My Lords, I declare an interest as a Scottish livestock farmer and a member of the National Farmers' Union of Scotland.
Farming, in many aspects, has been through some pretty dire times recently and now it seems that the banking industry is quite keen on joining it. In spite of this, it seems that the drug that gets to most farmers in the end is the fact that, whatever you try to do, farming is always a challenge on a huge range of levels.
As other noble Lords have mentioned, for many years after the Second World War and under the CAP the challenge was always to produce more. We are now entering a very different scene, where the great drive is for the efficient use of the minimum of inputs and the least effect on the environment. In practical, everyday terms, this is a seismic shift and will need research.
The noble Lord, Lord Haskins, called for more applied research, and perhaps I may mention a small practical application in the world today. I note that Defra has allocated 0.2 per cent of its research budget to reducing the methane output of ruminants where this enteric fermentation accounts for 2.5 per cent of the country's greenhouse gas emissions. Can the Government reassure us that this is adequate? As the noble Lord, Lord Cameron, said, in world terms, agriculture will have to go on increasing production and, in order to combine both aims, all sorts of research will be needed.
It is interesting to note that in the 2007 Comprehensive Spending Review it was expected that Defra's budget would have an average annual growth rate of 1.4 per cent over the five-year period. Of course, we are now in a very different economic situation, and no doubt the Minister will tell us of areas where the Government expect us to tighten our belts. However, within that review, the Government stated that they expected to be able to achieve an annual saving of £121 million through the increased sharing of responsibility for animal health and welfare with the agricultural industry. Some of this is taking place as we speak in areas such as the disposal of fallen stock and even in the bluetongue vaccination programme.
The fulfilment of this proposal is dependent on the industry's ability and willingness to pay. There is a rather worrying precedent in the most recent extension of the bluetongue area in England, where the uptake of the vaccine has accounted for only a very small proportion of what is required. Much of the vaccine that has been prepared at government expense is sitting idly on the shelves of veterinary surgeries and at the suppliers. As a Scot, I can say that this does not give me great reassurance that the disease will not try to spread north of the border.
A concern that I have recently come across is that the original figure for the industry's contribution is supposed to contain an element towards agricultural and food research. In our discussions tonight, this could be quite a critical factor, as the NFU tells me that the Defra budget for farming and food research and development is now only £20 million. Can the Minister say whether the department is still budgeting for a sizeable contribution from the industry for financing any of the core research facilities? I am sure that the Minister is as aware as anyone that, whatever happens, a certain number of our research facilities in the animal health field are absolutely key to our control of animal diseases—both those that we currently experience and the more exotic elements that seem to be migrating across the world. I need mention only avian flu as an illustration.
Of course, much of the finance for these facilities is not wholly dependent on Defra, and a fairly sizeable amount comes from the Department for Business, Enterprise and Regulatory Reform through the BBSRC and other sources. In Scotland, we are extremely proud of our world-class scientific research. I was recently speaking to the chief executive of the Mordun Research Institute in Edinburgh. It has received approximately £6 million from government, which gives the institute its core funding. The chief executive has just come back from the US, where she has obtained additional funding from major chemical companies, which overall will give the institute a working budget for next year of £18 million. That must be good value for money in the context of the UK economy and the chance to maintain quality jobs in this country. Can the Minister assure the House that, in considering the finances to be made available, adequate emphasis will be placed on the vital asset that these research facilities represent?