It is a pleasure to serve with you in the Chair, Dame Angela. I congratulate my hon. Friend Christian Matheson on not only securing this important debate but making an eloquent speech, which I agreed with entirely.
I will start by acknowledging my own family history with Ukraine. My paternal side is from Lviv and lived there for hundreds of years. I had cordial discussions with the Minister in the run-up to the debate, and I will take up the recommendation to read “East West Street” by Philippe Sands. Labour stands unshakably with Ukraine and our NATO allies in supporting Ukraine against an unprovoked and unjustified invasion by Russia. We have supported the Government’s measures to provide greater military and aid assistance to Ukraine, but on the subject of this debate—the effect of the war in Ukraine on UK farming and food production—we are somewhat critical.
Ukraine is a beautiful country, with some of the most productive agricultural land in Europe, and indeed the world. It is the breadbasket of Europe and its hard-working farmers produce much of the world’s grain and sunflower oil. Ukraine and Russia, as significant producers of sunflower seeds, barley, wheat, maize, rapeseed and soybean, are collectively responsible for 29% of the world’s wheat exports. The World Food Programme estimates that Ukraine grows enough food to feed 400 million people. This is not a short-term problem. The fact that there are Russian mines sitting in the fields of Ukraine will be with us for many years to come.
This debate is focused on the impact of the Russian war in Ukraine on food and farming in the UK. The UK’s food supply chain has been under intense strain over the past months and years, from spiralling food price inflation to the fertiliser crisis and labour shortages. These shocks impact businesses, workers and people up and down the country, who are forced to choose between putting food in the fridge or money on the meter, with those on the lowest incomes hurting the most.
The impacts on the food system go far wider, as much of the developing world is plunged into food insecurity and the risk of famine. The UN’s Food and Agriculture Organization projects that the war in Ukraine will cause an increase in global food prices in 2022 of between 8% and 22%. The UK food sector has been raising its concerns over several months. The Food and Drink Federation has said that the invasion of Ukraine was likely to impact negatively on the trading ambitions of its businesses, and I feel that is somewhat understated. Food supply chains in the UK are already under intense strain, now exacerbated by war. Producers are struggling with a lack of availability of key ingredients, such as sunflower oil, which is used in many products on supermarket shelves. The price of alternatives is rising dramatically.
The impacts are stark and clear, and many experts have been warning of the situation we might face, yet the Government have been at best late, and at worst absent from this crisis. While tensions were mounting between Ukraine and Russia last autumn and analysts were warnings about what could be coming, the Government’s food security report cited Ukraine as a country with a high market share of the global maize supply and said they did not expect any
“major changes…in world agricultural commodity markets and the top exporting countries of these commodities.”
Early in December, the US released intelligence of Russia’s invasion plans. Later in December, the Government released their food security report, which said:
“Real wheat prices are expected to decline in the coming years based on large supplies being produced in the Black Sea region”.
Were the Government simply unaware of the potential for the situation to impact our food supply and global wheat prices, or were they just ignoring it? It is clear that there was a severe lack of planning going on in DEFRA. Labour called on the Government to reconvene the Food Resilience Industry Forum—something they eventually did and which we welcomed; we just wish it had happened sooner. The Government maintain that they do
“not expect significant direct impacts to UK food supply as a result of the Russian invasion of Ukraine”,
but the sector is seriously worried, as are consumers, who are facing rising prices. To no one’s surprise, except perhaps the Government, food price inflation hit 6.8% in the year to May 2022 and has continued to rise—a point well made by my hon. Friend Margaret Greenwood and Ben Lake.
The Government delayed their promised response to the national food strategy, citing the invasion of Ukraine as a reason. I understand they were facing a changing situation, but I reiterate that it was not an unexpected one. Are they suggesting that the necessary planning for possible impacts began only after the invasion was first declared in February this year and not when the first warnings were put out by reputable intelligence analysts? Perhaps if we had seen a proper White Paper from the Government when it was originally promised, there would have been a more robust and effective framework for dealing with the shocks that the sector is facing.
