Agriculture (Financial Assistance) (Amendment) Regulations 2023

Debate between Baroness McIntosh of Pickering and Lord Grantchester

Tuesday 14th March 2023 Grand Committee

[Baroness McIntosh of Pickering (Con)]

My Lords, I am grateful to my noble friend the Minister for setting out the detail of and background to the regulations before us today. I simply want to probe him on a couple of points, if I may, including on how these regulations will apply, especially to English farmers, and particularly tenant farmers.

The guidance was published in March 2022, and the path to sustainable farming was set out earlier. Has the guidance been updated since 2022? I do not see that in the Explanatory Memorandum, paragraph 11. If they are just technical changes, that may not be so important.

Why was no impact assessment done? As my noble friend said, this is year three of the seven-year transition and where the finances will start to bite quite dramatically. I state at the outset that English farmers will feel unfairly treated. My understanding is that the direct payments will continue in Scotland, so those farms in North Yorkshire, Durham, Cumbria and Northumberland will look across the Scottish border and see a slightly more familiar scheme to that which they have now and which is being taken away from them. Is that something that concerns my noble friend the Minister?

My real concern is the transition from basic farm payments to ELMS. My noble friend concentrated very heavily on the advantages to the environment. I press him on how this will impact on hill farmers, upland farmers and small farmers everywhere, in particular those who produce grazing stock such as spring lambs and, indeed, fatstock cattle.

In a Financial Times article on 5 March, it is calculated that a drop in farm business income—a measure of net profit—of almost two-thirds is expected in this financial year. That amounts to a drop in profit of £16,300. When I was an MP next door—as indeed was my noble friend—I worked very closely with the graziers. I would hazard a guess that that £16,000 per grazier was their total income. The question is this: what alternative money will they seek? They tend to have the rights in perpetuity but they tend to be tenant farmers elsewhere. If they do not get direct farm payments because the landowner, where they farm elsewhere, is taking it then obviously they will not be getting any compensation.

My noble friend the Minister will be familiar with the work of Julia Aglionby, a Professor of Practice at the University of Cumbria’s Centre for National Parks and Protected Areas. Her projection is that income will recover to £22,900 in two years before slumping back to £16,700; this would place it at just above a third of its 2021-22 level. I understand that of particular concern to the president of the NFU is the fact that at the heart of this squeeze on government payments is the decision to calculate payments on the basis of income foregone plus costs, meaning paying for green improvements at rates aimed at recompensing farmers for the resulting fall in agricultural income.

According to the president of the NFU, Minette Batters, for some farms that took part at the pilot stage, the work was simply not cost effective. As my noble friend the Minister will be aware, upland farms are particularly affected because they tend to produce less food than lowland sites, meaning that they are considered to have foregone less income and are paid lower rates. As I understand it, most farmers will receive £151 a hectare for managing grassland with minimal fertiliser, but those doing the same work in so-called severely disadvantaged areas or upland farms will be paid only £98. That is a severe drop in income and this is only the third year of seven.

Can my noble friend the Minister address those points? How are these farmers meant to survive? What are the department’s projections for the fourth, fifth, sixth and seventh years? Where the farmers in the uplands are tenant farmers, as many of them will be—I appreciate the fact that, in North Yorkshire, where I served as an MP, and in County Durham, where I grew up in the Pennines, probably 50% of the farming community is made up of tenant farmers—what hope do they possibly have of farming in future if they are not eligible for food production grants going forward? I realise that they will get money for stonewalling, which is a tradition that we want to keep, but they are hardly contributing to food security or sourcing more food—as the Prime Minister would like them to do—for our schools, hospitals and local garrisons. What future does my noble friend see, even in this coming year, for upland farmers and, separately, for tenant farmers?

[Lord Grantchester (Lab)]

I declare my agricultural interests as recorded on the register, in that I own agricultural land and am in receipt of payments. I thank the Minister for his introduction to the regulations before the Committee and welcome my noble friend Lady Anderson of Stoke-on-Trent to her new Defra responsibilities.

