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Stephen Phillips (Sleaford and North Hykeham) (Con)
I am very grateful to have been granted this important debate on an issue that has not thus far spent too much time in the headlines, but which is fundamental to the way of life of many of my constituents. Today’s attendance demonstrates the great interest that the farming community and people who live in rural Britain have in the subject. It is a great pleasure and an added bonus, Mrs Riordan, that the debate should come under your chairmanship; that makes this, my first Westminster Hall debate, a privilege rather than the ordeal that it might otherwise have been.
I shall begin in perhaps something of an odd place, by recording what the debate is not about. It is not about—at least, not specifically about—the super-dairy that developers wish to land in Nocton in my constituency, in close proximity to a number of other villages: Branston, Dunston, Potterhanworth and Metheringham, to name but four. Now that the planning application has been validated, that issue will be properly considered in due course by North Kesteven district council. Nor is the debate about the planning process itself, at least not at this stage. Planning matters are rightly devolved to local government, where they are best dealt with, and this Government have made it clear that that arrangement will continue and be extended, which is to be welcomed.
What the debate is about—and I am pleased that Members have, for the first time, the opportunity properly to consider the issues surrounding proposals such as the one for Nocton—is the question of how we should go about producing what has been one of the staples of a balanced diet since mankind began to farm animals for his own use. It is also a debate about what is left, and about what should be the future of the British dairy industry after the 13 years of poverty for dairy farmers and their families under the previous Government. I hope that the Minister is now able to tell us that that is being brought to an end.
The simple fact of the matter, and indeed the starting point for any debate about the future of the dairy industry, is that dairy farming in this country has been in crisis for well over a decade. It has been in crisis not merely because central Government previously showed no real interest in British farming, but because of the power of the supermarkets and the other bulk purchasers to drive down prices, which they have done remorselessly and single-mindedly for far too long, without having their wings clipped.
I know that the Minister intends to do something about that. The power of the supermarkets and the large purchasers might be good for consumers in the short term, but it has not been good for farmers—nor, I suspect, is it beneficial for producers or consumers in the long term. It has driven down the price of commodities, including milk, to levels where it has become difficult, if not impossible, for British farmers to make a living or compete with producers across the world.
Those producers—and, most importantly, comparable farmers in other European Union countries—have a lower cost base than their British counterparts, principally because they are unaffected by the gold-plating of the plethora of red tape emanating from Brussels that has stymied the farming industry in this country.
To a large extent, that is an issue for another day and possibly even for another place, but it is not going away and it lies, in one sense, at the heart of this debate. It provides the reason why dairy farmers in particular have been forced to the brink, some of them into insolvency. It also provides the reason for why we are now seeing the first proposals for the sort of dairy farming industry that I know fills many ordinary people and many traditional dairy farmers with horror. Just at the moment when the British farmer is producing the food that the British consumer wishes to buy, in the way the consumer wants it, a recession and continued pressure on prices are forcing the dairy farming community to consider production mechanisms that give rise to grave concerns for animal welfare, local communities and the environment more generally.
It is often said by people in towns who have no real knowledge of how we live in rural Britain, that farmers do not care about the environment or about their animals. That argument is as wrong as it is offensive. In my experience, farmers care more about the environment and their animals than any other section of society does, but they have families to support, which is why in any debate about how we are going to produce our food and our milk in the 21st century, we need to recognise that whatever measures are introduced and whatever decisions are taken, farmers have to be paid a proper price for the food they produce.
If that were already happening with the dairy industry, we would not be having this debate today. If just a few extra pence were paid by consumers for the milk that graces our breakfast tables and tops our interminable mugs of tea, the British dairy industry would not need to consider undergoing the form of fundamental change that proposals such as those for the super-dairy at Nocton involve.
I hope that the Members who have come to today’s debate will join me in the Chamber on 12 January when I seek the House’s permission to introduce a Bill on the super-dairies and the issue of whether farmers receive a fair price for their milk. Those two issues are indisputably and irrevocably intertwined.
My particular concern is that the opening of intensive dairy farming units across the United Kingdom would inevitably drive more small dairy farmers out of the market. The cows that they keep, with which every schoolchild in this country is familiar from an early age, would effectively be replaced by extraordinarily high-yield animals, bred and milked in an intensive setting and with statistically higher occurrences of welfare problems. It is absolutely clear that the public would not support that if they knew about it and if they turned their mind to the question of how they wished their milk to be produced.
The Minister will know that a recent Ipsos MORI poll showed that 61% of the British public would not knowingly buy milk from mega-dairies. That is undoubtedly why many supermarkets have publicly expressed negative views about milk produced in that way, and have indicated that there is, as far as they are concerned, no market for milk produced in super-dairies.
What, one is driven to ask rhetorically, is the point of these intensive dairy farming operations? What is the point of British dairy farming going in that direction? If the British public and the British supermarkets are not going to buy the milk, it will have to go overseas, with all the associated implications for carbon miles. I have to ask, perhaps rhetorically, whether that is the way forward or whether, as I venture to suggest and as I ask the Minister to accept, it is simply better to pay a little more for the milk we need in this country and ensure that we are self-sufficient for all our dairy requirements from our existing farms.
Mr Andrew Turner (Isle of Wight) (Con)
One of the problems is not that the farmers sell directly to supermarkets, but that they sell to intermediaries who may then sell to supermarkets.
Stephen Phillips
My hon. Friend is correct. The real point is that the price pressure that has come down from the supermarkets, whether through intermediaries or those responsible for purchasing milk production, has been so great that many farmers have been driven out of business, and those who remain in business, however efficient they are, are effectively driven to a point where the costs of production are almost equal—and sometimes greater than—the price that they are being paid for their milk.
The Government will have to grapple with that problem in a way that the previous Government did not. I venture to suggest that we would not be having this debate if we paid our dairy farmers a proper price for their milk, because there would be no need to consider super-dairies.
I have already made it clear that every farmer I have met is concerned more for the welfare of his or her stock than is generally accepted, yet the proposals for mega-dairies undoubtedly give rise to legitimate concerns about the welfare of farm animals. Although the Department for Environment, Food and Rural Affairs and the Minister, in his previous utterances, are correct to say that the most significant influence on welfare is the stock keeper, rather than the system, that statement depends on the existing status quo and, with regard to the proposals for Nocton and other mega-dairies, might not take into account potential future developments in the industry.
Future intensive dairy farmers, if we are to go down that route, will have to comply with existing welfare legislation for their animals, a point that I look forward to hearing the Minister confirm. Those animals will need space to move around in and adequate bedding, and all the other regulations for the existing dairy industry will have to be complied with. If we are to go down that route, there is no reason to believe that farmers would not treat their herds as well as the vast majority of small dairy farmers currently treat their own. It would not be in their interests to mistreat their animals, and I do not suppose that that would happen. However, it is equally clear that very large dairies require better monitoring, and different—much more stringent—animal welfare guidelines, and I hope to hear the Minister confirm that.
