Lord Redesdale
To ask Her Majesty’s Government what plans they have to provide support to the British farming industry to combat (1) increased production costs resulting from the ongoing labour shortages, and (2) increased competition from the Australian and New Zealand markets.
Lord Redesdale (LD)
My Lords, I must start by declaring my interests as set out in the register. I thank all noble Lords taking part in this debate—however brief the time they have—and the noble Baroness, Lady Bloomfield, for taking part on behalf of the Minister who, I believe, is self-isolating with Covid.
The purpose of this debate is to raise two major issues, both of which are a result of Brexit. I know those issues were debated as part of speeches about Brexit, and the problems associated with it could be seen as an “I told you so” but that is probably not the most progressive way of looking at these issues. I was looking just at labour shortages, because both issues are enormous subjects, especially for an hour-long debate. However, the issue of free trade agreements was very live on the doorstep in North Shropshire during the recent by-election, where we managed to return the most excellent Helen Morgan as the MP. It is an issue that the farming community takes very seriously. The purpose of linking those two issues together is to look at the short-term issues that the industry faces, but also the longer-term issues raised.
Obviously, we are in a period of transition where we are moving from the CAP which, for all its faults—having debated it many times, I know that there were many—gave farmers an underlying, sustainable subsidy regime for the financial models on which they could base their business. The issue at the moment is that the Government are formulating policies to replace that subsidy regime. I ask a question which is asked many times: is it the Government’s intention to maintain the current farm payments until the new Brexit support scheme is rolled out in full and in place? Is there any basis in the reports that farmers could lose half their money in the next four years, because that would drive thousands of family farms out of business? Any information the Minister can give on that would be very helpful.
Looking at the different issues, I start with labour shortages. This is a Brexit issue, because British agriculture was particularly reliant on the freedom of movement of EU workers before Brexit and, to meet our needs, will continue to be after Brexit. Almost all the 70,000 seasonal workers in fruit picking and vegetable harvesting were from eastern Europe in 2017, according to the National Farmers’ Union, and in 2018, a report by the Migration Advisory Committee said that 99% of seasonal agricultural workers were from EU countries. The present position across the whole of the agriculture and food sector is that there are about half a million job vacancies, which is of course causing major problems.
For the horticultural sector, this shortage of workers means that some crops remain unpicked. Apparently, in June this year, 30% of daffodils were unable to be harvested or were picked later than planned due to labour shortages. Some produce is also being left in storage for longer. For the poultry sector, it means that production has had to be cut back. There is a particular need for flowers and fruits in the ornamental sector to be included in this debate because they are often overlooked.
Looking at the meat sector, some abattoirs are operating shorter weeks. Meat processing plants are also struggling to recruit, with knock-on effects throughout the food chain. The situation is being worsened because of the shortage of lorry drivers, which means that, even when a product is available, it cannot always reach its destination. Recently, I heard of a situation where there is a problem because larger companies are prepared to pay more for lorry drivers; this has a knock-on effect on smaller companies, which cannot afford the higher wages.
The chronic staff shortages in the supply chain mean that all businesses—farmers, growers, wholesalers and manufacturers—are having to offer incentives to retain and recruit staff, raising costs throughout the sector. Of course, this problem has been exacerbated for a number of reasons, such as Covid-related travel restrictions, self-isolation rules and EU nationals returning home to be with their families. However, it is also based on the UK’s new points-based immigration system, which coincides with the free movement of EU citizens ending because of Brexit. In the UK, as with many developed countries, seasonal work has relied on migrant labour; that is not likely to change in the short term.
I always find it funny that people call pickers unskilled labour. If you look at the difference between migrant labourers who know what they are doing and those people who are learning, there can be a massive difference in the amount that they can undertake during the day. Despite help from the Department for Work and Pensions through its matchmaker scheme, which linked growers to Jobcentre Plus offices, growers have struggled to recruit UK workers. There are negative perceptions of the sector and UK workers are often not attracted to seasonal work because travelling to rural locations is difficult and costly; it often requires living on farms; and the work can be irregular and is often temporary, which is a major setback.
Short-term solutions could include the introduction of a 12-month Covid recovery visa. This would enable all involved in the supply chain to recruit to critical roles and significantly reduce the labour shortages currently being faced. It would alleviate the pressure on the sector and give it the time it needs to continue to recruit and train domestic staff. The NFU has also called for permanent seasonal workers schemes for the UK horticulture industry and a seasonal workers scheme for the poultry sector. These would enable farmers to plan and create stability in the supply chain.
Longer-term asks promoted by the NFU include the agricultural sector being promoted as a career choice and reversing the negative perception of many of the job roles in the industry. This should include having a co-ordinated approach to skills and training. Relevant food and drink courses should be added to the list of level 3 adult courses eligible for the £95 million lifetime skills guarantee. This would help to bridge the widening skills gap with overseas workers while working to attract and train home-grown workers. The Government’s youth mobility scheme could also be extended to cover European and other relevant countries, such as Ukraine. This would enable some flexibility in the labour market to meet the demand for roles that do not meet the criteria for the skilled worker’s role.
