Agriculture and Food Industry

Lord Reid of Cardowan Excerpts

Thursday 24th July 2014 Lords Chamber

[Lord Plumb (Con)]

My Lords, while I am sorry that my noble friend the Minister is not able to attend this debate, I am pleased to hear that it is because he is actively promoting the strengths of the UK food and farming sector today to an international audience in Glasgow during the Conservative games. He said that we have much to offer as a place for inward investment and as a trading partner. I hope therefore that, as we go forward, we are singing from the same hymn sheet.

[Lord Reid of Cardowan (Lab)]

It may have been a slip of the tongue but I can assure the noble Lord that Glasgow has never been a welcoming host for Conservative games. I take it that he meant the Commonwealth Games.

[Lord Plumb]

I stand corrected, knowing my age, although I thought that I said the Commonwealth Games.

I welcome my noble friend Lady Northover, who takes the Minister’s place. This debate is to take note of the role of agriculture and the food industry in the economy of the UK. I think that it follows the debate that has just taken place well. I declare my interest as a farmer, as past president of the National Farmers’ Union, in European farm organisations as a whole, in the European Parliament and in an international policy group on food, farming and trade, which covers some 40 countries and different farming societies.

I have lived through some testing and challenging times. I speak with a passion for farming and the food industry. I have been encouraged by recent developments to work much more closely with the food industry in marketing British food, the display of which was second to none earlier this week at the Royal Welsh Show, as in other exhibits round the country. Those who see it have to realise that it just does not grow on trees. I sometimes despair when the talk about the growth of the economy—reducing the nation’s deficit to deal with debt and safeguarding our economy—means industrial growth, with agriculture not on the radar of many economic forecasts. I hope that today during this discussion we can put it on the radar.

Farming is certainly not a job for the faint-hearted. It is a risky business, dealing with a changing climate, disease and often loss—certainly with TB eradication still meaning a loss of up to 90 cows a day from our herds. Then there is the loss of land for so many other purposes, such as housing and roads. We have to live with price swings from imports related to currency values, which by nature means that the business is a long-term one.

What is the contribution to the economy from agriculture and food production, processing and retailing, which employs well over 3.5 million people? Farming’s contribution to the economy increased by a staggering 67% between 2007 and 2013 in gross value added terms, contributing an extra £10.4 billion to the UK economy than it did in the five years between 2004 and 2008. This is in stark contrast to the wider economy, even accounting for recent improvements in economic performance in the UK, which was 0.6% smaller in 2014 than its peak in 2008, mainly of course due to the banking crisis.

Whereas the UK in general has struggled for success—moving now, I submit, in the right direction—the agricultural output from the UK has increased by 59% in the last decade. Agriculture’s importance to the UK economy is emphasised by the fact that the United Kingdom has 142,000 businesses registered as farm businesses. That is more than the number of businesses involved in the motor trade, education, finance and insurance, and equates to 5.5% of the overall total. In more rural areas, of course, agriculture is obviously much more important to the local economy.

The self-sufficiency ratio is estimated to be 60% for all food produced in 2013 and 73% for indigenous-type foods. The first time I heard Winston Churchill speak, many years ago, he said:

“Thirty million people living on an island where we produce enough food for fifteen million is a spectacle of majesty and insecurity this country can ill afford”.

It makes you think. It is no different today. There is double the population but still 60% of the amount needed to feed our people. Imports exceed exports, as we well know, affecting the balance of trade. In the money terms of 2013, the deficit in 1990 was £10 billion. In 2013 it was £20 billion. Self-sufficiency at 60% must therefore be improved considerably to play an even greater part in the economy. This requires investment, management, skills and the taking of risks—risks that have to be taken, particularly in farming, for growth.

The comparison with other countries is interesting. In the United States, self-sufficiency in food is 130%; in France, it is 120%; and in Germany it is 93%. Japan is deeply worried about its level of 40% and has set a target of 50% by 2020. Many crops, particularly in the United States, are also produced and processed for energy, particularly wheat: 40% of the wheat in America is produced solely for energy.

I congratulate the Government on the incentives that they have shown in the last few years to encourage technical and scientific research. That has helped to transform farming. Through incentives from the European Union, we have seen the diversification of concern for the environment, which shows a clear balance in welfare and caring for the countryside compared to what used to be.

Today, 70% of our modern agricultural equipment has some sort of precision component inside it. A state-of-the-art combine harvester has up to eight computers on board. Think of those going at this very moment: eight computers in one operating combine harvester. Satellite technology is used to avoid soil damage and is being picked up and used in various ways by the farming community. We now have robotics, which has entered the milking parlour. The cow decides when it is going to be milked, not the person, and that is an interesting change. I am told that the incidence of mastitis, for instance, is far less in robotic milking than hitherto. I find that interesting and difficult to believe, but that is nevertheless the situation as I read it.

The farming and food industries have therefore already shown how they can help with economic growth and collaboration, helping to pave the way for home consumption and increased export opportunities while maintaining a high-quality product and the welfare of both plants and animals. Both industries have demonstrated support for integrated farming practices, training and development opportunities for succession and sustaining supply chains. The business and trading culture is progressive and aggressive, embracing innovative technology, adapting to the ever changing complications of common agricultural policy reform—I could spend the next two hours talking about that—the environment, finance and business policy, and linking more closely to the food retailers through contracts.

These conditions call for a highly educated, skilled workforce with the ambition to embrace these revolutionised industries that provide a duality of technological progression and environmental respect. The revolution of these industries has at times been unforgiving, with winners and casualties, but it has also demonstrated the robust restructuring and adaptation needed for efficiency and success. Whether we are talking about a farming plc or a small farm business diversification project, there is no shortage of innovation from young entrepreneurs discovering and exploiting future markets. That is an exciting and well thought-out challenge—a well practised route to market with considerable future prospects. Growth and opportunity will need to be managed in an intelligent way that embraces new technology and new markets while respecting the limitations of resource and environment. We need a future workforce to satisfy a considerable and growing global population. Our food and farming industries can be criticised for hiding their light for future employment opportunities under a bushel. More must be done to attract the highest calibre of recruits to take up jobs that offer magnificent and challenging career prospects.

Considerable work has been achieved with the land-based and environmental sector skills council and Defra to create the industry-focused agriskills and agritech strategies. There is a plethora of industry initiatives, schemes and awards, which provide much needed support and attraction for new blood into the industry, with a strategy for consolidation shortly to be discussed and, I hope, implemented. British agriculture has embraced radical changes in both policy and its own PR over the last decade. It has demonstrated strength and resilience through the economic downturn, worked hard to understand shortfalls and has lobbied for a workable policy while highlighting its products, service and methods of production.

Agricultural colleges have embraced the challenge of becoming fit for purpose. They are now demonstrating the diversity of the two industries with a range of suitable and improved quality courses and are enjoying an increased number of applications. I was a governor at Cirencester for a number of years. It was a struggle to get 400 students into the college each year. Now there are 1,400, and many more are knocking on the door. Other colleges are finding exactly the same. The university milk-round of recruitment will now, I hope, be seeing a long-awaited change. Industries will be fighting to retain their supply of graduates as intelligent young men and women see the exciting opportunities offered by the food and farming industries.

There has been a self-regulating internal revolution in these two industries. They have risen to considerable challenges, ranging from market conditions to environmental conflict. These industries are renowned for adapting to change while ensuring an essential supply of food and sensible, realistic caretaking of our most precious resource. There can be no logical reason for these industries to be excluded from Britain’s plans for economic growth in a hungry world. There is nothing, but nothing, more important than food security. I beg to move.