The point is that although poor welfare can occur in both intensive and less intensive systems, the evidence available from the United States and various other jurisdictions plainly shows that intensive systems are more predisposed to increasing the risk of poor animal welfare. Intensive milk production models are driven almost exclusively by volume; they demand high yields from cows to cover their inherently high set-up and operating costs. The relentless pursuit of more and more litres of milk to reduce the unit costs of production can take its toll on health and welfare, which is what concerns so many people. The toll on health and welfare can reduce the longevity of animals and place pressure and stress on them.
Experience from overseas, as I have indicated, is not promising. The driving up of milk yields through intensive selection has come at the well-documented expense of animal welfare, so the real fear is that mega-dairies in this country would do nothing to address the lameness, infertility and other health problems that already affect too large a proportion of Britain’s existing dairy herd.
However well cows are kept while indoors, it seems to many to be wholly unnatural to keep them inside all year round, and I understand those fears, although it is fair to say that that happens in some colder parts of continental Europe. Not allowing cows outside to graze during the grazing season seems to many to savour of battery farming, someone that this country set its face against a long time ago.
We must not ignore the fact that a lack of access to pasture concerns many people and is often responsible for animal health problems, which I do not exaggerate, as I am sure the Minister will accept. A review carried out by the European Food Safety Authority in 2009 concluded that zero-grazing systems give rise to a higher incidence of various health problems in animals and reduce their capacity to engage in normal social interactions. That concerns many farmers and many consumers when they turn their minds to the question.
Dairy farming has been part of this country’s agricultural economy for many hundreds of years and is part of our rural heritage, as it is in my constituency. That is partly why the reduction in the number of British dairy farmers is of such concern to so many of us. The numbers are frightening: in 2000 there were 23,286 registered dairy production holdings in England and Wales, but today the number is 11,233.
Many of those farmers have gone out of business for reasons to which I have already alluded—they cannot get a good price for their milk and too often have to sell at below the cost of production. I accept that intensive dairy farms could provide economies of scale and allow for greater mechanisation, which would start to reduce those trends, but I hope that the Minister will accept that that must naturally come at the expense of smaller operations.
To put it another way, although such economies of scale are great for the owners of intensive dairy farms, they sound a further death knell for many smaller producers. Although many people say that they would prefer to purchase their milk from smaller producers, there is, as the Minister knows, no requirement to label the origin of milk, a fact that supermarkets know well and wish to see continue.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
On my hon. and learned Friend’s previous point, is he aware that a number of auctioneers across the UK are simply not taking bookings to sell milking cows until well into next year because there is such a backlog of farmers going out of business and trying to sell their dairy cows?
Stephen Phillips
I was not aware of that, but it does not surprise me, given the state of the British dairy industry. That issue is at the heart of the debate. What do we want to see in future for the British dairy industry? I want to see existing producers paid a suitable price for their milk so that they can provide a decent living for their families and continue the tradition of farming that has gone on in this country for hundreds of years and that does not result in the environmental concerns associated with intensive dairy farming, which for the most part I set my face against.
This is not a situation that the Government can permit to continue. Given the pressures on small farmers up and down the country, it is unacceptable for the Government to say that it is all merely down to the planning process, leave it up to local authorities and allow smaller producers simply to be undercut by intensive dairy farms, which for many might be the last straw. If intensive dairy farms are to be allowed at all, I hope that the Minister will state that there will be action on price and labelling so that British consumers who wish to avoid purchasing milk from intensive dairy farms will have the opportunity to do so. If freedom of choice means anything, it certainly means that we should be able to do that.
Roger Williams (Brecon and Radnorshire) (LD)
I congratulate my hon. and learned Friend on how he is taking the debate forward. He has made the important point that there has been enormous price pressure on existing dairy farmers, but does he agree that one way to address the problem would be to have the so-called grocery ombudsman or regulator to ensure that a few large dairies cannot take advantage of many small producers?
Stephen Phillips
I agree with my hon. Friend. I believe that at the election all three main parties promised a farming ombudsman, and that the Minister intends to introduce one. Given the constituency that I come from, I hope that that will happen soon.
Be in no doubt: we need a farming ombudsman, and not just for dairy farmers. We all hear tales about how supermarkets in particular put pressure on farmers so that they can improve their bottom line. Consumers who purchase food at those supermarkets simply do not know about that; incidentally, I believe that they would be disgusted were they to know the full truth.
We need a farming ombudsman, and, if it is not out of order or inappropriate, perhaps the Minister would confirm that we will get one in due course, and that it will be soon. I agree with the comments of my hon. Friend the Member for Brecon and Radnorshire (Roger Williams).
The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)
My hon. and learned Friend has just used a phrase that I would not wish to gain currency. I can confirm happily that the Government are committed to introducing a grocery ombudsman, but he used the words “farming ombudsman”. That is not what is under discussion. I am sorry, but I wanted to make that correction.
Stephen Phillips
I am grateful to the Minister for that correction. At some point, we may need to have another debate about the scope of the ombudsman’s jurisdiction and powers, but perhaps we can leave that to one side for the remainder of today’s debate.
I said at the outset that this debate is not primarily about the specific proposals for Nocton, but one aspect of intensive dairy farming is that it can adversely affect local communities in several ways. As I have seen from my postbag, the ongoing application for the proposed farm at Nocton is almost universally opposed by the communities in which it would be sited, and by those who have lived in settled farming communities for all their lives. This is not nimbyism—at least it is not just nimbyism. It is a legitimate desire to maintain recognisable rural communities away from the hurly-burly of the industrialised practices that are associated with such farms, just as they are associated with light or heavy industry.
Also, let us not forget the slurry: cows produce slurry, which must be disposed of. Digesters are part of the answer for such operations, but significant quantities of dirty water remain to be disposed of either through environmentally-unfriendly tankering operations or through discharge, which, unless carefully managed, runs the risk of polluting aquifers.
As far as the opposition in my constituency to Nocton is concerned, the problem emphatically is not exclusively about odour—an odour which those of us who live in the countryside are used to and, indeed, of which we are rather fond. Effluent contains pathogens and other harmful substances, including residues of pesticides and veterinary medicines. The use of anaerobic digestion to process slurry cannot mitigate the entire problem, particularly when dealing with waste from a large number of cows.
This may not be a problem at present in Lincolnshire—although it is worth noting that it is one of the driest counties in the country—but the fact is that this country and the world face increasing pressure on water resources. Intensive dairy farming units would put a great deal of strain on those resources, as they use large quantities of water. Dairies such as those proposed for Nocton can cause strain on local water resources. I venture to suggest that, if this country were to go down the road of intensive dairy farming, the Minister might wish to regulate where such farms can be sited, given local water resources.
