Agriculture and Food Industry — Motion to Take Note

– in the House of Lords at 2:40 pm on 24th July 2014.

Alert me about debates like this

Moved by Lord Plumb

That this House takes note of the role of agriculture and the food industry in the economy of the United Kingdom.

Photo of Lord Plumb Lord Plumb Conservative 2:53 pm, 24th July 2014

My Lords, while I am sorry that my noble friend the Minister is not able to attend this debate, I am pleased to hear that it is because he is actively promoting the strengths of the UK food and farming sector today to an international audience in Glasgow during the Conservative games. He said that we have much to offer as a place for inward investment and as a trading partner. I hope therefore that, as we go forward, we are singing from the same hymn sheet.

Photo of Lord Reid of Cardowan Lord Reid of Cardowan Labour

It may have been a slip of the tongue but I can assure the noble Lord that Glasgow has never been a welcoming host for Conservative games. I take it that he meant the Commonwealth Games.

Photo of Lord Plumb Lord Plumb Conservative

I stand corrected, knowing my age, although I thought that I said the Commonwealth Games.

I welcome my noble friend Lady Northover, who takes the Minister’s place. This debate is to take note of the role of agriculture and the food industry in the economy of the UK. I think that it follows the debate that has just taken place well. I declare my interest as a farmer, as past president of the National Farmers’ Union, in European farm organisations as a whole, in the European Parliament and in an international policy group on food, farming and trade, which covers some 40 countries and different farming societies.

I have lived through some testing and challenging times. I speak with a passion for farming and the food industry. I have been encouraged by recent developments to work much more closely with the food industry in marketing British food, the display of which was second to none earlier this week at the Royal Welsh Show, as in other exhibits round the country. Those who see it have to realise that it just does not grow on trees. I sometimes despair when the talk about the growth of the economy—reducing the nation’s deficit to deal with debt and safeguarding our economy—means industrial growth, with agriculture not on the radar of many economic forecasts. I hope that today during this discussion we can put it on the radar.

Farming is certainly not a job for the faint-hearted. It is a risky business, dealing with a changing climate, disease and often loss—certainly with TB eradication still meaning a loss of up to 90 cows a day from our herds. Then there is the loss of land for so many other purposes, such as housing and roads. We have to live with price swings from imports related to currency values, which by nature means that the business is a long-term one.

What is the contribution to the economy from agriculture and food production, processing and retailing, which employs well over 3.5 million people? Farming’s contribution to the economy increased by a staggering 67% between 2007 and 2013 in gross value added terms, contributing an extra £10.4 billion to the UK economy than it did in the five years between 2004 and 2008. This is in stark contrast to the wider economy, even accounting for recent improvements in economic performance in the UK, which was 0.6% smaller in 2014 than its peak in 2008, mainly of course due to the banking crisis.

Whereas the UK in general has struggled for success—moving now, I submit, in the right direction—the agricultural output from the UK has increased by 59% in the last decade. Agriculture’s importance to the UK economy is emphasised by the fact that the United Kingdom has 142,000 businesses registered as farm businesses. That is more than the number of businesses involved in the motor trade, education, finance and insurance, and equates to 5.5% of the overall total. In more rural areas, of course, agriculture is obviously much more important to the local economy.

The self-sufficiency ratio is estimated to be 60% for all food produced in 2013 and 73% for indigenous-type foods. The first time I heard Winston Churchill speak, many years ago, he said:

“Thirty million people living on an island where we produce enough food for fifteen million is a spectacle of majesty and insecurity this country can ill afford”.

It makes you think. It is no different today. There is double the population but still 60% of the amount needed to feed our people. Imports exceed exports, as we well know, affecting the balance of trade. In the money terms of 2013, the deficit in 1990 was £10 billion. In 2013 it was £20 billion. Self-sufficiency at 60% must therefore be improved considerably to play an even greater part in the economy. This requires investment, management, skills and the taking of risks—risks that have to be taken, particularly in farming, for growth.

The comparison with other countries is interesting. In the United States, self-sufficiency in food is 130%; in France, it is 120%; and in Germany it is 93%. Japan is deeply worried about its level of 40% and has set a target of 50% by 2020. Many crops, particularly in the

United States, are also produced and processed for energy, particularly wheat: 40% of the wheat in America is produced solely for energy.

I congratulate the Government on the incentives that they have shown in the last few years to encourage technical and scientific research. That has helped to transform farming. Through incentives from the European Union, we have seen the diversification of concern for the environment, which shows a clear balance in welfare and caring for the countryside compared to what used to be.

Today, 70% of our modern agricultural equipment has some sort of precision component inside it. A state-of-the-art combine harvester has up to eight computers on board. Think of those going at this very moment: eight computers in one operating combine harvester. Satellite technology is used to avoid soil damage and is being picked up and used in various ways by the farming community. We now have robotics, which has entered the milking parlour. The cow decides when it is going to be milked, not the person, and that is an interesting change. I am told that the incidence of mastitis, for instance, is far less in robotic milking than hitherto. I find that interesting and difficult to believe, but that is nevertheless the situation as I read it.

The farming and food industries have therefore already shown how they can help with economic growth and collaboration, helping to pave the way for home consumption and increased export opportunities while maintaining a high-quality product and the welfare of both plants and animals. Both industries have demonstrated support for integrated farming practices, training and development opportunities for succession and sustaining supply chains. The business and trading culture is progressive and aggressive, embracing innovative technology, adapting to the ever changing complications of common agricultural policy reform—I could spend the next two hours talking about that—the environment, finance and business policy, and linking more closely to the food retailers through contracts.

These conditions call for a highly educated, skilled workforce with the ambition to embrace these revolutionised industries that provide a duality of technological progression and environmental respect. The revolution of these industries has at times been unforgiving, with winners and casualties, but it has also demonstrated the robust restructuring and adaptation needed for efficiency and success. Whether we are talking about a farming plc or a small farm business diversification project, there is no shortage of innovation from young entrepreneurs discovering and exploiting future markets. That is an exciting and well thought-out challenge—a well practised route to market with considerable future prospects. Growth and opportunity will need to be managed in an intelligent way that embraces new technology and new markets while respecting the limitations of resource and environment. We need a future workforce to satisfy a considerable and growing global population. Our food and farming industries can be criticised for hiding their light for future employment opportunities under a bushel. More must be done to attract the highest calibre of recruits to take up jobs that offer magnificent and challenging career prospects.

Considerable work has been achieved with the land-based and environmental sector skills council and Defra to create the industry-focused agriskills and agritech strategies. There is a plethora of industry initiatives, schemes and awards, which provide much needed support and attraction for new blood into the industry, with a strategy for consolidation shortly to be discussed and hopefully implemented. British agriculture has embraced radical changes in both policy and its own PR over the last decade. It has demonstrated strength and resilience through the economic downturn, worked hard to understand shortfalls and has lobbied for a workable policy while highlighting its products, service and methods of production.

Agricultural colleges have embraced the challenge of becoming fit for purpose. They are now demonstrating the diversity of the two industries with a range of suitable and improved quality courses and are enjoying an increased number of applications. I was a governor at Cirencester for a number of years. It was a struggle to get 400 students into the college each year. Now there are 1,400, and many more are knocking on the door. Other colleges are finding exactly the same. The university milk-round of recruitment will now hopefully be seeing a long-awaited change. Industries will be fighting to retain their supply of graduates as intelligent young men and women see the exciting opportunities offered by the food and farming industries.

There has been a self-regulating internal revolution in these two industries. They have risen to considerable challenges, ranging from market conditions to environmental conflict. These industries are renowned for adapting to change while ensuring an essential supply of food and sensible, realistic caretaking of our most precious resource. There can be no logical reason for these industries to be excluded from Britain’s plans for economic growth in a hungry world. There is nothing, but nothing, more important than food security. I beg to move.

Photo of Baroness Parminter Baroness Parminter Liberal Democrat 3:08 pm, 24th July 2014

My Lords, it gives me great pleasure to follow my noble friend Lord Plumb, and I thank him for securing this debate this afternoon. It is testament both to the importance of the issue and the respect in which he is held around this House as a doughty champion of the countryside that he has secured so many speakers on a Thursday afternoon. I congratulate him.

He has done a very good job of outlining the economic contribution that the farming community in particular makes to our country, to which I would add the significant contribution of the food and drink industry. When we think of our great manufacturing sector, such as it is still in this country, we do not always think first of the food and drink industry, yet it accounts for more than 15% of our total manufacturing turnover in the United Kingdom and more than 400,000 jobs. That is a significant achievement, and one on which we would do well to reflect further.

If we are going to continue the successes of agriculture and of the food and drink industries, we will have to work hard to face the challenges around food security, as my noble friend Lord Plumb said. We have to feed

9 billion people by 2050 in a world constrained by climate change and the resource implications—the loss of nutrients in soil and loss of water—that our food and drink industries and our farming communities will have to contend with, if they are to produce the food that we are going to need in future. We need to find a new way in which to produce that food.

We hear a lot about “sustainable intensification”, which means different things to different people. For me, it means working with nature and the environment to conserve the resources that we will need in future—the soil and water—to grow the food that we will need. We will have to address not only the challenges of producing food more sustainably but the challenges of the effects of some poor diets on people in our country and around the world. It is a salutary fact that 40% of men and 30% of women in this country are overweight, and that one-third of all 10 to 11 year-olds are equally overweight. The fact that we are not feeding our nation healthy food and that at the same time we are struggling to provide the resources that our industries will need in future is something that the Government will have to take more of a lead on in future—linking the health agenda with the agenda for producing food sustainably. I do not say that our Government have not done anything; they obviously have done an awful lot. We have the agri-tech strategy and responsibility deals, but they are not brought together. We do not have a co-ordinated strategy for linking the work that we need to do on health and on producing food in a sustainable way. Therefore, we are not setting our industries and the farming community the clear agenda that they are crying out for.

We are also lagging behind in comparison to other parts of the world. While I know that many noble Lords would not wish us to be compared with what is being done in Nordic countries or within Brazil, there are many similarities between the UK and the Netherlands—not least a very similar agenda for reform of the European Union. There they have a very clear set of nutritional guidelines, which they use as a means to communicate with their public about what foods need to be eaten. They give their industry guidance as to what they think it should produce, and they equally have a very clear public procurement policy, which they use to drive forward the production and purchase of sustainable food.

The Government have a record of doing a number of different initiatives, such as the agri-tech strategy and the responsibility deal. In 2012, they launched the Green Food Project, which was a very welcome initiative, bringing together a large number of stakeholders in this field to look at the challenges that the food and agriculture industries face and to see whether we could find some common solutions. Those stakeholders included the NFU, the CLA, the Food and Drink Federation, EBLEX, WRAP, the Food Ethics Council and the WWF—a whole breadth of organisations involved in the very large food business field. That first report received a ministerial foreword and there were some very clear conclusions. When the report from the second year of the Green Food Project was released last summer, there was no ministerial foreword and no launch; I found it buried on the Defra website. There was no commitment to take forward any further action, and I found that a great pity—particularly since all those diverse groups together had come up with a set of principles to produce healthy and sustainable food to which they all jointly agreed.

There were eight simple principles to be used as a guide for outlining nutritional standards for our country and for driving important public procurement. Those eight principles included an agreement on moderating meat consumption and encouraging the production of plant-based foods. I remind the noble Lords that that group included EBLEX, the lobbying and representative organisation for the beef and lamb sector, the WWF and the Food and Drink Federation. These groups, which would not normally come together, are in fact coming together under a government initiative and producing a clear and coherent set of principles to guide the industry in giving it a mandate to do something different about the food that it offers and equally to drive public procurement.