The war in Ukraine is placing significant pressure on British agriculture. This sector has suffered crisis after crisis in the past few years, from the pig backlog, which saw tens of thousands of healthy pigs culled on farms, to the botched roll-out of the environmental land management scheme. During these difficult times, when other nations in the UK and in mainland Europe stepped in to help, our Government have consistently refused to lend a hand to English farmers. The message is they are on their own and the market is the final arbiter. Some of them will go bust but, as the Government see it, that is the way things have to be. Now the conflict in Ukraine poses one of the biggest challenges yet. I would like to say that the Government have finally come to understand that their approach is the wrong one and they are willing to step up and provide meaningful support, to farmers and protect British food security. Sadly, they have been so far unwilling to intervene.
The Opposition take a different view, however, because intervention is not alien to us. Labour has routinely raised its concerns that many farms will be unable to cope with the war in Ukraine pushing up the price of agricultural inputs. The agricultural prices indices for inputs and outputs in the UK increased dramatically from the end of 2021 to the beginning of 2022, and the Ukrainian conflict has resulted in significant gas price increases throughout the world. At the start of 2021, growers were being charger 40p per therm, but prices have since surged as high as £8. The Lea Valley Growers Association has issued a warning that UK harvests of sweet peppers and cucumbers will halve this year after many glasshouse growers chose not to plant in the face of surging energy prices. Producers have warned that yields of other indoor crops, such as tomatoes and aubergines, will also be hit.
Fertiliser production is reliant on gas, and as the international gas price soars, so does the cost of fertiliser. In January 2021, the cost of ammonium nitrate was £200 per tonne. That figure now stands at £900 per tonne. That is simply unsustainable for many agricultural businesses. The Government’s recently announced measures to address fertiliser inflation are too little, too late. CF Fertilisers’ announcement that it will permanently close one of its factories in Ellesmere Port is yet another blow to the farming sector—another point eloquently made by my hon. Friend the Member for City of Chester. After months of dither and delay, can the Minister set out the steps the Government are taking to help farmers access affordable energy and fertiliser, and how the Government intend to curb agricultural inflation?
At the same time as farmers are contending with sky-high inflation, they must deal with a shortage of seasonal workers. The shortage is, in part, a consequence of the war in Ukraine; in 2021, 67% of seasonal agricultural visas went to Ukrainians, while a further 11% were awarded to Russians and Belarusians. However, the blame for the worker shortage lies squarely with the Government. It was originally announced that there would be 30,000 horticultural seasonal worker visas this year, a figure that was then increased to 40,000, with 2,000 of those visas awarded to poultry workers—an increase that many farming bodies have said is too little, too late. The National Farmers Union has predicted that there will be demand for 70,000 seasonal worker visas this year. A farmer confidence survey conducted by the union in January found that 86% of respondents expected low or very low levels of worker availability.
The shortages have had enormous consequences for farmers and keep pushing up prices at the till, at a time when 7.3 million households are experiencing food poverty. Industry experts claim that the labour shortage on British farms has resulted in “catastrophic food waste” of home-grown fruit and vegetables. Many farmers face bankruptcy if they cannot access the labour they need to harvest the crops.
We are in this dire situation because the Government have once again stumbled their way into a crisis, refusing to listen to warnings from farmers, industry and the Opposition, who have been raising the alarm about worker shortages for months. Their refusal to listen has left the Government pursuing a failed post-Brexit approach to agricultural labour that will see food rotting in the fields while millions of households go hungry. Can the Minister say how she intends to help farmers struggling to find seasonal labour, and what plans the Department has to put an end to the shortage?
The war in Ukraine has further exposed Britain’s flawed food system. Despite ample opportunities to take action, the Government have failed time and again to strengthen the system. I fear that the change in management in the Conservative party will not result in any real change, as its MPs have been more than happy to support Government inaction for months. Looking at the contenders left in the leadership race, we are likely to see even more zealous commitment to the market fundamentalism that is happy to let British agriculture go to the wall.
While the Conservatives may be unwilling to support British farmers and food producers, Labour will. On the shortage of seasonal workers, through our five-point plan to make Brexit work, Labour will deliver. We will sort out the poor deal that the Prime Minister negotiated and seek to find new, flexible labour mobility arrangements for those making short-term work trips. On inflation, Labour will support struggling agricultural and food production businesses to make, buy and sell more in Britain, investing in jobs and skills and using the power of public procurement. We will also look at using a windfall tax to support farmers and food businesses.