The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)
My Lords, I refer your Lordships to my entry in the register.
I thank the noble Baroness, Lady Harris of Richmond, for securing this debate and welcome the opportunity to respond on the state of the pig farming industry in England. I am very grateful to all noble Lords for their contributions to this very good debate.
Recently I was at the National Pig Awards and I was bowled over by some of the innovations, entrepreneurial activities and the animal welfare measures that pig farmers are bringing in. Many are from Yorkshire, as the proposer of this debate mentioned. It is amazing to think that a pig now produces roughly twice the amount from the same amount of inputs we had on the pig farm I grew up on. That is a recognition of the huge contribution that the pig farming industry has made at the same time as improving welfare standards. It is something to be enormously proud of. I do not diminish the problems the farmers face and I will come on to talk about that.
There are about 4.1 million pigs in England. Pig farming and pork production play an extremely important role in our domestic food supply chain. A rise in international consumer demand for high-quality pork means that there are huge opportunities for growth in British pork exports. The UK’s pig industry exported £567 million of pigmeat products in 2021.
Our pig industry has faced several challenges over the last year, including those arising from the pandemic, such as the loss of exports to the Chinese market for certain pig processors, disruption to CO2 supplies, and a temporary shortage of labour in the processing sector, all of which were well articulated by a number of speakers. This was accompanied by a 9% increase in the size of the pig herd between December 2020 and December 2021, the biggest increase in more than 20 years. We recognise that the industry is also now experiencing further difficulties following the increase in input costs, notably feed, fuel and energy, which has further impacted on farmer margins.
The combination of these initial challenges led to a significant backlog of pigs on farms, which in turn led to financial and emotional impacts on the individual farmers concerned and posed serious risks to animal welfare. I have huge sympathy for all those affected by this.
I am confused by those who say that at this time, we should be delaying the tapering of the basic payment scheme. Doing so would reward arable farmers, some of whom will see their gross margins double because of the current wheat price, whereas the pig and poultry sectors really need our help. Those who are saying, for whatever reason, that this is not the time to continue to change our farming system are missing the point.
The Government provided a package of measures in October 2021 to help address these unique circumstances. I refute those who say we did not act at speed: we acted as quickly as possible to help in these unique circumstances, including through a temporary visa scheme for butchers, private storage aid and the slaughter incentive payment scheme to facilitate an increase in the throughput of pigs through abattoirs. The PSA scheme allows processors to place pork products in frozen storage, enabling them to be safely stored and released on to the market later, while the SIP scheme encourages slaughterhouse throughput by providing a payment for any pigs slaughtered outside normal working hours. More than 740 tonnes of pigmeat has entered the PSA scheme, and close to 30,000 pigs have now been slaughtered under the SIP scheme.
Together with the Agriculture and Horticulture Development Board, the Foreign, Commonwealth and Development Office and other government departments, we continue to work on expanding our existing export markets and identifying new ones for pork. In March this year, we announced the opening of a new export market to Chile worth £20 million over the first five years of trade. This follows our successfully gaining market access to Mexico for fresh pig meat in September 2021, with support from the UK Export Certification Partnership and pork-producing establishments.
Working with our British Embassy in Beijing, FCDO and DIT, we continue to press the Chinese authorities to re-list and allow exports of pork from those processors who voluntarily delisted themselves at the request of the Chinese authorities due to the Covid-19 outbreaks in the workforce back in 2020 and early 2021.
Over the past year Defra has worked closely with the pork industry to support it in clearing the backlog. My honourable friend the farming Minister, Victoria Prentis, has chaired three roundtables: two, on 10 February and 3 March, with pig industry representatives from across the UK, and one on 3 April with representatives of the wholesale and hospitality sectors, to discuss the challenges the sector is facing. As a result, processors made commitments to slaughter an extra 40,000 pigs during the period of March to May. As has been said, several retailers also committed to provide further support to the sector. Last month, Tesco, Waitrose, Sainsbury’s and the Co-op made public commitments to increase both their financial support to the sector and the volume of British pork products they sell.
My colleague Victoria Prentis also met representatives of the agricultural banking sector to discuss the situation in the pig sector. The banks confirmed that they are working closely with impacted pig farmers during this exceptionally challenging period and remain keen to be supportive. Furthermore, we are launching a UK-wide review—this reflects the point made by the noble Lord, Lord Carrington—of supply chain fairness in the sector. We are also engaging with industry and expect a consultation to launch shortly. We want to hear from the industry about improvements to fairness and transparency that could be made to ensure a profitable and productive future. That is addressing the medium to long-term as well as the short-term difficulties. We also continue to work with the industry to support its efforts on the recruitment and retention of domestic workers.
The combination of these measures, together with an increase in slaughter numbers in processors, means that the backlog of pigs has now been almost completely removed, with only small pockets of producers still experiencing backlogs. That is the up-to-date information, and I hope it addresses some of the concerns that have been raised today. This is good news for the sector and demonstrates our commitment to it.
There remain, however, many challenges to pig producers, not least those arising from the conflict in Ukraine and the increase in input costs. The supply chain disruption seen across the agricultural industry, particularly in the pig sector, in recent months, driven significantly by Russia’s invasion of Ukraine, has created challenges across this sector and the wider food and farming industry. Farmers are facing increased input costs, including for fertiliser, feed and fuel, which we recognise are creating short-term pressures on cash flow.
We are working closely with the pig industry to identify where mitigations are available to tackle these challenges. Together with the devolved Administrations, we continue to keep the market situation under review through the UK Agriculture Market Monitoring Group, which monitors UK agricultural markets including price, supply, inputs, trade and recent developments. We have also recently increased our engagement with the industry to supplement our analysis with real-time intelligence.
