our productive capacity at a time when we already know that we are not self-sufficient at the levels that we would like to be.

As well as not having enough productive capacity to become more self-sufficient for our dietary needs, we will find ourselves even more vulnerable in the long term to the global agriculture market and any external shocks that happen there. The war in Ukraine has led to tonnes of grain, sunflower oil and other produce being blockaded at Black sea ports, which is already having an impact in the horn of Africa. It is said that Ukraine feeds approximately 400 million in the world. That pressure will not go away; indeed, there is a strong argument that the real impact will be felt next year, when the harvest has not been harvested and the grain cannot get out. This is a very serious issue, which will weigh heavily on import prices for our own farmers. If we are to become more exposed to and dependent on the global market for many of our staples, that will mean higher prices for the consumer.

Ultimately, this debate has brought to the fore the need for us to think again about how we increase our self-sufficiency in the UK for the food that we consume and, therefore, for our food security. A few things have been mentioned already, such as the establishment of a fertiliser price index in order to have greater transparency and to allow farmers to plan with greater confidence and avoid having to make difficult decisions about the use of fertiliser. I repeat the plea for us to look again at fertiliser plants, and at whether there is a need for the Government to intervene to acknowledge them as strategically important pieces of infrastructure.

Finally—this is a debate for another day, but it is one that we must have in the near future—we need to shift our food production to a more local and seasonal basis. That will not always be popular, but perhaps we have reached the point where we need to face up to the reality. Is it sensible that we can go into our local supermarket on Christmas eve and buy fresh strawberries? I think we have come to the point where we can no longer afford that illusion of sustainability. Perhaps the future is more local and more seasonal.

Cost of Living: Support for Farmers

Ben Lake Excerpts

Tuesday 12th July 2022 Westminster Hall

[Ben Lake (Ceredigion) (PC)]

It is a real pleasure to serve under your chairmanship, Mr Hollobone. It is also a pleasure to follow the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski). It might surprise him and other Members to hear that I very much agree with many of his remarks, especially his point that farmers in Shropshire, like those in my constituency, have long felt that Governments have not always appreciated the importance of their contribution to the nation’s wellbeing, and the importance of food security. I also associate myself with his comments about the strategic importance of fertiliser plants. He proposed the good idea of greater state intervention in those strategically important sites, and I will touch on that in a moment.

I congratulate the hon. Member for Rutland and Melton (Alicia Kearns) on securing this important debate. She eloquently set out the grave backdrop to it and the many challenges our farmers face. It is sobering to reflect on the fact that so many farmers, facing rising input costs and cost of living challenges, are considering leaving the industry. She said that 11.9% of dairy farmers are contemplating that, and I know anecdotally that a number of livestock farmers in Ceredigion are considering whether they have a future in the industry. It is little wonder, given that agflation, or agricultural inflation, stands at 28.4% according to the agricultural price index. The latest estimates from independent consultants the Andersons Centre have agricultural inflation standing at over 25%.

I spoke to some farmers in Wales recently. Many people say that they have better prices at the market, and that of course is true, but we do not always hear about the rising cost of production, so farmers very much need those higher prices. Although the prices have risen, they have seen little difference in their profit margin, and that is fuelling a great fear of a departure from the industry, which we can ill afford given the many concerns that have rightly been raised in recent months about our food security. The war in Ukraine has brought that into sharp relief. The challenge before us is to increase, not reduce, our agricultural productive capacity.

The hon. Member for North Devon (Selaine Saxby) made several important points, but one that struck a chord with me was about the need for more co-ordinated land use planning to overcome some of the many competing challenges. We need to return to that matter in earnest, because we cannot waste much time.

We have heard about rising fuel prices, and there is room for us to explore expanding the rural fuel duty relief scheme, although I appreciate that that is not within the Minister’s remit. Fertiliser has been mentioned a few times. To add to the remarks of the hon. Member for Shrewsbury and Atcham, I know of farmers who, just this last year, have seen orders for fertiliser increase significantly. They were quoted prices of about £200 per tonne last year, and now it is not uncommon to see prices upwards of £700 per tonne, plus VAT. The inability to plan amid such volatility is a real challenge for our farmers, and puts pressure on their margins. It is often said that farmers find it very difficult to eke out a living even in the best of times, but the added volatility and the price hikes that they have to navigate make it an almost impossible task.

In Wales, the average farm holding is 48 hectares. Anybody who cares to look at farm business incomes in Wales will know that most farms in Wales do not have much discretionary income with which to absorb these additional prices. It is time that we look at interventions to support farmers with rising input prices, particularly the cost of fertiliser.

The hon. Member for Rutland and Melton said that the Government need to establish a gas-fertiliser price index to help improve transparency in a very opaque market. That might not necessarily help to bring down prices, but it would at least offer a bit of a helping hand in planning and managing a bit of the volatility.

With regard to how we help with the costs of fertilisers, in addition to those points made by the hon. Members for Shrewsbury and Atcham and for Ellesmere Port and Neston (Justin Madders) about the strategic importance of fertiliser plants, is it perhaps time for us to consider again the VAT treatment of some of those inputs into agricultural production? I appreciate that that is for the Treasury, but perhaps the Farming Minister could consider having a discussion with Treasury colleagues.

In the short term, many Members representing rural constituencies will know that the price of heating homes is a real concern, especially for those in properties off the mains gas grid, including farmhouses. Under the energy bill support scheme, some £400 is due to come in the autumn, but a question remains as to whether farmhouses will be eligible, primarily due to how they tend to have commercial electricity contracts as opposed to domestic ones. The Department for Business, Energy and Industrial Strategy is looking at options to ensure that farms do not lose out under the scheme, but will the Minister impress on it the importance of us finding a way to include farmhouses in the scheme? Although it might not make the world of difference, every little will help in the coming economic storm, so it is important that we ensure that farmers do not lose out.