My worry is that the list that was produced by the group will sink without a trace. My understanding is that it went out for peer review. What do the Government intend to do with the set of principles that the Green Food Project steering group has drawn up? My understanding is that it could be buried in some website that Defra co-funds, but that it will not be used to drive forward a clear vision for the industry or drive forward procurement. That is a great pity, particularly since this week we saw the launch of the Government’s public procurement plan, which is a very welcome step forward. However, when it talks about some of the steps that we would like to see in procurement—and let us not forget that the public sector in the UK spends £1.2 billion on public procurement—it says nothing about meat moderation. Several of my colleagues might say that it is not the Government’s job to intervene in such a sensitive area, but this public procurement plan, which we launched this week, makes it clear that if you are in receipt of a government contract for food to serve meals, you have to provide fish twice a week, and one of those has to include oily fish. So it is prepared to say something about fish, but it should really say something about meat.

The Government have some initiatives in this field, but if we are to develop our food and drink industry properly we must make sure that we carry on with the work that we started with the Green Food Project and take it forward so that our industry can carry on in the way that we know it can and should.

Photo of Lord Palmer Lord Palmer Crossbench 3:17 pm, 24th July 2014

My Lords, the noble Lord, Lord Plumb, was a childhood hero of mine, most especially when I saw clips of him on television being driven in a smart car with the number plate NFU 1. I congratulate him on the way in which he has introduced this important debate. It is very disappointing how few members of Her Majesty’s Opposition seem to have put their names down to take part in it.

I have been in the food industry all my working life—first, as a primary producer and then as a manufacturer. I have now done the full circle, as I try to farm in the Scottish Borders. In one of the earliest debates that I took part in, introduced by the noble Lord, Lord Wade of Chorlton, nearly a quarter of a century ago, I wore a tie which I am proud to wear today, inscribed “British Meat”. I remember the noble Lord, Lord Plumb, asking how I got it. He had forgotten that he gave it to my father, who was the last chairman of Huntley & Palmer Foods, when the noble Lord, Lord Plumb, was a director of our biggest competitor, United Biscuits.

This debate is perfectly timed as combines start to roll and British lamb is at its very best. It is therefore rather distressing to note that one of our major retailers is promoting New Zealand lamb. Much has changed since the noble Lord, Lord Plumb, was in charge of the NFU. I started to try to farm back in 1979, and I inherited a workforce of 17. I am now farming a bigger acreage with just three men, all of whom were brought up at home, and I am immensely proud of them.

It must not be forgotten that the right weather at the right time can make a huge difference to a farmer’s profitability. On my relatively modest acreage, that can mean £100,000 either way. It is not good management, it is pure luck. We should not forget that 50 years ago 48% of the national wage was spent on food; today that percentage figure has dropped to just 9.1%—a huge difference.

In recent weeks, more details have emerged on the new basic payment scheme coming out of Brussels, which is being introduced next year to replace the current single payment scheme. Information has been issued on the new element of reform, namely, greening. However, it is frustrating that, at this time, we are still awaiting the critical details so that farmers can plan for planting with confidence in 2015. I gather that even in Essex, ground has already been ploughed for next year’s harvest.

The important role of crop protection products in producing healthy and affordable food needs to be supported by regulation that ensures that growers have access to as broad a range of crop protection tools as possible. I believe that we need a level playing field on the availability of plant protection products for UK farmers and growers, with their contemporaries in Europe and the rest of the world, both for major crops and specialist crops. To achieve this we need improved harmonisation of registration processes between the UK and other European member states, risk-based decision-making and development of novel techniques in plant protection.

The value of agricultural output has almost doubled in the last 10 years. Caring for the countryside—and here, of course, I have to include farming—is a highly capital-intensive industry and it is vital that farm businesses have access to the appropriate incentives that will allow farmers to invest for the future. The noble Lord, Lord Plumb, emphasised how incredibly important this aspect is. Farm businesses need certainty and it would be prudent for the annual investment allowance to be set at a permanent higher level and extended to farm buildings so as to ensure that there is continued investment and growth in this important sector.

Pests and diseases are showing increasing resistance to crop protection materials. For example, herbicide-resistant black grass, first seen back in 1982, is now found on as many as 16,000 farms in 24 counties in the United Kingdom. We need regulators to account for future challenges when it comes to crop protection. Investment in crop protection in Europe has fallen from 33.3% of worldwide investment in the 1980s to just 7.7% today. We need regulators to be aware that overzealous regulation drives away investment and is in danger of turning the European Union into an agricultural backwater when it should be the world’s powerhouse of agricultural development and innovation.

Photo of The Earl of Selborne The Earl of Selborne Chair, Science and Technology Committee (Lords) 3:22 pm, 24th July 2014

My Lords, like others, I must start by declaring an interest as a farmer and, perhaps uniquely, I am a fruit grower; I am not sure anyone else here is. I also pay tribute to my noble friend Lord Plumb for having initiated this debate.

I want to concentrate my remarks on trying to illustrate to what extent over past decades—and, I am certain, in future decades—the agricultural sector was and will be dependent on its research base. It always interests me how quickly policy, as determined by successive Administrations and Ministers, changes for this sector. For example, in the early days when my noble friend was starting his career at the NFU, food security after the war and the need to ensure that farm incomes matched urban incomes would have been important, hence the deficiency payments.

However, to back up the rapid changes in agricultural production, there was massive and very successful investment in agricultural research, development and extension. This led to a dramatic increase in productivity. We farmers would like to claim the credit for this, but if we are absolutely honest, we knew that we were enormously lucky to be able to exploit some rapidly moving technology in agricultural engineering, plant breeding, animal husbandry and the like. But, of course, in the very seeds of success lay the future problems, such as surpluses, leakages into soil, air and water—in other words, environmental damage—and animal welfare issues, as husbandry lots got ever larger. People resented the changes to the landscape. They noted the loss of biodiversity. Frankly, it was not surprising that, if you were trying to crop ever larger areas ever more intensively, there would be losses to biodiversity, as indeed there were. Of course, the agenda changed to meet some of these issues. Human nutrition has been referred to, and there have been a number of startling food safety issues, arising sometimes from production systems but very often from imported diseases which, in an era of globalism, become ever more prevalent.

So there was little enthusiasm, for more than 25 years I would say, for supporting production systems. When I say that the policies changed, I have to reflect with some shame that on my farm I have not only, 40 years ago, taken grants for taking out hedges, but 20 years ago I took another grant for putting them back in again. That illustrated how one tries to do what is right by the system of the day, though successive generations may not welcome what we have done.

Research emphasis in recent years has been particularly on enhancing farm biodiversity. Much can be done on this; it does not have to be organic. As we heard in the earlier debate, there are many other ways of delivering on this. Delivery of ecosystem services is rather a jargon concept, I admit, but it is nevertheless a very important point. Farmers have instinctively understood that soil conservation, flood control and water purity are services that the land manager provides. Of course, we now understand how this can be encompassed into food production systems in a way that does not lead to adverse consequences. As a fruit grower, I am now very much more aware, as I should have been in earlier years, of just how reliant we are on insect pollinators—not just imported honey bees but a wider range of insects. That is where getting the biodiversity of the plants right, at least in the pollinator strips, can play a very important part.

Likewise, there has been a greater emphasis on the non-food crops: biofuels, vegetable oils, pharmaceuticals and plant based chemicals. There is nothing new in this. Agriculture has always provided for industry, manufacturing, energy and transport, but with the range of non-food crops we are moving into some new areas of cropping.

The long and the short of it is that food production is the core business of agriculture. Food production must be done, in modern parlance, sustainably—in other words by reducing its adverse impacts on the environment and delivering, so far as is possible, enhancement to the environment. We have been encouraged—this has been successful—to get closer to the customer and add value to our products. Farmers’ markets and shops have been a useful way of making the consumer more aware of where their food comes from.

I go back to the present occupation. We are back to taking food security much more seriously; not so much in the United Kingdom and Europe, but globally. The figure of 9 billion people who need to be fed, requiring at least a 60% increase in production, has already been mentioned. Companies such as Syngenta, which represent a large part of the research base, not just here in Europe but elsewhere, have sent themselves the target of increasing average productivity of the major crops that they support by 20% without using more land, water or inputs. This is a challenging target, but a sensible one and I am absolutely certain, given the success that we have had in previous generations, that it is realistic.

The Government are to be congratulated on having recently introduced the new industrial strategy for the field of agri-tech. My noble friend Lord Plumb referred to robotics, satellite tracking and the like and the prevalence of new entrepreneurial farmers adopting systems that come out of molecular biology and other biological sciences. All this is very valuable. The investment of £160 million of new money in this industry-led strategy is to be welcomed. But, again, I say that unless you bed all this down in agronomy and in farming systems that are demonstrated to work and to reduce impacts and leakages, we will miss the vital connection. I worry enormously about the great loss we have had within the research and development sector over the past 25 years. Frankly, universities have very little, if any, capacity to do field research now. I used to chair something called the Agricultural and Food Research Council. That is now subsumed into the BBSRC. Those institutes have almost all gone—not John Innes or Rothamsted, which have been mentioned, but so many of the others. There is no horticultural station left. As a fruit grower, I worry enormously that East Malling research station, which is a private, charitable run trust, has an enormous responsibility but very little funding any more. Again, we are seeing whole sectors of our agricultural production and horticulture—strawberries, raspberries and the like—are being left without a research base.

We should not rely on Holland and other European countries, as I do. We need to take stock of our national capacity and recognise that, if we do not keep the research infrastructure in place, in future we will lack the capacity to achieve the great success that farmers have witnessed in adopting new technologies.

Photo of Baroness Miller of Chilthorne Domer Baroness Miller of Chilthorne Domer Liberal Democrat 3:31 pm, 24th July 2014

My Lords, I declare my interests as in the register. I say to my noble friend Lord Selborne that, although I grow fruit in my vineyard, I turn it into wine.

I congratulate my noble friend Lord Plumb on his splendid introduction and on the historical perspective which he brings to the House. It is an exceptional perspective from which we have all profited over the years, as we have done this afternoon.

We have all heard of peak oil—the concept that oil is about to run out. However, recently a new concept of peak soil has been mentioned. On current trends, the world has about 60 years of topsoil left. That is because we are so incredibly profligate with our soil use. One inch of topsoil takes about 500 years to form naturally. However, over the past few decades, we have allowed it to erode. Every time there are floods, we see topsoil flowing down our rivers. Irrespective of whether they are brown, sandy or limestone coloured, that is all soil flowing out to Europe. People are worried about whether we are staying in the European Union. Actually, Britain is leaving—the soil is all going and it is all ending up in Europe.

The reason I have chosen to ask my noble friend some questions on this topic is because there was going to be an EU soil framework directive. The UK Government was relying on this to provide the framework for soil protection in the same way as the water framework has incentivised a lot of good work to take place with regard to water in the UK. Sadly, the soil framework directive will not now be put on the table. In the UK we have very little statutory protection to protect England’s soils, although soils are indirectly protected by other legislation, such as that covering the prevention of pollution and contamination. However, that is not the same thing as protecting the soil itself, which worries me. I know that some people have been landowners—especially some noble Lords in this House—for hundreds of years but many people own their land only during their lifetime. As I said, one inch of topsoil can take 500 years to form naturally. It does not take much maths to work out how many generations it takes to replace that topsoil. Therefore, although one may be a landowner, one is really only a steward as far as the soil is concerned. Will my noble friend consider what sort of statutory protection can be introduced in this regard? I know that the Government are committed to having less regulation. However, I understand that the proposals for the CAP cross-compliance measures do not concentrate on soil protection.

