Pig Farming

Wednesday 23rd March 2011 Westminster Hall

[Hugh Bayley in the Chair]

14:30

[Mr Richard Bacon (South Norfolk) (Con)]

It is a great pleasure to serve under your chairmanship, Mr Bayley. I am delighted to have secured this debate, as we have reached a critical juncture in the British pig industry. I am also particularly pleased to see the Minister in his place, as I know that he is a friend and ally of Britain’s pig farmers and has taken a lot of trouble to understand the problems faced by the industry.

We should not underestimate the size of the industry. The value of pork retail sales in the UK is about £8.7 billion, outpacing chicken, beef or lamb. This is an important industry, but I am sorry to say that it is in trouble. Just three weeks ago, pig farmers from our constituencies and across the country flocked to Westminster to draw the Government’s attention to the plight of their industry. Many MPs will have signed the 16-foot sausage in Whitehall and heard the rousing rendition of the industry anthem “Stand By Your Ham”, all in support of the cry, “Pigs are still worth it!”

I say “still worth it” because the Minister and other colleagues with long memories may recall attending the 2008 “Pigs are worth it” rally. Like this month’s rally, the 2008 gathering was a response to a sharp increase in feed costs that left the industry on the brink of collapse. After the 2008 rally, led by the much-missed standard-bearer of the “Pigs are worth it” campaign, Winnie the pig, the industry returned to profit in 2009. That breathing space allowed farmers to recoup some of their losses and take the opportunity to invest in improvements to production and infrastructure.

Despite fluctuations in profit margins, the outlook remained positive, at least for a few months, until last August, when the industry was driven into crisis once more. The fleeting period of profitability was not long or profitable enough for pig farmers to recoup the severe losses that they sustained in 2007-08.

[Mr Greg Knight (East Yorkshire) (Con)]

I am grateful to my hon. Friend for giving way, and I congratulate him on securing the debate. Does he agree that one problem has been our loose labelling law? Many consumers wanting to support the British pig farmer by buying British pork have not always known when they were doing so, because it is possible to package pork reared overseas as British if it is merely processed here.

[Mr Bacon]

My right hon. Friend is correct. He might have seen my Food Labelling Regulations (Amendment) Bill, which is scheduled for Second Reading on 1 April. Should the Government wish to take this opportunity to announce that they will give it Government time, I would be only too pleased to hand it over to officials to be steered through the House. Yesterday, I was encouraged by a phone call from the Department for Environment, Food and Rural Affairs asking to see a copy. It is important to say that there has been some improvement in labelling in the pork sector, but I still believe and have always maintained that the only viable long-term answer is a mandatory regime. We already have mandatory regimes for many other foodstuffs; we should have one for pork and pork products as well.

The inexorable slide into loss-making as rising feed prices have affected the industry has begun to cripple pig farmers in this country once again. The price that pig farmers pay for feed has more than doubled since 2010. Feed costs are rising faster than during the crisis of 2008, and I am afraid that the omens for the future are not good. BPEX—the British Pig Executive, which is the industry body—estimates that feed, which is generally made up of a combination of wheat, barley and soya, remains the single largest cost for British pig producers and accounts for 77% of pig farmers’ costs, up from 60% in 2009. BPEX expects food costs to remain historically high this year, and possibly beyond.

That gloomy forecast is being borne out by recent movements on the international cereals market. The Food and Agriculture Organisation of the United Nations expects a tightening of the global cereal supply this year, driven by growing demand after the slump in world cereal production in 2010. According to the FAO, export prices of major grains have risen at least 70% since February last year, and global cereal stocks are expected to fall sharply due to a decline in supplies of wheat and coarse grains. Market uncertainty after the Japanese earthquake caused prices to fall from £214 a tonne in February to £170 a tonne last week, but as of last Friday, wheat prices had climbed back to £195 a tonne. As one might imagine, recent increases in the price of pig feed have had a severe impact on the cost of pig production, which has risen to £1.64 a kilogram.

However, although production costs continue to rise, the dead-weight average pig price—the price farmers receive for the pigs they produce—has fallen during the same period. In February, the DAPP stood at £1.35 a kilogram, 29p short of covering pig farmers’ costs and 12p a kilogram below the July 2010 price of £1.47 a kilogram.

Britain’s pig farmers started 2010 in a state of cautious optimism, their hope to rebuild based on the reasonably steady costs that they faced and their improved returns in 2009, but by September 2010 the industry had returned to making a loss, and by January 2011 the cost of production had risen by one third compared with 2007. According to BPEX, a farmer sending 200 pigs to slaughter in January this year stood to lose £4,500 in a single week. The pig industry is facing overall losses of £4 million a week, and farmers are estimated to be losing more than £21 on every pig produced.

Although the rising price of feed is undoubtedly a major factor in the pain being suffered by British pig farmers, it is far from being the only factor. The pressure on Britain’s pig industry caused by rising feed prices is being amplified by what can only be described as the decoupling of the supply chain. For a supply chain to work properly, manufacturers, processors and retailers must work collaboratively to bring down its costs effectively and sustainably. However, it is clear that the pressure of high feed costs is not being shared across the pigmeat supply chain. If anything, the reverse is the case. Feed manufacturers have passed on the rise in the cost of cereals to their customers—that is, pig farmers—but the costs of rising prices have stopped with farmers and are not being passed up the supply chain to producers and retailers.

The disconnect in the pigmeat supply chain can best be illustrated by the relative performance of its constituent parts in the 12 weeks up to the end of January 2011. In that period, British pig farmers suffered losses estimated at £35 million, which equates roughly to £416,000 every calendar day. However, over the same 12-week period, the processing sector made an estimated profit of £100 million, or just over £1 million a day. Retailers, including Britain’s supermarkets, which set much store by their support for British farmers, enjoyed combined profits of £192 million from pork and pork product sales, equivalent to daily profits of £2.3 million.

[Andrew George (St Ives) (LD)]

On the point about retailers, particularly supermarkets, the hon. Gentleman well knows that we hope the Government will shortly introduce the proposed supermarket adjudicator Bill. Although that cannot and should not be a price-sensitive or price-setting mechanism, it will address the issue of fair dealing. Does he agree that the sooner we pass such a Bill, the sooner we can help not just pig farmers, but many other farmers and suppliers to supermarkets?

[Mr Bacon]

I agree. We all use supermarkets because in many ways they are efficient, but we love to hate them because they are very powerful. We are not discussing perfect competition. People sometimes speak of supermarkets as though they were speaking of the market for foreign exchange, but this is an oligopolistic arrangement. Supermarkets have large amounts of power that they do not always use in the right way, and sometimes they misuse that power. I welcome the Government’s proposals for an adjudicator.

[Mr Keith Simpson (Broadland) (Con)]

I congratulate my hon. Friend and neighbour on introducing the debate. If he will pardon the pun, this is like “Groundhog Day” for other hon. Members and for me, as we have been debating the pig industry for at least 10 years. Although I do not want to turn supermarkets into devils, it seems to me that they stand condemned in two ways. The first relates to driving down costs and forcing down farmers’ profits, and the second is the labelling itself. They are better now than they ever have been, but all too often, as my right hon. Friend the Member for East Yorkshire (Mr Knight) pointed out, they put the Union flag on something and it is only when one reads the small print that one realises that it is imported bacon or ham.