Another reason why local communities are right to be concerned about proposals for large-scale dairy operations—I shall end my substantive comments today with this—are the traffic issues associated with any form of industrialised process, whether in the farming industry or any other. Large numbers of cows that are milked for high yields produce large quantities of milk that need to be transported, and require deliveries of all manner of feed and other products associated with their maintenance and support. In areas where traffic is already an issue, the strain that would be placed on existing infrastructure would be, at best, undesirable.
In areas where traffic is not an issue, perhaps because of their rural nature, the position would be just as bad. Additional traffic movements, particularly of heavy and slow-moving vehicles, could contribute to accidents. Communities in those areas are not used to such traffic, and there is not the infrastructure to deal with the issues surrounding the additional movements. To some extent, that is certainly the case at Nocton, where such issues rightly concern many of my constituents.
The solution to all that, as matters are at present, is that we need to make careful inquiries about the mega-dairy bandwagon and prevent it from gaining steam. At the same time, we must recognise that the necessary price of that is developing and paying properly for the remaining existing dairy farming industry.
We need a rural economy based on sustainable, conventional dairy farming, which includes farmers breeding robust cows that retain the capacity to look after themselves—cows grazed on pasture during the grazing season, and farmers striving for and achieving greater longevity for their animals, producing valuable male calves that can be reared economically for beef.
Robert Flello (Stoke-on-Trent South) (Lab)
I apologise for my late arrival; unfortunately, I was detained elsewhere in the House on other business. I have thoroughly agreed with and enjoyed as much of the hon. and learned Gentleman’s speech as I have been able to listen to.
Would the hon. and learned Gentleman agree that mega-dairies are actually the thin end of the wedge, and that we may well find in the future that there is almost no rural economy? The ideal location for one of these super-sheds is somewhere like Stoke-on-Trent, on a brownfield site next to major road infrastructure, where materials, feed and so on can be brought in, and waste products can be removed. This could be the start of the end of the British dairy farming industry.
Stephen Phillips
I agree with the hon. Gentleman. That was my reason for asking for this debate in the first place. It is also the reasoning behind my solution. Mega-dairies are not the road to take. The hon. Gentleman raises the prospect of super-dairies being sited in large sheds on brownfield sites, with all the difficulties that that would cause in respect of not only deliveries of milk, feed stuffs and so on, but disposal of the animals’ waste, which would have to be tankered away from such sites—nothing else can be done with it. I agree that this is the thin end of the wedge, and that is why we have to face it down. I hope to hear from the Minister that that is the Government’s view.
Intensive dairy farming is not the future that I wish to see. I hope that the Minister agrees with my view, which is that, in the best interests of the industry, rural Britain and our dairy farmers, we should create a supply chain that ensures that farmers receive a proper price for their milk. We do not need any super-dairies, whether at Nocton or anywhere else in the United Kingdom.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
I join in congratulating my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) on securing this debate. Any discussion in this building about the plight of rural communities, in particular the agricultural aspects of it, is encouraging.
If I may, I would like to start with some of the economic context which my hon. and learned Friend mentioned, and quote some figures. I do this as a brother-in-law of a dairy farmer, the son of a dairy farmer, and the husband of a dairy farmer’s daughter—hon. Members will get a general idea of my position. At present—admittedly, this is only one set of figures—farmers are producing milk at a loss of between 1p and 2.5p per litre. The dairies sell their products for a profit in the region of 4p to 5p, yet certain supermarkets—I shall try to be careful about naming them—are selling at a profit of 22p a litre. That is the economic context which my hon. and learned Friend mentioned. I absolutely agree with him that the buying public, if they were aware of the muscle that is applied by supermarkets, would greet that knowledge with a certain amount of disdain and, indeed, disgust.
Let me take that a stage further. One supermarket prides itself on paying its suppliers a rather higher price—about 28p a litre. If the truth was known that only 800 suppliers—some 10%—qualify for that price, the public would raise an eyebrow. In addition, the supermarket in question does not fork out that extra amount itself. Instead, it has insisted on the middle man at the dairy negotiating a more stringent price with the supplier. What did the dairy do? The dairy froze its payments to farmers who are not providing that supermarket, which meant consequentially that their price was reduced. Although that supermarket is obtaining good public relations for distributing press releases talking about fair trade for farmers, it has not been impacted on at all. Yet all those farmers who are not lucky enough to provide that supermarket chain have been penalised. That is the actual, factual economic context behind this important debate. That is why—there is no other reason at all—we are looking at the prospect of super- dairies, if that is the right expression.
I want to inject a degree of measured middle ground, if I may. It is obvious that, increasingly, farmers recognise that scale is the only way that they can make money. I am not talking about making large sums, but about making sufficient money not to go bust and to be able to invest in new technology, which is not just desirable for milk production, but is required by law in the current economic and legal climate.
I represent an area of west Wales in Carmarthenshire, in probably one of the largest milk-producing areas in the UK, where there is a significant problem of tuberculosis in cattle. Fortunately, that is a debate for another day. I am aware, through my constituents, that there is an attraction to housing cattle indoors as far as possible, because doing so reduces the risk of infection from TB and enables farmers to bulk buy feed and bedding materials. Hon. Members will be aware that feed has never been more expensive than it is this year.
It is also clear that production on a larger scale reduces the chances of pollution. We are all aware, sadly, of the incidences of pollution as a consequence of leaking slurry tanks and the like over the years. Fortunately, there has been a decrease in such instances, partly because of housing measures that people have put in place and are increasingly under pressure to implement.
There is an argument, whether it is proven or not, that indoor milk production reduces the carbon footprint of particular farms. Other hon. Members will no doubt expand on whether that is a compelling argument.
I am not trying to justify or promote large-scale dairy production; I am simply trying to set out what my milk-producing constituents see as an essential consequence of the supermarket grip on the industry, and saying that they regard themselves as being much more likely to be able to invest decent sums in modern technology—we have heard about anaerobic digesters—under such conditions than they would be able to under any other system.
Roger Williams
My hon. Friend is generating an interesting point of view, which is that we need a range of dairy farms, from small and medium-sized ones to larger ones. The hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) said that there is a welfare code for dairy animals. Perhaps animals kept in larger units might need a different approach under the welfare code, because they will be kept in different circumstances.
Simon Hart
I agree. There is no greater expert on this subject than my hon. Friend.
I want to return to welfare concerns. The hon. Member for Stoke-on-Trent South (Robert Flello) made an interesting intervention on whether dairy production would be encouraged to move from its traditional countryside location to brownfield sites. Although there is a danger of that happening, I am not as convinced of it as he is. There is more to dairy farming than milking cows; there is young stock, dry cows and sick and lame animals that cannot be housed indoors. There will always be a need for animals in green fields. I do not think that we want to assume that milking is the only part of the process and that dairy farms can be located anywhere in the UK. It is not quite as simple as that.