I had thought that we would be debating two instruments today: this one and the one on direct payments to farmers. The disastrous mess being created by the Government on food production is evidenced by the loss of that second instrument today; it is to be debated later this month through separate fatal and regret Motions.

These amendment regulations, albeit seemingly on technical administrative measures, have the potential to add greater confusion for food producers while taking away parliamentary oversight and giving more powers to Ministers. The regulations will minimise the references to specific financial assistance schemes and definitions in the original 2021 regulations to allow future changes to be made to the design of specific schemes, seemingly without due consideration and process and without the need for amendments to have parliamentary approval. Seeming to be subject to constant flux cannot instil confidence in the agricultural community to align long-term business planning with the perceived lack of consistency of government objectives on environmental sustainability. Are there are guidelines regarding the duration period? How many reinterpretations of schemes might the Minister’s department pursue without necessitating a fresh mandate? Will the Government commit to undertaking consultations on every change?

The instrument proposes extending exemptions for agricultural holders, under animal and plant welfare measures, to have to publish certain information. This administrative ease brings added complexity if an agreement holder is only partly involved in such schemes, as well as others. Can the Minister give an assurance that all agreement holders will be notified in advance of all the information to be published? Will that notification be subject to challenge?

On the wider issue, will changes of personnel within an agreement holder—for example, in the case of farm partnerships—necessarily have to be notified to Defra for legitimacy and the maintenance of agreements? I presume that this would have implications where the Secretary of State is required to publish the aggregate of financial assistance paid under the schemes, necessarily adjusted for exemptions.

Agriculture Bill

Debate between Baroness McIntosh of Pickering and Lord Grantchester

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Thursday 17th September 2020 Lords Chamber

[Lord Grantchester (Lab)]

I thank the noble Baroness, Lady Bakewell of Hardington Mandeville, the noble Lord, Lord Curry, and my noble friend Lord Whitty for adding their names to this amendment and to many of my following amendments, which introduce the office of the Groceries Code Adjudicator as the mechanism by which these fair dealing provisions under Clause 27 will be administered. At this stage I will mention that the noble Lord, Lord Curry, asked me to express his disappointment that he has had to leave tonight because of the late sitting of our proceedings; he cannot get home without leaving immediately. He would have liked to have been present to make his remarks on this important series of amendments to this clause.

I introduced these amendments in Committee as probing amendments to draw out from the Government how they expected to take these provisions forward. As with many features of this framework Bill, so much of the detail and the governance arrangements are not being made explicit in the Bill.

That these provisions have been recognised as needed and necessary to the better conduct of a fair market is something that the Government can be congratulated on. The debate in Committee underlined how effective the GCA Act has been in setting out and policing business practice in the GSCOP, which now regulates the behaviour of the retail industry, which must abide by it in its relationships with its direct suppliers. There was universal praise for Christine Tacon on how she, as the adjudicator, successfully encouraged effective change to become embedded down the supply chain.

In response, the Minister explained that his department, Defra, would be the lead department in delivering these obligations. The Government intended to commence these regulations agricultural sector by sector, starting with the dairy industry. This has already started, with a consultation on the operation of contracts that is drawing to a close next week, as I understand it, on 24 September—that is, three months after the opening of the consultation in June. However, I may be corrected, as on a previous amendment the noble Baroness the Minister said that it has already closed. That it is on the cusp of closing or has already closed is regrettable in that we are not able to deliberate on the consultation in our considerations on the Bill.

I table these amendments again to give the House a chance to debate these important provisions and reflect further on the Government’s approach. I state again that Clause 27 is a very bold and ambitious step that the Government have taken. I express concern that, although the groceries code has proved very effective in stabilising fair dealing provisions in the retail sector, difficulties remain regarding whether this was the appropriate mechanism to cover the whole of the supply chain: the service sector as well as the retail sector, the widespread diversity of food products in the supply chain and how they are delivered across many forms of enterprise and business practice.

