Agriculture Bill (Second sitting)

Sandy Martin Excerpts

Tuesday 23rd October 2018 Public Bill Committees

[Colin Clark]

Q To follow up, as the amber box is as much as £3 billion, it would be highly unlikely unless an entire payment were to go into the amber part of the WTO, where that could be a concern. It is hypothetical as opposed to realistically going to arise, isn’t it?

Andrew Clark: At present, it is hypothetical, but the point I am trying to make is that there is delegated ability to take action in each part of the UK. There needs to be agreement about how that is played out in a mature and professional way. I wouldn’t go as far as saying it is impossible. Clearly, £3 billion spent on an amber box in one country is impossible. We do not know what the total budget would be either. There are a number of factors around there that are still uncertain. What we would like to see is agreement between the devolved parts of the UK and Westminster about how that is taken forward and how those powers are deployed.

[Sandy Martin (Ipswich) (Lab)]

Q I note your contention that there is not enough focus on food production in the Bill. Would you agree with me that there is also not enough focus on the delivery of safe and healthy food? Would you support a duty on the Secretary of State to support the development of local supply chains and other measures in order to ensure delivery of safe and healthy food?

Andrew Clark: I am not sure I would go as far as a duty, but that is the sort of thing the NFU would like to include in the policy measures that are available and follow from that. Certainly, one of the objectives of food security could be strengthening and building local supply chains, both to private citizens and to the public sector as well.

[Trudy Harrison (Copeland) (Con)]

Q You mentioned earlier that livestock and lowland farms were identified as being particularly at risk. Given that they are already on fairly poor land—they are often coastal farms—does the Bill allow any mitigation to support those farms, and if not, what does the NFU recommend?

Andrew Clark: At present, the Bill does not go into that detail. That is something that would fall into the policy measures that would follow from this. There is potential for agri-environment schemes to help deliver support to those type of farms. Equally, I would see measures on the productivity cornerstone the NFU has been advocating as being suitable for those types of farm business so they can, as I say, be better, more sustainable food producers, but also sustainable in the environmental sense.

--- Later in debate ---

[Trudy Harrison]

Q Do you feel that the Bill as it stands does allow for that change to happen?

Huw Thomas: There are certainly powers within the Bill that would potentially see the strengthening of the farmer’s position within the supply chain. At NFU, we have been calling for more transparency around price reporting for some time.

Because the powers as drafted are so broad, I suppose it ultimately comes down to how they are used. There is scope to do some good here, but we need to ensure that Ministers go away and use the powers that they are granted to do that good for the supply chain. As John said, we do not know what sort of situation we will face post Brexit but we could face the very difficult situation of imports coming in produced to lower standards than in our domestic production, further undermining our prices and marketplace returns.

Dr Fenwick: It is worth noting that the current system is the latest incarnation of a system introduced after the war, which has reduced household expenditure on food by half since the 1950s. That has freed up money to allow people to go on holiday and what not. People spend less of their income on food now than they had to over the years. That is the result of a system that is specifically aimed at giving people plentiful, safe food at affordable prices. I am afraid to say that we now face a situation where that direct link between farming and food production is being removed. It is less direct than it was, obviously, but it is proposed that it be removed, and a quid pro quo is needed to restore the cheap food that we have managed to secure over the years.

In terms of many supply chains, yes, you can make the most of middle-class markets and local hotels and we see a lot of great innovation going on with farms—I am sure you see the same in the Lake district—but the fact of the matter is that the vast majority of our produce goes on to what is effectively a global market or an EU market, and we are competing against people from across the EU, across the UK and so on, as regards quality, but a bulk product that is going into our supermarkets in this country. That needs to be taken account of—that we are competing against other people.

If, as some people say, agricultural support is so bad for agriculture and holds us back so much—I agree with John that elements of that are true—one would question why, if it is that bad, it is regarded by the World Trade Organisation as something that should not be allowed and should have limits on it. That would suggest that the WTO has missed the point, but I do not think that that is the case; I think some of us are missing the point.

[Sandy Martin]

Q The Bill has already been characterised today as a scaffold rather than a building. It gives Ministers very wide discretionary powers, and most of the effect will be given by regulation. Yet there is very little statutory expectation of consultation. Would you feel more comfortable if there were more statutory consultation in the Bill?

Huw Thomas: Clearly, we are reading the Agriculture Bill in conjunction with the “Brexit and our land” consultation that is taking place in Wales. They are not synchronous, because one came out before the other, but you can see where the direction of travel has been set.

[Sandy Martin]

Q Sorry; I meant consultation on the regulations that will give effect, rather than on the Bill itself. Clearly, consultation on a Bill that does not specify exactly what will happen is one thing. Consultation on the regulations that will specify what will happen is surely something that you might welcome.

Huw Thomas: The Welsh Government have said that they will publish a White Paper early next year that will flesh out what they are consulting on at the moment, which will derive from this. In effect, there will be a consultation around that. Certainly, there would need to be further consultation before Ministers took some of the powers forward and utilised them, because they are so broadly drafted in the primary legislation that they could allow such a range of actions to be taken under their provisions. There has to be consultation with industry and stakeholders following that.

Dr Fenwick: I agree. It is part of a transparent, democratic system to consult. I do not mean on every occasion, on every tinkering, but when it comes to things that have an impact on jobs, people’s lives and so on, those should be consulted on.

[Mr Goodwill]

Q Farmers in other European Union countries have perhaps been more successful than farmers in the UK at attracting the capital funding that the Minister described in schedule 3. Given that those farmers have some very well organised and very large farmer-owned co-operatives that can not only get funding for processing, marketing and grain storage, but are big enough to square up to the supermarkets and other customers, how well organised are co-operatives in Wales, where you have lots of small farmers so co-operatives work very well? Do you see the capital funding going to the industry that the Bill would allow being a good thing for farmers, and would you see them as a preferred bidder to commercial companies that would be doing the same sort of thing?

Dr Fenwick: I agree. My first job this morning, before I got on the train, was to go down to our farmers’ co-op. It has branches all over the west side of Wales, from north to south, and employs large numbers of people. My grandfather has been a member of that co-operative since 1947, and it is one of a number across Wales. We sometimes forget that they are even co-operatives, but they do exist, and there are plenty of them in Wales, across England, and into Scotland.

I would guess that some of the funding made available to European co-operatives comes from rural development funding. We have an incredibly low historical allocation of rural development funding from the EU, as a result of our having handed it over as part of the CAP negotiations in the first part of this decade. We gave up what we were entitled to, effectively, when there was an equalisation process, which was obviously disappointing, and for that reason we have high modulation rates, particularly in Wales. As I am sure Mr Davies is aware, that is a big bone of contention, and it is to fill a gap that we have in our funding. It should not be forgotten that European businesses and farmers have access to far more funds when it comes to direct investment and support, because they make more use of a larger rural development programme budget.

John Davies: You are absolutely right in identifying the balance of power in the marketplace. We have been successful in terms of supply-side co-operatives in Wales, but we have not been as successful as the likes of Müller, Kerrygold and other co-operatives in other parts of the EU. We have to look at how this could work, and help and support that in the Bill, because there are opportunities to focus more on new product development. Having travelled to New Zealand and seen how a real focus of the farmer-controlled meat operations has been new product development and accessing new markets, over and above shareholder return, there are lessons to be learned from other parts of the world. You are absolutely right to identify those opportunities in the Bill.