Another idea could be to look at greater flexibility in how the apprenticeship levy can be used to enable businesses to train and upskill staff. Of course, the simplest thing, however, would be to look at a change in the immigration policy, because I think that there has been a change in people’s view of immigration. It is not as much of a concern as it was in the run-up to Brexit.
The two other issues are the Australia and New Zealand free trade agreements. There has been concern across the industry that, in the move to sign up to these agreements as quickly as possible, the needs of the agricultural industry have been set aside because exports to this country from Australia and New Zealand are of course heavily predominated by lamb and beef products. Although there is a 15-year period over which this transition could take place, it seems that the amount involved will put added pressure on the sheep and beef sector in this country. However, in looking at some of the trade that New Zealand is undertaking, I was interested to see that a lot of it will be diverted to China and the Pacific countries as they get a taste for lamb in particular.
I will end with one point highlighting the degree of anxiety that these issues are causing; of course, I have not even started on the major problem of energy prices. I read in the oral evidence given to the Select Committee in another place on 26 October last year a line in which Tom Bradshaw, vice-president of the NFU, summed up the fear that many in the industry feel. He said:
“I have never seen the industry in the position it is in at the moment and the real lack of confidence is crippling the sector.”
Lord Lilley (Con)
I declare an interest as the former MP for Harpenden, where the Rothamsted Research Institute is.
When your Lordships’ House discusses agriculture, it is converted into a TARDIS, transporting us back in time to the Corn Law debates of the 19th century—debates then, as now, dominated by landowners advocating for protection and high food prices and supported by bourgeois romantics who oppose industrialisation and progress; their modern counterparts are the Greens. Both are indifferent to the impact of higher food prices on those poorer than themselves. I hope that I will not be the only one to speak up for consumers today.
The only way to combine prosperous agriculture with abundant, low-cost food is for farming to be competitive. Nothing promotes competitiveness like competition, which means phasing out protections and subsidies. Can UK farming become competitive without protection? Much of it already is. The world record yield for wheat changes hands between farms in Northumberland—the county of the noble Lord, Lord Redesdale—and New Zealand, both far higher than the best producers in Canada, the US or Russia.
New Zealand agriculture, which this Motion sees as a threat, was losing competitiveness until it abolished all protective tariffs and subsidies. The NFU brief for this debate claims that New Zealand’s costs are between one-quarter and two-thirds lower than the UK’s but it ignores the subsidies that UK farmers receive, which are equal to 40% of their costs. It also ignores the cost of transporting New Zealand products half way round the globe.
Improved UK competitiveness will come not just from the long tail of less efficient farmers adopting the efficient methods of the best. As well as reducing time-consuming EU regulations, Brexit should mean that British farmers can apply modern scientific methods banned by the EU—often developed at Rothamsted— such as CRISPR and GM, which will boost yields and reduce the use of costly and environmentally unfriendly pesticides, herbicides and fertilisers. The main losers from opening up our market to our Antipodean friends will be not UK farmers but inefficient European farmers, who currently supply nearly half our food. The winners will be more efficient British farmers and hard-pressed British consumers.
Lord Whitty (Lab)
My Lords, two minutes: three points. First, on labour costs, the fact of the matter is that British farming is going to have to accept that it will have to pay its workers more. As the noble Lord, Lord Redesdale, said, we have relied for too long on immigrant and migrant labour to undercut British workers. We need a proper skills base to address the kind of mechanisation and technological improvement referred to by the noble Lord, Lord Lilley. We need better training. Unfortunately, the underfunding and overdiversification of Lantra and our agricultural colleges have meant that new people who are skilled enough to take up posts as farm workers or managers are not coming through. I hope that the Government will recognise this problem and set up a manpower board for land skills that truly delivers a new generation of a skilled workforce working in this new era.
On trade, I disagree with the noble Lord, Lord Lilley. We are placed in a very difficult situation: just at the point where subsidies are being reduced and costs increased, we sign a deal which goes against the commitments made by the Government during the passage of the Agriculture Act. I can only quote the words—approvingly, in this case—of the president of the NFU when she said:
“We always wanted to do a deal with Australia. But we never thought that it would be a deal where we just gave the most prized food market in the world over for nothing.”
That is the problem with the deals being reached now.
Thirdly, on policy itself, there is a central problem. I agreed with the greening of agricultural policy in the Agriculture Act, but it has proved to be very slow and complex to deliver. To judge by the words of George Eustice last week, the problem is that the Government are focusing not on making agricultural and food production more sustainable but removing large chunks of land from food production for other purposes. That is the wrong emphasis. Both have to happen, but we need to find more sustainable, effective and advanced methods of producing our own British food.
Lord Bilimoria (CB)
My Lords, I am proud to chair the Manufacturing Commission of which Jack Dromey was vice-chair, and I pay tribute to him. He was outstanding. I thank the noble Lord, Lord Redesdale, for initiating this debate, and I declare my interests right up front as the manufacturer of Cobra Beer, manufactured using the finest British malted barley, and Malabar Blond IPA—India pale ale—produced using the finest British hops.