As regards peak soil, John Crawford, the director of the sustainable systems programme at Rothamsted, said:

“We know far more about the amount of oil there is globally and how long those stocks will last than we know about how much soil there is”.

He continued:

“Under business as usual, the current soils that are in agricultural production will yield about 30 percent less than they would do otherwise by around 2050”.

We have talked about the need to feed more people more efficiently and the need to be self-sufficient. However, if our soil is not in good condition, that will not happen. I was struck by another commentary from Tim Hornibrook in the same article in this month’s edition of AgProfessional from which I quoted the words of John Crawford. I shall read out that commentary later. Indeed, I could have read out the whole article, it was so good. One of the main drivers of soil degradation is the trend towards less diversity in agriculture. I should have declared my interest as a member of the All-Party Parliamentary Group on Agroecology, as we hear a lot in that group about the fact that mixed farming is much better at keeping soil in good condition because of the amount of organic matter that is added to it through that method of farming. Tim Hornibrook, head of Macquarie Agricultural Funds Management Limited, stated in AgProfessional:

“In a lot of agriculture it has become a monoculture, so you just don’t the diversity of plants that are necessary for healthy soil, and often the agricultural practices are all about mining the soil rather than managing it”.

I thought that phrase was particularly powerful as we need to fight the attitude that the soil is there to be mined and we do not have to exercise stewardship over it or care for it. There is a lot of evidence that excessive use of fertilisers can also damage soil, for example, by altering its acidity, or even salinity, in ways that reduce microbial activity and therefore ultimately plant growth.

Soils in England face the threats of erosion by wind and rain and compaction due to heavy machinery being driven over them. There is a conflict in that regard. As all farmers know, you have to get your machinery on to the land and if you have wet land, that is more difficult. Good advice and agri-tech can help with such issues, given that machines are beginning to come on to the market which are designed to spread the load in a different way. However, the biggest threat is posed by the decline in organic matter. The loss of soil organic matter and its supply of nutrients makes it very difficult for us to increase the quantity of food we grow until we solve that issue.

It is no coincidence that the Food and Agriculture Organization has declared 2015 the International Year of Soils as it is so worried about what is happening to soils worldwide. I mention floods and want to end on the following note. We have worried about the effect of floods on soils and farmland, but that is as nothing compared with the effects of drought. Drought resilience is needed and soil that is like a sponge which can hold the water. If we are to be able to grow crops in a climate where we do not know whether we will be subjected to floods or droughts, we need our soil to be in peak condition.

Photo of Lord Bilimoria Lord Bilimoria Crossbench 3:38 pm, 24th July 2014

My Lords, less than 2% of our labour force meets 60% of our food needs. Agriculture and food is a crucial aspect of our economy. However, I do not believe that the sector is given the appreciation or recognition that it deserves in light of its importance. I do not believe that we take enough pride in our food and agriculture, as we could and should do. I believe that we take it for granted.

In my industry, my own product, Cobra Beer, is made predominantly from agricultural products, and the vast majority of that is, of course, malt, which is made from British barley. My joint-venture partners are Molson Coors, the American-Canadian global brewers, and I have heard Pete Coors, the vice-chairman, speak with immense pride about the relationships that Coors has had with farmers for more than a century. Such is the interdependence that exists between agriculture and industry.

I thank the noble Lord, Lord Plumb, for his excellent speech and for leading this debate with authority—as we heard from the noble Lord, Lord Palmer—as a former driver of “NFU 1”. The agri-food sector, as the noble Lord said, contributes almost £100 billion to the economy, or 7.4% of our GVA. That is huge—3.6 million people, or 13% of national employment. Nevertheless, can the Minister confirm that employment in the agri-food sector has actually fallen over the past 12 months, which is the largest decrease in agriculture, falling by 18,000?

The Minister, George Eustice, has said that the industry should have “confidence in its future”, and that there is,

“growing consumer interest in food provenance”.

He mentioned, as we have heard in today’s debate, that the world population is set to top 9 billion, so we will see increased demand for more westernised foods, including dairy products and meats. The demand for food is forecast to rise by 60% by 2050, and we need a vibrant, profitable farming industry in the UK to cope with this demand.

In February 2014, George Eustice said:

“The rural economy is worth £211 billion a year. Rural areas are home to one fifth of the English population, yet they support nearly a third of England’s businesses”.

This is excellent. However, the vast majority of these businesses are SMEs, and we need to create the right environment for these businesses to flourish. Cambridge University, in a report by the Centre for Industry and Government and the Institute of Manufacturing, said that,

“many descriptions of the food and drink sector are oversimplified”,

and that,

“the food and drink sector is a key element of future strength for the UK, providing value to the national economy in financial, strategic and social terms”.

As the noble Lord, Lord Plumb, said, the NFU has said:

“agriculture’s contribution … has increased by a staggering 54 per cent between 2007 and 2012”.

The UK has 142,000 businesses that are registered as farm businesses. This is phenomenal. The levels of growth are incredible. We should be proud that we are the third largest wheat producer in Europe. We are the third largest milk producer in Europe. We are the largest producer of sheep meat in Europe. We are the fourth largest producers of beef in Europe. Yet we have heard that there is a trade deficit and that our self-sufficiency is actually declining. This is a concern.

On the positive side, British shoppers actually want to back British farming. According to the NFU, 86% of shoppers are,

“as likely or more likely to want to buy more traceable food that has been produced on British farms”.

In the other place, the House of Commons Environment, Food and Rural Affairs Committee produced a food security report earlier this year and made the point:

“The UK is currently 68% self-sufficient in foods which can be produced here”.

However, it says:

“There has been a steady decline … over the last 20 years”.

A lot of our food is imported from Europe. The report goes on to say:

“As part of the CAP, many of our farmers receive support from the EU”.

Can the Minister give us an update on the CAP? Is it working to our advantage? It is a contentious issue.

We have heard before about the £160 million agri-tech strategy, which is about supporting collaborative research and development and translating this into practice. However, I would submit, and the committee submitted, that this is insufficient. The proof of that is the first round of bids for this was six times oversubscribed. Do the Government agree?

I am proud to have been appointed recently as the chancellor of the University of Birmingham, and last week I visited our department of chemical engineering and saw the amazing work that the food microstructure group is doing in linking up with industry and helping the food industry. If more of this can take place, the better it will be. The green revolution in India, a country that for centuries had famines, took place only because of bold innovation; India no longer has famines.

The UK must ensure that we work with the EU to address the issue of CAP and also the issues of food security and innovation. The reality is that from 1940 to 1990 yields were rising. Since then, farm wheat yields have stalled; there is no rising trend. Will the Government confirm that the yields have plateaued and that we desperately need innovation? In this sense, we need to increase agricultural output, including GM. What is the Government’s view on GM? The NFU policy is that it is in favour of GM technology. It believes that GM will be one of the solutions. Do the

Government agree? Are they willing to work with the EU in tackling the issue of GM? There is a lot of resistance in the EU. The EU regulatory framework has prevented development of GM and has one of the strictest approval procedures for GM products in the world. AB Sugar has suggested that the Government could help change the perception of GM foods by seeking to move the public debate away from viewing GM as a blanket technology and instead focus on the benefits it can bring to society in specific applications. Will the Government work towards doing this, because we desperately need it? Again, the relationship between universities, innovation and research is crucial.

The next issue is agriculture as a business. I have seen with my wife—who is South African; her family had farmed for more than a century in South Africa—that although farmers can be great farmers, they are not always great business people. What are the Government doing to encourage business training for farmers in the UK, encouraging them to attend business schools and attend courses in business, particularly given that so many of them are SMEs? For example, there is the business growth and development programme at Cranfield, which I attended. Are there equivalent programmes that the Government can encourage to be tailor-made for farmers, to encourage them to be more competitive?

I conclude with the GREAT Britain campaign, which promotes all that is great about Britain, both within the UK and abroad. Why does it not feature agriculture and food products more? This is an industry that is not appreciated enough, that we should be proud of and that should be a top priority for this Government.

Photo of The Duke of Montrose The Duke of Montrose Conservative 3:47 pm, 24th July 2014

My Lords, it is a great pleasure to be able to take part in this debate and I thank my noble friend Lord Plumb for introducing the topic. It is extremely important that the agricultural and food aspect of rural activity is not overlooked, as the noble Lord, Lord Bilimoria, was just emphasising. I declare my interest as a UK farmer in a less favoured area, as a member of NFU Scotland and as president of the National Sheep Association. I might also declare an interest in that we introduced new farming practices into the area I now live in 270 years ago. I am conscious of not just adding half an inch of topsoil; we perhaps have done rather better than that.

Because agriculture takes up a major part of the national land area, its influence extends well beyond purely the economy of the UK. However, today, it is the economy that needs to be emphasised, and the aspect that I will highlight is the sheep industry. The government figure for the total output of the livestock industry last year was just over £9 billion, of which just over £1 billion was from sheep. My noble friend Lord Plumb mentioned what a volatile world agriculture works in, whether due to the weather or to the markets. After a sodden winter, we have had one of the most favourable spring and summers that we have seen for some time.

Sheep, along with many other commodities, have just had an amazing run of prices in the past year, but that has suddenly gone over a cliff and the prices are back below what they were two years ago. My noble friend Lord Selborne talked about the future we are looking at, and all this is of small account when we look at it from the perspective given to us by Professor John Beddington, the chief scientific officer, in his “perfect storm” report. This summed the situation up by saying that we have less than 20 years to deliver 40% more food, 30% more fresh water and 50% more energy to meet the demands of a rising world population.

The sheep industry in this country is looking at this challenge and is gearing itself up. In spite of the fact that a great deal of sheep production occurs in very extensive situations, science is beginning to provide suitable tools to move the industry into the technological age. Used intelligently, electronic tagging of sheep will bring greater detail and control into flock management, and modern genetic screening will have a place in improving foundation stock. Great strides are also being made in the application of vaccination against major sheep diseases, and we are fortunate that a great deal of the ground-breaking work is produced by the bioscience industry in the UK, particularly, dare I say it, in Scotland. The object has to be to get more production from fewer and healthier animals. However, for the most extensive production areas, this all has to be tempered with the ewes’ survivability in the circumstances that exist.

I want to draw the Government’s attention to another aspect. Now that the framework of the next common agricultural policy has been drawn up, one particular element is causing distortion to the sheep market, due to an EU competence on animal health. In the 28 years since the crisis of BSE in cattle erupted, no case of a natural transfer of BSE to sheep has ever been found. Your Lordships will be aware that as a precaution, and latterly under an EU regulation, all UK sheep carcasses have to be split to assist with the extraction of the spinal cord. This and other measures are adding £23 million to the cost of UK sheep marketing, and I ask my noble friend to see what can be done about that and to see that it is reviewed.

It will not be any surprise to your Lordships that another aspect of the UK in which food and agriculture plays a part is politics, and at present this is particularly true in devolution politics. As it happens, food and farming form a much larger proportion of the economy in Scotland than they do in the balance of the United Kingdom, so it has proved a very rich field for politicians looking to show what differences there are between agricultural administration in Scotland and in the rest of the country.

What would appear to be, at first sight, a particularly crazy policy has been introduced in Europe governing the provision of money through the CAP to agriculture. In drawing up the financial national envelopes of all member states for Pillar 1, the policy is that, wherever they are now, they should be adjusted to the equivalent of €196 per hectare by 2020. This is to be implemented in stages and, for those currently receiving less than €196, there is a supply of what is known as convergence money to bring them up to this level. In the UK, current funding is the equivalent of €229 per hectare, whereas in Scotland, which is characterised by a great deal of more extensive land and farming units, it works out as €130, which is said to be one of the lowest rates in Europe. As it happens, within the current settlement the UK received an element of convergence money which, given the figures, the Scots would like to have appropriated as their own—you can probably understand that, given the background people associate with the Scots—but instead this was averaged out across the whole of the UK.