[Mr Bacon]

My hon. Friend is right. There have been some egregious examples involving some of the best known and highly admired supermarkets. Marks & Spencer, for example, was guilty of such practices, but I think that there are fewer of them now. The use of Union, English and Scottish—I was in Scotland for Christmas—flags in supermarket aisles is better and more appropriate, but we are not there yet and he is right that there is still work to do. Some supermarkets are leading the way on doing what I think would be the right thing, both for themselves in the long term and for the industry. I shall mention Morrisons in particular in a moment.

There is no doubt that supermarkets in general seem to be using their part of the supply chain to insulate themselves against the increasing costs of the production of pork and other pigmeat product, such as bacon, ham and sausages.

[Elizabeth Truss (South West Norfolk) (Con)]

Is it not a shame that we import 50% of all pig products? Given that the Chancellor has just given a Budget for growth, would it not be a good idea to try to become a net exporter of pork products, particularly from Norfolk, which is where my constituency, as well as that of my hon. Friend, lies? There does not seem to be a level playing field on welfare internationally to enable us to increase our exports and decrease our imports.

[Mr Bacon]

My hon. Friend is absolutely right—there is not a level playing field. BPEX has done a lot of work on the issue and estimates that 70% of the pork imported to this country is produced under animal welfare standards that would be illegal here. In other words, 30% of what comes in meets our standards, and 70% does not.

Price promotions in supermarkets are a particular problem. Tesco ran a price promotion in January in what are called the gondola ends—the ends of the aisles—and it was very successful because of its high visibility. Such promotions can increase sales by up to 200%. If a supermarket has an uplift of 200%, not only will it want to keep the promotion going for longer, but it will need more product. I fear that, at such times, even if supermarkets such as Tesco are adhering, or say that they are adhering, to the standards for their imports, suppliers will be under pressure and will get the product from wherever they can, and the standards will not always be adhered to.

People may be familiar with the concept of stalls and tethers, which are banned in this country. Tesco wrote to me this morning pointing out that they will be banned in the European Union, but they will not—an allowance will still be made for the use of stalls and tethers, although the period will be restricted. Even so, that will not be introduced until 2013, which means that if one visits a British farm and sees a stall and tether, one will know that it is illegal, whereas if one visits a farm in other parts of the EU, one will still be able to see stalls and tethers and will then have to audit whether they are used for more than four weeks. I really do not know how that can be successfully audited. There are still big issues to resolve.

I have no doubt that the behaviour of some supermarkets has helped to suck in imports, which has had the effect of keeping the lion’s share of the profits at the customer-facing end of the supply chain, and of ramming the rising production costs on to pig farmers.

[Andrew George]

It would be interesting to know whether the promotional campaign to which my hon. Friend referred was effectively being funded by the suppliers themselves. I am afraid that, too often, the so-called promotional campaigns of two for the price of one are largely or mostly funded by the suppliers, not the retailers.

[Mr Bacon]

Of course, that is a common problem with very powerful retailers. We have seen it in the book trade—many book publishers have been driven under by that sort of practice by some book chains. We know that big factors in the marketplace mean that it is constantly dynamic—no static position, even if it holds for a while, will hold for ever—but that is another thing that the adjudicator needs to look at, because it is an exercise of market power that distorts in a way that could sometimes be thought of as anti-competitive.

Retailers have the power, if they choose to use it, to make a difference by using their stocking, labelling and pricing policies to promote the prominence of British produce and to ensure a fair return for British farmers, including British pig farmers. I pay particular tribute to Morrisons, which is the only one of the big four supermarkets to source 100% of its fresh pork from Britain. Morrisons has also committed to using British-only meat in its own-label sausages, and earlier this month the company’s chairman, Sir Ian Gibson—I am led to believe that he is no relation of the former Member for Norwich North—wrote to me about Morrisons’ backing for British farmers. He said:

“We recognise the pressure pig producers are under and will continue to be strong supporters of the sector. We are the only major supermarket to have such close control over the provenance of its meat, buying pigs directly from Britain’s farmers and processing the pork ourselves”.

He continued:

“This results in exceptional quality, freshness and value. It also enables us to offer industry-leading support to British farming. Our commitment to source 100% British fresh pork is unique among the major supermarkets and in 2011 we expect to reach the milestone of purchasing a million pigs a year from British farmers”.

That is extremely good news. Sir Ian added:

“This policy is popular with customers who we know show a preference for British produce if the price is right. Our combination of British provenance and quality at an affordable price sees us overtrade on pork—that is to say, our share of the pork market exceeds our overall market share”.

I think there is a lesson there for other supermarkets. Sir Ian continued by saying that not only are Morrisons

“major customers of British farming but we consistently pay over the market price for our pigs and we always have done. This was reflected in the results of an independent satisfaction survey of our pork farmers last year, with over 70% responding that they were happy at the price paid by Morrison”.

I salute Morrisons for backing British farmers so wholeheartedly and I wish them every success in their million pig milestone.

It would be remiss to not also mention supermarkets such as Waitrose, Marks & Spencer, Aldi, Lidl and the Co-op, which now all source 100% of the fresh pork that they stock from British pig farmers. All of that pork displays the red tractor mark, which is an independent logo that guarantees that the food it adorns was sourced from farms and food companies that meet Britain’s high standards of food safety and hygiene, animal welfare and environmental protection.

Such support, however, is not constant throughout the retail industry. On the day before the “Pigs are still worth it!” rally, Mr Andrew Opie, food director at the British Retail Consortium, commented in a press statement entitled “Pig farmers do have retailers’ support”:

“Retailers know some consumers prefer to buy British. They’re already doing what they need to to look after their supply chain and secure a sustainable UK pig industry”.

I am afraid that that will raise a hollow laugh from many pig farmers. Mr Opie goes on:

“Supermarkets do not generally pay farmers directly for their pork.”

Well, that will be news to Sir Ian Gibson, because that is exactly what Morrisons does. Mr Opie concludes by asserting that supermarkets have no direct relationship with farmers. Unsurprisingly, the BPEX chairman, Stewart Houston, described those comments as “complete rubbish”, before adding that supermarkets

“dictate prices to processors who pass those prices directly to producers. It is a very short supply chain and they have nowhere to hide. How much money there is in the supply chain is determined by the price supermarkets pay. It is as simple as that.”

[Mr Keith Simpson]

Am I right in thinking that supermarkets or their agents frequently inspect farms for hygiene, health and animal welfare?

[Mr Bacon]

They certainly do. They inspect or employ auditors independently to inspect British farms and say—Tesco has been saying this in correspondence with me over the past few days—that they do the same in relation to their foreign supply chain. I fear, however, that, when they have promotions at the discounted end of the market, that audit trail may run out and the provenance will not always be as clear as it should be.

Hon. Members may be disturbed to hear that there is evidence to suggest that British pork products are quietly being withdrawn from the shelves of our largest supermarkets and displaced by imports. Data from Kantar Worldpanel show that, over the past three years, the volume of pork on sale in British supermarkets that does not clearly identify a specific country of origin has increased, with a spike in sales of non-British pork having been recorded recently, in the past few months of this year and late last year.

