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Farm Produce (Fair Practice)

Oral Answers to Questions — Environment, Food and Rural Affairs – in the House of Commons at 9:30 am on 5th November 2015.

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Photo of Lisa Cameron Lisa Cameron Shadow SNP Spokesperson (Climate Justice) 9:30 am, 5th November 2015

What steps she is taking to ensure that farmers receive a fair price for their produce from retailers.

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

First, I welcome the new shadow Front-Benchers to their positions. I am sure they will find DEFRA to be a fascinating and rewarding, if somewhat unpredictable, brief to be involved with.

In the last Parliament, we introduced the grocery code adjudicator to enforce the principle of the grocery supply code relating to fair practice in contracting arrangements. In addition, we have encouraged large retailers to offer contracts with prices linked to the cost of production. Many of them now do so for their liquid milk, and such contracts are popular with farmers.

Photo of Lisa Cameron Lisa Cameron Shadow SNP Spokesperson (Climate Justice)

What steps is the Minister taking to alleviate the severe cash-flow pressures on our farmers, and will he consider placing a floor in the market to protect the dairy and lamb industry?

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

We have worked hard with the European Commission to get a support payment. The Rural Payments Agency is processing that now—for Scotland, England and all other parts of the UK. We aim to get that out in the first week of December. That will offer some support to dairy farmers with their cash-flow problems. In addition, we are working hard in England to ensure that we can get the basic payment scheme payments out to farmers on time.

Photo of Helen Whately Helen Whately Conservative, Faversham and Mid Kent

I thank my hon. Friend the Minister for his response to last week’s debate on the impact of the living wage on fruit farmers. As he knows, fruit farmers in my constituency support the living wage, but they are worried that supermarkets will not pay them a price that recognises the increased cost of production. What steps is he taking to support the fruit farming industry on this issue?

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

My hon. Friend is right that we had a good debate on this issue last week. As a former strawberry farmer, I can say that supermarkets pay a premium for English fruit—the quality is superior and we have better varieties. It commands a premium over both Dutch and Spanish fruit.

Photo of John Mann John Mann Labour, Bassetlaw

The English Christmas could not exist without Stilton cheese, yet the Minister is refusing to allow the name Stilton to be given to the only English cheese made in the traditional way—Stilton cheese—because of some bureaucracy from DEFRA and him. An entire herd of cows in my constituency survives because of real, traditional unpasteurised English Stilton, with 45p a litre paid, keeping the dairy farmers in good profit. Will the Minister accept a full Stilton cheese to give to the Cabinet, and perhaps provide the biscuits to go with it, so that they can understand the price we pay by denying England its true traditional English cheese—and rethink?

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

I think that the company to which the hon. Gentleman refers is called Stichelton. It produces cheese using raw milk, and as a high-quality product it commands a premium over Stilton. Every single Stilton producer opposed changing the protected food name status for Stilton, and we believe that there should be some sense of consensus before changes to recipes are imposed on producers.

Photo of Antoinette Sandbach Antoinette Sandbach Conservative, Eddisbury

Dairy farmers in my Eddisbury constituency, who are on non-aligned contracts, are suffering from the volatility in world dairy prices. What is the Minister doing to assist in making them resilient to that market volatility?

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

My hon. Friend makes an important point. One of the key long-term aspects we are looking at is developing a dairy futures market so that farmers can help to mitigate and manage the risks of price volatility. Such a market works quite effectively in the United States, and the European Commission is setting up a high-level group to look at how to develop such a scheme in the European Union.

Photo of Calum Kerr Calum Kerr Shadow SNP Westminster Group Leader (Environment and Rural Affairs)

I, too, welcome the new shadow Front-Bench team. The failure of the market to provide a fair price for what farmers produce means that, for many of them, common agricultural policy payments make the difference between bankruptcy and continuing in business.

The Secretary of State has been repeatedly asked to confirm whether those payments would continue in the event of a Brexit. Simply batting that question away is no longer acceptable. What will happen?

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

The RPA is making emergency payments worth about £2,500 to help the average Scottish dairy farmer through this difficult period. We are doing our bit to ensure that Scottish dairy farmers are helped.

Photo of Edward Argar Edward Argar Conservative, Charnwood

Farmers can be helped to obtain a fair price for their produce if they act as retailers themselves through, for example, farmers markets and farm shops such as the excellent Roots in Barkby Thorpe and Cook’s in Newtown Linford, in my constituency. What assessment has the Minister made of farm shops as a small part of the way in which producers can be helped to sell their produce at a fair price?

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

I should declare an interest. My family run a farm shop, and I can add to my hon. Friend’s list Trevaskis Farm in Cornwall, which is one of the best farm shops in the country.

My hon. Friend makes an important point. In the last 15 years we have seen a huge surge of interest in food provenance—people want to know where their food comes from—and a significant rise in the turnover of farm shops, which are a good way of enabling farmers to protect their margins.

Photo of Mark Williams Mark Williams Liberal Democrat, Ceredigion

There is a perception among the dairy farmers whom I represent, and particularly among small farmers, that they are being individually picked off by some of the big supermarkets. What can the Government do to encourage and support the development of producer organisations and real collaboration between individual farmers?

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

I entirely agree with the hon. Gentleman. We have been trying to foster the development of producer organisations, and Dairy Crest runs one that is very successful. We provided funds to support the development of dairy producer organisations through the most recent rural development scheme. As the hon. Gentleman says, ensuring that farmers can negotiate collectively is key to enabling them to deal with the fact that they are small and fragmented.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

The number of dairy farms and dairy cattle in Northamptonshire has fallen by more than a third since 2001, largely because the common agricultural policy is rigged in favour of the French dairy industry. Other countries have negotiated early payments from the CAP this year. Why have we not done the same?

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

This year we decided to issue the full BPS payments as quickly as possible and as early as possible in the payment window. About 60% of the entry level and higher level stewardship payments have now been made. We are working on the dairy crisis fund, and we aim to issue the majority of basic payment scheme payments in December and the vast majority by the end of January.

Photo of Nick Smith Nick Smith Shadow Minister (Environment, Food and Rural Affairs)

Given that farmers are struggling, may I ask by what date the last farmer will have received this year’s cheque from the Rural Payments Agency?

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

As with all years, the payment window runs from 1 December until June. In each year there are some highly complex cases—typically involving non-governmental organisations, such as the Royal Society for the Protection of Birds, which run large schemes and do not receive their payments until later—but, as I have said, we expect to issue the majority in December and the vast majority by the end of January. We hope to issue the payments in respect of common land during February, because those cases are more complex.