Agriculture and Food Industry

Lord Bilimoria Excerpts

Thursday 24th July 2014 Lords Chamber

[Lord Bilimoria (CB)]

My Lords, less than 2% of our labour force meets 60% of our food needs. Agriculture and food is a crucial aspect of our economy. However, I do not believe that the sector is given the appreciation or recognition that it deserves in light of its importance. I do not believe that we take enough pride in our food and agriculture, as we could and should do. I believe that we take it for granted.

In my industry, my own product, Cobra Beer, is made predominantly from agricultural products, and the vast majority of that is, of course, malt, which is made from British barley. My joint-venture partners are Molson Coors, the American-Canadian global brewers, and I have heard Pete Coors, the vice-chairman, speak with immense pride about the relationships that Coors has had with farmers for more than a century. Such is the interdependence that exists between agriculture and industry.

I thank the noble Lord, Lord Plumb, for his excellent speech and for leading this debate with authority—as we heard from the noble Lord, Lord Palmer—as a former driver of “NFU 1”. The agri-food sector, as the noble Lord said, contributes almost £100 billion to the economy, or 7.4% of our GVA. That is huge—3.6 million people, or 13% of national employment. Nevertheless, can the Minister confirm that employment in the agri-food sector has actually fallen over the past 12 months, which is the largest decrease in agriculture, falling by 18,000?

The Minister, George Eustice, has said that the industry should have “confidence in its future”, and that there is,

“growing consumer interest in food provenance”.

He mentioned, as we have heard in today’s debate, that the world population is set to top 9 billion, so we will see increased demand for more westernised foods, including dairy products and meats. The demand for food is forecast to rise by 60% by 2050, and we need a vibrant, profitable farming industry in the UK to cope with this demand.

In February 2014, George Eustice said:

“The rural economy is worth £211 billion a year. Rural areas are home to one fifth of the English population, yet they support nearly a third of England’s businesses”.

This is excellent. However, the vast majority of these businesses are SMEs, and we need to create the right environment for these businesses to flourish. Cambridge University, in a report by the Centre for Industry and Government and the Institute of Manufacturing, said that,

“many descriptions of the food and drink sector are oversimplified”,

and that,

“the food and drink sector is a key element of future strength for the UK, providing value to the national economy in financial, strategic and social terms”.

As the noble Lord, Lord Plumb, said, the NFU has said:

“agriculture’s contribution … has increased by a staggering 54 per cent between 2007 and 2012”.

The UK has 142,000 businesses that are registered as farm businesses. This is phenomenal. The levels of growth are incredible. We should be proud that we are the third largest wheat producer in Europe. We are the third largest milk producer in Europe. We are the largest producer of sheep meat in Europe. We are the fourth largest producers of beef in Europe. Yet we have heard that there is a trade deficit and that our self-sufficiency is actually declining. This is a concern.

On the positive side, British shoppers actually want to back British farming. According to the NFU, 86% of shoppers are,

“as likely or more likely to want to buy more traceable food that has been produced on British farms”.

In the other place, the House of Commons Environment, Food and Rural Affairs Committee produced a food security report earlier this year and made the point:

“The UK is currently 68% self-sufficient in foods which can be produced here”.

However, it says:

“There has been a steady decline … over the last 20 years”.

A lot of our food is imported from Europe. The report goes on to say:

“As part of the CAP, many of our farmers receive support from the EU”.

Can the Minister give us an update on the CAP? Is it working to our advantage? It is a contentious issue.

We have heard before about the £160 million agri-tech strategy, which is about supporting collaborative research and development and translating this into practice. However, I would submit, and the committee submitted, that this is insufficient. The proof of that is the first round of bids for this was six times oversubscribed. Do the Government agree?

I am proud to have been appointed recently as the chancellor of the University of Birmingham, and last week I visited our department of chemical engineering and saw the amazing work that the food microstructure group is doing in linking up with industry and helping the food industry. If more of this can take place, the better it will be. The green revolution in India, a country that for centuries had famines, took place only because of bold innovation; India no longer has famines.

The UK must ensure that we work with the EU to address the issue of CAP and also the issues of food security and innovation. The reality is that from 1940 to 1990 yields were rising. Since then, farm wheat yields have stalled; there is no rising trend. Will the Government confirm that the yields have plateaued and that we desperately need innovation? In this sense, we need to increase agricultural output, including GM. What is the Government’s view on GM? The NFU policy is that it is in favour of GM technology. It believes that GM will be one of the solutions. Do the Government agree? Are they willing to work with the EU in tackling the issue of GM? There is a lot of resistance in the EU. The EU regulatory framework has prevented development of GM and has one of the strictest approval procedures for GM products in the world. AB Sugar has suggested that the Government could help change the perception of GM foods by seeking to move the public debate away from viewing GM as a blanket technology and instead focus on the benefits it can bring to society in specific applications. Will the Government work towards doing this, because we desperately need it? Again, the relationship between universities, innovation and research is crucial.

The next issue is agriculture as a business. I have seen with my wife—who is South African; her family had farmed for more than a century in South Africa—that although farmers can be great farmers, they are not always great business people. What are the Government doing to encourage business training for farmers in the UK, encouraging them to attend business schools and attend courses in business, particularly given that so many of them are SMEs? For example, there is the business growth and development programme at Cranfield, which I attended. Are there equivalent programmes that the Government can encourage to be tailor-made for farmers, to encourage them to be more competitive?

I conclude with the GREAT Britain campaign, which promotes all that is great about Britain, both within the UK and abroad. Why does it not feature agriculture and food products more? This is an industry that is not appreciated enough, that we should be proud of and that should be a top priority for this Government.