Families in my constituency and across Britain who make their living from farming pigs may find their weekly shop at the local supermarket increasingly dispiriting. In-store observation by BPEX suggests that an overall increase in pork sales is being driven by promotional sales of imported pork that does not carry a quality mark. Imported pork has replaced British pork carrying either the quality standard or the red tractor. Where major supermarkets have run promotions on pig products that are multi-buy packs or are heavily discounted on price, it is mostly imported pork. According to BPEX, just one in five pork loins promoted by Sainsbury’s two weeks ago was British, Asda’s three for £10 promotion only included imported pork, and anecdotal evidence from BPEX members suggests that Tesco’s recent in-store promotion on the so-called gondola end—end of aisle—of three pork products for £10 also featured only Danish or Dutch meat.

That is borne out by Pork Watch, the bi-monthly survey of supermarkets conducted by representatives of the National Pig Association and by Ladies in Pigs. The most recent survey found that the overall number of pork facings—the shelf space allocated to a product line—has fallen from 80% in November last year to 77% in February, which is the lowest figure for the past 12 months. Facings of the red tractor or the quality standard mark for pork—both indicators that British welfare standards have been adhered to—have also fallen slightly from 75% to 73%, after making small gains last year. It is worth taking a particularly close look at Pork Watch’s findings on Tesco: it found that facings of “British” on Tesco pork had tumbled from 73% to 59% and red tractor facings had slumped from 63% to 55%—a fall of 14 percentage points in the British category, which is the largest decline of facings of “British” on pork in any British supermarket. About half of the pork on Tesco’s shelves does not bear the red tractor, which makes it unlikely that imported pork meets the UK’s welfare standards in all cases, despite Tesco’s claim that its overseas suppliers’ standards “broadly equate” to red tractor standards.

Let us be in no doubt that the situation facing British pig farmers is extremely serious. Of course, neither retailers, individual farmers, their industry bodies nor Members of Parliament can do much to influence world commodity prices. Feed is expensive because cereals are expensive, and that looks unlikely to change in the near future.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

I hope that my hon. Friend can help me on one point. Presumably, the story he is telling ends with pig farmers leaving the industry. If that is the case, is the situation not serious for not just pig farmers, but for agriculture and indeed rural Britain as a whole? I suggest that problem goes much further than pig farming.

[Mr Bacon]

It does go much further than pig farming. People are beginning to exit the industry and many are worried about whether they can expect to still be in the industry by the end of this year. My point is that if we have a stronger pig farming and farming sector, that is good for Britain, for the rural economy and for the economy as a whole, and that that is good for the Tescos of this world and their like. If the supermarkets took a longer-term view, rather than just worrying about the next three months and the next quarterly results, it would be better for them in the end. It is not an accident that Morrisons’ fresh meat sales have increased by 12% since it announced its 100% British pork policy. I urge supermarkets that are not currently doing so to take a more pro-British stance. It is incumbent on institutions—and such companies are institutions—of the like, size and power of Tesco to do more than just think about one set of shareholders; they have to think about the entire community of stakeholders, of which they form such a powerful part.

Let me give an example. Tesco states on its website that it supports British farmers, and hon. Members will have probably seen the signs as they go into Tesco showing that it is the biggest customer of British agriculture. On its website, it identifies 27 farmers whom it supports: five produce apples and pears, five produce cheese, nine produce either beef or lamb or a combination of the two, one produces watercress, one produces rapeseed oil and one produces milk. There is not a single pig farmer among the 27.

[Mr David Ruffley (Bury St Edmunds) (Con)]

Will my hon. Friend explain why the economics mean that Morrisons can make a profit by sourcing 100% British pork when Tesco and the other superstores he has mentioned cannot? What is the economic reason he has divined for that?

[Mr Bacon]

My hon. Friend makes a very interesting point because one might think that if everybody could do it, they would. My point is they can do it and they should. The economic case is that when customers see that supermarkets, such as Morrisons, are backing British farmers and backing Britain, they are disproportionately likely to go and shop in those shops and buy those products. They want to see that the supermarket that they endorse by their shopping decisions—it is their spending the money in their pocket that means a supermarket is profitable—is also helping to back our community, back Britain and back British farmers. When people see that, they respond. That has an economic effect of its own, which is why Morrisons’ policy has proved to be so successful. Other supermarkets should follow suit.

The even broader point is that, even if the effects were cost-neutral in the long term—I do not believe for one moment that they are—the supermarkets should recognise that they are British supermarkets and they are succeeding only because we have allowed the planning permissions to go through, sometimes against people’s better judgment, and enabled them to have those locations. It is because we go into those supermarkets and spend our money that they are able to make such profits. I come back to the question: what kind of market are we talking about? We are not talking about the market for foreign exchange; we are talking about enormously powerful players, and with enormous power comes enormous responsibility. I am asking the supermarkets to exercise that responsibility in a more measured way in the interests of this country. I do not want to rant even more on that point, so I shall stop there.

It is certainly true that some British supermarkets can and do support British pig farmers, but only one of the big four sources 100% of its pork in Britain. That is not good enough. In addition, the biggest of the big four also seems to be slowly turning its back on British farmers, offering cheap imports in the misguided belief—promoted by the British Retail Consortium but disproved by Morrisons—that British shoppers do not care where the meat comes from as long as the price is right. Retailers will no doubt respond that they have to meet the variable demand of their customers and that in the current economic climate price has to be a factor. However, I question how much of the instability in the pigmeat supply chain is due to fluctuations in customer demand on price and how much is caused by the internal operations of the supply chain which, as I have set out, is entirely skewed in favour of retailers.

This is not simply a case of backing our heroic pig farmers against the evil supermarkets because, as we have heard, some of our supermarkets are trying to do the right thing. Of course it would be foolish to state that shoppers will buy British whatever the price, but we also know that it is possible to offer consumers British food at high standards of quality and animal welfare all at an affordable price. Morrisons have shown that that is possible and, if the producers can get a fair price for their pigs, we will have the best of all possible worlds.

When feed prices peaked in 2008, it took six months for prices to fall back to a sustainable level, during which time many pig farmers had left the industry. Today, three quarters of the remaining farmers say that they too will get out of the pig business if things do not improve within the next 12 months. That would be a tragedy for not only pig farmers, but processors, retailers and consumers. British consumers want to buy British produce because they want to support British farmers and they believe that it is the best. I have not wavered in my belief that a mandatory country of origin labelling regime, combined with the widest possible support for the red tractor and quality standard marks, will give shoppers the information they need.

The Minister acknowledged in the House last week that the pig industry receives no subsidies. That is quite correct and I am certainly not calling for that to change. However, if the Government value having a British pig industry that sets the highest standards for quality and animal welfare, they cannot simply shrug and believe themselves to be powerless in the face of global food prices and grocery behemoths. The Government must encourage the pigmeat supply chain to work as it should, so that pig farmers can make a living, not a loss. Pigs were worth it in 2008. They are still worth it today.

14:59

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

It is a pleasure to serve under your chairmanship, Mr Bayley. I congratulate my hon. Friend the Member for South Norfolk (Mr Bacon) on securing the debate. I hope he will not mind if I take his name in vain. Pigmeat is really important to this country and, dare I say it, there is never a better way to start the day than with a cup of tea and a bacon sandwich. I can hear people salivating around me as I mention that. The state of the industry has already been well described, and there have been numerous interventions from hon. Members about some of the points that I will try to present in a slightly different way in my speech. There is no doubt, however, that the industry needs some action from the Government. I will ask for clarity on actions that are already under way, and make some suggestions about the future.