From then on we have heard nothing but how much better Scottish farmers could be with independence, ignoring all the other factors that exist. The final details of how the money will reach Scottish farmers are still being worked out, but the outcome may not be as dire as it first appears, as it has been decided by the Scottish Government that about 500,000 hectares on which no agricultural activity occurs will not receive any of the money. This should help those still in active farming.

Following on from the scene that my noble friend Lord Plumb started with, farming in the UK needs a fresh input of young and talented participants. If the needs of the world are anything to go by, we will find that in future agriculture will be contributing a greater and greater part to the national economy.

Photo of Baroness Scott of Needham Market Baroness Scott of Needham Market Chair, EU Sub Committee D - Agriculture, Fisheries, Environment and Energy 3:54 pm, 24th July 2014

My Lords, I join the thanks to my noble friend Lord Plumb for securing this afternoon’s debate. As chair of EU Sub-Committee D, which has agriculture within its remit, I appreciate enormously his long experience of both agriculture and Europe and really value his contribution to the work of the committee.

Many millions of people around the world are hungry. In some places it is because of natural conditions and in others it comes as the price paid by ordinary people for the ambitions and mismanagement of their leaders. Close to home, an estimated 5.6 million people are struggling to afford food. Many more people in this country have plenty to eat but are probably malnourished or on the verge of it because they are consuming food which is high in calories and low in nutrients.

It seems strange, given that food is essential to life, that we have no strategy for it. It is certainly true that the food sector is heavily regulated. It is not the Wild West out there. Everything from hygiene to labelling and packaging, from competition law to the Groceries Code Adjudicator, is regulating food, but there is no discernable strategic approach to food production and distribution which looks at our food from local, national, European and global perspectives into the future.

The assumption is that the free market will deliver for us because it is in its interests to ensure that we continue to have easy access to a range of cheap and plentiful food. Retailers have done a great job in providing this. The variety of food on offer has increased enormously in my lifetime, and as the noble Lord, Lord Palmer, noted, we spend significantly less on food than we used to. However, cheap food comes at quite a high price, and the price is often paid by growers in developing countries who are tied into unfair contracts and by exploited workers in sectors such as tea and coffee, cashew nuts and prawn fishing. The price is paid in rooted-up rainforest, soil depletion and other environmental degradation. In places, people are going hungry because their land is more profitable to fill our food and energy demands, not their needs.

This is a matter not for government to address through legislation and regulation, but for retailers and consumers to give much more thought to the impact of their purchasing decisions. I welcome the fact that the major retailers are really starting to focus in on the ethical and environmental consequences of our food consumption.

Our sub-committee recently carried out an inquiry into food waste. It became evident that much of the problem lies within the nature of the food chain. Farm to fork has become something of a cliché, but long food chains consisting of individual businesses, each of which is concerned with its own bottom line, can result in practices which are bad overall. In the case of food waste, we identified the relationship between supermarkets and growers as a major problem, particularly where cancelled orders and overzealous specification results in growers being left with surpluses of food which they have had to produce to avoid penalty, which has then not been used. Without a market for that food, it gets ploughed back or anaerobically digested.

Those lengthy food chains are also where safety and verification problems come in. The horsemeat scandal was a real wake-up call both to the public and industry because, as supply chains become longer and extend geographically, the enforcement of regulation becomes harder. Will the Minister update the House on Professor Elliott’s report into food supply networks?

The sub-committee thought that the Government could do a lot more to understand food chains better and to promote expertise and understanding. Witnesses told us that expertise in food chain management is in short supply, and this is partly why tackling food waste and other issues has become so difficult. It not just retailers. Equally problematic are the large food service companies, which provide meals in our schools, hospitals and prisons, and the hospitality sector.

One of the issues identified by many witnesses in our food waste inquiry is that people understand food far less well than they used to. In the context of food waste, it means they do not know how to use leftovers, and they do not understand basic facts around the storage of food and particularly when it is safe to eat it. It goes far wider than food waste. Many people do not know how to cook any more, so they spend far more than they need to buying expensive prepared food and take-aways. Ironically, this is hitting the poorest hardest. A recent report from Kellogg’s showed that 45% of children said they do not learn about food at home or at school, although 79% said they would really like to. I would like the Government to give much more thought as to how people can learn about food. Most commentators now agree that, as the global population rises, food will become a much scarcer commodity. With basics such as land and water coming under pressure and the impact of climate change and agriculture making dramatic fluctuations more common, basic food security cannot be taken for granted. This is not in the distant future. Asda’s corporate affairs director recently told a conference that 96% of the fresh food that Asda buys is already at risk from changes to weather patterns.

We need to think long and hard about this. Are we right in our assumption that, somehow, we western countries will continue to take priority in global food markets and that we will have the same access to food? Can we just leave it to supermarkets to ensure plentiful food and, if we do, what is the price we are likely to pay financially, environmentally and socially? We need to consume more food produced closer to home. There are already growing signs of the impact of improving diets of people in China and India. Competition for food is becoming much more of an issue and it is already happening. Parts of the fishing industry in Asia are no longer prepared to supply EU markets because they can easily supply markets closer to home, where the ethical and safety demands are much less stringent.

For those of us who care about carbon footprints, how do we reduce them when less of our food is being grown close to home? The Government should give a high priority to research in agriculture, working with academia and industry to improve yield, reduce food losses and waste, and improve storage processing and packaging. There are a lot of very valuable partners in the EU, which can build with organisations such as the University of East Anglia, closer to home. I was delighted to see the Prime Minister’s announcement, earlier this week, of a new agricultural research fund and I believe that should focus on yield, food loss and waste and particularly, as the noble Earl, Lord Selborne, and others have described, the question of land stewardship. We need social research to try to understand how best to nudge consumers into making choices which are safe, affordable, healthy and sustainable. A number of noble Lords have talked about the future. The Kellogg’s survey showed that just 1% of the Kellogg’s children wanted to be farmers so where, I wonder, is the next Henry Plumb coming from?

Photo of Lord Trees Lord Trees Crossbench 4:02 pm, 24th July 2014

My Lords, it is a great pleasure to contribute to this debate on agriculture and the food industry, which I am grateful to the noble Lord, Lord Plumb, for initiating. It is on agriculture that I wish to focus.

Agriculture, as has been said by several noble Lords, contributes hugely to the economy—£9 billion to the UK economy in gross value added—making it one of the biggest manufacturing sectors in our land. Its value, of course, extends much beyond that. It underpins much of the food sector, about which we heard from the noble Lord, Lord Bilimoria, which is worth far more—about £88 billion in gross value added to the economy in 2012. More than that, agriculture is the custodian for most of our land. Some 71% of the land area of the UK is classed as agricultural. Finally, as has been mentioned by the noble Baroness, Lady Scott, and the noble Earl, Lord Selborne, agriculture provides a substantial part of our food. Some 76% of the food that we could grow in Britain we are growing and providing for the nation. In that respect, it underpins our security, health, and productivity.

I want to concentrate particularly on livestock production and in that respect I draw attention to my register of interests and my chairmanship of an animal health research institute. Nearly 40% of the total UK land area is classed as permanent grassland, much of it upland and in less favoured areas. This is ideal for raising ruminants, which turn indigestible cellulose in grass into nutritious products that are in high demand nationally and internationally.

The gross output value for livestock production is estimated at £14.2 billion in the UK in 2013. That makes it a very substantial level of productivity in comparison with other EU member states, as the noble Lord, Lord Bilimoria, outlined. However, we still have a substantial overall negative balance of payments position for livestock products. This presents a challenge but, coupled with the likely increase in the value of livestock as the result of a rapidly expanding global population which demands more meat and dairy products, it also presents a great opportunity.

Production of food in the UK is under threat from competing claims for land use within the finite boundaries of our land. There are competing claims for energy production, forestry, transport infrastructure, conservation and so on. In future, land for agriculture and livestock production will reduce.

None the less, our livestock industry has been very resilient in recent years. Productivity has been more or less maintained and in some cases considerably increased, although the number of animals and holdings has decreased in many cases. For example, in the dairy industry between 1997 and 2005 the size of the dairy herd shrank by 20% but milk production fell by only 2%. This has been achieved partly by fewer but bigger units with concomitant efficiency gains. However, there can be downsides to that. I have not the time to go into them but the pollution and so on will be apparent to your Lordships.

In terms of increasing efficiency of livestock production, what does not have downsides is improving the health of our herds and flocks. In a given period, disease morbidity impairs productivity but inputs, pollution and greenhouse gas emissions remain more or less the same. Mortality from disease of course stops production from an animal. One loses totally its productive capacity without reducing the inputs and emissions up to the point of death. Improving health can reverse all these negative impacts.

Investment in disease control and the application of science is essential. Recent initiatives such as the Government’s agritech strategy are very welcome, but overall investment in agricultural research in 2010 was just 5% of the gross value added of the industry. I suggest that that is below the norm for comparable high-tech industries. This investment does not all have to come from the Government of course: industry should contribute. However, given the national importance of food production, the Government have an important part to play.

It is essential in supporting research investment that we give attention to endemic disease research—those diseases indigenous to the UK which affect livestock every minute of every hour of every day, 365 days a year. They are diseases such as mastitis, lameness, reproductive and parasitic diseases and, of course, TB. It is important that we emphasise research on those endemic diseases as well as protect against incursions of so-called transboundary diseases like foot and mouth. It is also important that we gear incentives to reward health and not disease, and that biosecurity, health planning and disease surveillance—the concepts of protect and prevent—are given appropriate emphasis rather than purely reactive measures. Research into and application of disease prevention measures are the equivalent of insurance. It is tempting to cut back on this, especially when times are hard but, to use a domestic analogy, it is a false economy to cancel one’s household insurance if the house then burns down.

The reforms of the common agricultural policy, which is set to distribute £15 billion in England alone between 2014 and 2020, give an opportunity to reposition a proportion of funding to support and facilitate farmers to embrace health planning and disease prevention. Maintaining or even improving productivity from fewer animals reduces pollution and reduces inputs in imported feedstuffs and greenhouse gas emissions but increases food security and improves animal welfare. It makes sense to improve animal health and thereby strengthen a sustainable agricultural economy so that it can continue to make such a valuable contribution to the nation’s well-being.

Photo of Lord Marlesford Lord Marlesford Conservative 4:10 pm, 24th July 2014

My Lords, it is a great privilege to follow in a debate initiated by my noble friend Lord Plumb. There are very few, if any, Members of this House who are more respected. I declare my interest as a Suffolk farmer and the president of the Suffolk Preservation Society.

I will start by emphasising the cyclical nature of agriculture. In a sense, one ought almost to go back to where it all started in recent history. After the American Civil War, the railways were built, the middle west was opened up and the great agricultural recession hit Europe in about 1870 and lasted until the First World War. Now British farming is suffering from a fresh turn-down. The best example of prosperity in farming has always been the price of wheat and there have been huge fluctuations in recent years. By 2002 the price of feed wheat had fallen to £60 a tonne. If you adjust for output—4 tonnes rather than 1 tonne before the war—and adjust for inflation, that brings that price down to about £6 a tonne, which is what farmers got during the great agricultural depression of the 1930s. By 2007, the price was up to £120 and in 2012 it touched £200. Since then it has fallen by 38% and today it is under £120 a tonne. Oilseed rape, which is probably the main arable rotation crop, has fallen from just under £400 a tonne to £226 a tonne. That is a reduction of 42%.