When we discuss animal welfare in this context, there is a gulf of difference between reality and perception. My hon. and learned Friend mentioned legitimate concerns. I am always wary of legitimate concerns unless they can be backed up by evidence. The Department is assessing the welfare implications of indoor cattle. We Members of Parliament, particularly those representing agricultural areas, would be well advised to be a little bit cautious about talking about legitimate concerns until we know that there are legitimate concerns to be cautious about.
It is important to remember, in considering the scale of milk production, that thin, lame or ill cattle can be segregated in bigger herds, whereas in normal circumstances, in small-scale production, they can be prone to bullying by other animals in the herd. Being able to do such things on a larger scale, there is an argument, which I accept is unproven, that says that welfare standards can be improved. In other words, big is not necessarily bad. I suspect that we are all aware of small dairy producers—the sort that we are trying to champion—whose welfare standards are not as good as larger, slightly more industrial units, to use an unattractive term.
We have to be cautious about assuming things and being led by the nose—I am not suggesting for one moment that hon. Members are—down the road that says that big is bad and that the only kind of high-welfare milk production is undertaken by small producers. We know that that is not so. We need evidence to hand before we make judgments in that regard.
I welcome this debate, which has been waiting to be heard and which has huge consequences for the rural economy. If the Government get this wrong—I am not suggesting that they might—there will be massive social and environmental consequences and it will be hard to be put things back together.
Hon. Members have mentioned economic circumstances, but tracing this issue to its source it comes back to a simple question. How do we deal with the stranglehold of the supermarkets over our dairy industry? It is not the fault of farmers, the planning system or the Government; it is the fault of supermarkets, which are putting short-term gain at the top of their agenda, at the risk of putting the UK dairy industry either into terminal freefall or being exported.
We need to impress on the supermarkets the importance of this matter. A demonstration by Welsh farmers outside Asda in Chepstow tomorrow will express this view. I said that I would not name a supermarket, but now I have. It is a sad day when any section of the agricultural community is subject to such pressure, because the long-term downstream consequences for the rural community as a whole will be devastating unless we get this right.
Mr Roger Gale (North Thanet) (Con)
I congratulate my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) on securing this debate, his measured introduction and balancing clear arguments on welfare and costs. May I also congratulate my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart), who brings personal expertise to this debate in a way that most hon. Members cannot? It is more than 60 years since I first tried to milk a cow by hand and if I tried it today, I probably would not be good at it.
Anybody who has been brought up in the west country, as I was fortunate enough to be, cannot fail to recognise the importance of the dairy industry to the rural economy and to our countryside environment.
My hon. and learned Friend initially said that super-dairies were a planning issue, although he moved away from that posture. Technically, that is correct, as is the case with the one in his constituency, but I venture to suggest that the issue goes much deeper and is a moral one. Those of us who are sad enough to wake up too early and find ourselves listening to “Farming Today” know only too well, because we hear about it with monotonous regularity, the plight of the dairy industry. Having heard the figures—they were placed on the record again this morning—we understand how dairy farmers are being screwed by the supermarket industry. That may be inelegant, but it is accurate.
The debate so far has concentrated on the obvious economic problems to the detriment, to some extent, of the moral argument. Those of us who have knocked around in this place for a bit—some of us are here today—participated in the campaign to ban veal crates in the United Kingdom. We were highly delighted when we succeeded, and the Government of the day outlawed the use of crates in this country. With glorious hindsight, with which we are blessed, it was a pyrrhic victory, because all we did was to move the problem from A to B, and veal calves that were once reared under relatively humane conditions, albeit not desirable, in the United Kingdom are now reared under infinitely worse conditions on mainland Europe. Not only that, they are first transported to mainland Europe by sea. Far from win-win, we can fairly say with hindsight that it was lose-lose.
My concern is that unless we get the matter right, we are in grave danger of moving the dairy problem from A to B, to the detriment of the British dairy industry and of animal welfare, so again it could be lose-lose. Reference was made to regulations from Brussels being an argument for another day but, with respect, I believe that it is an argument for today. Unless we engineer a situation that overrides European regulations on free trade, and put in place measures that will not allow to be sold in the United Kingdom animal produce that has been reared under conditions that we would not permit in this country, we shall lose.
I detect that no one in the Chamber wants super-dairies to take over from traditional dairy farms, but the danger is that those who fund the super-dairies will take their money to northern France, Belgium, Holland or elsewhere close by on mainland Europe and produce precisely the same quantities of milk under precisely the same undesirable circumstances. We will import it and our British dairy farmers will go out of business.
Robert Flello
I am listening with great interest and appreciating the passion of the hon. Gentleman’s speech. Will he draw some parallels with what has happened in the pottery industry in my constituency, where the work has gone abroad? Pottery owners drove down prices as much as possible to try to compete with cheap imports until they were no longer competitive. Production moved abroad, goods were produced more cheaply and then imported back, and were passed off as being produced here because they were packaged here. Is not the same thing happening already in the food industry with pork being imported, packaged and sold to unsuspecting British consumers as though it were British pork? I appreciate the hon. Gentleman’s line of argument, and perhaps he will draw some parallels.
Mr Gale
I will not be tempted down that road, simply because it is probably outside the remit of this debate, and because there is a fundamental difference. Of course, I accept that cheap imports of anything from anywhere can damage our UK producers and, therefore, to some extent our UK economy. Mass production is a feature of the world, and we import goods from all over the world, but we are talking about welfare. We still import veal that has been produced in veal crates, while not allowing veal crates here. That is a welfare issue. We still import chickens and pigmeat that are produced under intensive conditions that we would simply not allow in the United Kingdom. I fail to see how it can be right for us to shackle United Kingdom agricultural producers and to tie one, if not both hands behind their back, while cheerfully allowing European trade regulations to override all those welfare considerations so that our markets are flooded by anything from anywhere, produced under any circumstances. That is morally wrong, and we must stop it.
If the public seriously believe in the moral and welfare issues, they must be prepared to pay. We must be prepared to pay a fair price to farmers for our food—not to the middle man or the supermarket, but at the very beginning to farmers. That is the only way to secure the right to demand high animal welfare standards. But I must tell my hon. Friend the Minister that in tandem with that, we must get regulation under control so that we not only pass, but enforce on Europe and the rest of the world the welfare regulations that we apply to ourselves here in the United Kingdom.