In 1998, this country was 80% self-sufficient in producing enough pigmeat for our needs. This year we are at 48%, for reasons that have already been referred to: aspects of the animal welfare standards; the stall and tether and castration bans; and the dumping of cheap meat on our market, especially when we had the German dioxin feed scare. The current value chain has been well documented. I received my figures from one of my local farmers, Jimmy Butler of Blythburgh Pork, who has approximately 18,000 pigs at any one time, all of which are free range and very tasty. I had better not promote any more producers. He told me that farmers effectively end up losing £20 per pig. From the figures he gave me, the farming industry loses £4 million per week, while processors make £8 million, and retailers make £16 million, profit per week. There are various causes. We have already heard that the pricing that cannot be agreed with supermarkets, but there is also an issue about the price of feedstock. I appreciate that the Government cannot control that particular aspect of the input, but they can do something about the output prices in their proposed legislation for groceries and the inclusion of a draft adjudicator code for supermarkets. There is also the issue of welfare standards.

[Mr Knight]

My hon. Friend has introduced an important issue to the debate—the dioxin scare in Germany, which has caused a fall-off in demand for pork in that country. Is there a sign of hope in the fact that the lack of demand for pork in Germany is likely to be a very short-lived phenomenon, and will hopefully lead to prices being a little more buoyant in future than they have been this year?

[Dr Coffey]

My right hon. Friend makes a very good point. I hope that that will be the case and, going even further, that our British farmers will be able to exploit an export opportunity. It would be interesting to see Germans eating British sausages, rather than their own bratwurst, but why not? We have won on other fronts in Germany in the last century and I am sure that our pig farmers would be proud to go in and make sure that an English wurst—

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

1966.

[Dr Coffey]

Indeed. My hon. Friend is absolutely right. I was not referring to anything else.

We should be proud of the welfare standards that we enjoy in this country. My hon. Friend the Member for South Norfolk is right that some of the regulations have been partly changed, and the task of bringing welfare standards up to those enjoyed in the United Kingdom will be completed by 2013. I call on the Government to ensure that they use all possible influence to make sure that that date is not delayed in any way. We have already heard other examples of derogations that have been extended. It is critical for our industry, and just as important for the welfare of the animals that are farmed, that we do not delay.

What can we do? The industry is innovative. We have heard about Ladies in Pigs, with its lip-smacking recipes and demonstrations around the country. The industry is good at talking about consumer choice and education. We can continue to advertise the fact that 45% of pig herds in this country are reared outdoors, whereas in the rest of Europe it barely reaches 5%. Such things are important, and they are one reason why British pork is rightly a premium product. I wonder whether it is appropriate to bring in the following point, and I do not know if the pig industry has ever done this. I have received a number of letters from constituents who are concerned about halal labelling on other forms of meat. Regularly, meat is presented—one might buy chicken or something similar—as having been prepared to halal standards. I think I am right in saying that halal is irrelevant when it comes to pork, bacon and so on. Therefore, if people want to be confident that they are not eating meat that has been prepared in a halal way—or indeed in a kosher way—then eating a pigmeat product would be one particular avenue for them to pursue.

We should also make sure that the industry of butchers continues to recommend itself to consumers. I think that we all regret the loss of any high street butcher from our constituencies, and I am proud that we have so many—do not worry, Mr Bayley, I will not be naming them all, or any. Butchers provide a professional insight for consumers and help with choice. I hope that they will be encouraged by the information in the Budget today on small business rate relief. There will be significant reductions for properties with rateable values of less than £12,000—an example of the Government supporting high street shops, including butchers, to ensure that they can continue to sell good British pork and other pig products.

My hon. Friend the Member for South Norfolk said that we are not calling for a subsidy. I completely agree with that, and I do not believe that the industry is calling for it either. However, the Government could make sure that they take advantage of my hon. Friend’s excellent Food Labelling Regulations (Amendment) Bill. We were very strong on that issue before the election and I am very keen to see that we make good progress. That would not cost money, it is free to do, and it would have a dramatic effect on consumer education, as the consumer would know that the products that they buy that sport the British flag were raised and reared here and conform to UK welfare standards. It might also be worth trying to pull together all the different legislation on UK food labelling and having a more simplified process. My hon. Friend’s Bill might be a good avenue for doing so.

It would be helpful if the Minister clarified the position on Government buying standards for food, which were due to come into effect this month. I understand that that is not a buy-British campaign, but it is supposed to ensure that a high quality standard of food is purchased by Government. I look forward to clarification on that.

Another slightly controversial question concerns feedstock. Pigswill was banned as a source of food for animals, which was understandable at the time. I am not suggesting that all pig farmers want pigswill to return, especially those at the premium end, but have the Government considered reviewing that policy as a way of trying to reduce the input costs for our farmers? Will the Minister also clarify what the UK pigmeat supply chain task force is doing, as well as the EU advisory group on pigmeat? I only learned about that group yesterday through a response to a question about pigs in the House of Lords. It is good to see that the other place takes an interest in this issue too. I appreciate that the Government cannot just go out and tell people to buy pigmeat, but there is a lot that they can do to ensure that the product that we are proud to see on our shelves, when carrying a British label, is deemed to have been produced to the same welfare standards anywhere in this country. I look forward to the action of a great friend of farming—the Minister.

Finally, I must apologise for forgetting to congratulate my hon. Friend the Member for South Norfolk on securing this debate. I hope that it will not be groundhog day, as my hon. Friend the Member for Broadland (Mr Simpson) suggested, but all I can say is that, with the friends of the farming industry who are present in the Chamber today, the Minister will know that we will not give up.

15:09

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

It is a great pleasure to serve under your chairmanship, Mr Bayley. I congratulate my hon. Friend the Member for South Norfolk (Mr Bacon) on securing the debate, which is very important not just for us in East Anglia, but for many rural communities all over the country. Pig farming and farming in general have suffered in the past few years. Although it is important that we have a comprehensive debate about pig farming, it also helps us to raise a number of issues that are important to the wider farming sector.

One of my first engagements as a new MP last year was a visit to Stuston farm in my constituency, where I was introduced to a new breed of pig—the mangalitsa pig— which has just come into the United Kingdom; that was a great pleasure. Today’s debate is about the future of pig farming, which is one of the most important parts of agriculture in East Anglia, particularly in Suffolk and Norfolk. I am therefore delighted that we have replying to today’s debate a great friend of East Anglia, Suffolk and my constituency. The Minister knows the issues better than many and I am sure that he will do all he can to help us resolve them.

My hon. Friend the Member for South Norfolk talked about a number of important issues, including the fact that the pig industry slid back into loss making in 2010, its problems exacerbated by the rise in wheat prices and the fact that retailers are not passing on their profits to pig producers. According to the National Farmers Union, over the past three years pig producers have been losing £20 a pig, whereas retailers have continued to make a profit of £100 a pig. That is unacceptable. Retailers should show more corporate responsibility in supporting British food producers.