I am so proud of our British farming industry, and I pay tribute to the NFU, which is a member of the CBI, of which I am president. In fact, the NFU identified in a report last year that there is an estimated workforce shortage of 500,000 across the food and farming sector, including hospitality and haulage. In June last year, the CBI and I pointed out—including on the Floor of this House—labour shortages, for example among lorry drivers and butchers. The Government did not listen. By October last year, healthy pigs had to be culled at farms rather than being sent to slaughter. This was the first time that pigs were mass culled since the 2001 foot and mouth outbreak. The Government eventually issued temporary visas for 800 pork butchers, which were available until the end of 2021. Will the Government extend this? The Government also eventually announced temporary visas for 5,500 poultry workers and 4,700 HGV drivers. The HGV driver visas expire on 28 February, and the poultry worker visas expired on 31 December. Will the Government extend these?
Why do the Government not reform the Migration Advisory Committee, including academics, economists and businesspeople, to give it the independence of the Low Pay Commission, which sets the minimum wage that the Government have to follow, or the Monetary Policy Committee, which sets interest rates that the Bank of England has to follow? This reformed MAC could, on a regular basis—quarter by quarter—activate the shortage occupation list sector by sector, prescribing the number of jobs and the length of the visas. This would give our economy, including our farming, food and drink sector, the workforce that it needs, instead of crippling it with self-inflicted labour shortages and shooting ourselves and our economy in the foot.
Lord Colgrain (Con)
My Lords, Kent is the garden of England. Its fruit and vegetable growers are market leaders and are now being joined by English wine growers in being held in increasingly high esteem. All these producers are being crippled by the restrictions of the seasonal workers scheme.
It is missing the point to say that English workers can fill the void. They cannot, as has been ably demonstrated by the training schemes of the like of the admirable Thanet Earth organisation, where after good teaching and with good pay prospects, English trainees wither on the vine and fail to stay the course. Mechanisation and automation are also not the panacea they are made out to be—at least not for a few years yet. Can the noble Baroness try to apply further pressure to ensure that the numbers in the seasonal workers scheme can be increased? Without the provision of more pickers, many of our admirable market-leading producers will be unwilling to invest and will cease to be competitive.
In my view, the Australian trade deal will prove to be most unhelpful for British beef producers. When, according to the NFU, the cost of Australian beef production is around two and a half times less than for the UK, it is not surprising that the Australian trade negotiators could not believe how easily the British Government were rolled over in their eagerness to get one run on the new trade deals scoreboard. The 10-year implementation period will allow the mist of time to descend to disguise how awkward this trade deal will be for all future British Governments.
The recent decision by Asda to suspend the purchase of British beef in favour of Irish—a quick-turnaround decision made on cost alone—shows how exposed the industry is to cost pressures. Can the Minister give any assurance that the same high standards of animal welfare, environmental protection demands and haulage time limitations, all of which are being imposed on and willingly met by British producers, will be monitored and adhered to in Australia and New Zealand? What power of sanction can she realistically suggest that the Government of the day will have to exercise should any such failings be identified?
Lord Hendy (Lab)
My Lords, my noble friend Lord Whitty is right: the ongoing labour shortages in agriculture are caused by low wages and bad terms and conditions. The problem has dogged agriculture for years. Hitherto, the sector has been sustained by cheap European labour, which the government visa scheme will now extend. The use of foreign labour has been dependent on single persons whose families remain abroad and who therefore do not need to pay British family costs and are prepared to put up with non-family accommodation.
In 1924, the problem of low wages was addressed by the Agricultural Wages (Regulation) Act, which established agricultural wages boards, AWBs, which set wages by collective bargaining. The resulting annual agreements were binding by law on all agricultural employers and workers. The AWB for England and Wales was abolished in October 2013, though Scotland retained its board. The Welsh Government established their own, facing down a challenge in the Supreme Court in doing so. Now the Northern Irish board is under threat.
The AWBs set different rates reflecting skills and experience, thus offering something of a career progression—essential to attract youngsters into farm work. There were enhanced rates for overtime, weekend and night work, and fallback rates for waiting and travelling time. Housing costs were regulated and, underlying it all, workers had a say in their terms and conditions. Clearly, the AWB for England should be reinstated.
Small farmers operate on small margins, of course, but it was not they who sought abolition; it was the supermarkets. The brutal truth is that food is too cheap, and consumers too deserve higher wages. As the TUC general secretary said in a new year message:
“Britain needs a pay rise.”
The Government’s goal of a high-wage, high-productivity economy should start with agricultural workers.
Baroness McIntosh of Pickering (Con)
My Lords, I congratulate the noble Lord, Lord Redesdale, on securing this debate and refer to my interests in the register.
A common strand to all the northern dales, whether Northumbria, Cumbria, Durham or North Yorkshire, is the sheer number of family farms. In North Yorkshire in particular, almost 50% are tenant farmers.
