War in Ukraine: UK Farming and Food Production

(Limited Text - Ministerial Extracts only)

Wednesday 20th July 2022 Westminster Hall

[The Minister for Farming, Fisheries and Food (Victoria Prentis)]

Thank you very much for your sensible approach to the heat, Dame Angela. I am sure we all felt for the farmers who were harvesting yesterday, in extraordinarily hot conditions. I know that many of them will have harvested all night in order to have a slightly more comfortable time. I would like to reassure the hon. Member for Wirral West (Margaret Greenwood) that climate change is a very large part of the discussion about leadership in the Conservative party at the moment, and rightly so.

I, too, thank the hon. Member for City of Chester (Christian Matheson) for securing this important debate, and indeed colleagues across the House for their engagement. It is right to say at the outset that we all condemn the Russian state’s outrageous attack on Ukraine, and that we remain absolutely committed to standing with the people of Ukraine as they defend their country and their democracy.

The Government are certainly not unaware of the situation in Ukraine. I have talked to the hon. Member for Leeds North West (Alex Sobel) about his own family links; my daughter lived in Ukraine until December. We now have a Ukrainian woman living with us at home, and five Ukrainians living in a cottage on the farm. We were aware that war was coming, but I do not know that we were aware of all the consequences or how severe that war would be—a feeling that is probably global. I do not think any of us were expecting Russia to behave quite in the way that it has.

We are here today to discuss UK food security and the effect on farmers. As the agriculture Minister, and having had to travel a great deal in order to deal with the consequences of the war, I feel very strongly that we are fortunate in the UK, as we have a highly resilient food supply chain that is built on strong domestic production as well as imports through very stable trade routes. When I look around those international fora, I feel blessed with the food supply that we have in the UK. That is not at all to say that we are complacent; as the hon. Member for Ceredigion (Ben Lake) said, it is important, and our food security depends on not being complacent about this. We are not complacent, but we are very lucky.

Our food strategy sets a goal for the first time—a real win, which I am pleased about—that the level of food security in this country should be broadly where production is at the moment. Currently, 74% of what we can grow here we do grow here, and about 60% of what we eat altogether is grown here. That has been stable for about the past 20 years and it is important that we maintain that sort of level and always keep an eye on where our trading routes are and their stability. I could not agree more with hon. Members that the future should be more local and more seasonal—that is an important point.

In summary, our food import dependency on the eastern European region is low, and we do not expect any significant direct impact on overall supply as a result of the conflict in Ukraine. We are very much in touch with food and farming industry figures, who remain confident that our food supply chain remains stable.

However, there is, of course, the matter of increasing costs. The global spike in oil and gas prices has affected the prices of agricultural commodities, which are always close to energy costs. Gas prices were rising as we emerged from the pandemic anyway, and the invasion of Ukraine has caused some additional turbulence in international commodity markets—for example, the global prices of wheat, maize and vegetable oil have all increased substantially since the start of the war.

Rising food prices are dependent on a combination of factors, including agrifood import prices, domestic agricultural prices—which are, as the hon. Member for Ceredigion noted, quite high in some cases, although the farmer is still struggling with rising input costs as well—and domestic labour and manufacturing costs. In the farming sector, increased costs are particularly affecting fertiliser, animal feed and fuel, and that is undoubtedly creating short-term pressures on cash flow for farmers. To help, this month we are bringing forward half of this year’s basic payment scheme payment as an advance injection of cash to businesses. Subsidies will be paid in two instalments each year for the remainder of the agricultural transition period.

On the agricultural transition generally, unlike the NFU and Opposition Members I simply cannot justify the current BPS payments situation, whereby 50% of the payments go to the 10% of largest landowners. I remain convinced that there are fairer and better ways to support farmers. I reassure the House that the yearly £3.7 billion pot of money available to support farmers remains the same. Where we take from farmers in BPS payments—which I am afraid I cannot justify, and in the long term I am sure there are better ways to do it—we give back in other schemes. I am pleased that farmers are voting with their application forms: 52% of farmers are now involved in stewardship schemes of some kind, which pay well, and farmers are now applying to the sustainable farming incentive—the lowest tier of our new schemes—which was rolled out gently a couple of weeks ago, and significant numbers of applications are already being approved.

