Moved by Baroness McIntosh of Pickering
174: Clause 18, page 15, line 2, leave out paragraph (a) and insert—“(a) there is an acute or chronic disturbance in agricultural markets or a serious threat of an acute or chronic disturbance in agricultural markets caused by economic or environmental factors, and”
My Lords, I first thank the Government for including this chapter on intervention in agricultural markets and exceptional market conditions, as set out in Clause 18. The purpose of Amendment 174—I thank the noble Baronesses, Lady Jones of Moulsecoomb and Lady Ritchie of Downpatrick, and the noble Lord, Lord Carrington, for their support—is entirely complemented by Amendment 285, supported by the noble Baroness, Lady Jones of Moulsecoomb and Lady Bakewell of Hardington Mandeville, and the noble Lord, Lord Carrington. The latter amendment refers to Wales, but both amendments deal with ensuring that financial assistance can be provided to the farming industry at times of crisis caused by natural phenomena and in chronic situations, alongside the acute economic situations already covered in the Bill.
Why is there the need for this amendment and to probe the Government in this regard? While I welcome the provision in the Bill, which would allow the Government to provide financial assistance where there is a disturbance to markets of agricultural commodities causing producers to face reductions in income, I am nevertheless concerned that the Bill as drafted will not provide the Government with sufficient ability to intervene in markets where disruption is being caused by environmental factors, such as weather. This year has been quite extraordinary and is a great example of how environmental factors can cause precisely the conditions set out in this amendment. For example, we saw floods in late winter, right into January and February this year, only to be replaced more recently by potential drought. These matters continue on a chronic rather than acute basis, which would cover, for example, animal diseases such as bovine TB.
The amendment does not require the Government to intervene in these widened circumstances but provides a mechanism for them to do so, which seems sensible in a Bill that contains so much about providing the Government with the powers to act when necessary. Not having the power to intervene in markets where environmental or chronic issues prevail could render the Government impotent in responding without bringing forward further primary legislation. It must be better to ensure that powers are available now, on a forward-thinking basis, rather than having to take powers at the time an issue needs to be addressed.
My noble friend the Minister, in concluding the last debate, referred to comments made by other noble Lords about the implications for food companies. We must recognise here, and in the previous debate, that we are talking about farmers and the conditions that farmers have to meet, not those on the food shelves of supermarkets and others. The farmers are of necessity exposed to all sorts of pests and pestilence and I believe that they need the measures set out.
I pay tribute to those charities that will reach out to help farmers in the circumstances set out in this amendment. The Yorkshire Agricultural Society, the Farming Community Network and the RABI do outstanding work. One great regret from the pandemic is that there will not have been any country shows that bring the rural and farming communities together. I also want to recognise the role that national parks and areas of outstanding natural beauty play. I beg to move.
My Lords, the noble Baroness, Lady McIntosh of Pickering, has explained this issue extremely clearly. Essentially, Amendments 174 and 285 would greatly improve the definition of when exceptional market conditions exist, which would be a very sensible thing to include in the Bill.
My Amendment 176 would prevent financial assistance in exceptional market conditions being given to producers who do not meet animal welfare standards. I set out the arguments for restricting this assistance in the debates on previous groupings but, in short, public money should not be given to producers who fail on animal welfare—in fact, such producers should not be in business at all.
My Lords, it is always a pleasure to speak after the noble Baroness, Lady McIntosh, who speaks with such authority and passion on these agricultural questions.
I wish to speak to my Amendment 175; I am grateful for the support of the noble Lord, Lord Cormack. The agricultural sector has always been subject to the whims of nature and climate. However, recent years have seen an increase in disruptive weather patterns, such as prolonged, unseasonal periods of flooding, extreme cold and heat, and drought—often with different challenges at the same time in different areas of the country. We have also experienced the impact that invasive diseases, such as bird influenza, blue tongue and ash dieback, can have on plants and animals.
These unexpected, often catastrophic, events can deliver significant damage to our agriculture businesses, both individuals and whole sectors. A year’s worth of income can be decimated by one bad storm or a few rain-free months during a growing season. In Wales, the 2013 heavy spring snow is a good example; by the way, England was even worse hit then. Another example in Wales is the long summer droughts of 2018 and 2019 that caused even secure water sources to dry up and arable yields to drop significantly as water for irrigation was unavailable. These farming “natural disasters” are at such a scale that there is a case for state sector intervention of the kind that this amendment proposes—especially with the growing impact of climate change, which is undoubtedly a cause of them.