I take issue with my noble friend Lord Lilley. I argue: where is the level playing field? How can it be right that we are imposing higher costs of production in the stringent animal welfare and environmental criteria that our livestock farmers have to meet, yet are going to accept meat produced to a lower standard from Australia and New Zealand? That simply cannot be right, and I ask my noble friend and the Government to look very closely at that.
Also it cannot be right that the Animal Welfare (Kept Animals) Bill, if my understanding is correct, will outlaw the sale of live animals, particularly the sale of spring lambs to France, which is an outlet that is highly regulated and limited in nature but a source of income to northern farmers. What understanding can my noble friend the Minister and the Government display of livestock farming production? Can she say this evening with clarity what the schemes that replace those under the CAP will contain? Will she endeavour immediately to make the forms simpler at the point of sale at livestock marts, and can she tell us precisely how livestock farmers, particularly small family farms and tenant farmers, will benefit from the new schemes? My wish list this evening is: simpler forms at the point of sale; clarity of the new schemes; and affordable homes for farmers to retire to.
Baroness Harris of Richmond (LD) [V]
My Lords, I am sure we will hear from the Minister how Defra will take our farmers to the sunny uplands during the agricultural transition plan rollout and move us as far away as possible from the European Union and its hated farming policies, but in my part of the world, up in north Yorkshire where we have more sheep than people, there is considerable anxiety about just how effective the Government’s model is going to be.
Most of us would not argue against the environmental land management scheme as being a good thing—nor would we argue about giving grants to improve productivity, especially around animal welfare and that catch-all word “sustainability”. But the questions farmers here are asking are, when negotiating the Australian trade deal, did the Government calculate what impact importing meat might have on UK meat producers? Sheep farming is a mainstay of farming in the Yorkshire Dales. In relation to the stated aims of maintaining our landscape for tourism, leisure and encouraging wildlife, are the Government simply relying on making payments to keep the landscape as it is now, without considering how best to support and maintain the market for sheepmeat? Will sheepmeat imports be subject to the same production standards as meat from farms in Yorkshire? If not, what steps will the Government take to compensate Yorkshire farmers?
Basic payments have accounted for around 60% of profits for farmers over the last five years; they urgently need to know how that will be replaced. A plethora of complicated new schemes is being offered, one of which might mean that farmers decide to sell off land and move to producing renewable energy. One firm has already signed up more than 500 additional renewable sites, 80% of which are on UK farmland. Indeed, one is proposed on a contentious site close to my town’s boundaries. Farmers complained bitterly of the huge amount of paperwork and form-filling when we were members of the EU; will they not be hit by even more of it now that we have “taken back control”?
Lord Harlech (Con)
My Lords, I draw your Lordships’ attention to my interests as set out in the register. In general, I support closer ties with Australia and New Zealand, as well as the wider Commonwealth. There are many sectors where a free trade agreement will benefit British businesses. I commend the Government for their bold regenerative agriculture aims, encapsulated by the new environmental land management schemes. However, I agree with the noble Lord, Lord Lilley, that this free trade deal comes at a time when British farmers are already facing immense challenges following Brexit and are about to embark on the biggest changes in agricultural practice and funding for decades.
The Government’s own impact assessment showed that, although the deal will be of marginal benefit to the UK economy overall, agri-food sectors will be significantly worse off over the same period. Gross value added in agriculture and semi-processed foods will decrease by approximately £94 million and £225 million respectively, compared to 2019 levels. The amount of beef and lamb allowed into the UK in the first year of the agreement is 60 times larger than the volumes currently imported from Australia, so the so-called protective tariffs will not kick in until it is too late. To swamp domestic markets with cheap imports at such a pivotal moment for our farmers is, I fear, reckless. As we saw with fishing, farming is more than just cold, hard, economics. It means landscape, community and livelihoods. Do we really want to risk putting small family farms out of business for such miniscule potential GDP growth?
British produce has the highest environmental and welfare standards in the world, something we should be incredibly proud of. At a time when consumers want sustainable produce with as few miles as possible between farm and fork, should we really be importing inferior products from the other side of the world when there is such a colossal economic risk to our own farmers? I urge the Government to look again at the agricultural clauses within the deal and do what is necessary to back British farmers.
Baroness Boycott (CB)
My Lords, in June 2021 when the UK and Australia signed the agreement in principle, a former Australian trade negotiator said:
“I don’t think we have ever done as well as this. Getting rid of all tariffs and quotas forever is virtually unprecedented.”
So, what are we getting in return? Animal welfare standards are low. Australia permits practices such as mulesing and allows the use of antibiotics as growth promoters. Climate policy in Australia is a joke; Australia ranks bottom out of 193 countries. It also permits the use of double the number of highly hazardous pesticides that we do in in this country, and has no set period for reviewing pesticides approvals.
