Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

Agricultural co-operatives

Agriculture Bill – in a Public Bill Committee at 2:30 pm on 20th November 2018.

Alert me about debates like this

“(1) The Secretary of State must promote agricultural co-operatives by—

(a) offering financial assistance for the creation or development of agricultural co-operatives, and

(b) establishing bodies to provide practical support and guidance for the development of new co-operatives.

(2) The Secretary of State shall examine any proposal for primary or secondary legislation to assess—

(a) its impact upon agricultural co-operatives, and

(b) whether that impact is disproportionate in relation to its impact upon other producer organisations or interbranch organisations.

(3) Financial assistance under subsection (1) may be given by way of grant, loan or guarantee, or in any other form.

(4) An organisation shall be recognised as an agricultural co-operative if it meets the conditions in subsections (5) and (6).

(5) Condition 1 is that the organisation—

(a) is registered with the Financial Conduct Authority as a co-operative, or

(b) is constituted under the Co-operatives and Community Benefit Societies Act 2014.

(6) Condition 2 is that the organisation—

(a) operates in a sector which is listed in Part 2 of Schedule 1 to this Act, and

(b) includes at least one member which is an agricultural or horticultural producer.

(7) The Secretary of State may by regulations make provision specifying the criteria under which financial assistance under subsection (1)(a) may be offered.

(8) Regulations under subsection (7) are subject to the negative resolution procedure.”—

This new clause would require the Secretary of State to promote agricultural co-operatives.

Brought up, and read the First time.

Photo of David Drew David Drew Shadow Minister (Environment, Food and Rural Affairs)

I beg to move, That the clause be read a Second time.

I am speeding up—but might slow down again. We have already mentioned agricultural co-operatives. Again, this is more of a probing amendment—I will say that from the outset—so I will not press it to a vote. However, we would like to insert in the Bill something that runs alongside the competition that is clearly central to aspects of how the new legislation will operate.

Why agricultural co-operatives? First, so many parties within the farming and landowning industry already belong to co-operatives. They may not necessarily always see it that way, but NFU Mutual is, of course, a form of co-operative. Many of the buy-in rings for equipment, and much of the sharing of pesticides and other inputs in to how agriculture operates, are done by a form of co-operative, formal or otherwise. The difficulty with the Bill is that it does not explicitly mention co-operatives. We have had some interchange, and I welcome what the Minister did in relation to Co-operatives UK, because its members were much happier once he gave them some assurances.

New clause 21 gives the Secretary of State a new duty to promote agriculture co-operatives and the ability to provide grant and loan funding to new and existing co-operatives. It also requires all future legislation and regulations to be checked to ensure no disproportionate negative effect on co-operatives. We see co-operatives as a way in which the new environmental world can operate. Many environmental organisations are, of course, charities or social enterprise bodies, so in a sense they are co-operating if not co-operatives.

The new clause flies in the Bill’s apparent direction of travel. It is about fairness and resilience, and recognising that as new people come into the industry the best way to bind them in is to give them the opportunity to be part of a co-operative so that they do not have the lonely existence that we mentioned when discussing a previous clause that causes so much heartache and pressure on those individuals.

In many areas of agriculture, the supply chain already operates on a co-operative basis, but it needs to be enshrined within the legislation. Such a provision is sadly not in the Bill, so we want to insert one. The new clause would not mean that the private sector would not be the main operating vehicle for agriculture; the provision would just sit alongside it, and farmers and landowners would have that opportunity. Environmental organisations will certainly want to look at that way of operating. As the Minister rightly said, they could be the advice givers and supporters of the new direction of agriculture, and it is important to have that debate now. Opposition Members are always worried that we will be promised that things will come about through secondary legislation. That may be the case with future Administrations, if not with this one, but that is leaving things to chance.

We really want to ensure that there is an opportunity for primary legislation to reflect what is already happening in farming, and that this legislation is fit for purpose in the 21st century. The new clause draws on best practice in Scotland, which, dare I say is ahead of England in terms of its co-operative arrangements. We certainly would welcome that degree of cross-country collaboration and learning from each other. I hope that the Minister will make some nice noises about co-operatives, and that he will look at giving greater powers to such business organisation on Report.

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs 2:45 pm, 20th November 2018

I am more than happy to take up the hon. Gentleman’s suggestion to say nice things about co-operatives. As I said in an earlier sitting, I am a supporter of collaborative working, joint working, joint ventures and co-operative approaches to help farmers deal with the fact that often they are fragmented and end up as price takers in the supply chain.

We have done a number of things already. Earlier this year, I announced a £10 million collaboration fund out of the rural development programme to support joint working and to support the formation of co-operatives. The hon. Member for Stroud will also remember from an earlier discussion on clause 22 and the recognition of producer organisations that we had meetings with the co-operatives’ representatives and have taken on board some of the suggestions that they made. We tabled a Government amendment to clause 22 to ensure that models other than that of a limited company, which is the requirement under current EU law, are recognised as producer organisations.

On the substance of new clause 21, which would ensure that there is financial assistance for co-operatives, I am happy to take the opportunity to confirm that, just like the existing rural development programme, clause 1(2) —the subsection on productivity—enables us to make available grant support, Government-backed loans or other guarantees to the co-operatives, should we want to support their endeavours. It is not only clauses 22 and 23, on exemption from competition law, that help certain co-operatives and recognised UK producer organisations; the very first clause of the Bill has provisions for our giving financial assistance to co-operatives. By establishing the £10 million collaboration fund earlier this year, I hope that I have demonstrated through my deeds rather than my words that I see this as important. Should the hon. Member for Stroud ever be in Government, I hope that he would do the same and continue to support these important organisations.

Photo of David Drew David Drew Shadow Minister (Environment, Food and Rural Affairs)

Of course—I am a Co-operative MP. We would not see a conflict of interests; we would see a commonality of purpose, which we encourage. I find what the Minister said very encouraging, and I hope that he will continue his discussions with Co-operatives UK and other farming organisations to see how this can be developed. The UK farming and environmental sector will need to co-operate if we face Brexit, because it will be subject to many of the winds of change, some of which could be very turbulent. I hope that co-operation is one good thing that comes out of this. I beg leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 22