Zac Goldsmith (Richmond Park) (Con)
I thank my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) for obtaining this important debate. He could not have picked a more important time to do so, as we have heard. We are all aware that we are at a crucial stage with a plan for a new factory dairy farm. It will either be approved by Lincolnshire county council or, if the decision is deferred, considered by the Secretary of State for Communities and Local Government. I hope to contribute to persuading the Minister to use his influence to encourage the Secretary of State to delay that application when it is submitted. I shall briefly explain why.
We have heard arguments on animal welfare and broader environmental concerns. A broad range of organisations, including Compassion in World Farming, the Campaign to Protect Rural England, the World Society for the Protection of Animals, Friends of the Earth, the Campaign Against Factory Farming Operations and many others, have made their views known. I want to return to another major concern.
The Minister told hon. Members in the House that he welcomes the fact that people are looking to invest in our dairy sector. But is that the kind of investment that we want? No one can deny that if the mega-dairy model is a success, it will impact heavily on traditional dairy farming in this country. If the new model works, the old model will have to give way at some point. Farmers will go out of business, and for those who survive, there will be little prospect of their children taking over. We will see a profound transformation of our countryside with acceleration of the depressing trends described in the brilliant speech by my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart).
Today, just over 16,000 dairy farms produce 12 billion litres of milk. If the CPRE research is correct, the same quantity could be produced with just 232 Nocton-style mega-dairies. We have seen in the United States how quickly intensive agriculture can take hold. In 10 years, the number of cows reared in intensive conditions nearly doubled from 2.5 million to 4.9 million between 1997 and 2007.
If we are to move to a situation in which farmers are replaced by a handful of technicians, cattle food is imported, fields are left empty, and cows are denied grazing, at the very least we should consider the implications because that shift is not inevitable, as we have been led to believe. It will not result from some kind of overwhelming evolutionary market force. It has nothing to do with the market. I have yet to meet a single consumer who wants to buy such stuff. Even some of the mega-supermarkets that have rightly taken a bashing this morning—I will give them another bashing later—and household-name supermarkets have said that they will not sell milk from mega-dairies. There is no shortage of milk. We export more than we import. The market is not what will take us towards the mega-dairy—or, indeed, towards cloned meat or genetically modified food, both of which seem to be back on the agenda. However, politicians might take us in that direction.
We have a new farming Minister who is almost unique in that he is respected by both small and large farmers. He belongs to a Government whose leaders spent a great deal of time before the election, crucially, supporting slow food, organic food, sustainable food, local food, farmers’ markets and the works—the antithesis of factory production. I do not believe that the Minister wants to preside over a process in which our countryside is effectively handed over to US-style intensive agribusiness.
I recognise that the National Farmers Union has, more or less, endorsed the Nocton plans, but the NFU stands almost alone among farmers’ groups with that support. It would be wrong to mistake the NFU for an authentic voice for farmers, given that its president casually recommended recently:
“We need to experiment…We should give it a try.”
He was not speaking for farmers but for agribusiness. That is why, outside Parliament a few years ago, representatives from countless small farming organisations lined up with posters saying, “NFU: No F…ing Use”—I was there at the time.
Nocton is opposed by a wide range of farming bodies, from FARM, the Small Farms Association and the Family Farmers Association to the Soil Association, and including the Farmers Union of Wales, which said recently:
“Given that a single super-dairy could take the place of scores of average sized family dairy farms, we would prefer to see traditional family farms staying in business and receiving a fair price for their milk, rather than single massive units pushing others out of business”.
I know that the Minister shares that concern for the future of farming in this country. I urge him to step in now, before it is too late. We do not always have to yield to the lowest possible standards. We could, for example, invest the £2 billion or so spent on food in schools and hospitals on the best quality, local, British sustainable food, cutting food miles, giving patients and children the food that they want and immediately boosting the rural economy.
As we have just heard in the speech of my hon. Friend the Member for North Thanet (Mr Gale), we can insist that whatever food is imported should meet the same standards that we apply to our own farmers, so that our farmers are not unfairly outcompeted. Yes, that requires us to take on the trade rules but, if the rules make no sense, the Government’s job is to challenge them. We must do that if we are serious about protecting the British farming sector.
In addition, we could negotiate a better deal from the supermarkets. I will not repeat the arguments that we have already heard, but they are absolutely valid and I echo them. There is an imbalance of power—again, I cannot imagine any other body in this country, other than the Government, that is able or equipped to challenge and address that imbalance. That is a prerequisite for ensuring the survival of the farming sector.
We have heard that the Department for Environment, Food and Rural Affairs does not have the power to stop Nocton or such a dairy model. However, if the Minister is persuaded that the risks are too great, he can raise standards without legislation, to prevent such developments from happening. I do not expect him to be persuaded in this forum, in a brief series of speeches, but I ask him to acknowledge the concerns and to use his influence to put the project on hold until he has commissioned a broad and thorough analysis of the likely impacts, not just on welfare, which is key, but on the whole farming sector. Without that information, we cannot take a proper, responsible or reasonable decision.
Glyn Davies (Montgomeryshire) (Con)
Thank you, Mrs Riordan, for the opportunity to contribute to a debate that is close to my own interests. I thank my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) for the way in which he introduced the debate and, in particular, his reference to the power of the supermarket—I am looking forward to that debate in the new year, when we will address what is a fundamental issue in this debate.
I have three reasons for wanting to contribute to the debate. First, for the first 15 years of my working life, I was a dairy farmer. I gave up dairy farming because, with 70 cows and a pipeline system, I was finding myself left behind. I had to make a huge investment to go up to 150 cows, so I took the decision to stop dairy farming and to switch to beef and sheep.
I also spent seven years as the chair of a local planning authority, so I have a significant interest. The issue that we are discussing is a planning one, making the debate of interest to me.
My third reason is the application for a 1,000-cow dairy unit in my constituency, quite close to my home, which has been controversial. I do not want to make particular reference to that planning application, because there are pluses and minuses. A local young farmer has general support for wanting to stay competitive in a difficult industry, but on the other hand the unit would be close to a local school, so it will be a big issue for the local planning authority to decide.
There are mixed views. I am keen to see a balanced approach to the debate. My fundamental approach to any issue is to ask, “Why not?” We are talking about a completely new type of dairy unit. It is important to start from the general principle that people should be allowed to do what they want unless there is a good, solid reason for not doing it. The same applies to planning. A planning authority starts from the position that it should grant planning permission, unless there are good planning reasons not to do so. I want to approach the debate with that general attitude.
I am as much a romantic as, probably, any of us. My first experience of dairying was on my nain and taid’s farm, where they milked seven cows. My nain milked the cows by hand. They made cheese and I used to spin the churn—it was pretty hard work, too. I am probably the only one present who has done that, and it is pretty significant work—my granny was quite elderly and had no problem at all, but I did—and milking cows by hand is not easy, either.