It is well known that the British public do not want these low standards. A recent survey by Which? found that maintaining food standards in trade deals remains a top concern for 91% of consumers. So, what should we do? The Government must not let this zero-tariff, zero-quota deal become a blue print for deals with even larger nations like Brazil and the US. They need to accept the recommendations of the Trade and Agriculture Commission, the National Food Strategy and the Committee on Climate Change to bring forward core standards.
The Government should also support British farmers by buying more, higher-standard and higher-welfare produce for the public sector. Each year we spend £2.4 billion on food for schools, hospitals and the Armed Forces; if this were made a legal standard, it would make up a bit for the £94 million that our farmers are expected to lose as a result of this deal, which will increase our GDP by between 0.01% and 0.02%.
Finally, the Government have formally commissioned the Trade and Agriculture Commission to look at the impact of this deal on animal and plant health. Can the Minister confirm to the House tonight that the human health impacts will now be assessed by the FSA, and can she assure the House that that organisation will be adequately resourced to take forward this new and large responsibility?
Earl Leicester (Con)
My Lords, I refer to my farming interests as listed in the register. Many noble Lords have highlighted the short-term problems of increased production costs resulting from the ongoing labour shortages. I add my support to those statements but will not dwell on them, other than to confirm that they exist and that all farm businesses are suffering as a result.
In the long term, if the Government really are going to support the UK farming industry and help it to become world-beating, they must improve the teaching of agriculture in colleges and universities. It is poor and outdated and has, for example, barely started to address regenerative agriculture. We have a fantastic, keen new apprentice in our farming business. He has been with us since September, but he is not the first to have become demoralised with the three days per week that he spends at Easton College as part of his apprenticeship. The agricultural colleges are tired. Their principles of education are based on very traditional systems and practices; they have been more a way of life for farmers’ sons and daughters. Agriculture must attract students from outside the industry. It needs to stimulate and inspire in similar ways to other industries. Three of the four most recent tractor drivers we have employed have degrees from Russell Group universities, and two are not from an agricultural background.
John Deere estimates that 80% of combine harvester operators have little idea of the full capabilities of their combines. This leads me to my second point: that the general low-skilled labour demand could and should be replaced in the long term by technology. This would be one way of making farming attractive to an intelligent and ambitious workforce. Also, government must invest in long-term research, by which I mean more than the normal three-year projects, and must encourage a meeting of minds between academics—the scientists—and practitioners—the farmers.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank the noble Lord, Lord Redesdale, for securing this debate. It is a delight to speak after the noble Baroness, Lady Boycott; she said many of the things I was going to say, so I have done a quick rejig.
I start with the words of Minette Batters, the NFU president, at the Oxford Farming Conference a week ago: “We have trade policy here and we have agricultural policy here—they are a million miles apart”. We are well used to a lack of joined-up government, but this is a truly extreme example not of failure to join up but of absolute contradiction in government policy.
I will focus on Australia, for reasons made obvious by my accent. Building on the points of the noble Baroness, Lady Boycott, the use of antibiotics as growth promotants poses a huge risk to antimicrobial resistance—it is a risk to our medicine. There are only voluntary guidelines for stocking density of broiler chickens and laying hens. For carbon emissions, Australian beef is 1.5 times as bad as British beef. Tree cover and biodiversity destruction is 180 times higher in Australia than it is in the UK. I have much experience of Australian agriculture. I have mustered paddocks—fields, sort of—of 10,000 hectares; sheep or cattle run on them and are mustered two or three times a year. How will your Yorkshire Dales farmer, who calls a vet every time an animal gets ill, compete with that?
The noble Lord, Lord Lilley, suggests that this debate takes us back to the 19th-century corn law debates. He is certainly going back to 19th-century ideas about food and farming systems. Those of us seeking to improve the health of our food—to have high animal welfare and environmental standards—speak for the citizens of the 21st century.
Lord Carrington (CB)
My Lords, I declare my interests as a farmer, as set out in the register. I thank the noble Lord, Lord Redesdale, for this debate. The support called for should not be a return to the subsidies we have just abolished but the establishment of a level playing field on trade, together with a food and farming strategy to promote productivity and develop export markets. Other noble Lords have covered every aspect of the labour issues and trade deals, and I will avoid repetition. In the seconds available, I will concentrate on the overall context in which these farming issues arise and what a huge number of farmers, faced with so much policy uncertainty, are thinking, so that we can identify a sensible way forward.
First, farmers still do not know enough about the financial viability of government schemes as they pertain to their circumstances. Secondly, they are fully aware that current government support is guaranteed only for the life of this Government. Thirdly, they know that, although we produce the best food in the world, most customers buy according to price, not quality. Fourthly, they know that options such as planting trees, rewilding or selling carbon credits are difficult to reverse. Fifthly, they know that, from a financial return standpoint, covering their farms with houses and other fixed assets is unbeatable. It is therefore unsurprising if there is limited appetite for government schemes.