It is hardly necessary to refer to the bad situation that milk producers are in due to the catastrophic fall in milk prices. I was a milk producer until 2004 and I got out because of the price. Some small milk producers in the West Country have incomes barely above subsistence level. It is largely due, in a sense, to overproduction because only about 50% of all the milk produced is drunk as liquid milk and the rest has to be used for products. They face keen competition and the price for farmers has now gone down again in the last day or two to only about 30p a litre. Supermarkets are selling it at something like 40p a litre as a loss leader.

The global milk demand is set to grow and therefore we ought to be well placed to take advantage of it. It needs big investment and the investment must, as others have said, have certainty for 10 or 20 years, otherwise it will not happen. Many people probably regret the passing of the Milk Marketing Board, founded in 1932 by the great Walter Elliot and presided over with distinction by my noble friend Lady O’Cathain, who is sitting in her place. Sadly, it was abolished.

Returning to wheat, cereal needs have, as the noble Lord, Lord Bilimoria, said, flatlined over the last 10 years compared with other crops, such as sugar beet, which have shown considerable improvement. Cereal plant breeders have stopped investments. The Government have started to spark investment again with incentives and that must continue because it takes about 20 years to develop a new seed variety that goes on to the field.

I echo the need for the Government to give much clearer ideas about GM, which must be a big way forward.

This year there has been a huge increase in herbicide-resistant black grass in wheat. There is a simple remedy for next year. There should be a temporary derogation of the ban on straw burning, which, when properly supervised, is the ideal non-chemical way of clearing the ground of weed seeds and sterilising the soil against many crop diseases. I was on the old Countryside Commission when we recommended it be banned because of abuse by some farmers. In those days the chairman was the brilliant noble Lord, Lord Barber of Tewkesbury. Aged 96, he is still going strong, with all his faculties. I rang him this morning to say that I was going to make the suggestion about black grass and he said, “You have my full endorsement and you can quote that”. My view counts for nothing but I hope the Minister will take that back to the department and make sure that it is looked at properly.

I also congratulate the Government on taking a firm line against diverting large areas of good agricultural land into solar parks. Again, this is quite relevant to the points made about topsoil. Let me say at once that solar has an important part to play but it should be in industrial areas on industrial buildings—there is plenty on scope—not on good agricultural land. Of course, the economics are too attractive for many farmers to resist. Even with wheat at £200 a tonne and four tonnes to the acre, that is a gross revenue of £800 an acre—out of which you have to grow the stuff. The solar people were offering £1,200 to £1,500 an acre a year, which of course they recouped by adding it on to the electricity bills of everyone. It was a very unsound thing.

We had a recent case in the village of Hacheston near where I live and farm. There was a proposal for a solar park on 150 acres of good agricultural land on the banks of one of the most sensitive designated landscapes, the Ore River Valley. But after a robust campaign, in which everyone in the local community joined, it was rejected by both the inspector and my right honourable friend Secretary of State Pickles. Now the land will continue to be farmed, as it should be. I will put a plug in for the Suffolk coastal area, which is one of the most important parts of England for the growing of vegetables.

I will refer also, as others have done, to CAP reform, in particular the greening obligations. All claims on the basic payment scheme on 15 May 2015 have to be “greening-compliant”. However, Defra still has not produced the guidance that is needed. There will be a real worry if it is not produced in time. It is almost too late. Farmers are working blind. Defra has said it will do it by the autumn but that is really too late. If the Ministers have difficulty, let them ask the noble Lord, Lord Rooker, who did such a terrific job of getting a grip of Defra when we had the shambles of the Rural Payments Agency.

I very much regret that we have lost my right honourable friend Owen Paterson as Secretary of State for Defra. He was a super Minister and I am sure his successor will be wonderful. I am very sorry that my noble friend Lord De Mauley is not here. I am not sure that he has his priorities right by being in Scotland but at any rate we should expect him to give a really strong lead to Defra in some of the things that your Lordships’ House can speak about with authority.

Photo of Baroness Bakewell of Hardington Mandeville Baroness Bakewell of Hardington Mandeville Liberal Democrat 4:18 pm, 24th July 2014

My Lords, I, too, thank my noble friend Lord Plumb for securing this debate and giving me the opportunity to talk about a very important aspect of my life and the lives of countless citizens in the country.

Other noble Lords have talked about the importance of large-scale farming, food production, animal welfare, the greenfield agenda and soil. I have enjoyed and learnt much from these contributions. I will concentrate on the role of the growing number of very successful farmers’ markets. Whether one lives in or near a small market town or in large urban areas, farmers’ or produce markets are a key attraction.

While unusually spending the weekend in London recently, and looking for something to do on a Sunday, it was suggested that we go to Alexandra Palace for the produce market. It is a splendid market in a lovely setting with many varied and interesting stalls, most of them quite different from the ones I am used to frequenting at home. On a beautiful sunny day, eating our purchased lunch at the top of the hill, the view was stunning. I was delighted to have the opportunity to do that.

In Somerset we have a wide range of farmers’ markets within easy travelling distance. My favourite is in Crewkerne on the third Saturday of the month. There are numerous stalls offering a wide variety of produce: locally grown vegetables, French-style patisserie and cakes, gluten-free flans and pasties, a marvellous fish stall selling Weymouth-caught crabs and lobsters, sea bass and whole haddock, a variety of different cheese stalls and, of course, free-range poultry and carefully reared meat from West Country buffalo, as well as cider, wine, preserves, flowers and plants. These markets provide a vital outlet for growers and producers.

The stall holders attend a number of produce markets ranging from two a month for the gentleman selling his wife’s homemade chutneys, jams and honey through to Wootton Organic Dairy, whose owners attend 20 markets a month throughout Somerset and Dorset, and Beech Ridge Farm selling free-range ducks and chickens at two to three markets a week for 50 weeks of the year. One gentleman who sells only the most delicious cherries is currently attending five to six markets a week, but his season is extremely limited. For the rest of the year he is an adviser to cider growers.

That brings me on to the importance of the cider industry to the county. In years gone by, the cider industry and Somerset were synonymous. Then, sadly, cider fell out of public favour and many traditional apple orchards were grubbed up and a number of specialist strains were lost. However, cider is now very much back in favour and many local producers regularly win prizes for their cider at agricultural shows such as the Royal Bath & West Show, which is held outside Shepton Mallet at the end of May each year. If one believes the television adverts, drinking cider will greatly enhance your life. I welcome this turnaround in the cider industry’s fortunes. While touring the stalls last Saturday, I was delighted to talk to the gentleman from Wraxall Wines. He was selling fine white and rosé wine. He attends four markets a month and sells from a shop at the vineyard as well as on the internet. The vineyard is also now benefiting from Waitrose buying his white wine as it adds a range of English wines to its shelves—long may this last.

As noble Lords can probably tell, I am a great advocate for farmers’ markets. I can buy fresh gluten-free flans which are not available in supermarkets. My husband can buy huge, irregularly shaped scones to have with his tea, and we can then go and have a really nice cup of coffee in a family-run café and have a relaxing catch-up. We and other fans like us support several markets, including that at Montacute House run by the National Trust. Montacute hosts a regular market six times a year, which also encompasses a craft market that is especially popular in the run-up to Christmas.

Jonathan Hoskins from North Perrott Fruit Farm gave me the background on how farmers’ markets have grown up in the south Somerset area. In 1994, he and other small farmers were looking for an outlet for their produce, so they started a monthly market in Chard, the rationale for holding the market only once a month being to encourage local shops to stock their produce. Over time, the offer has transformed into popular farm shops, with many villages now having a farm shop. Success has grown from the markets and there is a balance to be struck between the farmers’ markets and the farm shops, although farmers’ markets remain an important part of their business. However,

Mr Hoskins was keen to point out that farms cannot be sustained on farmers’ markets alone and need other outlets for their produce. Previously, he brought only his apples to the markets but has since moved into apple juice. Now his farm sells 40,000 to 50,000 bottles a year. In addition, he runs a very successful nursery and farm shop, which also has a café selling coffee and homemade cakes. The shop also stocks milk, bread and newspapers. These are basically loss leaders, but are of service to the community.

My research on Saturday showed that, of the 20 stallholders present, six also sold on the internet, either delivering themselves or sending their produce by courier; three also attended events such as the cheese festival in Sturminster Newton; one supplied wholesalers; two supplied local shops; six had their own farm shops; and one, although not having a shop, sold from the farm. Some businesses were small cottage industries; for others, farmers’ markets were the main outlet for their produce, with considerable turnover.

I hope I have demonstrated in some small way how important farmers’ markets are to local growers and farmers, and to their economic survival. They provide a platform for them to showcase their excellent produce. They bring people together in a busy, vibrant social atmosphere, even when it is snowing and freezing cold. They provide the public with the opportunity to taste and experience really fresh, well reared produce and for the public to realise that food does not just arrive on supermarket shelves in brightly coloured packaging, where it may have been sitting for a little while. I hope the Minister will agree with me that farmers’ markets contribute to the economy, should be supported and are here to stay.

Photo of The Earl of Caithness The Earl of Caithness Conservative 4:26 pm, 24th July 2014

My Lords, I declare my interests as on the register. With other noble Lords, I thank my noble friend Lord Plumb for initiating the debate. He rightly said that it followed on well from the previous debate. I add that it also follows on well from a debate we had not so long ago on investment in the rural economy, which is hugely important. In that debate we discussed broadband, which is crucial to the agricultural industry, particularly for those who live in remote, out-of-the-way places.

I congratulate and thank all our landowners and farmers. Their ability to survive and adapt is extraordinary and quite unlike any other industry. I agree with the noble Lord, Lord Bilimoria, who said we need to promote and trumpet our successes and achievements more. Farmers are unable to plan ahead with any certainty. The noble Lord, Lord Palmer, said it is a lot down to luck, and how right he is. Noble Lords have mentioned the vagrancies of the weather, not only in this country, but worldwide. If Texas has a terrific harvest this year because the weather has been right, that is going to affect prices here. We also have to consider droughts, floods and the control of water to farmland, which will have to be more strictly controlled for farm use in future.

Farmers have to put up with price volatility. My noble friend the Duke of Montrose mentioned sheep; I was going to major on the price of wheat, but my noble friend Lord Marlesford has done that for me.

He quoted the price today of about £120 a tonne for wheat. If he takes the price back to 1999 and brings it forward to what it should be in real terms, the price today ought to be more than £200 a tonne. Farmers are losing out.

There are low profits in farming. Even in an average year, let alone a bad year, some farmers are earning the equivalent of only two-thirds of the minimum wage. Is my noble friend on the Front Bench content with that situation? Is she really happy that some farmers, who are producing so much for the economy and who keep us alive, receive about two-thirds of the minimum wage? Is my noble friend also happy with the differential between farm gate prices and retail prices? In particular, the price of beef has changed hugely. While retail prices are creeping up, farm gate prices are dropping. What is she going to do to solve that situation?

The other problem for farmers is that the value of their asset—their land—bears no economic relationship to the return they can get from farming it. There are huge pressures on agricultural land. We cannot make any more of it in the world. There has to be more development and more houses in this country, as we have discussed; agricultural land will have to be taken for that. There will have to be more forestry; agricultural land will have to go for that. There is an increase in use of agricultural land for growing crops that are going to be used for energy rather than for food, yet, as noble Lords have said, the population is rising and, as the noble Baroness, Lady Miller, said, the soil structure is a continual worry.