Of course, the increasing cost of fuel will further exacerbate the problems in the pig industry, so we were pleased to hear in today’s Budget statement about the fuel stabiliser, which will help many farmers. Another important problem is the difficulties in many parts of the country with getting planning permission for local abattoirs, so that we can reduce food miles. I am delighted that we finally have in East Anglia, in my constituency, an abattoir. Local pigs can now be slaughtered locally, which is a very good thing.

We have talked about broader questions of Britain’s food sustainability and the importance of supporting a profitable and sustainable agricultural sector to improve that. In the past decade or so, the amount of food consumed in Britain that is produced here has fallen quite dramatically: we now produce only about 40% of the food that we eat. With climate change already affecting many major agricultural producers such as Australia, where extreme temperatures could undermine a major world supplier of wheat, it is all the more important that we promote food sustainability and support British pig farmers as a means of doing that. I am pleased that that matter has already been raised: the Minister talked about it in response to parliamentary questions from my hon. Friend the Member for North Warwickshire (Dan Byles), who touched on it in the context of supporting our armed forces. It is important that we make sure that Britain can feed itself and that we have proper food security and food sustainability for the future.

One important point that has been teased out in the debate is that British pig producers have much higher standards of traceability and animal welfare than many of their overseas competitors, but they are not competing on a level playing field in the supermarkets where they sell their goods. An important related point is that 30% of imported pork does not meet UK standards of animal welfare, but it is still sold in our supermarkets.

[Mr Bacon]

Actually, BPEX estimates that 70% of imported pork does not meet the British standard, and that only 30% does.

[Dr Poulter]

I thank my hon. Friend for that clarification, which makes the point even more forcefully. As he says, only 30% of imported pork in our supermarkets meets UK standards, according to BPEX. We need action from the Government to put the onus on supermarkets to show greater corporate responsibility and to provide a more level playing field for British food producers and the goods they sell.

[Simon Hart]

The Minister might be able to comment on the appropriateness and legality of using the planning system to impose such conditions on supermarkets.

[Dr Poulter]

I thank my hon. Friend for that, and I look forward to the Minister covering that that in his concluding remarks.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

My hon. Friend is making a powerful point about the need for a level playing field. Pig farmers in my constituency are not asking to be given any artificial support; they are asking to compete on a level basis. They go to other countries and see farmers putting in new sow stalls when they themselves spent hundreds of thousands of pounds per unit replacing their stalls 10 years ago, and they are rightly upset. Does my hon. Friend agree that other countries should not be allowed a derogation in due course? If our farmers have had to make that investment, so should farmers elsewhere and they should not be allowed to import their meat into this country unless they follow the same rules.

[Dr Poulter]

My hon. Friend is absolutely right and makes the point very powerfully. The fact is that there is not a level playing field, particularly in the European Union. Stricter EU animal welfare laws for pigs have been agreed, but they will come fully into force only in 2013. As he forcefully argues, we need those standards to be applied in Europe. However, it is not just a question of standards being applied universally; our supermarkets must also show corporate responsibility. If overseas food producers do not produce food to the same high standards of animal welfare and traceability as British farmers, our supermarkets should not buy food from them. We need to see that corporate responsibility from the industry.

[Jim Shannon (Strangford) (DUP)]

I represent an area in Northern Ireland where almost everyone used to keep pigs, sometimes in large numbers. We are now down to only one producer, albeit a big one, which indicates that we are hearing the death knell of the pig industry. In some parts of Europe, regulation is non-existent, so does the hon. Gentleman feel that the Minister needs to convey to European Ministers and to Brussels the fact that whereas regulation is enforced with almost evangelical zeal in parts of the United Kingdom, the same is not true in other parts of Europe?

[Dr Poulter]

I thank the hon. Gentleman for that forceful intervention, and I absolutely agree with him. British pig farmers have struggled a great deal over the past few years, and it is a great pity that the number of people farming pigs has consistently declined throughout the UK. We would like that to be put right and we would like to see greater support for pig farmers. He is right to mention the EU, because over the past decade or so Whitehall has been fond of gold-plating and platinum-plating European legislation, whereas countries that do not like the legislation tend to ignore it. He is absolutely right to say that we need to seek consistency across the EU, and that needs to be taken up at a European level. We want a level playing field so that our farmers can have a thriving and prosperous future.

I do not want to detain colleagues much longer, because we want to hear from the Minister. We have talked much about honest food labelling, which applies across the farming sector, but particularly to British pork. At the moment, bacon only has to be sliced in the UK to be labelled British, which is unacceptable. UK law requires that labelling should not be misleading, which is a good thing, but it does not define how much British involvement is required before produce can be counted as British. Traditionally, slaughtering animals in this country would count, so calling something British lamb or British pork could mean that although the meat was imported, slaughter and packaging took place in the UK, but now meat need only be sliced here to be labelled British. That can be misleading in supermarkets. We want stronger action on labelling, and I am sure that the Bill to be introduced by my hon. Friend the Member for South Norfolk will go a good way towards countering that great problem, which would also help to support British pig farmers.

We have talked a lot about getting greater corporate responsibility from our retailers. I mentioned the fact that while pig farmers have been losing £20 per pig over the past three years, our retailers have been making profits of £100 to £120 per pig. Surely there must be an onus on those retailers not only to support honest food labelling and promote the fact that British farmers produce pork to higher animal welfare standards and with greater traceability, but to want to support local and British produce. That has to be a good thing. As we know from the example of Morrisons, cited by my hon. Friend the Member for South Norfolk, consumers want to buy British and support local food producers. Consumers in East Anglia, Suffolk and Norfolk want to support our local food producers. That would be a good thing for supermarkets to do.

[Roger Williams (Brecon and Radnorshire) (LD)]

I could not resist attending the debate, if only for a few minutes. Does the hon. Gentleman agree that one consequence of the pricing system used by supermarkets is that pig production in this country is driven down and more pigs are produced in sub-standard conditions in other countries? That is a serious problem.

[Dr Poulter]

My hon. Friend is right. The key point, which my hon. Friend the Member for Beverley and Holderness (Mr Stuart) raised, is the need for a level playing field. We are proud that Britain has high animal welfare and traceability standards, but if our farmers are not competing on a level playing field with farmers in Europe and overseas, with 70% of overseas pork not being produced to the same high animal welfare standards, that is wrong. There is an onus on our supermarkets to show greater corporate responsibility and to make a stand by supporting local food producers and ensuring that they help their customers to understand the issues. I hope that we will hear strong words of support on that from the Minister.

We have talked today about the importance of backing British pig farmers, because we believe in backing British food sustainability and security. We have talked about the fact that there should be a level playing field for British farmers and pork producers, with their high animal welfare and traceability standards compared with the standards of their European competitors. We have talked about the need for honest food labelling, which we will discuss further in the main Chamber in the near future. The Minister is a great friend of farming and we look forward to his reply to the debate and to him telling us how he and the Government will support the British pig industry.

[Hugh Bayley (in the Chair)]

I want to call the Front-Bench spokesmen to start the winding-up speeches at half-past 3, which leaves us time for one further speech.

15:23

[Neil Parish (Tiverton and Honiton) (Con)]

Thank you for calling me, Mr Bayley, and I thank my hon. Friend the Member for South Norfolk (Mr Bacon) for securing this opportune debate.