I have an instinctive antipathy to the idea of nearly 4,000 cows in a unit, but we need to go beyond that and look at why we might oppose such plans. It is not straightforward.
Stephen Phillips
My hon. Friend is concerned about 4,000 cows, but I wish to make it clear that the proposers of the development at Nocton originally put in an application for more than 6,000. If he is concerned about 4,000, it has been made clear that that will in due course become 6,000, so he ought to be even more concerned. I hope that he agrees with me.
Glyn Davies
I heard that the original Nocton proposal was for 7,000 cows. Once we reach 1,000, the principle is much the same—we are dealing with a big unit in which the animals are housed for almost the whole time. That is a different way of producing milk. I accept my hon. and learned Friend’s point.
Let us go into the reasons for not doing it. The first was in the more significant part of my hon. and learned Friend’s introductory speech: the driving out of small farmers as a result of the economic conditions that the larger farmers might create. I am not sure that I accept that reason. When I was milking 70 cows, I was accused of driving out small farmers. That was the position then. In truth, a person hand-milking seven cows was just not economic—that was the reason for stopping the business. In those days, the 70-cow unit was economic, but we reached a stage when it was not.
Small farmers will be and have been going out of business—we heard the numbers earlier. That has happened and will continue, irrespective of the large farming unit. I do not think that there is a direct correlation between the two issues.
Simon Hart
We are in danger of muddling two things, one of which is the size of the unit. Plenty of farmers have gradually crept up from seven cows to 70, from 70 to 170 and, in my family’s case, from about 100 to 400. Is there some cut-off point, above which they should not be allowed to go? That is one of the issues we are discussing. The other issue is whether it is appropriate to be milking cows indoors 365 days of the year. We are in danger of confusing the two issues.
Glyn Davies
Several issues are probably involved, so I want to make my second point, which is that we might want to resist the development on welfare grounds. We can include housing for 365 days a year as a welfare issue. Even with a seven-cow herd, the animals were indoors for six months of the year. Being indoors is not particularly unusual. I think that the application for a 1,000-cow unit in my constituency proposes that the animals should be indoors for almost two thirds of the year. I suspect that the application for the 7,000-cow unit proposed having the animals indoors, apart from the followers, for 12 months of the year. What we have to keep at the core of our thinking is high welfare standards, and we must be guided by science or we shall lose the argument in the end.
[Mr Edward Leigh in the Chair]
I do not accept that it is necessarily more difficult to meet welfare standards with a large herd than with a small herd. I know that some people will disagree, but I just do not think that the large size of a herd is a proven reason for that. In fact, we can argue a little bit the other way, because for a large herd, there will almost certainly be professionally trained staff, and a large unit will be able to afford to keep them professionally trained. It will be able to do the training that smaller units cannot. A large dairy unit will almost certainly have an ongoing relationship with a veterinary surgeon, who will call in regularly. The smaller units do not have that. Most farmers with herds the size of mine considered themselves to be veterinary surgeons. We were not willing to pay what I thought were excessive bills at the time—we did it ourselves. I think that we shall find that the welfare standards in large units will be very impressive, and if they are not, they will not get permission.
There are many other, environmental reasons why one might want to refuse an application for a large unit, and I think that planning authorities should be willing to turn down applications, unless they meet their exacting standards. The application in my constituency is within view of Powis castle. The local planning authority will have to consider that issue. The Environment Agency will have to examine all the implications for the environmental impact. All such issues will have to be considered by a planning authority before approval is secured.
I want to deal now with the public resistance element. During my eight years in the National Assembly for Wales, I was a huge enthusiast for organic farming and farmers’ markets. We should continue with that, but we have to persuade people to come and buy from these units. The reality is that most customers—consumers—will buy where the price is cheapest. The supermarkets will drive down the price, and unless British farmers produce the product, they will import it. My hon. Friend the Member for North Thanet (Mr Gale) made a very good point about exporting a problem. That is exactly what might happen in the dairy industry unless we deal with the matter. In relation to public resistance, we need a balanced and open mind and a view based on scientific knowledge.
I want to appeal not only to my hon. Friend the Minister but to everyone who participates in the debate—because it will be an ongoing debate; the issue will not be dealt with in the short term—not to take an instinctive view. Mine might be one of antipathy. We must examine the science, because in the end that is what will rule the decision. If we in this House are to have an impact on the issue, we have to present the facts and have an influence, we hope, on the purchasers, which are mostly supermarkets. Only the Government can do that now, because supermarkets have reached such a state of dominance in the market. By taking a balanced approach, we may well have some influence and, while not necessarily returning to the image of my childhood, staying rather closer to it.
Mr Edward Leigh (in the Chair)
Order. I want to allow time for the winding-up speeches, so I will call Neil Parish now, but he must finish his speech, please, within five minutes.
Neil Parish (Tiverton and Honiton) (Con)
I should like to follow my hon. Friend the Member for Montgomeryshire (Glyn Davies) and say that my views on this issue are also mixed. If I look at the commercial situation and even the animal welfare situation, I do not think that there is a problem with the unit that we are discussing, because there will be vets on call, the buildings will be exceptional and the quality of everything on that farm will be excellent. I do not think that that is the issue.
I shall explain my concern. When we see the advertising of milk, cheese or butter, we see the wonderful Kerrygold cows hopping around the field. I do not think that the Kerrygold cows are any happier than anyone else’s cows, but of course that company is very good at marketing the product.
I worry about the dairy industry as a whole. We live in a time when people want to eat less fat and we need to market the product well, and I am not convinced in that respect with regard to 4,000, 6,000 or 8,000 cows on a farm in Lincolnshire or wherever that are kept indoors all the time. Let us say that a farm has 6,000 cows. Six fours are 24; that is 24,000 feet. Imagine turning those out into a field; certainly, if it was one of my fields in Somerset, it would not take long to turn it into a plough ground. I know that, in reality, not all 6,000 cows would be turned out together, but the chances of those cows going out into the field and being seen grazing are pretty negligible. I think that we all accept that.
We can argue the rights and wrongs of the single farm payment and the common agricultural policy, but farming does take quite a lot of public money one way or the other, and the public, rightly or wrongly, want to see a certain style of farming. They want to see cows out in the fields. We have only to think back to the time of foot and mouth disease in 2001, when so many sheep and cattle were, unfortunately, slaughtered. The one thing that the public told me was that they missed the livestock in the fields. We have to face up to that.
My hon. Friend the Minister has a huge conundrum to solve. From the point of view of the economics, welfare and planning, there is probably no problem, but in terms of the industry, the welfare of farmers and the public’s concept of farming, there is a big issue. We can argue about the economics of dairy farming, but it will be accepted that even now, people should be able to make a reasonable living from 200 cows, so do we really want to go to 4,000 or 8,000 cows, which will take out 40 or 80 of what I would call commercially viable farms?