Perhaps I may ask my noble friend the Minister some more questions about self-sufficiency. It reached a peak of 75% in the early 1990s and has now dropped to about 61%. What figure are the Government happy with? If they are not happy with 61%, what does she think it should be?

I want to ask her, too, about seasonal workers. This is a huge problem for farmers this year, following the abolition of the seasonal agricultural workers scheme—it will affect my noble friend Lord Selborne in respect of fruit. We are already getting reports that fruit and vegetables are being left unpicked in the fields because there is a shortage of workers. What proposals do the Government have for producing an alternative to the seasonal agricultural workers scheme?

I turn finally to Scotland. Besides all the difficulties that I have mentioned, farmers have to put up with the biggest menace of all, and that is us—the interfering politicians. First, we have the common agricultural policy. What a disaster that reform has been. It is not helping the farmers and it will not help food production. On a specific point, will my noble friend say that farmers will still be allowed to use paper as input rather than having to rely on broadband, as the regulations seem to demand, particularly when farmers do not have broadband in the more remote rural areas? To have confidence, farmers need stability, yet in Scotland we have the report of the land reform review group being published and proposals on the right to buy.

Perhaps the noble Lord, Lord Grantchester, could answer the following question. The Scottish National Party and the Labour Party in Scotland have said that the direction of travel is a limit on the amount of land that anybody can own, an absolute right to buy for tenants and an ability to purchase land from you if it is in the public interest—and the public interest is, of course, defined by us politicians. If the noble Lord, Lord Grantchester, cannot say that the English Labour Party categorically opposes that, we must assume that that will be its policy. It is a terrifying thought.

On the absolute right to buy for tenants, tenants need to be aware that, as tenants, they are loved. The tenancy is what has allowed farmers and young people to come on to the farming ladder, but the moment they stop being tenants and buy their farm, they will be hated because they will be an owner.

Photo of The Earl of Caithness The Earl of Caithness Conservative

No, I do not have time. I am sorry; this is a time-limited debate.

If that person buys another piece of land because it will lead to economies of scale and lower costs, they will be even more hated. To owners, I would say this: do not let any land. But if that is the case, we are undermining what has been the structure of farming and has served this country so well. That will be a threat to our food production and to the British economy.

Photo of Lord Curry of Kirkharle Lord Curry of Kirkharle Crossbench 4:33 pm, 24th July 2014

My Lords, I, too, am grateful to the noble Lord, Lord Plumb. It is not for the first time in my life, but I am particularly grateful to him today for stimulating this critical debate. Without duplicating all that has been said already, I want to emphasise the importance to the UK economy of this vital sector. I declare an interest in that I farm in Northumberland and have a number of other farming and food interests.

The agrifood industry is the largest contributor to the UK economy by some margin, as has been said already, and it has the potential to contribute even more, both to our balance of payments through increased exports and to local and regional economies through adding value and other diversified activities that can lead to a reduction in dependence on imports.

We can and should seek to halt the decline in the self-sufficiency of food production that we have witnessed over the past couple of decades or so. While it is virtually impossible to set a self-sufficiency target—I was encouraged to do so in 2001 in a report I was responsible for and resisted the pressure—it is difficult to do so due to the annual influence of weather, volatile commodity prices and currency movements. Nevertheless, we should attempt to provide a higher proportion of our annual consumption than we do at present. Many look back with pride on the early 1990s, when we achieved almost 90% self-sufficiency, as was mentioned by the noble Lord, Lord Bilimoria, but they conveniently forget that at that time we were filling intervention stores with piles of surplus food such as beef, milk, and grain, which had been subsidised to produce and was then subsidised again to dispose of on to global markets, potentially undermining the fragile economies of the developing world.

We need to concentrate our efforts on producing food in a sustainable way, as has been mentioned by a number of noble Lords—and I will return to this challenge in a moment—with sustainable markets that address the diverse opportunities that exist both at home and abroad, in local, regional and mainstream markets, through constant innovation and investment. This requires confidence within the food industry that the agrifood sector is still a priority for government. Too often it has been regarded as a mature sector and rather traditional, with newer industries seen as being more sexy and exciting and receiving more attention and support from government, when in fact the evidence suggests that the food sector has a great record of innovation and of responding to changing consumer lifestyles. This important sector needs recognition that it is a priority for investment in skills development and business support and that it has the potential to contribute even more to the economy.

The challenge of feeding the huge anticipated increase in the global population has been well rehearsed and, despite the fact that we are a relatively small global player, I firmly believe we have a significant contribution to make. In addition to export opportunities, we will have upwards of 70 million people here in Britain to feed from a shrinking land mass, as was mentioned by the noble Lord, Lord Trees. It used to be said that an area the size of the Isle of Wight disappears every year in Britain through industrialisation, infrastructure projects and housing development, and it is probably even greater than that today. This continues to take place, not only here in the UK but throughout the developed world and increasingly in the developing world, too. If we add to these factors the impact of more frequent volatile weather conditions disrupting food supplies, then the challenge is multiplied. For a variety of reasons, land capable of food production is decreasing at a significant rate. To add to this dilemma, the intervention by government to incentivise renewable energy production is leading to vast areas of maize being grown to feed anaerobic digesters. In the 2003 EU reform negotiations, we quite rightly took the bold step to decouple financial support from food production in England only to find ourselves now competing with subsidised energy production, which is distorting the market.

As has been said, we need to maintain our investment in science. Historically, we have had a great track record of contributing to global knowledge in a whole range of science disciplines that have led to improvements in production systems, genetics and standards in both livestock and crops. It is essential that we continue to do this. We now need new tools and new knowledge to be able to respond to the challenges we face more than ever before to produce food in a sustainable way. The agritech strategy, which has been mentioned a number of times, is an important component of this commitment and the Government are to be congratulated for making these funds available. However, this additional expenditure does not restore our historical spend levels, so we cannot be complacent, as the noble Earl, Lord Selborne, said.

Wearing my hat as chair of the Better Regulation Executive, I feel I should take some responsibility for the decision to discourage the introduction of a soils directive, as referred to by the noble Baroness, Lady Miller. I absolutely agree that the quality of our soils is a matter of concern and a priority issue, but we need to look at alternative solutions to solve the problem by the promotion of best practice rather than by even more EU legislation.

My final concern is that we do not have an overarching strategic plan for the agrifood sector. I absolutely endorse the comments of the noble Baronesses, Lady Parminter and Lady Scott. There is lots of encouraging activity, but there is no glue binding it all together. I find myself involved in a number of important initiatives, but they are taking place in an ad hoc manner without any clear direction, whether it be in providing opportunities for schoolchildren to learn about the countryside, encouraging young people to consider agriculture and the food industry as a career, working with the Farming Help charities—as the noble Lord, Lord Plumb, is doing—or trying to drive forward the science agenda and the extension of knowledge. I find it really encouraging that the industry itself is responding to many of the challenges that we face and is increasingly willing to do so.

This lack of a strategic plan is particularly important as the local enterprise partnerships assume responsibility for administering funds under Pillar 2 for economic development and rural growth. They clearly need to ensure that funding supports regional priorities, but it must also be consistent with government priorities. I would be interested to hear from the Minister what direction has been given to the LEPs in the absence of an overarching plan.

On the subject of a plan, it is concerning that we bounce from one CAP reform negotiation to the next. No sooner do we wrestle with the implementation of the latest agreement than we embark on the next. Each reform package gradually reduces the level of support through the single payment scheme. I am fully aware that negotiations within the EU can be very difficult and I know I am asking for the impossible, but we need clarity on the future of direct support. I am meeting an increasing number of young people who believe that the sooner we have a plan with an agreed timescale to remove the single payment scheme, the sooner we can begin to adjust to an industry that is supported by the food and services it provides rather than public intervention. The current process seems to be based on a thousand cuts. We need a plan.

Photo of Viscount Ridley Viscount Ridley Conservative 4:42 pm, 24th July 2014

My Lords, I congratulate my noble friend Lord Plumb and join others in paying tribute to all that he has done and said, not least today. I declare my interest as a farm owner in Northumberland, not very far from the noble Lord, Lord Curry. I am sorry to tell the noble Lord, Lord Bilimoria, who is not in his place, that the latest text from my combine harvester says that the barley bushel weight is disappointing.

As the noble Lord, Lord Plumb, has detailed, farming is an astonishingly successful industry but it is also countercyclical. It grew throughout the previous recession and has often done so. It was an important factor in keeping the economy going that at least one part of it was not badly affected by the great recession. However, we must redouble our efforts in the years to come to keep farming competitive.

This urgency comes not because the world will necessarily struggle to feed itself, with 2 billion more mouths to feed by 2050, and not necessarily because climate change will make it harder to feed the world. If anything, more rainfall and longer growing seasons mean that we may well see improved yields for some decades. These are not the main, imminent threats. Indeed, if British farmers sit back and think that population growth and climate change will ensure plenty of consumers for their produce, they may be in for a rude shock.

The world is on the cusp of a great farming transition. From now on, and at an accelerating rate, it is quite possible that we will need less, not more, land globally to feed the world, even as the population grows. My noble friend Lady Miller of Chilthorne Domer spoke of “peak soil”. I commend the Minister’s attention to a paper by the Rockefeller University’s Professor Jesse Ausubel, Peak Farmland and the Prospect for Land Sparing. Professor Ausubel says that,

“humanity now stands at Peak Farmland, and the 21st century will see release of vast areas of land, hundreds of millions of hectares, more than twice the area of France for nature”.

His argument is as follows. At the moment, we are using 65% less land to grow the same quantity of food, averaged over all crops, as we did in 1960. Had we stayed at 1960s yields, would need 3 billion extra hectares to feed today’s population—that is several continents. Yet yields are still going up globally at about 2% a year. If you assume, pessimistically, that that drops to 1.7%, you assume that meat consumption rates grow faster than they are growing at the moment and you assume that population growth falls more slowly than it is falling at the moment—if you make those three conservative assumptions—you still find that we will need 146 million fewer hectares of land in 2060 than we farm today. If you make more realistic assumptions, we will need 256 million fewer hectares to feed the population in 2060 than we need today to feed today’s population. In other words, the world will potentially find it easier and easier to feed itself, which means real competition for British farmers from elsewhere in the world. As for African competition in commodity grains, we still live behind an artificial European tariff wall—an unjustifiable wall, in my view. I commend what the noble Lord, Lord Curry, said about not letting the pursuit of self-sufficiency lead to perverse incentives.

We should note that whereas yields have quadrupled here since 1950—most wheat yields have gone up about fourfold—and even more than that in Asia and America, they have barely budged in Africa in that period. If Africa gets hold of fertiliser, as it will—it is doing so—world food production will soar. In short, we will need to plan for a very competitive future, with potentially low commodity prices and high yields. This could be an underestimate of how much land could be released from farming. If climate change enhances rainfall and lengthens growing seasons; if hydroponic irrigation gets going with cheap desalination, so that many desert countries can grow plenty more food; if the productivity of chickens, pigs and other livestock, as mentioned by my noble friend the Duke of Montrose, continues to increase; and if landless agriculture—that is to say, tissue engineering and 3D printing to make meat, although I am sorry to say that that is competition for wonderful Scottish sheep—all bets could be off in terms of how much less land could be needed.

Even without any of these new technologies, we will need less land. That reality has been concealed in recent years by what is little more than a scandal of biofuels. We have been turning 5% of the world’s grain crop into motor fuel. We have displaced just 6% of the world’s oil use, so the impact on oil use has been trivial, but it has had an impact on food prices none the less. When that madness stops, as it will, the extent to which the world needs less land to feed itself may well be revealed.