I want to address some of the points that have been made. I hope that I misunderstood the noble Baroness, Lady Harris, when she seemed to suggest in her introduction that pork products entering this country just come here. That could not be less true. In recent times, we have recruited an extra 180 inspectors. We are also designing a global import control scheme that will be simple, efficient and safe to use, and best suited to our own needs. We want to utilise digitalisation while also maintaining strict biosecurity controls on the highest-risk imports.
A lot of noble Lords, including the noble Lord, Lord Trees, mentioned the very serious threat of African swine fever. He is right to point out how it is progressing across Europe, often in the wild boar population. I chair a monthly biosecurity meeting and the next one will be on Tuesday, where we will hear the latest information on this issue. The Government take this very seriously. We have raised the risk profile for certain countries and undertaken exercises with the Animal and Plant Health Agency and our Border Force colleagues on how we will react to an outbreak and what we can do to mitigate it. However, the most important thing to do is stop it getting here in the first place.
The noble Lord, Lord Carrington, raised the issue of short-term cash flow, and he is absolutely right. It will help some pig farmers that we have brought forward the basic payment scheme by six months because they will have other farming interests, but the majority of the pig sector is unaffected by the support schemes. We want to make sure that there is more action and that they can benefit from the new, reformed farming system through all the innovation grants we are bringing in and the improvements they can bring to their processes. We can make sure that they will benefit.
The Groceries Code Adjudicator was a very welcome change brought in under the coalition Government. It is working for producers and other parts of the supply chain.
I absolutely assure the noble Lord that the pot of government support is not getting smaller. The £2.4 billion that was in the basic payment scheme will continue to be allocated to the sector.
The noble Lord, Lord Trees, talked about food as a percentage of household income. He is right, but we are mindful that a great many families are suffering at the moment. There is wider support for them right across government in how we deal with that. I agree with the noble Lord about waste. We could resolve all our food supply issues if we wasted less food. I was always taken by a campaign called The Pig Idea, which involved the use of safe swill in feeding pigs. However, that might be above my pay grade.
The issue of African swine fever was also raised by the noble Baroness, Lady Bakewell. I assure her that we can block imports from African swine fever countries in the EU through the regionalisation agreements we have made. We want to make sure that future farming support reaches pig farmers.
I absolutely note the point made by the noble Baroness, Lady Hayman, about rare breeds and I am delighted that the Berkshire breed has been saved; it was going fast towards extinction. It is just one example of the possibilities of future development here. The noble Baroness’s involvement with the Rare Breeds Survival Trust is noted.
In the last few minutes, I will again run through the vital work that we are doing. I hope that this will reassure noble Lords. We included temporary visas for skilled butchers, private storage aid, slaughter incentive payment schemes, and working with the AHDB to seek new export opportunities and an expansion of existing export markets. There were 12 specialist pig abattoirs in England in 2020 and, overall, 93 registered slaughterhouses of all sizes, commodity-specific and cross-species, that can process pigs. Yesterday, I was at Fir Farm in Gloucestershire, looking at a mobile slaughterhouse. This is an innovation that I hope the Food Standards Agency will authorise in the near future. This will be of enormous benefit to stock farmers, and it will alleviate the movements that some stock has to make.
Together with an increase of pigs slaughtered by processors and, sadly, the on-farm culling of an estimated 40,000 pigs—not the 60,000 that was allocated, but still a horrendous number—the combined impact of these measures has helped reduce the backlog of pigs on farms significantly. The size of the backlog has fallen from close to 200,000 pigs at its height to almost nothing, with the backlog now estimated to be cleared by the end of June. This is based on a combination of industry intelligence and internal Defra modelling based on February slaughter data, culling estimates and butcher arrivals. Small pockets of pigs remain backed up on farms where there are specific challenges.
A mention was made of the temporary visa scheme. Due to Covid, many of the butchers did not start to arrive in the UK until February or March 2022, but their arrival has enabled processors to increase the throughput of pigs. The private storage aid scheme closed to new applications on 31 March. Under the scheme, 745 tonnes of deboned pigmeat have been placed in frozen storage, which has been of great benefit.
I will write to any noble Lords whose points I have not been able to answer. We acknowledge the important role that the pig farming industry plays in our domestic food supply chain, and the challenges that it has faced over the last year and continues to face as a result of the war in Ukraine. We will continue to work with and support the industry to ensure its long-term future.
Baroness Bennett of Manor Castle (GP)
My Lords, I covered extensively the Sustainable Food Trust report, Feeding Britain From the Ground Up. Can the Minister commit to the department looking at the report to see what it might draw from it for government policy?
Lord Benyon (Con)
I was at the launch of that report yesterday. I read it and it has been received by the department.
Lord Trees (CB)
Can the Minister reassure us that the Government will reinstate sanitary checks on animal products from the EU?
Lord Benyon (Con)
Already, the 180 extra inspectors are doing that. We have built our BCPs and will be occupying them in the coming months.
Baroness Harris of Richmond (LD) [V]
My Lords, I thank the Minister for his response, especially on biosecurity, although I did not quite catch all that he said a moment ago when talking about the highest risk imports and border checks, which he says are adequate; we will see.
I am most grateful to all noble Lords who have spoken in this very interesting debate and who have supported my concerns about the pig farming industry. My noble friend Lady Bakewell of Hardington Mandeville and the noble Baroness, Lady Hayman of Ullock, have neatly summed up the contributions of your Lordships, so I will not repeat them. I look forward to continuing discussions on this important subject in the future.