Then what are we doing? We are handing over even more power to the supermarkets. They will love to get their milk from herds of 4,000, 6,000 or 8,000 cows, because they can send dirty great tankers along, probably all day long, to collect the milk. I suspect that the cows will be milked several times a day, so there will be milk there all the time and the supermarkets will be able to get tanker-loads of it. That suits everyone from a commercial point of view, but will it actually increase the price of milk? I doubt that very much. I suspect that it will decrease the price of milk and then the 200-cow herd, the 300-cow herd and even the 400-cow herd will be under pressure.
I know that I am perhaps wanting to have my cake and eat it. I want to say, “Let’s have commercial farming,” and then say, “Well, this is a little bit too commercial. Let’s stop it here.” However, we do have to consider the issue carefully, because we are talking about the overall health and the overall marketing of the dairy industry and what I believe is an excellent product; it is very good for people to consume. Returning my remarks to my constituency in Devon, I have to say that keeping cows out grazing is part of the landscape that people expect to see.
I do not envy the Minister his task today because he has to balance many elements, but as we move forward on this proposal, or stop it or whatever, we must be conscious of the dairy industry as a whole, of smaller farms and of the public’s perception of dairy farming.
Mr William Bain (Glasgow North East) (Lab)
It is a pleasure to serve under your chairmanship for the first time, Mr Leigh, as it was under Mrs Riordan’s. This has been an excellent debate. I congratulate the hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) on securing it. He spoke with great passion and authority.
I also wish to commend the contributions of the hon. Members for Carmarthen West and South Pembrokeshire (Simon Hart) and for North Thanet (Mr Gale), who referred to the moral argument underpinning the issue and to the need for EU-level reform. I thank the hon. Member for Richmond Park (Zac Goldsmith), who made an interesting and thoughtful speech. The hon. Member for Montgomeryshire (Glyn Davies) spoke of the need to promote further scientific research with the authority of being a dairy farmer. I also wish to commend the speech of the hon. Member for Tiverton and Honiton (Neil Parish).
The dairy industry in the United Kingdom has been through an extremely volatile period. Intensive farming raises three challenges: first, animal welfare; secondly, greenhouse gas emissions, to which I think the hon. Member for Richmond Park referred; and thirdly, market distortions, which we hope the work on the grocery ombudsman, begun under the previous Government, will address. I hope that that work will be implemented under the current Government. I shall develop each of the points in turn.
After a period of extreme volatility, the dairy industry in the UK is still the third largest in the EU and the ninth largest in the world, producing more than 11 billion litres per annum, amounting to more than 16% of agricultural output last year, and contributing £3.1 billion to the economy. Despite the volatility in production and prices, yield per cow increased between 1995 and 2005, and average yield per cow increased in 2008 and 2009. The NFU said earlier this year that a typical UK dairy farm with a herd of 113 is likely to produce approximately a million litres of milk per year, with the average yield per cow increasing from slightly less than 6,000 litres in 2000 to more than 7,000 in 2010.
It is clear that it is ultimately for the local council and, if brought in by the Government, the Secretary of State for Communities and Local Government to determine what happens in Nocton. I do not wish to comment on the precise legal technicalities of the process that may come in future. However, the debate has raised wider questions on what the view of DEFRA and right hon. and hon. Members should be towards intensifying farming, based on the three points that I mentioned.
There does not seem to be consensus that intensifying farming will universally lead to negative outcomes on animal welfare. The Farm Animal Welfare Council and the Royal Society for the Prevention of Cruelty to Animals have said that, in their view, intensification will not necessarily lead to a diminution in animal welfare.
Mr Bain
That is an extremely good point. The hon. Gentleman anticipated the argument that I was going to advance. There is a need for more research into intensification. In the United States, farms of 15,000 cows or more are not unknown, and the proportion of farms with more than 500 cows has doubled from 31.3% to 59.5% of the national herd. Less than half the farms with under 99 cows are still in business, so it is clear that there has been an impact on the small dairy farmer in the US. It is important that we conduct economic research into whether the same would happen in the EU.
Stephen Phillips
In the US, which is a much larger country, there is a minimum separation zone between these sorts of intensive farms and the nearest settlement. Does the hon. Gentleman agree that that is important? It may be one reason why these intensive dairy farms are not appropriate for many places in the UK.
Mr Bain
That is another excellent point, and it is why we must move with extreme care and ensure that we get the best evidence on animal welfare and on the economic impact on small farmers. I hope that the Minister can give us further information in his closing remarks on any impact assessment that DEFRA is conducting.
The UN Food and Agriculture Organisation said earlier this year that the global dairy sector contributes 4% to total global anthropogenic greenhouse gas emissions, and the share from global milk production is 2.7%. There is a balance to be struck between the need to reduce greenhouse gas emissions, which taking more cows inside and using anaerobic digestion more may diminish, and the wider arguments on animal welfare. Some concerns have been expressed by Compassion in World Farming, for example; it said that excessive intensification could lead to growing incidences of lameness, mastitis and other illnesses affecting cattle.
However, some advantages of intensification have been identified, which we must properly evaluate and not rule out. For example, the FAWC has said:
“In general, management of dairy cows that are housed all year round is easier for the farmer”.
It goes on to say that housing cows all year round allows for more effective control over feed composition and for diets that are targetable to specific groups. There is also a reduced risk of parasitic infestation and greater biosecurity. It is clear that there is no consensus on whether intensification is intrinsically bad, which is why we need further economic and scientific research to explore the issues more fully.
There have been extreme swings in the market in recent years, particularly in EU milk prices. Indeed, the Commission had to produce a package of support in 2009 to support dairy farmers in the UK and across the EU. In the discussions on CAP reform, which we hope will be concluded by 2013, there needs to be a longer-term settlement that will put the dairy industry, across the EU, on a surer footing. I hope the Minister can indicate the position that the Government will take on dairy farming in those negotiations.
This is an extremely controversial issue. The planning application for Nocton in itself raises important matters, but I think the wider debate we need to have about the three principles is more important—animal welfare, greenhouse gas emissions and correcting the problems in the dairy market. I hope the Minister can set out the Government’s position on all three in his concluding remarks.
The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)
I am grateful to be serving under your chairmanship for, I think, the first time, Mr Leigh. I start obviously, but genuinely, by thanking my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) for securing the debate. He feels strongly about this issue, which is obviously precipitated by his constituency. It is a matter of great concern, as we all understand and has been demonstrated in the Chamber this morning. I have received countless letters and e-mails from people all over the country expressing concern, as I am sure other Members have.
If I may, I shall make a slightly provocative statement. For the past 30 years or so, all political parties and consumer organisations have called for the dismantling of agricultural protection, in whatever form it took, and for a move to a market-based system, because the consumer pays too much for food under protectionist systems. We have moved a long way in that direction over the past few years, and the debate today is the consequence of that move.