What does that mean for British agriculture? It means three things. First, we must press on with innovation. Yields have stagnated over the past 10 years in this country, as a number of noble Lords have said. We must rebuild the research base, as the noble Earl, Lord Selborne, said, and grasp the nettle of genetic modification, as the noble Lord, Lord Bilimoria, said. I hope that the Minister will confirm the Government’s continuing support for genetic modification, particularly things such as nitrogen-use efficiency, which would decrease the amount of fertiliser needed to support a particular level of yield. We must redouble work on diseases, as the noble Lord, Lord Trees, said, and, as the noble Lord, Lord Palmer, said, we need to tackle the crisis in crop protection. It is a genuine crisis, with black-grass, yellow rust and these other problems, which are harder and harder to deal with. The precautionary approach that dominates the development of crop protection chemicals in the European Union has been disastrous in terms of allowing us to develop new and environmentally more friendly products.

Secondly, we need to switch our efforts to quality not quantity of food, with nutrient-enhanced varieties with Omega-3 amino acids and lysine-enhanced varieties of specialist crops. As the noble Baroness, Lady Parminter, said, we need to link the health agenda to the food agenda.

Thirdly, and finally, we need to add value and move up the processing chain. Those are the things that will keep British agriculture competitive. Yet the opportunities for Britain are surely great, because Mother Nature has given us day length that the Spanish would die for; soil moisture that a farmer in Kansas would kill for; access to markets that most Africans cannot dream of; and mild winters that Canadians would greatly envy. The Canadian crop is possibly down by as much as 26% this year, I am told, which is partly because of the harsh winter they experienced.

One Lincolnshire farmer by the name of Tim Lamyman comes very close every year to beating the world record wheat yield, set in New Zealand some years ago, of 15.6 tonnes per hectare. He claims that if he was given unlimited use of nitrogen, he would get there. That is the potential of this wonderful country.

Photo of Lord Grantchester Lord Grantchester Opposition Whip (Lords), Shadow Minister (Environment, Food and Rural Affairs) 4:50 pm, 24th July 2014

My Lords, I thank the noble Lord, Lord Plumb, for introducing our debate today and pay tribute to his continuing championing of agriculture. I declare my interests in a commercial dairy farm in Cheshire in receipt of EU funds and my life-long experience of co-operating with other farms and farmers in the food chain. In that regard, I chaired Dairy Farmers of Britain, which managed liquid dairies and an ingredients factory as well as engaging in hard and soft cheese manufacturing.

Through the reduction of international trade barriers, agriculture now has to have a global outlook, and we must be aware of the different perspectives that this can bring. From the top down, we have to be concerned with the health of the population, bearing in mind the modern challenges of obesity and climate change. However, when we look up from the agricultural perspective, the industry can seem very different when farmers recognise the headlock that they can often be in in the food chain, continually seeking to resist pricing to the marginal unit of production, which drives farming policy and outcomes without regard to profit as a return on risk and investment. It is a challenge to the future to drive down unit costs of production and the constant restructuring of the supply chain.

We on this side of the House are very aware of the importance of joined-up food policy. It is disappointing that the noble Lord, Lord Cameron, is not in his place today. However, the noble Lord, Lord Curry, has pointed out the need for rural proofing and getting an integration of policies on the rural economy from Defra, BIS, CLG and even the Home Office. That is why, in government, the Labour Government published Food 2030, a comprehensive vision for a sustainable and secure food system for 2030.

I thank the noble Lord, Lord Plumb, for his introduction to the debate today. He and other noble Lords have highlighted the importance and value of agriculture in the UK economy. Food is indeed the biggest manufacturing sector in the UK. It employs 3.7 million people in a huge range of businesses from farms to retail. That is equivalent to 14% of all GB employment. Agriculture and food processing is worth more than £80 billion to the UK economy and is our largest manufacturing sector.

The noble Lords, Lord Palmer and Lord Marlesford, and the noble Earl, Lord Caithness, highlighted the changes in food production over the years. The noble Earl, Lord Selborne, drew attention to the importance of research to the future development of agriculture and its effects on the environment. He also mentioned the importance of work on nutrition, a key aspect of the remarks of the noble Baroness, Lady Parminter. The noble Baroness, Lady Miller of Chilthorne Domer, drew attention to the fragility of the environment and the importance of soil structures. The noble Lord, Lord Bilimoria, highlighted the importance of agriculture to the drinks sector and in developing international trade, while the noble Baroness, Lady Bakewell, extolled the virtues of farmers markets.

However, agriculture is not one trade, but rather is made up of different sectors, often competing against each other for space on the supermarket shelf and often concentrated in different parts of the UK. The noble Duke, the Duke of Montrose, drew attention to the consequences of this practice.

I resist the challenge to take a diversion in my remarks to answer at length the noble Earl, Lord Caithness. However, I will speak of Labour’s approach to agriculture and the food chain, which is focused on several key areas. The first is the importance of skills. Improving skills and competitiveness is a central aspect of a sustainable food and agricultural industry. There is a growing need to educate farmers with business skills. Have the Government given any thought to how they might take forward the work of the food and farming partnerships set up under the previous Labour Administration? The farming industry faces particular challenges in maintaining and building its skills base, innovating to stay profitable and attracting new entrants to the sector.

We must also help diversification across the rural economy and up the food chain and be aware of the effects of planning and the tax regime, whereby farm shops are often considered on a separate basis from the capital structure of agriculture. At the root of sustainability is the creation of a more highly skilled workforce and better paid jobs. A key element of Labour’s Agenda 2030, our long-term strategy to earn and grow our way to a higher standard of living—a priority of the next Labour Government—is to invest in the quantity and quality of apprenticeships. We will strengthen and develop a manufacturing supply chain to boost productivity and raise living standards. The long supply chain in the food chain sector is a very important aspect that we need to recognise, as we should the input provided by the FDF paper, Ingredients for Success.

Another key area on which our approach is focused concerns that of the United Kingdom’s place in the EU. At home, the impact of the challenge of the cost of living crisis is especially crucial for the wider population. Returns are being focused not only in the top companies but on the top management of those companies. A balance needs to be struck in focusing the returns throughout the industry and across the companies in the food chain. The challenges thrown up by the increasing use of food banks need to be understood and met. The Government, industry and stakeholders must work together to ensure that food is available and accessible by reducing market volatility and ensuring that our national, regional and international trading systems work effectively.

It is vital that we remain a key member of a reformed European Union and pay attention to the impact of the CAP on agriculture. The UK food industry is highly integrated into that of the rest of the EU. It is crucial that Britain remains in the EU to benefit from better access to markets. The EU is also leading the Transatlantic Trade and Investment Partnership to ensure that we can open up the US market, especially to European beef. The EU has free trade agreements with a number of emerging economies, including Chile, South Korea, Mexico and South Africa. Will the Minister tell the House why the Conservative Party would risk threatening this hugely important industry by leaving the EU?

The third aspect on which I wish to concentrate is food. In this regard the noble Baroness, Lady Parminter, highlighted the importance of nutritional quality. Other issues raised today include food security, which the noble Lord, Lord Curry, mentioned. The noble Lord, Lord Bilimoria, spoke about GM food and the noble Baroness, Lady Scott, spoke about the lack of a coherent food policy and the lack of attention given to ethical concerns. I shall highlight food safety.

Food security needs to remain a central priority for the entire food system, protecting the health of consumers and their safety from disease and contamination. The challenges that this throws up include maintaining investment in animal livestock health and being aware of diseases crossing over into the wild population and, indeed, into the human population through zoonosis. I am very glad that the noble Lord, Lord Trees, mentioned that issue. Under the Tory-led Government the horsemeat scandal severely damaged the consumer’s confidence in the industry, and we must fix that urgently.

The Elliott review into the integrity and assurance of food supply networksis a crucial part of restoring that trust. The final report was due to be published this week. Can the Minister explain why this important report has been further delayed? The continuing delay and obfuscation by Defra Ministers is damaging the process. We already have the interim report. As Parliament is now rising, will we have a further three months to debate the report? Given that the food and agriculture industry is so valuable to the British economy, the Government’s continued delay, by not publishing the report, is bad for the food industry and bad for consumers. Consumers deserve better and Ministers must take account of this report.

The fourth aspect that I will focus on is the CAP and its reform equitably throughout the European Union, bearing in mind integration with other land uses and, by the same token, the importance of the value of food-producing land in the equation. Food must be produced in a way that is environmentally sustainable or we will create problems for the long term. We always need to be aware of the need to feed a growing world population in a way that does not degrade natural resources on which farming and food production ultimately depend. Labour wants to see reform of the CAP based on clear principles. It should enable farmers to thrive in a liberalised global market without the need for subsidies across the UK, bearing in mind the challenges that this will bring to the food sector to deliver returns to primary production—that is, agriculture. It should ensure that funding is used to support environmental and other public investments, including supporting rural communities. It should demonstrate that the payment is a genuine public good, and value for money. It should create a level playing field with other EU member states and does not disadvantage other UK farmers.

The public want real and transparent value for the money that they pay out each year, and fairness for this in future generations. Does the Minister join Labour in supporting a fair distribution of returns from taxpayers and the market in an overall sense to encourage agricultural innovation and improved profitability? Agriculture is very resilient but needs to have its voice heard and reflected in public policy.

Photo of Baroness Northover Baroness Northover Lords Spokesperson (Women & Equalities), Baroness in Waiting (HM Household) (Whip), Lords Spokesperson (Department for International Development) 5:02 pm, 24th July 2014

My Lords, I am grateful to my noble friend Lord Plumb for calling this important debate, not least because it enables us to emphasise the huge contribution that our farmers and those in our food industry make to the economy. I feel immensely privileged to be answering the noble Lord. This is my opportunity to tell him that, when I was young, I recall my father, a tenant farmer, speaking in awed and hushed terms of the noble Lord when he was vice-president, then president, of the NFU. My parents felt that here was a true champion of what they were doing. They felt valued as they sought to make a living out of difficult hill-top land, the fertile valleys being occupied by a golf course, which my father longed to plough up. They worked against the odds in food production in dairy, beef, sheep and arable, training me and my siblings as expert sheep-dogs, bale movers and—I address this to the noble Lord, Lord Marlesford —straw burners. The noble Lord, Lord Plumb, said that farming is not for the faint-hearted; he is so right. I also know how important the agricultural industry is to our own food security and what we can contribute, given the huge global need that my noble friend Lady Parminter and others pointed to.

The UK agri-food chain, from the farm to the retailer to the caterer, is estimated to be worth £97 billion. Our world-class food and drink manufacturing and retail sectors supply consumers both in the United Kingdom and abroad. The food supply chain employs some 3.7 million people. Food and drink is the country’s largest manufacturing sector, contributing £24 billion to the economy and employing 370,000 people. British food and drink has an excellent reputation for its high standards and rigorous traceability, as well as the strong environmental and animal welfare standards that are valued by consumers across the world.

We have a rising UK and global population, and demand for British produce is increasing. At the same time, for the types of food that we can produce in this country, we import 31% of what we eat. Consumers care increasingly about the origin of their food, thus offering the chance for UK producers to increase their share of the domestic market. We want to provide the right conditions for UK producers to take advantage of these opportunities now, in the face of increasingly fierce international competition.

Both the agriculture and food sectors have their challenges. Our rate of agricultural productivity growth has lagged in recent decades relative to some of our key competitors such as the USA, Denmark, Ireland and the Netherlands. Various noble Lords referred to this. We therefore need to increase our rate of agricultural productivity but, as my noble friends Lord Selborne and Lady Parminter emphasised, we need to ensure that we do it sustainably, to ensure that we can go on competing in the global market.