The Government are undertaking a huge task and care must be taken, as a one-size-fits-all regulatory regime may not fit all in the appropriate manner. The problems and solutions in one sector and the relative merits in the behaviour of various participants may not be suitable to be applied across the board to all sectors, each with differing market imperatives, regarding how the various markets may be made to work more effectively. That there is an imbalance in negotiating power between the primary producer through the processing, manufacturing and product development supply chain and the end market is not in doubt.

I shall not press these amendments tonight, nor support other amendments, including Amendment 87 should it be pressed. The Government have set out on the task and already started a consultation with the dairy sector. As I set out in Committee, I was concerned that these provisions had a narrow focus on contracts. Indeed, Clause 27(1)(a) specifically addresses contracts. Fair dealing provisions should examine the business relationship in its widest implication and interpretations that encompass many various circumstances that arise in primary production. However, it must be recognised that a first step is being taken, and it is starting at a very pertinent point—the contract.

In the interval between Committee and Report over the Summer Recess, I spoke to many in the dairy sector, especially those at the foot of the supply chain—the dairy farmer and his or her processor. I can tell the Minister that the department’s consultation has been widely promoted among the many sections of the industry: the farmer, the producer group representing the farmer’s suppliers, and the processing industry. Many have shared their submissions with me, and I am sure that the Minister’s department will receive a widespread response. Here and now is perhaps not the place to debate this further; I will add merely that the voluntary code of practice—VCOP—in contracts, introduced in 2012, has proved ineffective in improving fairness and transparency on a wider scale and, as has been experienced during this pandemic, urgency is needed to tackle the problem more extensively and in a comprehensive fashion.

I also note that this is a widespread problem throughout the industry that now extends across borders, with the overseas ownership structure covering the dairy industry in both the UK and Europe. The EU is also pressing on with its solutions, through directive 2019/633 on unfair trading practices in business-to-business relationships in the agricultural and food supply chains. Can the Minister make any comment, even though the consultation has barely closed, on the progress of the consultation, concerning the numbers, extent and general features beginning to become clear? Even in the immediacy of the lockdown, the retail relationship with the supply chain is today much better than it has been, due to the activities of the Groceries Code Adjudicator.

Will the department be separating out submissions from the retail sector and the service sector from this consultation? The consultation does not mention the wider farmer-processor relationship with the ongoing supply chain, and specifically with the retailer. Will the Minister give a commitment that further inquiries will be conducted as the submissions are considered? It may prove difficult to make immediate recommendations. Reflecting across other sectors in the industry, can the Minister give any indication as to when further consultations will be progressed? Which sector has the department next in mind? Furthermore, how might the various sectors combine to find comprehensive answers to this very difficult problem of fair dealing in the industry, a problem that is now being tackled by the Bill? I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate the noble Lord, Lord Grantchester, and the co-signatories for bringing forward Amendment 63 and others in this little group. Amendment 67, in my name and that of the noble Baroness, Lady Ritchie of Downpatrick—I thank her for supporting this amendment —seeks to achieve precisely the same ends. I join with the noble Lord, Lord Grantchester, in expressing regret that the noble Lord, Lord Curry, is not able to speak to this group, but I entirely understand the circumstances in which he felt he had to head north.

Again like the noble Lord, Lord Grantchester, I pay tribute to the Groceries Code Adjudicator, who has done a sterling job in regulating the relationships between the major retailers and direct suppliers. I was most grateful to have the opportunity to discuss this amendment with my noble friend the Minister, who I understand may be able to signify some movement in this regard. I look forward to that with great interest.

I hope that the Government are minded to widen the remit to cover the gap that needs to be plugged by including the indirect supply chain, such as dairy, which is currently excluded from the process. For dairy producers and fruit growers, many of whom are quite small in size, it is extremely difficult to bring a complaint to the Groceries Code Adjudicator. That is why I am very keen—and it is something that we concluded some seven or eight years ago on the Environment, Food and Rural Affairs Select Committee next door—that it should be incumbent on the Groceries Code Adjudicator to bring forward, on her initiative, investigations in this regard. The indirect supply chain, as well as the direct, is extremely important for these small suppliers, and things do sometimes go awry. We should not be entirely reliant on complaints from small producers and growers who can too easily be identified and may, as a result, lose their contract, livelihood and mainstay of their income.