However, clarity on government food and farming policy would make a huge difference, so that there is an agreed land use framework that encompasses food production for our security. Can the noble Baroness, Lady Bloomfield, tell us what sort of level of domestic food production the Government envisage? Will farmland be protected under a land use strategy? What risk assessments have been done on the production of domestic food with the full implementation of the Agriculture Act? When this is clear, together with the labour and trade policies, farmers can sensibly plan for the future.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, my noble friend Lord Redesdale has set out his case fully. Moving the payment of farmers from a purely land-based formula is the right way forward. However, some of the Government’s schemes and initiatives for future farming funding lack detail and are being trickled out slowly. This is not providing the necessary reassurance that farmers need to secure their businesses into the future.
This, coupled with the New Zealand and Australian trade deals, is causing anxiety and stress to our farming businesses. My noble friend Lady Harris of Richmond already indicated that Australian meat imports will have an effect on UK producers. The Government have negotiated a shoddy deal that could see our markets flooded with cheaper, lower-quality imports. Ministers now need to come clean about the impact of this deal on local farmers, with particular reference to labour shortages, seasonal workers and supply chains, as raised by several noble Lords.
New Zealand controls 30% of the global dairy market and its farmers can produce lamb and beef at a cost 63% lower than UK farmers can. Australian farmers are similarly advantaged by the sheer scale of the country and their ability to mass-produce. Fears are growing that family farmers are being sold down the river, after the Government’s own impact assessment found that the Australian deal will cost £94 million to the farming industry. The noble Lord, Lord Harlech, referred to this. Is this really what the Government intended when they negotiated Brexit and wanted to engage in trade deals with the world outside the EU? Was it to undercut our own farmers and to import an inferior product that is not produced to the same high standards we enjoy here and whose animal welfare policies fall a long way short of our own?
Many Peers have asked critical questions, including the noble Earl, Lord Leicester, and the noble Baronesses, Lady Boycott and Lady Bennett of Manor Castle. I look forward to the Minister’s response.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank the noble Lord, Lord Redesdale, and all noble Lords who have spoken in this debate. I declare an interest through my involvement at Rothamsted.
Last year, we supported the NFU’s powerful campaign for Britain’s high animal welfare and food standards to be protected by law in the Agriculture Bill. Sadly, the Government rejected that call. Instead, the compromise Trade and Agriculture Commission can comment on trade deals only retrospectively, when the deal has been done, rather than being a partner in the process, which is what we proposed.
As a result, we have an Australian deal that would increase beef exports to the UK by more than 60 times their 2020 levels, despite Australia’s notoriously poor environmental standards and use of substances banned in the UK, as noble Lords described. New Zealand’s lamb production costs are 63% lower than the UK’s, giving it a huge trade advantage.
The winners in these trade deals are the huge farms and megacorporations of Australia and New Zealand. The losers are British farmers, in particular those who run small family farms. Add into this mix the current labour shortages in the food supply chain and you can understand why many farmers feel let down by this Government. As Neil Parish, the Conservative chair of the Commons environment committee, said recently:
“We are seeing our industry slowly being destroyed”.
I ask the Minister: is it true that Priti Patel refused to meet the NFU to discuss the labour shortages? Does the Minister agree with many noble Lords that we need to resolve this shortage on a long-term basis? Does she agree with the NFU and the Opposition that we should maintain Britain’s self-sufficiency in food production at a minimum of 60%? Does she agree that the Department for International Trade should put our high-quality standards and great British produce at the forefront of future trade deals, rather than as an afterthought, which is currently the case?
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I congratulate the noble Lord, Lord Redesdale, on securing this important and timely debate, and welcome the opportunity to respond on our plans to support the British farming industry. I am grateful for the many thoughtful contributions to today’s debate, and I will try to respond to many of the key points raised. However, given the time pressures, I may need to write to noble Lords after reviewing Hansard.
This Government are committed to ensuring that our food system is built on a sustainable and resilient farming sector, so that we and future generations can continue to access good, healthy and sustainable food. Thanks to the contributions of the 4 million people employed within the sector, we can proudly say that the British agri-food industry contributes about £130 billion to our economy, with the value of UK food and drink exports reaching £23.6 billion in 2019. Our high-quality produce and high standards mean that we can boast a world-class reputation for food and drink, at home and abroad.
However, we must acknowledge that this has been a particularly challenging time for many within the agri-food sector. The unforeseen disruption caused by Covid-19 and EU exit mean that pressures have been felt widely across the sector. We are more than aware of how this has impacted the supply of seasonal labour from overseas to our agri-food sectors. We hope that some of these agricultural workers may still have settled status and have returned home to family but may come back to the UK once the pandemic is over.
This Government have worked alongside industry to ensure that our sectors are appropriately supported and have put in place a range of measures to help alleviate the challenges that they have faced. Our short-term mitigation measures have included, if not exactly a Covid-recovery visa, introducing emergency temporary visa solutions, and a package of measures to help the British pork sector. Most recently, we announced that the seasonal worker visa route will be extended to 2024 to allow overseas workers to come to the UK for up to six months to harvest both edible and, as the noble Lord, Lord Redesdale, observed, ornamental crops. I can only hope that all the daffodils will be harvested in time for St David’s Day.
