Pig Farming

Lord Carrington Excerpts

Thursday 16th June 2022 Lords Chamber

[Lord Carrington (CB)]

My Lords, I declare my interests as a farmer and landowner, as set out in the register. I welcome this very timely debate, as many of the issues relating to the problems of the pig industry are the same as those in other farming sectors. It is also timely due to the publication of the White Paper on the national food strategy.

The noble Baronesses, Lady Harris and Lady McIntosh, and the right reverend Prelate have gone through a lot of depressing statistics. I will not repeat them, other than to underline that the average loss in the first quarter of this year per pig was £58, which compares to a loss of £39 in the last quarter of 2021. The last time pig farmers had positive figures was in the third quarter of 2020. There is currently a firming of the price as production falls. It is expected to fall by another 5% in this quarter, which is also depressing. At the same time, input costs continue to rise.

Against that background, pig producers currently face multiple issues, but perhaps the most important, in terms of the ability to alleviate these problems, are as follows. The first is the lack of skilled labour, particularly butchers and others in the processing industry. The second is supply chain fairness, in that the increasing move towards integrated supply chains has put more in the hands of the processers than the independent producers. The third is the decline of local abattoirs. Fourthly, the often gold-plated regulatory base has certainly motivated the decline of small producers. Fifthly, the currently limited number of options open to farmers under the sustainable farming incentive limits other income options for pig farmers and others, as BPS is withdrawn. Finally, there is a lack of indexing against inflation on government support under the Agriculture Act, despite the length of the transition period.

Characteristically, the pig price moves according to supply and demand rather than input costs, so the industry, just like the potato industry, has always been prone to feast and famine, and we are now firmly in the latter territory. As with other farming sectors, there is no expectation of a return to subsidies. The industry needs to look to three main players for the easing of their problems: the Government, consumers and supermarkets.

I will not repeat what the Government have already done to address some of the problems, but I note the Minister’s Answer to a Written Question on 25 May, which stated that increasing costs

“are creating short term pressures on cash flow”

for farmers. I would be fascinated to hear his definition of “short term” and on what his delightful optimism is based. There is an old saying that a long-term investment is a short-term investment gone wrong. Let us hope that the Minister is correct.

The issues that still need to be addressed properly are those of labour in the abattoirs, the supply contracts and red tape. The visa scheme for butchers, introduced at the end of last year, was simply ineffective, owing to the short-term conditions. I note that, in the food strategy, an additional 10,000 visas will be issued under the seasonal worker visa route, but this does not address the abattoir problem. Please could the Minister confirm that this issue will be reviewed by the Migration Advisory Committee when it studies the shortage occupation list, or by the independent review that has been announced on the quantity and quality of the food sector workforce?

The options for encouraging consumers are more limited, although efforts to publicise the predicament of pig farmers are most valuable—I am delighted that “The Archers” is following this particular storyline. A campaign to advertise the product, particularly with the summer barbecue season under way, would be a valuable involvement by major retailers. I welcome the Government’s efforts to increase exports, with the appointment of specific trade representatives overseas, but this will take time to have an effect.

I also welcome the Government’s plan to regulate more effectively the commercial relationship between producers and processors. This has been implemented in the dairy industry, and consultation is about to happen for the pig sector, but it needs to happen in very short order to prevent this heavily pressurised sector seeing more growers going out of business.

It is worth mentioning the dreadful situation at the recent British Pig & Poultry Farming Fair at Stoneleigh, where 10 major retailers were invited by the British Free Range Egg Producers Association to a crisis summit. None turned up and few replied. Happily, in the pig sector, the major retailers have been more accommodating, but there is still a need to go further.

I note that the Groceries Code Adjudicator has said that the pressure from rising prices had impaired relationships, with more than one in four suppliers experiencing a refusal by a retailer to consider paying more for their goods or experiencing unreasonable delay in considering this request. The adjudicator himself was quoted in the Times last week giving his concern that these pressures had impaired relationships and created wider problems. Could the Minister comment on the role of the GCA when placed between the devil and the deep blue sea? How can it strengthen things from the producer point of view?

I welcome the Government’s national food strategy and their recognition of the importance of domestic food production, as well as the features of highest food safety, animal welfare and environmental standards, but we are faced with a huge dichotomy. Despite everything that is said, the overwhelming majority of consumers buy on price, not because it is British and produced to the highest standards. They might wish to, but they cannot afford to. Accordingly, the Government need to focus on removing all surplus costs and unnecessary red tape, which has often pushed the small family farm, running a few pigs or hens or whatever, out of business, resulting in more and more concentration in every farming sector. Each of these sectors is now subject to boom and bust. A small family farm is often more resilient than the big, concentrated unit with high overheads and bank borrowings. Their market is the farm gate and farm shops, where price is not the issue, as it is with the supermarkets. Failure to address these cost issues will undoubtedly lead to greater imports at lower standards.

Finally, whether the current crisis is short or long term, could the Government expedite the agriculture transition plan? There is still far too little detail for growers to make informed decisions. The full scope of the environmental land management schemes is unclear when it comes to a farmer planning a sustainable and resilient food business. Farmers have largely accepted the changes initiated by the Agriculture Act and in particular are aware that they can no longer rely on BPS cash as it is steadily phased out, but this makes it imperative that they be given the full picture on what replaces BPS. Bringing forward the current payment is welcome but, as the pot gets smaller, short-term measures like this will become less supportive, and not just pig farmers will be in trouble.