I want to concentrate first on the profitability of the pig sector. It is obvious that pig farmers cannot go on losing £20 per pig—something needs to be done. At other times when pig farmers lost money due to high cereal prices, cereal prices subsequently fell, so pig farmers could bridge the gap and the profitability of pigs returned. This time, we cannot guarantee that the peak in cereal prices will be here for only a short while; it may be here for quite a lot longer. It is always difficult to predict a market while thinking on your feet.

We must say clearly to the supermarkets that it does no good to drive pig farmers out of business, which is what they are doing. It is very short-sighted and has a knock-on effect on the cereal producer, because we produce a lot of barley and wheat for feed that goes to the pig and poultry sectors.

As many hon. Members have said, the pig industry is unsubsidised. It does not get any single farm payments, and pig farmers have to make their money back from the marketplace. We have to help them to do so through the grocery adjudicator and others. Hon. Members also talked about labelling, and although the “British” label is not always easy to get, there are regional labels, which have legal standing and are easier to maintain. When I was in the European Parliament, the French, and particularly the Italians, seemed to manage to label everything with a region and, largely, get away with it. We have to be keen on this.

Back in the ’90s, we introduced extra welfare standards for pig farming. Why did we bring those in? Because our people are very keen on animal welfare, but, to put it bluntly, if they are keen on animal welfare, they should put their money where their mouth is. Clearly, higher standards make costs higher, so we must ensure that produce is properly labelled in supermarkets so that consumers know what they are buying and are able to buy a British product.

Our main competitors in the pig industry are the Danes, probably closely followed by the Germans, and they are using sow stalls and tethers to this day. I remember trying to table an amendment to get them banned in Denmark by 2004, but the Danes are getting away with it until 2012. The Minister is a friend to farming, and I know that he will fight our corner very hard to ensure that there is no extension. This has gone on for far too many years and driven far too many pig farmers out of business.

Pig farmers do not want to join the subsidy junket. One or two might, but generally they want a fair price for their pigmeat. I have been to many local producers in my constituency to see the farrowing and the outdoor pig systems. We have some of the best, if not the best, pig systems in the world, but that costs more money. We have all made this plea to the Minister: let us look at this matter every way we can. Let us help pig farmers to brand their produce with a local label—Devon meat, of course, is better than any, but perhaps Norfolk meat is nearly as good—and to market it so we can get an increase in price. We give Morrisons top marks, but other supermarkets have lower grades, so let us say to the supermarkets that they cannot go on making pig farmers produce pork at a loss, because the pork will not be there. Once pork in the rest of Europe has decreased—the German situation—and production has fallen, there will not be this vast amount of pork sloshing about in the European market. What the supermarkets are doing is all very short-sighted.

We should look at ways that Government can help, but this is also about the power of the consumer. We must get the message over to consumers that they must go into the supermarkets, look at the label and ensure that the Union Jack is not just for processing, but that the pork was reared, slaughtered and processed in the UK. That someone can still put a Union Jack on a label just for processing is a problem. Often, people will pick that product up as though it is a genuine British product.

I welcome the debate. The number of Members present this afternoon, even with the Budget debate going on, shows how important we feel the topic is. I also welcome the presence of the Minister and the shadow Minister.

15:28

[Mr William Bain (Glasgow North East) (Lab)]

It is a pleasure to serve under your chairmanship once more, Mr Bayley. I congratulate the hon. Member for South Norfolk (Mr Bacon) on securing this important debate, which is also timely, given the number of pig farmers who recently attended the House and put their points on the future of the British pig industry very forcefully.

I commend the contributions made by the hon. Members for Suffolk Coastal (Dr Coffey), for Central Suffolk and North Ipswich (Dr Poulter) and for Tiverton and Honiton (Neil Parish), who expressed their concerns, but also their hopes for the expansion of the industry. They were united in their call for reform of the supply chain, which I shall address later.

The number of pigs in the UK declined from 7.9 million in 1996-98 to around 4.7 million in 2009, although numbers have stabilised since, and world pork production has increased in recent years after pauses in growth earlier in the decade. The United Nations Food and Agriculture Organisation estimated that global production reached 106.5 million tonnes in 2009, and 108.5 million tonnes in 2010. Pork accounted for 37.8% of global meat production in 2010, and pork production is rising in the Asia-Pacific region, but falling in Latin America.

From 2005 until 2010, the European Union exported more pork than any other region or trading bloc, but the Food and Agricultural Policy Research Institute has established that EU exports fell by 19% in 2009, and it forecasts a progressive loss in EU global market share, which is partly accounted for by the differentials in animal welfare treatment. It identifies Brazil and the United States as areas with a quickly expanding global pork market share.

That raises the question whether the EU, in negotiating to complete the Doha round of the World Trade Organisation trade talks, ought to consider trying to level up environmental and animal welfare commitments and guarantees across the world, given the competition that the European pig industry faces from Brazil, the US and other regions. That is an important point.

In this country, the pig industry has made real efforts on reform—for example, greater use of anaerobic digestion to cut down on food waste—and has operated to the highest level of animal welfare, but, as hon. Members have pointed out, food labelling and supply chain problems are placing our farmers in increasing financial difficulties. The previous Government set up a taskforce on the pigmeat supply chain, which produced a code of practice on labelling pork and pork products. It was based on the best practice available from the Food Standards Agency and had the support of the industry.

On research and development, the taskforce sought to extend new systems for surveillance and epidemiology, IT systems for integrating health schemes, slaughterhouse surveillance and quality assurance schemes, and schemes for reducing waste and emissions to the environment from the supply chain. There may be many measures in the Budget that I will not be able to support— [Interruption.] I am sure that hon. Members will not be too surprised by that.

[Daniel Kawczynski]

Shocked.

[Mr Bain]

Shocked, even—dismayed, perhaps. However, I hope that pig producers, and indeed BPEX, will take up one of the welcome measures in today’s Budget: the expansion of small business relief for research and development. That has the potential to improve the competitiveness of the British pig industry.

The Opposition call on the Government to act in three areas. The first is ensuring that the cross-EU enforcement of directives 2001/88/EC and 2001/93/EC on banning close confinement sow stalls takes effect on 1 January 2013, as scheduled. I am aware that the Government are supporting an intra-EU ban on the sale of eggs from countries that do not introduce the new provisions on egg-laying hens from 1 January 2012. Will they adopt the same position in respect of any breach of the directives on pig welfare standards by any member state? I hope that the Minister addresses that point in his winding-up speech.

Secondly, on food labelling, we call on the Government vigorously to support country of origin labelling in their discussions at the Council of the European Union, as alluded to in the coalition Government agreement.

[Mr Graham Stuart]

I do not know whether the hon. Gentleman, from the rural idyll that is his seat, will be able to answer this question. He said that he wants the Government vigorously to act on food labelling. Why was so little done during the 13 years of the previous Administration, although I know he was here for only a little while during that time?

[Mr Bain]

I am grateful for the hon. Gentleman’s intervention. I remind him, as I did the hon. Member for Christchurch (Mr Chope) during a debate on the Sustainable Livestock Bill some months ago, that there are three arable farms at the very top of my constituency. I am hoping to visit them during the Easter recess. Indeed, I have had a good discussion with the National Farmers Union Scotland on a range of issues in the past few weeks.