The noble Lord, Lord Redesdale, also asked whether the Government would support a permanent seasonal worker scheme for the UK horticultural industry. We will continue to assess the seasonal workforce needs for the horticulture and other sectors, such as the seasonal worker route, recently agreed with the Home Office, as 2022 to 2024 progresses; 30,000 visas will be available and this will be kept under review, with the potential to increase by 10,000 visas if necessary. The noble Lord also made a number of other constructive suggestions, including apprenticeships, which the department will now note.
Education was of great concern to the noble Lords, Lord Redesdale, Lord Hendy and Lord Whitty. The “free courses for jobs” offer, launched in April 2021, gives all adults the chance to access their first level 3 qualification for free. There are over 400 qualifications on offer, including qualifications which can lead to employment in the food and drink industries, such as food technology, hospitality, catering, agriculture and land management. The list of qualifications is kept under review to ensure that it adapts to the changing needs of the economy.
A number of noble Lords, including my noble friend Lord Leicester and the noble Lords, Lord Hendy and Lord Whitty, repeated the concern that the education on offer was not of the standard needed to take this industry into the next phase. The Government are contributing towards the establishment of a new professional body, the institute for agriculture and horticulture. This initiative is aimed at removing the fragmentation that exists in the current learning and skills landscape for farming businesses, enabling the industry to drive forward greater uptake of skills. The institute will drive improvements in industry capability which will cover the skill sets required to deliver future environmental land management objectives, including water and air quality, soil husbandry, woodland restoration and management, agroforestry and biodiversity.
It is through our continued engagement that food supply chains were successfully maintained through these challenging times, and we have managed to protect our farmers from the worst price impacts of labour shortages. To answer my noble friend Lord Colgrain, Defra will continue to work closely with the Home Office on the issue of visas. However, most food sectors are accustomed to fluctuations in supply chain costs, and Defra’s extensive work in this space has reinforced the long-standing view that the most effective response to food supply disruption is industry-led, with appropriate support and enablement from the Government. No better is the resilience of our food supply chain illustrated than through the recent publication of the UK’s first Food Security Report. I assure the noble Baroness, Lady Boycott, that Ministers meet regularly with the FSA to monitor and discuss its resource needs.
I hope that my noble friend Lord Harlech will be reassured that the report shows that our self-sufficiency ratio is about 60% overall, though much higher for produce suited to our landscape and soils, such as some brassicas, including carrots and cabbage, and beef, poultry, milk and grain, to name but a few.
The noble Lord, Lord Redesdale, and a number of other noble Lords, raised the real issue of the increased costs faced by farmers. I agree that it is, to some extent, a perfect storm. We are very well aware of this and know that farmers are facing worrying times. We are monitoring the situation and working closely with farmers to endeavour to come up with solutions. Sadly, some of the factors contributing to cost increases are beyond our control, such as Russia restricting exports of natural gas and China of urea, and the escalation of wholesale energy prices. But the market may drive producers to look at biofertilisers, for example, or fewer applications for fertilisers. This could be seen as the beginning of an opportunity.
We want to continue supporting farmers and to work hand in hand with them on our plans for a renewed, efficient agricultural sector, including many of the suggestions made in the excellent speech made by my noble friend Lord Lilley. Now that we have left the European Union, the way we support farmers is transforming. As set out in the agricultural transition plan in November 2020, we plan to gradually reduce and stop untargeted direct payments and invest the money freed to pay farmers to improve the environment, improve animal health and welfare, and reduce emissions.
The noble Lords, Lord Redesdale and Lord Whitty, both worried about the reduction in farm incomes as farm payments are phased out, but the agricultural transition is over seven years from 2021 to 2028, giving farmers time to adapt. Direct payment reductions are proportionate, with large landowners taking the biggest cuts. As they go down gradually, new schemes will be introduced in parallel.
In answer to my noble friend Lady McIntosh’s plea for simpler forms and clarity, I will reinforce her message, but we codesign the ELM schemes with farmers to ensure that the applications are farming-friendly and that it is easier to understand all the available grants. As to her plea for livestock farmers, as part of our future farming schemes, the introduction of the animal health and welfare pathway will improve the health of our national herd, reduce the need for vets and medication, reduce the effect on the environment and underpin our international reputation for good health and welfare, bolstering our export opportunities.
As announced by the Secretary of State at the CLA conference in December 2021, the sustainable farming incentive sets out how, within a few years, we want all farmers to view producing environmental and climate change benefits as an integral part of their business, alongside food production. I am grateful for my noble friend Lord Harlech’s support.
Similarly, we will also provide significant grants that will help farmers to reduce costs, stay competitive and improve their profitability. Last October, we announced the opening of applications for the first three competitions in the new industry-led R&D partnership fund—R&D that will boost the productivity and prosperity of England’s agricultural and horticultural sectors and enable more farmers and agri-food businesses to become involved in agricultural R&D. This will maximise the impact of investment in innovation and improve the take-up of novel approaches on farms.