These uncontrollable factors uniquely affect the products that we grow from our land. Increasingly, it is not just the market conditions of the globalised agricultural commodity markets that affect our core industry of food and farming; it is the untameable elements of nature that are getting increasingly erratic and wild. This new reality, already acknowledged and understood when we look at actions around climate change adaptation, needs to be extended into the thinking on how we support farming businesses affected by these situations. The drivers of exceptional circumstances have changed, and we must change with them. I hope that the Government take heed of that.
Indeed, that imperative is underlined by official Defra statistics showing that our food sector is heavily reliant on imports. We export £2.1 billion of meat but import £6.6 billion, and we export £1.3 billion of fruit and veg but import a massive £11.5 billion. We are so vulnerable as a nation over our food supplies; that is made worse by the ravaging effects of climate change.
The policy objective of this Bill is admirable. It is to encourage and incentivise our farmers, the custodians of our countryside and the managers of our land, to deliver more environmental benefits from their land use and use new trade opportunities and markets to increase economic sustainability. This ambition must be balanced with a fresh look at how, when and why the Government are willing to provide additional support to a key economic sector in crisis. That means looking beyond the traditional and narrow definition of what drives economic failures. It also means acknowledging and providing emergency support tools to deal with the reality that our climate, our weather and our environment are changing and that businesses operating in the natural environment will be detrimentally impacted by factors completely beyond their control—indeed, beyond our control—including the Covid-19 pandemic, an unexpected crisis that has shaken the world economy beyond anybody’s imagination. We should be using this opportunity to make sure that we have the tools and powers in place to allow us to support those businesses if and when a natural crisis occurs, which is what Amendment 175 seeks to do. I hope that it finds favour with the Minister, who has played such a constructive role in his sympathetic handling of this Bill.
My Lords, I declare my interests as a farmer and landowner, as set out in the register. I had great pleasure in putting my name to the important Amendment 174, and to Amendment 285, proposed by the noble Baronesses, Lady McIntosh of Pickering, Lady Jones of Moulsecoomb and Lady Ritchie of Downpatrick. This amendment has the support of the Tenant Farmers Association, the National Farmers’ Union and the CLA, together with a high proportion of farmers. They have the invaluable experience of farming the land and are well aware of the many unpredictable factors that can quickly turn a crop from profit to loss or livestock from asset to liability.
Amendment 174 widens the definition of “exceptional market conditions” to make sure that as many circumstances as possible are covered. It moves beyond global market changes to other triggers, such as severe weather and disease. The intention is not to provide an easy escape route for farmers to claim that circumstances have conspired against them. The definition remains tighter than many would wish. It is particularly important that we get this right, in view of the removal of the overall safety net of the basic payment scheme, which has protected farmers from so much volatility, often caused by exceptional market conditions, for over 40 years.
The importance of the amendment is shown by the events earlier this year when rain caused devastating flooding. Happily, the Government stepped in and support was given to flooded farms. However, the effects of this—hopefully exceptional—weather event were felt much more broadly, and the result can be seen across the country: land left fallow, patchy crops and much more. Most farmers have relied on the BPS to cover their fall in income. This sorry situation was compounded by the length of time it took the Government to repeal the three-crop rule. Desperate farmers drilled crops in unsuitable conditions to adhere to the rule, and this has caused environmental damage to soil structure and more.
It is also vital that a process exists to ensure that there are no delays in triggering intervention. The impact of Covid-19 on the dairy industry is a good case in point. Although a support scheme was implemented, it took an inordinate amount of lobbying by the industry to achieve a positive result.
Finally, I am not a lawyer, but I ask the Minister to clarify exactly what is meant by “prices achievable” in subsection (2)(b). It is surely a matter not just of price but of income too. Can the Minister confirm that it covers the situation where a farmer or grower cannot achieve the price because he does not have the product to sell, due to drought, flood, disease or other exceptional conditions?
My Lords, I support Amendment 174, in the name of the noble Baroness, Lady McIntosh of Pickering. This amendment reflects and acknowledges the situation, while also being probing. The nature of our climate is changing and, as the noble Lord, Lord Hain, said, we are now facing disruptive weather conditions. In many ways, those conditions have changed our climate, in geographical terms, from a temperate one to an extreme continental pattern. I hope the Minister will consider that we now have chronic weather patterns and that financial considerations in the Bill should therefore reflect those in some way. The amendment strengthens this clause and brings it up to date in the light not only of Covid but of extreme climatic conditions, and I am content to support it.