The hon. Member for Beverley and Holderness (Mr Stuart) raises an interesting point. We can bat around what did or did not happen during the past 13 years, but what will certainly be most effective is cross-EU standards in this area. He knows that the food labelling directive is before the European Parliament, and that it may have a Second Reading by early summer. We should focus our efforts and show unity across the House on getting decent standards that will protect the pig industry and other parts of our arable and livestock farming industries.

I want to address the anomaly that the hon. Member for Central Suffolk and North Ipswich pointed out—that is, food that is processed in the UK can be labelled as produced in this country. We need reform and clarity across the EU through regulations to deal with that issue.

The third area in which we seek Government action is in respect of a plan for the food industry. The previous Government commissioned the report “Food Matters”, under the auspices of the Cabinet Office, and the study “Food 2030”, under the auspices of the Department for Environment, Food and Rural Affairs, but circumstances have moved on. The Foresight report sets out new challenges for better use of water and soil. It also sets the global challenge of feeding 9 billion people by 2050, but with potentially fewer resources—increasing food production by 50%, but in a sustainable way.

To meet the challenges of sustainable food production, which the pig industry will be involved with, and to show that we can meet our climate change reduction commitments, the Opposition and the NFU call on the Government to adopt a proper plan for food, which should include the pig industry. If there is to be a plan for growth arising from today’s Budget, the UK’s largest manufacturing industry—namely, agriculture—cannot be left out. The plan should contain strong proposals for a groceries code adjudicator with the statutory power to tackle unfairness and inequity wherever they are found throughout food supply chains. As hon. Members have pointed out, such an ironing out and levelling of the market would be enormously beneficial to our pigmeat producers.

[Jim Shannon]

One of the subjects that the hon. Gentleman has not mentioned—perhaps he is about to do so—is the supermarket ombudsman, for whom I think there is a role. There is a margin between the £16 million per week profit made by shops and the £8 million per week that the pig producer gets. Is there a method whereby the supermarket ombudsman could bring those figures closer together, thereby keeping pig farmers in production?

[Mr Bain]

It is precisely that ability to take steps to iron out market inequalities that we are calling for. The previous Government called the institution a supermarket ombudsman; the new Government call it the groceries code adjudicator. What matters is the powers that it will have, and we look forward to the draft Bill that the Department for Business, Innovation and Skills promised to publish by Easter to see how rigorous it will be in helping the sector and the dairy sector as well.

Hon. Members have alluded to the fact that the British pig industry needs not a handout, but a hand up. With the combination of an increase in research and development, a strong groceries code adjudicator, better and stronger EU food labelling rules, fairer supply chains and reform of the WTO animal welfare rules, we can collectively ensure a brighter future for our pig farmers, which is what they want and deserve.

15:39

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

I too, welcome you to the Chair, Mr Bayley. I genuinely congratulate my hon. Friend the Member for South Norfolk (Mr Bacon). During his time here, he has been a stalwart supporter of the pig industry, and I am sure that that is not because of his name. His Bill, to which I shall return, is being presented to the House for the fourth time, which shows his determination. I have attended innumerable breakfast and other meetings that he has hosted on the pig industry, and it is fortunate to have someone who is so determined to support it and the pig producers in his constituency.

On one occasion, most of the Suffolk and Norfolk MPs were in the Chamber, which demonstrated not just the importance of the concentration of the pig industry in those two counties—[Interruption.] My colleagues from east Yorkshire also joined us. Those are the main pig producing parts of the UK, and the fact that so many hon. Members decided to attend demonstrates the importance of the pig industry to them, and it reflects the lobbying that has taken place. As a former pig producer in the constituency of my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter), I entirely understand its importance.

As my hon. Friend the Member for South Norfolk rightly said, the industry is vital. He said that its total value is £8.7 billion, which is a significant sum in the retail sector. Others hon. Members have referred to the collapse of the pig herd since the mid-1990s. It is impossible to say precisely how much of that is attributable to the unilateral ban on stalls and tethers that we introduced, but it is obviously a significant part.

One of the changes over 20, 30 or 40 years has been rationalisation into specialist pig units. Years ago, pigs were one unit on a generalised farm, and a rise in grain prices had less impact, because farmers were feeding their own grain to their pigs, so they lost on one side and gained on the other. Now, more and more farmers are specialist pig producers, and must buy all their feed, so they can only lose from rising grain prices.

I shall try to address some of the issues that have arisen during the debate. My hon. Friends will be aware that there has always been pig a cycle. Pigs have a relatively short gestation and growth period, so the rise or fall in supply is a reasonably short-term phenomenon. They were always muck or money as supply and demand fluctuated slightly, but the level of fluctuation has become much worse, and the £20 a pig loss to which several of my hon. Friends referred reveals a dramatic downside of the cycle. It is unfortunate that the cycle was already beginning to drop off when feed prices were hiked up because of the grain price. That exacerbated the problem, but we are there, and the situation is horrendous.

My hon. Friend the Member for South Norfolk referred to some of the costs that our producers incur. Stalls and tethers were first phased out in the early 1990s, and were banned completely by 1999. Tethers were banned in the rest of Europe in 2006, and stalls will be banned by 2013, although, as my hon. Friend correctly pointed out, it will be permissible to keep sows in stalls for up to four weeks after service, and that brings me to the question asked by the hon. Member for Glasgow North East (Mr Bain). I assure him that the Government are absolutely opposed to any extension or derogation. As with battery cages for chickens, countries have known for a long time that the change was coming, and farmers have no excuse for not making the transition.

The hon. Gentleman asked me quite rightly about enforcement, and the fact that farmers will be allowed to have stalls on their farm in which to keep sows for four weeks will create a big challenge. Responsibility for enforcement will rest with the competent authority—usually the Department of Agriculture in member states—and I recognise the issue. We must keep pressing the Commission to ensure proper enforcement, because that is a worrying loophole.

[Mr Graham Stuart]

Will my right hon. Friend say whether the Government have consistently made the case that there should be no derogation after 2013, and whether he has any idea of when the Commission might publish details on enforcement? The earlier we see the proposed enforcement mechanisms, the more we will be able to influence them before they are introduced, when they will be harder to change.

[Mr Paice]

The answer to the first part of my hon. Friend’s question is that we constantly tell the Commission that when a rule is introduced, every country should comply with it, and that there should be no derogations. He is right in saying that we have not seen any proposals for enforcement, and I am not aware that we have seen any assessment of what stage other countries are at. There were efforts to do that with conventional battery cages, but there were difficulties. The matter is important, and I will chase it up to see whether there has been any assessment of what other countries have done. To be fair, we know that many countries with a significant number of pig farmers, such as Denmark, which is a major pig producing country, have converted, but I cannot tell my hon. Friend precisely what the proportions are and how many remain to convert.

The hon. Member for Glasgow North East challenged me on whether we would support an intra-EU ban on those countries that have not introduced the measure. I shall be completely honest, as I always try to be. We have not considered that yet, but he makes a valid point. I made the point about eggs, and there is no logical reason why we should not do the same for pigmeat. However, we want everyone to convert, and until we see some sort of assessment, we cannot speculate too much, but I entirely accept the hon. Gentleman’s point.