My noble friend Lord Plumb is absolutely right about the need for research to underpin agriculture. After all, it was in the United Kingdom that the agricultural revolution started, which transformed agriculture in Britain and around the world. That combines now have eight computers demonstrates the complete variance from my father’s battered old combine.

Only his engineering skills kept it going and, when it was finally sold, it was bought by a collector. It is right that science and research must underpin the agriculture industry. As my noble friend Lord Selborne emphasised, this is the key. That is why we have brought forward the agri-tech strategy, which was mentioned by many noble Lords.

However, as my noble friend Lord Selborne and the noble Lord, Lord Curry, pointed out, we cannot be complacent. The strategy was launched to support the agri-food sector, providing the UK food and farming industry with opportunities to increase productivity, grow the economy and give UK businesses a competitive edge both here and overseas. The Government are investing £160 million through the strategy, as noble Lords have noted, in projects that will, for example, establish centres of agricultural innovation. The strategy also calls for a joined-up, industry-led approach to improving skills in the agri-tech sector. My noble friend Lord Selborne emphasised the importance of linking this to farming practices. My right honourable friend the Prime Minister announced funding of £18 million from government and industry for 15 agri-tech catalyst projects on 21 July so that they can become commercially viable.

We have a long record of innovation in farming in this country. However, in recent decades, as I mentioned, our productivity has not grown as fast as that of some of our competitors. The strategy is designed to help tackle this by supporting the transfer of innovation to the farm. There is huge potential from breakthroughs in areas such as plant and animal breeding and in the application of technologies such as the satellite imaging mentioned by my noble friend Lord Plumb in terms of their effect on agriculture—my father would have been stunned to hear my noble friend say the things he did. The aim of the agri-tech strategy is to ensure that we make the most of these opportunities. The noble Lord, Lord Trees, rightly emphasised that animal health is relevant in this area. I am sure that he knows, but I would point out to him that the new catalyst projects announced on Monday 21 July included one for technology automatically to monitor pigs for early detection of health and welfare issues.

Many issues came up that show the need for a research base in agriculture. The noble Lord, Lord Bilimoria, and my noble friend Lord Ridley mentioned GM. At an Environmental Council last month, there was overwhelming support for the proposal that will allow member states and the devolved Administrations more choice on whether to cultivate GM crops. The next stage is to agree this proposal with the European Parliament, and these negotiations could conclude later this year or next year. If adopted, it will be a few years before GM crops are grown commercially in the United Kingdom but, earlier this month, an EFRA Committee report on food security recognised the benefits of GM technology and supported the UK’s efforts to make the approval process operate more effectively.

My noble friend the Duke of Montrose asked a very specific question on sheep carcasses. I can let him know that the EU Commission is looking into this, but that is at a very early stage, and we note what he says.

My noble friend Lord Marlesford mentioned herbicide-resistant black-grass in wheat. We recognise that this is a serious issue, and we will look carefully at this problem.

British food and drink is known the world over for its quality, and our food and drink industry is a success story both at home and internationally. Since 2010, we have seen exports increase by £1.2 billion to reach an impressive £18.9 billion in 2013. Increasing exports provide an excellent opportunity for the sector to grow even further as well as to become more resilient and more profitable. With surging global population growth and demand for western products increasing worldwide, there has never been a better time to pursue food and drink export opportunities. That is why I can assure noble Lords, including the noble Lord, Lord Bilimoria, that promoting food and drink exports is a key government priority. To help grasp these opportunities, Defra and UKTI launched the UK food and drink export action plan. This details the Government’s commitment to champion UK food and drink overseas, break down trade barriers and open up new international markets for our produce.

Last year, the United Kingdom exported food and drink to the value of £18.9 billion, as I mentioned. There is room to increase this even further, particularly in emerging markets. The export action plan outlines an ambitious target, jointly agreed by government and industry, to add £500 million to the UK economy by helping 1,000 UK food and drink companies with their international growth up until October 2015. The plan also details government and industry’s commitment to work together to champion UK food and drink overseas, open up new markets, overcome barriers to trade and simplify and improve support and trade procedures for exporters.

Back home in the UK, both agriculture and food manufacturing face another challenge: the skills gap. Various noble Lords referred to this. This affects innovation and profitability. The Food and Drink Federation anticipates that 137,000 new employees are required in food manufacturing by 2017 to meet its ambition to grow sustainably by 20% by 2020, and 45,000 of these will be needed in management roles and professional jobs. The noble Lord, Lord Grantchester, mentioned apprenticeships. The Government are supporting the food industry’s work on creating a number of career pathways for young people. These include the BIS-led reforms to ensure that apprenticeships are even more rigorous and responsive to employers’ needs and the development of the UK’s first food engineering degree at Sheffield Hallam University.

The future agricultural workforce is a vital part of meeting the challenge of global food security. We are currently addressing a number of the findings of the Future of Farming Review, which industry and Government worked on together, to look strategically at the opportunities and barriers encountered by those making a career in farming.

My noble friend Lord Caithness mentioned various challenges, including poor pay and poor prices. They are clearly important factors. He will be pleased to know that we held a beef industry summit on 1 July, bringing together all parties in the supply chain to discuss the fall in beef prices. My noble friend Lord Marlesford mentioned milk prices. There were record milk prices in 2013, and they have remained high in 2014. When I hear about various variables, it takes me back to my father’s view of why he needed a mixed farm, not only for the preservation of the soil, but because he never knew which bit of it might be profitable at any time. Sheep would be losing money, arable would be neutral, but a third area—let us say beef—might be making a little. He never knew which it would be and which would be losing.

My noble friend Lord Caithness also mentioned seasonal agricultural workers. We understand the concerns over the availability of seasonal workers. We have established an industry-government working group bringing together growers, labour providers and relevant government departments. We are pleased that Jobcentre Plus has shared its experience in helping with temporary recruitment in the relevant industries and it is now working with the agricultural sector. It is worth bearing in mind that, on average, UK farmers enjoy higher incomes than others in the EU but we fully realise that that varies by sector. Seeing the variability plays an important role in recruitment into the industry.

My noble friend Lord Plumb is right to emphasise the importance of colleges and to note the encouraging increase in competition for places, which indicates the health of the industry. As part of CAP reform, we are developing a new rural development programme and have dedicated £140 million to farming growth and productivity, with particular attention to how to support new entrants and those developing their businesses in the early years, to pick up on a point that the noble Lord, Lord Bilimoria made. He also asked more generally about the CAP, as did the noble Lord, Lord Grantchester, who emphasised the importance of the EU market and its influence in other markets. He is, of course, absolutely right about that. I remind him, as my noble friend Lady Warsi so often does, that the Prime Minister has made it very clear that he does not intend to leave the EU.

Our approach to implementing the new CAP in England is aimed at minimising the burdens on farmers while delivering value for taxpayers and improving our natural environment. Within a smaller overall EU budget, English farmers will benefit from £15 billion of funds over the next CAP period and we will invest at least £3.5 billion in rural development schemes. A bigger share of the rural development budget will be spent on the environment than ever before—87% compared with 83%. I point out to my noble friend Lord Caithness, that we aim to have an IT system that is simple, affordable and effective, but assistance will be provided for those who genuinely cannot or do not get online, ensuring that farmers and their advisers have access to the guidance they need. What he said rather rang true.

We should acknowledge that agriculture’s contribution to our economy is not just about production. Significant economic and social benefits are provided directly to local economies and communities. We heard some wonderful examples from my noble friend Lady Bakewell, on farmers’ markets. It was lovely to have that as a contribution to the debate. My noble friend Lady Scott made the important point that the Government need to do much more to educate people about food and where it comes from as part of the wider context. She will probably know that Defra sponsors Open Farm Sunday, which is held every June and sees more than 200,000 people go to farms to see where food comes from. Natural England has set up educational access agreements with farmers, which help them host educational farming visits. Quite a lot of work is going on but I am sure that more could be done and I know that children enjoy that immensely.

As I have indicated, agricultural and food industries are not without challenges. Noble Lords will be aware of the increasing demands on our land. Defra has helped to fund a project by the University of Cambridge—a sustainability leaders’ platform—which clearly outlines the calls on land, including those from food, fuel and housing. The Government are currently discussing how policies that can have an impact on land interact so that the best outcome is achieved. My noble friend Lady Miller of Chilthorne Domer spoke passionately about the need for us to steward our soils. She is absolutely right. We fully recognise the importance of soil and its essential role, including in food production, carbon storage and flood protection. The ambition expressed in the Natural Environment White Paper was that all soils should be managed sustainably by 2030. New national standards to limit erosion, protect soil organic matter and maintain soil cover will be in place from 2015. I hope my noble friend is reassured by that.

On Monday 21 July, Peter Bonfield’s report, A Plan for Public Procurement, was published. My noble friend Lady Parminter referred to what she found within that and what she wished might have been in it. In the report, my right honourable friend Elizabeth Truss, the Secretary of State for Defra, stated that the plan will create £400 million of new business opportunities for the British food industry. From 2017 all of central government will commit to buying fresh, locally sourced, seasonal food so that all food that can be bought locally will be.

My noble friend Lady Parminter spoke about the Green Food Project. The noble Lord, Lord Curry, and my noble friend Lord Ridley also spoke about this in a strategic context. We are committed to supporting growth and increased competiveness in the food and farming industry. We are working in partnership with industry to focus on priority areas for action, including through the areas I already outlined. We want a healthy and resilient farming industry that contributes to our food security. I assure noble Lords that we have looked at how this also serves to enhance the environment and reconcile any tensions there might be within that. The research and technology we are investing in will also, we hope, help contribute to that.

There are various other things that I might need to reply to in a letter, I am afraid, given the time.

Photo of Lord Grantchester Lord Grantchester Opposition Whip (Lords), Shadow Minister (Environment, Food and Rural Affairs)

Since the Recess is approaching, could the noble Baroness say anything about the Elliott review?

Photo of Baroness Northover Baroness Northover Lords Spokesperson (Women & Equalities), Baroness in Waiting (HM Household) (Whip), Lords Spokesperson (Department for International Development)

Yes, we are considering Professor Elliott’s interim recommendations and will respond to his final report, which will be published shortly. I am sure that the noble Lord will enjoy reading it as he lies on the beach somewhere or other. The professor’s interim report recognises that UK consumers have access to some of the safest food in the world. This record must not be undermined by criminals. We should pride ourselves on our record in this area, built upon the work of a number of Governments successively. I am sure that we will all look forward to debating the report when it comes out in its final form in due course.

This has been a wide-ranging and thoughtful debate, reflecting the huge expertise among its participants. We fully share noble Lords’ sense of the key importance of British agriculture, both for own food security and for our potential contribution worldwide. That is why we support the range of research, investment and other areas that we do.

Photo of Lord Plumb Lord Plumb Conservative 5:23 pm, 24th July 2014

My Lords, we have a lot of food for thought that I hope will lead to action. This afternoon, I felt a bit like the father figure with a team—what a team. I thank all noble Lords for the contributions they made. It makes a difference. The Minister brilliantly summed up the whole of the proceedings. She reminded us that farming is very much a family business. This afternoon, during the whole of the debate, my wife sat there. She used to travel with me to various places in the world as we considered farming matters. She sat there through the whole of the debate this afternoon. I am amazed that she stayed all that time. On our way home, I have no doubt that, one by one, we shall consider what was said—and how—during the afternoon. I thank all noble Lords for a wonderful debate and beg to move.

Motion agreed.