On a previous group of amendments, the noble Lord, Lord Greaves, referred to the quality of the contributions made during the course of this evening, and I echo that. It is true of the prolonged Committee stage of this Bill as a whole. The experience and knowledge that people have explored and delivered over these days has been remarkable, and I have learned quite a lot.
I speak in support of the amendments before us, particularly Amendments 175 and 176. It is clear to me that where the kind of disruption outlined this evening exists, the Government need to be able to intervene, but to do so to support the kind of farming that reflects the society we live in.
I will speak briefly on Amendment 176, because it has been dealt with previously. There is a slogan, “You are what you eat”. I think we are how we treat. At the very beginning of the debate back on Thursday
My noble friend and good friend Lord Rooker appeared on
The noble Lord, Lord Greaves, also said earlier this evening that maybe speeches were too long, so I will pause.
My Lords, I rise briefly to support Amendments 174 and 285 in the name of my noble friend Lady McIntosh of Pickering. As other noble Lords have said, Amendment 174 changes the wording in Clause 18 to remove “severe” twice and replace it with “acute or chronic”. Having checked the definition of acute—
“sharp and severe in effect”—
I think this is a better word than just severe. Chronic is even better, defined as
“persisting for a long time and constantly recurring”.
Adding at the end
“caused by economic or environmental factors” defines more broadly the parameters when financial assistance may be given at times of crisis caused, as other noble Lords have said, by unpredictable natural phenomena such as the flooding earlier this year and drought more recently, and animal diseases. Amendment 285 extends this wording to Wales.
Amendment 175 partially covers ground covered in Amendment 174, but I prefer the broader aspect ofusb the former. I like the definition in my noble friend’s amendment of when exceptional market conditions exist.
My Lords, this group of amendments deals with financial assistance under exceptional market circumstances. I have put my name to Amendment 285. All four amendments deal with what may happen in the event of an acute or chronic disturbance in agricultural markets. As the noble Baroness, Lady McIntosh of Pickering, indicated, this is not currently covered in the Bill.
These disturbances may be caused by economic or environmental factors. The most recent occurrence of a disturbance due to environmental factors was reflected in the rules for direct payments being relaxed due to the appalling wet weather in February, which prevented farmers sowing a second crop on their land. The noble Lord, Lord Hain, spoke about exceptional market conditions caused by meeting the needs of the environment, and gave some excellent examples of the wide range of extreme weather. The noble Baroness, Lady Ritchie of Downpatrick, also referred to changing weather patterns and their effect on climate change.
In Amendment 176 the noble Baroness, Lady Jones of Moulsecoomb, has returned to the issue of producers who do not meet animal welfare standards not being eligible for financial assistance under Clause 19. She is supported by the noble Lord, Lord Blunkett. I and many other noble Lords support this amendment. It would be unpopular in the extreme with the public if those who do not look after their animals in a humane way were seen to profit due to exceptional market conditions. Does the Minister agree with this amendment and will he accept it? If not, will he say why not?
I have put my name to Amendment 285, which seeks to ensure that the farming industry in Wales is treated on the same basis as that in England when it comes to exceptional market circumstances. There can be no separate treatment for those across the Welsh border.
I imagine that everyone is in favour of this group of amendments. The only point of discussion is likely to be what actually qualifies as a serious economic disturbance and an environmental disturbance. The noble Lord, Lord Carrington, reminded us of the catastrophic effect on the farming industry of outbreaks of animal disease. Are these likely to qualify? It is likely that an environmental disturbance will be fairly obvious to everyone in the country. Severe flooding affects a number of areas and the television ensures that we all see its devastating effects. Severe drought is sometimes less obvious but as fields and crops brown and are scorched by the sun, realisation will set in. An economic disturbance might go unnoticed to start with, but it will soon manifest itself—again, through social media, radio and television. No matter how this is brought to the public’s attention, they will nevertheless be interested in how the farming community is going to cope. I look forward to the Minister telling us how that is going to happen.
I thank noble Lords for tabling their amendments to Chapter 2 of Part 2, headed “Intervention in agricultural markets” under exceptional market conditions. These clauses—18 to 20—plus their application in Wales bring into domestic legislation the powers the European Commission had to provide emergency assistance in extreme, often weather-related, circumstances. The Secretary of State may modify this retained direct EU legislation by regulations and this would usually involve intervention on storage.