The noble Lord, Lord Carrington, asked about our food self-sufficiency. Our Food Security Report shows that our self-sufficiency ratio is about 60% overall, although it is much higher for produce suited to our landscape and soils. By combining efficient farming systems with leading environmental and animal welfare standards, we can make sure that British producers play their part in feeding the UK and the world, and reduce the risk of offshoring production and environmental harms to other parts of the world. We can embrace a way of farming that makes space for nature, halting species decline, reducing greenhouse gas emissions, protecting soils and improving water quality.
My noble friend Lady McIntosh of Pickering also raised housing and tenant farmers. As part of the development of our new schemes, we have considered the needs of tenants and worked closely with a number of organisations, including the Tenant Farmers Association. I believe that she had a recent meeting with the Minister and the Tenant Farmers Association. We are looking into the problem raised about access, and will work with these organisations and other stakeholders to understand whether there is anything that we need to do to ensure that tenants are not excluded from these schemes.
I will now cover the hugely important aspect of trade, which many noble Lords clearly have many worries about and have spoken about. As mentioned, British food and drink has a world-class reputation. This Government are committed to encouraging people, both at home and abroad, to buy British. I point out that 81% of beef sold in the UK is British, and every Aldi, Budgens, Co-op, Lidl, M&S, Waitrose and Morrisons stocks only British beef.
We will help our farmers capitalise on the enormous global demand for British food and drink. In November, we launched a refreshed export strategy on tackling trade barriers, opening new markets and providing the services that our exporters need to compete in global markets. As a newly independent trading nation, we are pursuing new opportunities for British farmers previously denied to us.
I fear that I do not recognise the rather gloomy portrayal of the Australia trade deal, as illustrated by my noble friend Lord Harlech, as being of marginal benefit. The deal is expected to unlock an estimated £10.4 billion of additional trade.
This is about not just free trade agreements but the removal of various barriers to exports. For example, just before Christmas, the US lifted its export ban on lamb from the UK, paving the way for our farmers to start exporting some of the finest lamb in the world into US markets for the first time in two decades. This follows on from the opening of US beef markets to UK exports in 2020, which the industry estimates will be worth £66 million over five years.
I recognise that concerns have been expressed about the impact of new trade deals on our farming and food sectors. I would like to reassure noble Lords that our recent agreement with Australia, as will be the case with New Zealand and indeed any future partner, does not compromise our high standards. The agreement with Australia does not create any new permissions or authorisations for imports. All products imported into the UK will have to comply with our import requirements, as they do now.
Furthermore, we have secured a comprehensive partnership to work with Australia on animal welfare. The non-regression clause on animal welfare that we have secured with Australia is the first in a free trade agreement and will help demonstrate that both countries are committed not to lower their animal welfare standards in a manner that impacts trade. The UK has also secured the exclusion of pork, chicken and eggs from tariff liberalisation, reflecting the importance of animal welfare to the UK and the level of trade between Australia and the UK in these products.
Let me also take the opportunity to alleviate the concerns of some colleagues regarding meat imports from Australia. Strong demand from the Asia-Pacific region will continue to attract Australian supply. In 2020, more than 75% of Australian beef exports, and more than 70% of sheepmeat, were exported to these markets. Moreover, increased imports from Australia are more likely primarily to displace imports to us from the EU—the origin of roughly 230,000 tonnes of our beef imports in 2020—than to hurt UK farmers.
We have also secured a range of measures to safeguard our farmers. The first is the tariff rate quota, which lasts up to 10 years, depending on the product, and automatically applies higher tariffs to imports above a certain volume threshold. The second, from year 11 to year 15, is known as the product-specific safeguard and applies to beef and sheepmeat. Additionally, if volume thresholds under the tariff rate quotas or product-specific safeguards for sheepmeat are consistently filled, the UK can periodically reduce the volume thresholds of the quotas or safeguards by 25%.
The final measure, a general bilateral safeguard mechanism, will provide a temporary safety net for industry if it faces serious injury, or threat thereof, from increased imports as a direct consequence of the FTA. This applies to all products. It is a protection that will last for a product’s tariff liberalisation period plus five years, in order to allow domestic industries time for readjustment. We are committed to ensuring that any deal we sign now and in future will include protection for the agriculture industry and will not unfairly undercut UK farmers.
The noble Baroness, Lady Bakewell, asked whether we had sold farmers out. No, we strongly believe that this deal balances open and free trade with protections for the agricultural industry. The UK has secured a range of measures to safeguard our farmers, including these tariff rate quotas for a number of sensitive agricultural products, product-specific safeguards for beef and sheepmeat, and a general bilateral safeguard.
I must end. I thank noble Lords for taking part in this debate and for raising some extremely important points. Our food system is complex and we recognise the challenges that farmers face, but the UK has a highly resilient food and farming system, as demonstrated throughout the Covid-19 response. I hope I have reassured your Lordships that we will always champion our farmers and producers, supporting them to grow more of our great British food and to provide a reliable and sustainable food supply to the British public and beyond.