I very much support the Groceries Code Adjudicator taking over this role. I understand the difficulties, as she reports to a different department. If there has been some movement and my noble friend is able to see a way forward in this regard, I think it would be very welcome to the House.

Agriculture Bill

Debate between Baroness McIntosh of Pickering and Lord Grantchester

Committee stage & Committee: 7th sitting (Hansard) & Committee: 7th sitting (Hansard): House of Lords
Tuesday 28th July 2020 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted to open the group of amendments leading off with that in my name and to thank the noble Baronesses, Lady Henig and Lady Ritchie of Downpatrick, and the noble Lord, Lord Krebs, for lending their support to this amendment.

It is very timely, as today we learned that the official launch of the new Trade and Agriculture Commission has taken place. We learned that the commission will report directly to the International Trade Secretary and will produce an advisory report at the end of its six months’ work. I congratulate my noble friend, his department and the Department for International Trade on recognising the wish for such a commission. I hope he will look kindly on the need for Amendment 270 and possibly some of the other amendments in this group.

A million people have signed up to say we would like to support our farmers. Since the Covid-19 pandemic, people care much more about where their food comes from and the standards to which it has been produced. In Amendment 270 I ask that the Government establish an international trade standards commission within 12 months of passing the Act. At the time I drafted and submitted this amendment, we did not think even in our wildest dreams that there would be such a commission, so obviously the name change is not reflected in this amendment.

My disappointment is that the trade commission is not permanent; its work will wind up after only six months. We were told at its official launch that it will function as an advisory board to the Department for International Trade and the Secretary. I make a plea that the advice and recommendations given by the international trade commission be as binding on the Government as those of the Migration Advisory Committee. We heard from our noble friend Lady Williams at the Second Reading of the immigration Bill that the Home Office follows the MAC’s recommendations very closely indeed. That is the sort of recommendation-following I would like to see from the new Trade and Agriculture Commission.

I believe that it should be permanent and that the model we should look to is that in other countries with which we seek trade agreements. For example, why not model it on the US International Trade Commission, which is independent, non-partisan and quasi-judicial? It is a federal agency fulfilling a range of trade-related mandates, providing analysis of international trade issues to the President and Congress and adjudicating on intellectual property and trade disputes. We could look to similar trade commissions that are also permanent and independent in New Zealand, Australia and other such authorities.

In proposed subsection (2) of Amendment 270, we say:

“The International Trade Standards Commission must establish criteria for maintaining standards as high as or higher than standards applied within the United Kingdom at the time of import for agricultural goods imported under a trade agreement between the United Kingdom and any other state.”


I congratulate and thank my noble friend the Minister, who confirmed on Thursday that Britain will not lower its high standards of animal health, welfare and environmental protection, but today I make a plea to my noble friend: we need fair competition and a level playing field. We need to give our farmers an assurance that they will not be undercut by imports of substandard farm produce and that their good husbandry will be recognised. It is good husbandry in particular that we should take cognisance of, rather than necessarily the processes.

A number of figures on stock density were bandied about on Thursday. I put it to the Committee that in the US—it is a matter of note—there are no federal laws on the control of stock density for pigs. In nine states, sow stalls are banned. In the remaining states, it is legally permissible to keep sows in stalls for the entire 16-week gestation period. Similarly, sow stalls are legally permitted in Brazil. I applaud the fact that in the UK we have a gold standard for stock density for pigs and that we currently have a relatively level playing field with our competitors in the European Union.

Proposed subsection (3) refers to:

“‘Agricultural goods’ under subsection (2)”,


which

“includes, but is not limited to, standards relating to … animal welfare … protection of the environment … food safety, hygiene and traceability, and … plant health.”