I am sure the Minister would wish to have these fallback provisions included in the Bill. Can she give any guidance as to how the Government might decide whether to intervene? While a member state, the UK was not noted for being eager to apply for these powers to be exercised and assistance to be provided. Do the Government have the inclination to utilise them and can the Minister give any general criteria?
I say to the noble Baroness, Lady Jones of Moulsecoomb, regarding welfare that in the wet weather period during the foot and mouth epidemic that struck the UK 20 years ago, the Government stepped in to provide welfare in buying up stranded animals that could not be moved because of the regulations. That was directly in support of welfare. I am not sure that all circumstances would pertain to the amendment she wishes to pursue.
In the past any support has been forthcoming only very late in an emergency and some considerable distance into a crisis. What assurance can the Government give about the exercise of these powers when a timely response to calls for support can be crucial to stabilise a market?
On the other hand, private storage can be notoriously difficult to bring into operation when required. Is the Minister sufficiently confident the UK has enough capacity in the various market sectors? Data on storage capacity could be included in the food security report. There was much debate and experience last year around storage in relation to stockpiling and the possibility, which still exists, that there could be no deal reached in time for the new trading relationship with the EU to be agreed. Can the Minister outline any conclusions and lessons learned regarding those circumstances?
My Lords, I begin with Amendments 174 and 285, in the name of my noble friend Lady McIntosh. I recognise my noble friend’s desire to ensure that farmers are protected against chronic disturbances such as structural market changes and disturbances caused by environmental factors such as severe weather or the Covid-19 pandemic. Indeed, a number of other noble Lords mentioned their concerns. The existing powers are sufficiently broad to ensure that agricultural producers will be covered should they need financial assistance due to exceptional market conditions caused by economic, environmental or other factors. In most cases, farmers already manage the effects of fluctuating weather conditions.
There are also powers in existing legislation that allow the Government to act in exceptional circumstances to support farmers in the event of extreme weather conditions. For example, the National Environment and Rural Communities Act 2006 could be used to make one-off payments to farmers affected by extreme weather conditions. As we saw in response to recent flooding, the Government successfully launched a new farming recovery fund for England using powers under this NERC Act.
The particular powers in Clauses 18 and 19 are framed to deal with unforeseen short-term shocks to agricultural markets rather than chronic conditions. The Covid-19 situation is exactly the type of exceptional circumstance that these new powers are intended to address. Another example would be the dairy crisis in 2015, when the ending of EU dairy production quotas led to increased production, global dairy prices being low and rationed sanctions on imports of dairy products from the EU significantly reducing demand. This caused a sudden and significant drop in the price of dairy products across the EU. This event was unpredictable and caused a severe market disturbance, which had an effect on prices, and future circumstances such as these could be considered exceptional market circumstances.
The noble Lord, Lord Carrington, asked what we could do to support farmers when more long-lasting difficulties appear, including the after-effects of flooding. The Government want to encourage farmers to manage their own risk and become resilient to foreseeable disturbances. The Government will help farmers to invest in equipment, technology and infrastructure, which will support high-quality research to promote innovation and productivity in agriculture, horticulture and forestry to make farms more resilient. The Bill also sets out powers to strengthen fairness and transparency in the supply chain, enabling food producers to respond more effectively to market signals, strengthen their negotiating position at the farm gate and receive a fairer return.
The second aspect of the amendment seeks to ensure that disturbances caused by environmental factors will be covered by this clause. These powers are triggered by the effects of disturbances rather than by what has caused them. The exceptional market conditions powers could be used to address severe market disturbances caused by economic or environmental factors, so long as there is an adverse effect on the price achievable for one or more agricultural products.
The noble Lord, Lord Carrington, asked what is meant by “prices achievable” under Clause 2(b). The price achievable is to be given its ordinary meaning, and includes not having a product available to sell; in that case, the price achievable on the market would obviously be zero. The current Covid-19 pandemic is a disturbance caused by environmental factors and is exactly the type of exceptional circumstance that these new powers are intended to address. We could not have foreseen that this pandemic would be as wide-reaching or prolonged as it has been, and farmers could not have been expected to prepare for the disturbances in daily life it has caused. I understand that Welsh Ministers are content that the existing powers are sufficiently broad to ensure that agriculture producers in Wales will be covered should they need financial assistance due to market conditions.
