Agriculture and Food Industry

Duke of Montrose Excerpts

Thursday 24th July 2014 Lords Chamber

[The Duke of Montrose (Con)]

My Lords, it is a great pleasure to be able to take part in this debate and I thank my noble friend Lord Plumb for introducing the topic. It is extremely important that the agricultural and food aspect of rural activity is not overlooked, as the noble Lord, Lord Bilimoria, was just emphasising. I declare my interest as a UK farmer in a less favoured area, as a member of NFU Scotland and as president of the National Sheep Association. I might also declare an interest in that we introduced new farming practices into the area I now live in 270 years ago. I am conscious of not just adding half an inch of topsoil; we perhaps have done rather better than that.

Because agriculture takes up a major part of the national land area, its influence extends well beyond purely the economy of the UK. However, today, it is the economy that needs to be emphasised, and the aspect that I will highlight is the sheep industry. The government figure for the total output of the livestock industry last year was just over £9 billion, of which just over £1 billion was from sheep. My noble friend Lord Plumb mentioned what a volatile world agriculture works in, whether due to the weather or to the markets. After a sodden winter, we have had one of the most favourable spring and summers that we have seen for some time.

Sheep, along with many other commodities, have just had an amazing run of prices in the past year, but that has suddenly gone over a cliff and the prices are back below what they were two years ago. My noble friend Lord Selborne talked about the future we are looking at, and all this is of small account when we look at it from the perspective given to us by Professor John Beddington, the chief scientific officer, in his “perfect storm” report. This summed the situation up by saying that we have less than 20 years to deliver 40% more food, 30% more fresh water and 50% more energy to meet the demands of a rising world population.

The sheep industry in this country is looking at this challenge and is gearing itself up. In spite of the fact that a great deal of sheep production occurs in very extensive situations, science is beginning to provide suitable tools to move the industry into the technological age. Used intelligently, electronic tagging of sheep will bring greater detail and control into flock management, and modern genetic screening will have a place in improving foundation stock. Great strides are also being made in the application of vaccination against major sheep diseases, and we are fortunate that a great deal of the ground-breaking work is produced by the bioscience industry in the UK, particularly, dare I say it, in Scotland. The object has to be to get more production from fewer and healthier animals. However, for the most extensive production areas, this all has to be tempered with the ewes’ survivability in the circumstances that exist.

I want to draw the Government’s attention to another aspect. Now that the framework of the next common agricultural policy has been drawn up, one particular element is causing distortion to the sheep market, due to an EU competence on animal health. In the 28 years since the crisis of BSE in cattle erupted, no case of a natural transfer of BSE to sheep has ever been found. Your Lordships will be aware that as a precaution, and latterly under an EU regulation, all UK sheep carcasses have to be split to assist with the extraction of the spinal cord. This and other measures are adding £23 million to the cost of UK sheep marketing, and I ask my noble friend to see what can be done about that and to see that it is reviewed.

It will not be any surprise to your Lordships that another aspect of the UK in which food and agriculture plays a part is politics, and at present this is particularly true in devolution politics. As it happens, food and farming form a much larger proportion of the economy in Scotland than they do in the balance of the United Kingdom, so it has proved a very rich field for politicians looking to show what differences there are between agricultural administration in Scotland and in the rest of the country.

What would appear to be, at first sight, a particularly crazy policy has been introduced in Europe governing the provision of money through the CAP to agriculture. In drawing up the financial national envelopes of all member states for Pillar 1, the policy is that, wherever they are now, they should be adjusted to the equivalent of €196 per hectare by 2020. This is to be implemented in stages and, for those currently receiving less than €196, there is a supply of what is known as convergence money to bring them up to this level. In the UK, current funding is the equivalent of €229 per hectare, whereas in Scotland, which is characterised by a great deal of more extensive land and farming units, it works out as €130, which is said to be one of the lowest rates in Europe. As it happens, within the current settlement the UK received an element of convergence money which, given the figures, the Scots would like to have appropriated as their own—you can probably understand that, given the background people associate with the Scots—but instead this was averaged out across the whole of the UK.

From then on we have heard nothing but how much better Scottish farmers could be with independence, ignoring all the other factors that exist. The final details of how the money will reach Scottish farmers are still being worked out, but the outcome may not be as dire as it first appears, as it has been decided by the Scottish Government that about 500,000 hectares on which no agricultural activity occurs will not receive any of the money. This should help those still in active farming.

Following on from the scene that my noble friend Lord Plumb started with, farming in the UK needs a fresh input of young and talented participants. If the needs of the world are anything to go by, we will find that in future agriculture will be contributing a greater and greater part to the national economy.