On a personal note, I will probably be accused of being protectionist. I am protectionist. I am protective of the chicken, the cattle and the lamb produced under potentially inhumane and intensive conditions that we would simply not tolerate in this country. Their production frequently bears no resemblance to ours, and those imports should not have any place against the produce we currently produce to our high standards in this country.

In proposed subsection (4), we go on to say:

“A Minister of the Crown may not lay a copy of an international trade agreement before Parliament under section 20(1) of the Constitutional Reform and Governance Act 2010 that contains provisions relating to the importation of agricultural and food products into the United Kingdom unless satisfied that the criteria established by the International Trade Standards Commission”—


now the Trade and Agriculture Commission, obviously—

“under subsection (2) have been met.”

That encapsulates my wish that the commission will give binding advice and operate independently and that the advice will be followed by both the international trade and agriculture departments. At the moment, it appears that every time a press release is issued by the new commission it is issued from the department, and that does not demonstrate any act of independence whatever. I hope my noble friend’s department, Defra, and the Department for International Trade will look at this.

You cannot have a perverse situation whereby farmers continue to meet our high standards of trade, welfare and environmental protection, only to be undercut by potentially substandard imports from third countries. I have a question for my noble friend. I understand that we have probably left the expert trade in agriculture group, which meets fortnightly under the auspices of the EU Commission. What will replace it? I hope the replacement will be the new Trade and Agriculture Commission but if not, which body will hold the Government’s feet to the fire as they set out the detail and criteria that will be followed in negotiating international trade agreements? In my view, the Trade and Agriculture Commission will be the best place to do so but should have sight of trade texts and provide detailed feedback, which is why Amendment 270 is so badly needed. If the commission is to wind up after six months, that is not satisfactory.

I will comment briefly on two of the other amendments in this group. Amendment 271, in the name of the noble Lord, Lord Grantchester, and other noble Lords, is well thought out, but my concern is that it does not set out the role of the international trade commission or who would draft criteria against which the international trade agreements being concluded would be measured. Subsection (5)(b) of Amendment 271 just refers to a take-note report submitted, presumably, to both Houses. I believe that there should be full scrutiny through the normal means of Select Committees, assuming that the trade commission will be a permanent body.

Amendment 279 again has been well thought out and is commendable, but I believe it is fatally flawed. Having read it, I wait with great anticipation to hear what the noble Lord, Lord Curry, says. It is not satisfactory that the report will have been submitted but we cannot revert to the Trade and Agriculture Commission because it will already have been wound up by then.

In summary, we must not have a credibility gap. I am enthusiastic about the launch of the Trade and Agriculture Commission today, but it must be allowed to do its duty. It must be a permanent body and accountable to the relevant bodies, particularly Select Committees of both Houses. It should have comprehensive terms of reference, which include current and future trade talks. Its recommendations should be mandatory, in the same way as those of the Migration Advisory Committee. I beg to move.

[Lord Grantchester]

If there is one strong theme running through many of the amendments, it is that of standards. I am grateful to all noble Lords who have raised concerns, whether on animal health and welfare, on husbandry methods in agriculture and horticulture, on environmental and climate aspects, on food, nutrition and labelling the final product, or on intra-UK relationships and international aspects at the WTO. They are all important, because they all matter.

This country has decided. The answer is that the UK wants to bring back control, so that decisions are made at UK level. This group of amendments determines how our standards will be set, at the outset of our EU exit, and how they will be maintained.

I shall speak to Amendment 271, and I am grateful to the noble Lord, Lord Cameron, and the noble Baronesses, Lady Hodgson and Lady Bakewell, for adding their names in support. This amendment is needed, as the Agriculture Bill is a domestic measure setting a new approach to food production support by setting new domestic standards in law. That includes all present laws and regulations that pertain in the UK. All food, wherever it comes from, must adhere to this basic threshold. It is important that domestic agricultural production is on a level playing field with all production of food available and sold to UK consumers. Let us be clear: these are food production standards, not just food safety standards. British consumers have constantly demanded high production standards even, at times, in excess of standards within the EU.