I turn to Amendment 175 in the name of the noble Lord, Lord Hain. As I have said, the existing powers are sufficiently broad to provide financial assistance in exceptional market conditions caused by a range of factors, including the environment. Any future restructuring of the agriculture sectors to meet environmental needs is likely to be planned and to take place over a longer timeframe and would not be an appropriate use of these powers. The noble Baroness, Lady Ritchie, asked why there was no definition in the Bill of exceptional market circumstances or severe disturbance; indeed, a number of people asked how we would know when the Secretary of State could use the powers. We strongly believe that including a definition in the Bill could tie us to a specific definition which might not cover a future situation or could delay action, because, for instance, evidence would need be gathered to show that the definition has been met. It is also important that we can limit intervention in the market and financial assistance to farmers to truly exceptional situations; otherwise, we will discourage farmers from managing their own risk and could undermine private sector provision of risk management tools.
In Amendment 176 the noble Baroness, Lady Jones of Moulsecoomb, seeks to limit financial assistance under exceptional market conditions to producers that meet our existing high welfare standards. I recognise her sincere concern in this area, but we strongly believe that the welfare of our farmed livestock is already protected by comprehensive and robust legislation which is further supported by species-specific welfare codes. Defra’s Animal and Plant Health Agency inspectors and local authorities conduct inspections on farms to check that animal welfare standards are being met. Appropriate action is taken against anyone who breaks animal welfare laws. If our high animal welfare standards are not being met, this will be addressed under the relevant enforcement regime. As such, a specific reference to maintaining existing animal welfare is not required in this clause.
I am conscious that the noble Lord, Lord Grantchester, asked a couple of questions about storage facilities and the formal circumstances in which these clauses could be triggered. I do not have that specific guidance, but I will write to him and put a copy in the Library.
I hope that I have sufficiently reassured my noble friend Lady McIntosh, and I ask her to withdraw her amendment.
My Lords, considering the lateness of the hour, I am most grateful to those who have remained, including our supporting teams. We have had a very good debate. I am grateful to the noble Baroness, Lady Jones of Moulescoomb, for her support of my amendment and for tabling her own amendment. I am delighted that my noble friend the Minister has confirmed that animal welfare standards are already robustly implemented. I am also grateful to the noble Lord, Lord Hain, for his amendment, which perhaps was a little narrower than mine, and to the noble Lord, Lord Carrington, and other noble Lords for the points that they have made. I am most grateful to my noble friend Lord Northbrook for specifying the acute and chronic conditions which should be met. Regarding the point made by the noble Lord, Lord Grantchester, about storage, we had a lengthy debate about this, but I am still not convinced about what constitutes a reservoir. However, I am sure that we can come back to that in the Environment Bill. At this stage, I beg leave to withdraw my amendment.
Amendment 174 withdrawn.
Amendment 175 not moved.
Clause 18 agreed.
Clause 19: Exceptional market conditions: powers available to Secretary of State
Amendment 176 not moved.
Clause 19 agreed.
Clause 20 agreed.
Clause 21: Agri-food supply chains: requirement to provide information
Amendments 177 to 182 not moved.
Clause 21 agreed.
Clause 22: Meaning of “agri-food supply chain”
Amendments 183 to 189 not moved.
Clause 22 agreed.
Clause 23: Requirement must specify purposes for which information may be processed
Amendment 190 not moved.
Clause 23 agreed.
Clause 24 agreed.
Clause 25: Provision on required information and limitations on its processing
Amendments 191 and 192 not moved.
Clause 25 agreed.
Clause 26: Enforcement of information requirements
Amendments 193 and 194 not moved.
Clause 26 agreed.
Clause 27: Fair dealing obligations of business purchasers of agricultural products
Amendments 195 to 200 not moved.
Clause 27 agreed.
Clause 28: Producer and interbranch organisations etc: application for recognition
Amendments 201 and 202 not moved.
Clause 28 agreed.
Schedule 1 agreed.
Clause 29 agreed.
Schedule 2: Recognised organisations: competition exclusions
Amendments 203 to 205 not moved.
Schedule 2 agreed.
Clause 30: Regulations under sections 28 and 29
Amendment 206 not moved.
Clause 30 agreed.
Amendment 207 not moved.
Clause 31 agreed.
My Lords, we now come to the group beginning with Amendment 208. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or any other amendment in this group to a Division should make this clear in the debate.
Clause 32: Identification and traceability of animals