What we have heard in the debate is almost a plea to go backwards. We have heard that consumers would pay a bit more for their milk to protect farmers, but that is a bit like the letters we get from people who say they would rather pay more tax than have the funding to their children’s school cut. However, the reality, as we all know, is that they will not pay more tax if they are given the option, and I am afraid that it is the same with dairy farming.
My hon. Friend the Member for North Thanet (Mr Gale) referred absolutely rightly to what happened after we banned veal crates, and the same applied with sow stalls, when the pig industry was decimated. We simply exported those standards. Units in the pig and poultry industries have become larger, with fewer individual proprietors, and concern has been expressed that milk will go the same way.
The reality, of course, is that we have imported pig meat, veal and other commodities from other countries because it is cheaper to produce it abroad. As my hon. Friend made absolutely clear, that is what consumers wanted. The only protection against that is not to raise our standards or to instigate some form of import control, which, as we all know, is illegal under European law and the World Trade Organisation.
Neil Parish
I do not believe that we want to go backwards, but this proposal wants to go forwards too fast. It will see off too many medium-sized farmers who can make a good living. That is my point.
Mr Paice
I understand my hon. Friend’s point, and I will try to pick it up, although I will obviously not be able to respond to all the important points that my hon. Friends and the hon. Member for Glasgow North East (Mr Bain) have made.
There has been a bit of a battle for credibility between some of my hon. Friends as to who first milked cows. If I might join in, it is about 44 years since I first milked cows. In those days—we can all say “in those days”—most dairy herds were in the 20-to-30 cow bracket, and 100 was a massive herd. If we had had a debate about mega-dairies in those days, we would have been talking about 100 cows.
The average herd in England is now 113 cows. There are lots of herds with more than 500 cows; one has 2,000 cows and several have more than 1,000 cows. The world has moved on, and no Government of any colour—we have obviously had all shades over the past 44 years—have blown the whistle and said, “This is too big.”
Zac Goldsmith
The Minister is right to have identified, as others have, the perverse European rules that force us into a situation where our farmers are out-competed by farmers importing substandard products from elsewhere in Europe. Before the election, the Prime Minister pledged to challenge those rules, and my question is simply whether the Government still have any appetite to do so on behalf of our farmers and food security groups. It would be welcomed by farmers across the board if that pledge was fulfilled.
Mr Paice
Without wishing to duck that question, I should say that trade issues are, as my hon. Friend is well aware, a matter for my right hon. Friend the Secretary of State for Business, Innovation and Skills. Obviously, however, we would wish to pursue as best we can commitments made by the Prime Minister before the election.
Let me move on to the point about competition in the domestic market and about supermarkets, which all my hon. Friends have raised in various ways. First, let me reaffirm that the Government are committed to introducing legislation to bring in the supermarket code adjudicator. We will call it an adjudicator because, compared with existing ombudsmen, it is not strictly an ombudsman.
I urge those of my hon. Friends who share my view that the sooner we introduce the adjudicator the better, to press the Secretary of State for Business, Innovation and Skills because this is his legislation. We will proceed as quickly as possible, but we need to be absolutely honest with ourselves and with farmers that this proposal will not in itself lead to a price rise; it is about ensuring that we have fair and transparent terms of trade and about enforcing the code, which has been in operation since February. We must not be accused of misleading people into thinking that the adjudicator will somehow make everything all right.
My hon. Friends said a lot about supermarkets, so I will not go further into that issue. However, we also need to look at processors. As my hon. Friend the Member for Tiverton and Honiton (Neil Parish) said, certain processors have massively bid for contracts to process and bottle for supermarkets. They then pass on to the producers the results of what is, in many ways, over-bidding. We are now in the absurd situation where the farm-gate price paid for milk that goes into liquid products or relatively high-value cheese products is lower than that which people could afford to pay if they were going to convert that milk into skimmed milk powder, which is the lowest-priced global commodity—although, even then, the global price for the raw milk is about 27p or 28p a litre.
The Government are, of course, committed to the concept of free trade and open markets, and the Opposition probably largely share that fundamental belief. We do not believe in interfering in how business operates, but it behoves business to operate a fair market arrangement.
I cannot stand here and say that the Government will never intervene if we clearly see unfair practices going on. We hope that the adjudicator will resolve all that, but let me make it clear to the dairy processing and retail sectors that it behoves them to operate a fair market. They must recognise that if they do not, we will, as hon. Members have frequently said, lose the British dairy industry, whatever the type of housing, to overseas competitors. The result will be ever-more volatile prices.
Mr Paice
I am sorry, but I cannot give way any more.
People would not have the cheap liquid milk that they want, because, as we all know, importing liquid milk is always expensive given its bulk cost. As a result, therefore, business will find that it is operating against consumer interests in the long term.
That reminds me of the point that my hon. Friend the Member for Richmond Park (Zac Goldsmith) made about imports and exports. He is right about the figures for liquid milk, but virtually all our liquid milk exports actually go over the Irish border, from Northern Ireland to southern Ireland, where they are made into cheese before coming back into the UK market.
Overall, our dairy market is massively reliant on imports of dairy products, which is why I personally believe—there is no strong evidence one way or the other—that the fear that a mega-dairy will destroy smaller dairy farmers is not necessarily justified. There is huge scope in this country to improve and expand our dairy industry. With the exception of Ireland, we grow the best grass anywhere in Europe, and we should be competitive. It is my job to try to create that competitiveness.
I am clearly running short of time, and I cannot respond to all the points that have been made. However, as my hon. and learned Friend opened the debate, I must emphasise that, as has frequently been said, I have no powers to intervene in any application. Issues to do with traffic, pollution and noise are for the local council to consider. My hon. Friend the Member for Richmond Park talked about my using my influence on the Secretary of State if an application went to appeal, but that would be seen as illegal and would be wide open to judicial challenge, so I am afraid that I cannot accept that invitation, much as I might wish to.
In conclusion, the Government understand the great public concern about this issue and about the changes to cattle—a lot of genetic improvement has taken place—and we accept, as the hon. Member for Glasgow North East said, that there is a need for research. That is why we have commissioned research—the previous Government commissioned some of it, and we are very happy with that—from the Scottish Agricultural College on improving the robustness and welfare of cows through the development of breeding indices, as well as a further study on the management and welfare of continuously housed cows.
If those studies demonstrate that the Government need to act on welfare codes, or in any other way, we will, of course, have to consider that, but I do not wish to pre-empt the conclusions of those studies. The Government believe in being led by scientific evidence; we will examine those research studies when they come out and we will act if necessary. I am grateful to my hon. and learned Friend for giving me the opportunity to discuss this matter.