I have just been passed a note saying that no official information is available about how far EU countries have moved towards complying with the directive. Denmark and the Netherlands have said that they will comply, but the situation in some other countries is different and vaguer. There are different rules on castration and tail-docking in different countries, and there is a competitiveness issue. Some hon. Members referred to supermarket specifications and, as my hon. Friend the Member for South Norfolk said, claims by Tesco and others about their supply sources. It is reasonable and acceptable, of course, for retailers to ensure that their supply chains comply with British standards, and it is not in the Government’s gift to check whether they do. There is no doubt that tail-docking and castration rules are different in other countries, and it is only right and proper that they should insist on the same standards. I shall return to the supermarket issue.

That leads me to my last point on welfare. My hon. Friend the Member for Suffolk Coastal (Dr Coffey) referred to pigs being kept outdoors. Anyone who drives through Suffolk and South Norfolk will see that tens of thousands of sows are kept outdoors, even through the recent winter and the snow before Christmas. There is no doubt that keeping pigs outdoors is more expensive in production costs. Productivity is lower, there are not so many pigs a year from the sows, and growth rates are slightly affected. Those systems are being adopted because the drive for better welfare from retailers has pushed them that way, but higher management standards are required and farmers do not receive the price for their pigs that that higher standard demands.

I was with a group of Agriculture Ministers in Belgium before Christmas, and we were taken to a modern, highly efficient Belgian pig farm operated in totally enclosed buildings, where the hygiene must have been incredible, as there was no disease. Nevertheless, there were just spartan, bare shelves with a few rubber balls hanging on chains for the pigs to play with. Those pigs compete with our pigs, which are reared outdoors. Apparently, British consumers prefer pigs that have been reared outdoors, but they are not always told about it.

My hon. Friends referred to the overall issue of supply, and to dioxins, which was a problem from Germany that we had in January. The Commission introduced a private purchase scheme for a short space of time, and some pigmeat was taken off the market, which helped for a while. What concerned me was the allegation—I say only that—that certain supermarkets were dropping their British suppliers because the European mainland market was awash with cheap pigmeat as a result of the dioxin scare. To me, that undermines the claims made by my hon. Friend the Member for South Norfolk about supermarkets looking after our sector.

[Mr Bacon]

As the Minister said, it is not in the Government’s gift to check whether claims made by supermarkets about animal welfare standards are adhered to by overseas producers whose products the supermarkets import. Even if the Government cannot do that, however, does the Minister agree that there is an interest on the part of consumers and of Government in knowing whether such claims are true?

[Mr Paice]

My hon. Friend is right and we stand four-square behind the assertion that it is important that the consumer be properly informed about what is available for sale. There should be an effective traceability chain that can verify the claims made on the label.

At this point, I should probably discuss the issue of labelling. I welcome my hon. Friend’s Bill, but he knows as well as I do that there are question marks—to say the least—about the legality of the UK legislating alone on food labelling. There is good news, however, and since we came to office, two things have happened. The hon. Member for Glasgow North East made a point about the pigmeat supply chain taskforce and the code agreed with the industry. That happened before we took office, and I am the first to recognise that. Since we took office, a bigger agreement on all meat has taken place between the supermarkets, the meat trade, the catering and hospitality trades and the producers, resulting in a much broader voluntary code of practice concerning country of origin labelling. That is the key issue. That code is now in place, and we are currently doing an evaluation exercise to baseline it so that we can measure progress in the future.

Alongside that, there are negotiations on the EU food information regulation. Since taking office, we have toughened up the UK’s approach to support the idea of mandatory labelling for meat and meat products, and that is what the regulation currently requires. As my hon. Friend the Member for South Norfolk says, there is a long way to go and I do not want to forecast the outcome. At the moment, however, the food information regulation would achieve what he seeks with his Bill, except that it would apply not only in the UK but across the EU. That is the best way forward, and potentially that is encouraging news.

My hon. Friend the Member for Tiverton and Honiton (Neil Parish) asked about regional labels. There is nothing to stop anybody from marketing and using regional labels, and we strongly support protected name indicators—PNIs—in principle. The two examples I give will not make or break the pig industry, but Gloucester Old Spot pigmeat, and more recently Cumberland sausages, both in the pigmeat world, have been approved for that status. PNIs are a marketing tool, but like any other form of marketing they are effective only if the labelling is honest about the country of origin where the pig was born, reared and slaughtered. That is the point about labelling espoused by my hon. Friend.

[Mr Bacon]

Does the Minister agree that the most important thing about labelling, including mandatory labelling, is to stamp on the canard that giving full, accurate information to consumers somehow distorts the market, because consumers might act on that information? The only possible consequence of accurate food labelling is to assist the clear operation of market preferences.

[Mr Paice]

I entirely agree. We are constantly told by retailers, “We are doing what the consumer demands.” Well, let the consumer demand, but make sure that they are properly informed so that we know that the demand is genuine. There is no reason for anybody, whether producer or retailer, to be afraid of the consumer, and we should not be afraid of consumers being properly informed.

I will touch on the two final issues raised by hon. Members. First, the coalition Government are committed to introducing Government buying standards, and we are on schedule to do so. Some parts of that relate to food but concern health, rather than the DEFRA rules on food, so I will concentrate on pigmeat. Our clear objective is that we should spend taxpayers’ money only on food that has been produced to British standards, as long as it does not cost any more—there are plenty of examples and pieces of casework to demonstrate that it will not cost more. That is only right and fair, and it means using farm assurance schemes as benchmarks to ensure that it takes place. That objective is on schedule.

My final point, on which I have been challenged, concerns the adjudicator. That is the responsibility of the Department for Business, Innovation and Skills and it is clear that the Department is determined to go forward with it. I was asked about its role, and the adjudicator will investigate complaints from anyone in the supply chain who has been affected, either directly or indirectly, by what they believe to be a breach of the code. Furthermore, the issue can be dealt with anonymously. Those are the two big issues that we will see when the legislation is published.

Finally, let me turn to the wider issue of supermarkets. I must resist the temptation to identify individual supermarkets and say what each is doing, because I do not have full knowledge of that. Morrisons is distinct, because it has its own abattoirs, unlike any other supermarket. That is why it buys pigs from the farmer as opposed to from a processer, as other supermarkets do. Usually, however, supermarkets are closely involved in sourcing their meat.

I entirely share the general thrust of the comments made by my hon. Friend the Member for South Norfolk, and those of everybody else who has spoken. If supermarkets and retailers believe that future consumers will want to buy British pigmeat, they have a responsibility to ensure the supply of British pigmeat for the future, and that lies behind the adjudicator and the code. The Competition Commission’s conclusions were not about farmers but about consumers. It was concerned that retailers were shifting too much risk on to the supply side, and that in future the consumer might lose because the supply side was constrained. Therefore, it is in the interests of the consumer to ensure a supply of British pigmeat for the future. I share the view held by my hon. Friends that although no one pretends that there is a single solution to the challenges we face, supermarkets have a big role to play. To be fair, it is not only Morrisons that takes the more responsible line to which my hon. Friend referred.

I am grateful for the compliments that I have received from hon. Friends about my feelings on this matter, but that is not really important. What matters is what the Government do, and we have made a pledge on the adjudicator and are making dramatic progress on the labelling front and on Government buying standards. We have dealt with the issue of potential GM contamination of imports, and we are determined to do everything we can in an industry that, as others have said, is unsubsidised and vitally important. I congratulate my hon. Friend on securing this debate.