On fertiliser, we have issued statutory guidance to provide clarity to farmers on how they can use slurry and other manures during the autumn and winter. Although global fertiliser prices have risen, the UK has remained quite dynamic in sourcing products, and CF Fertilisers continues to produce ammonium nitrate at its plant in Billingham. We remain concerned about the Ince plant, and remain in touch with the hon. Members for City of Chester and for Ellesmere Port and Neston (Justin Madders).

I reassure the House that we are working closely with the Agriculture and Horticulture Development Board, the Agricultural Industries Confederation and the NFU on how best to establish fertiliser price transparency. I have a large follow-up roundtable on fertilisers tomorrow, as part of a long-term piece of work we are doing with the industry to see what more we can do and to assist the partial change—it is never going to be a complete solution—from chemical fertiliser to bio-fertiliser. We have also delayed the changes to the use of urea fertiliser until spring 2023 and introduced new slurry storage grants.

We know that feed is a substantial input cost. On 1 June we concluded the removal of section 232 tariffs, allowing us to remove the 25% tariff on imports of US maize, which is a key ingredient for animal feed. That went down well with the sector.

I know that farmers need seasonal labour; we are the only sector with an immigration carve-out in that regard. An extra 10,000 visas were announced in the Government’s food strategy, so this year we have 40,000 seasonal visas. I have been working with the contractors throughout the year and am aware that last year around 80% of our seasonal agricultural workforce came from Ukraine, Russia or Belarus. The operators who help us to source the workforce are confident that they will be able to find the workers they need for this season, and all the indications are that those visas are being taken up.

As well as farmers, we work closely with the food and drink manufacturing sector, through strong industry and cross-Government relationships. Despite the ongoing supply chain challenges in global inflation, our manufacturing sector has maintained a stable food supply. Some specific commodities, including sunflower oil and white fish, have been badly affected by the invasion of Ukraine. The Government are supporting the industry to manage those challenges.

We work closely with the Food Standards Agency to adopt a pragmatic approach to enforcing the labelling rules so that alternative oils can be used in place of sunflower oil in certain processed goods without requiring changes to labels. On white fish, we continue to engage with the seafood sector, including the fish and chip shop industry, to monitor impacts and encourage the adoption of alternative sources of supply other than Russia.

It is very important that we maintain our sanctions against Russia. We recognise that it is very difficult for some of our sectors. Our global partners are feeling a far greater impact from the war than we are. Russia is once again using food—or the lack of it—directly as a weapon of war. It is not just a weapon of war in Europe; it is a weapon that is firmly targeted at Africa, where there is already starvation caused directly by Russia’s invasion of Ukraine and the resultant increase of the global wheat price. There is now insufficient wheat for certain areas of Africa to have enough to eat.

We are engaging with like-minded partners through multilateral global forums, including the World Trade Organisation, the UN and the G7, to build important consensus on keeping markets—particularly the grain market—open to support global food security. I have worked closely with the Ukrainian Agriculture Minister, both at the UN global food summit and at various G7 meetings. I am pleased with one achievement we have been able to make ourselves directly—in fact, it was paid for by DEFRA—which is the establishment of a global grain sampling library. In itself, it will not stop Russia stealing grain, but it will have a chilling effect on those buying grain from Ukraine that is clearly stolen.

There is a great deal more work that the world needs to do and I reassure the House that as a Government we are determined to play our part in that work globally. We are aware of the pressures caused by the knock-on effects of this war. We continue to work in partnership with farmers and food producers to ensure that the UK is well equipped to respond to the global forces that continue to drive the supply and price issues that we are facing.