Leaving the EU: Agriculture — [Mr Peter Bone in the Chair]

Part of Backbench Business – in Westminster Hall at 4:19 pm on 1st February 2018.

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Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs 4:19 pm, 1st February 2018

The right hon. Gentleman pre-empted me—I was about to get to that point. We were very clear in our manifesto that the budget in cash terms for agriculture policy will stay the same until 2022. My hon. Friend Luke Graham asked the question: I reassure him and other Members that that applies to all parts of the UK. There would be no question between now and 2022 of any devolved Administration departing from that and using those funds for some other purpose—that would be a breach of the manifesto commitment.

As a Government, we have been very clear that we will keep the cash total the same until 2022, but we have given a very clear undertaking that we will seek to phase out over time the single farm payment and to replace it with the new environmental land management scheme, which will be funded. It is not the case that funding will end in 2022; at this stage we have not set out exactly what the figure will be post-2022, but we are absolutely clear that there will be a gradual transition and a funded policy to support our environmental land management scheme after 2022.

I am going to touch very briefly on a few of the areas that we are looking at in England as future policy. For a new environmental land management scheme we want to move away from the current direct payments, which are on an area basis. I do not think there is much sense for that. We want to directly reward farmers for what they do by way of delivering public goods—whether enhanced animal welfare or environmental goods. We want to move to a system where we are rewarding farmers for the goods that they provide. We are also looking at innovation and competitiveness, including the possibility of grants to support investment on farms, to help farmers prepare for a new world in agriculture.

To pick up on the point that my hon. Friend Scott Mann raised, we are looking at whether we can help support and foster the development of futures markets and insurance products to help farmers manage risks. We are looking at issues such as fairness in the supply chain, too.

The right hon. Member for Orkney and Shetland and my hon. Friend the Member for Tiverton and Honiton raised the issue of New Zealand. New Zealand is different: people often forget to take account of the fact that when it removed subsidies, it also devalued its currency by 45% and priced itself back into world markets. In doing that, New Zealand had certain problems with the environment—even today, New Zealand dairy has environmental impacts that we would not want to tolerate in this country. There are differences and there are things that we would not want to follow in the case of New Zealand. There are also things that we can learn—for instance, its support for investments on farms through grants.

I assure the right hon. Member for Orkney and Shetland that I regularly meet with NFU Scotland—I can see its members today in the Public Gallery, carefully watching the debate—and we are very keen to get its engagement; we are not allowing that to be something that just the Scottish Government do. As the UK Minister, I want a UK perspective. My hon. Friend Mr Jack mentioned animal welfare. I agree with him; we have prioritised it and we are looking at ways that we can incentivise and support high animal welfare systems of husbandry. As I said, it is a public good and we recognise it as such.

Kerry McCarthy gave some positive comments on what she has heard so far. I very much look forward to her supporting us in the Division Lobbies as we try to take the Bill forward on that basis. She mentioned the issue of labour; I was formerly a strawberry farmer and I understand the challenges that fruit farmers face. We have been working with the Home Office to discuss what work permit arrangements we might put in place for when we leave. The Migration Advisory Committee has just started a big piece of work to look at the labour market in the round. I agree with what the hon. Lady said about some of the work of the Food Foundation. Horticulture often has been overlooked, and we have an opportunity to address that. I attended the launch of the project that she highlighted.

My hon. Friend the Member for Tiverton and Honiton talked about some of the pressure on the uplands. We recognise that, but I had a very interesting conversation with the Uplands Alliance just last week; it pointed out that although they are financially more vulnerable, it believes that there are more things that they can deliver by way of public goods—whether peatland restoration, flood mitigation work or public access. There are many opportunities for it to do that.

Farmers are the recipients of subsidies, but they are not always the main beneficiaries. Subsidies distort all sorts of markets. We have an opportunity to do things very differently. It would remiss of me not to mention trade with the US. It is difficult to assign the description of “anti-American bigotry” to the Secretary of State, who is quite an Atlanticist, but we recognise and value our high animal welfare standards and we are determined to protect them.