Direct Payments to Farmers (Reductions) (England) Regulations 2023

Lord Taylor of Holbeach Excerpts

Tuesday 28th March 2023 Lords Chamber

[Baroness Boycott (CB)]

My Lords, I too support the ELM scheme, and, broadly, I support everything that the noble Baroness, Lady Hayman of Ullock, said. I understand what the noble Baroness, Lady Bakewell, said, but I do not believe for a second that we should effectively cancel the ELM scheme at this moment.

I think it is important to put another point of view, to do with the food price situation. The noble Earl, Lord Caithness, talked about when we were progressing the then Agriculture Bill and we debated the ELM scheme. It was decided that sustainable food growing would not be classed as something that could get any sort of payment. It was thought that if you grow food, you have a means of making money; that is fundamentally correct but, at that time, the reckoning was that about 8p in every pound got to the farmer; the rest disappeared into supermarket profit, packaging, production, processing and all the different things up the chain. New figures that have come through in the last year—compounded by issues that the noble Baroness, Lady Hayman, set out to do with the war in Ukraine and energy costs—reveal that UK farmers receive less than 1% of the retail price for goods that go through our main supermarkets.

That is not a percentage on the production cost but a percentage of the total price; it is pathetic and tiny. For example—I am referring to the research—for a wrapped, sliced loaf of bread, a cereal farmer will spend 9.03p yet will receive a negligible profit of 0.09p on something sold as a unit for £l.14. If they sold it as a loaf of “real bread” through an independent bakery they would make 0.5p profit; that is not much but it is something. For four beefburgers, the processor gains 10 times the profit of the beef farmer. A carrot grower spending about 14p per bag and selling to the supermarket will get virtually no money in return.

This leaves them with nothing to fund the transition. We all know that we need to have this transition. The agri-food sector currently makes up a third of UK greenhouse gas emissions, while agriculture accounts for 10% or possibly more. Farming drives 70% of terrestrial biodiversity loss. Intensive livestock farming poses a serious threat to climate change—we have debated many times in this House what industrial chicken farming does—and 85% of our land is used to graze livestock or produce crops to feed animals rather than feed us.

Everyone in this House agrees that we have to reform the farming sector, but if we are to reform it through the ELM system, people will need some reason to put in the herbal leys and they need to make some decent money out of food. This is driven by our commercial and rubbish food system dominated by supermarkets, which are driving farmers—especially small farmers—completely out of business.

So I have three small ideas: accelerate ELMS—madly so, putting more money in—introduce a land use framework that supports farm diversity, and support the transition to agroecological farming. Farming can be nature-friendly; it does not need to be industrial. We are pushing big farmers in the middle of England towards being more industrial rather than thinking, “I will grow some hedgerows”.

The Government should set up new, legally binding sector-based supply chain with codes of practice and use data to help farmers deliver more public goods and get supermarkets to help by giving farmers a much fairer deal. Given what we know about the two big supermarkets that recently distributed £1 billion to their shareholders, we could do something; we could have some higher prices paid to the farmers.

Given all that we have learned from recent shortages in fruit and vegetables, the UK must have a coherent and ambitious horticulture strategy to improve our nutritional food security. We are already importing large amounts of fruit and veg from climate and water-stressed countries. As it worsens, this threatens our own food security. As many people have said, we need to support our small and family farmers; but we need also to support our big farmers so that they see a proper advantage in transitioning out of industrial farming methods that cause so much damage.

[Lord Taylor of Holbeach (Con)]

I ought perhaps to draw the attention of the House to my interests as in the register. I am also president of the Institute of Agricultural Management and I have the good fortune to be involved in a horticultural and farming business. I consider it good fortune because that business has grown. As my noble friend Lord Caithness would say, we are in some of the most fertile parts of England, and we have flexibility available to us that is not available to everybody involved in farming.

It is inevitable that we will talk about farming in general as we talk about this SI. The noble Baroness, Lady Boycott, spoke particularly about the strains that face farmers—the difficulties that they have in marketing their produce—but we can all agree that we want to take the industry forward. We want to see the agricultural and horticultural industries going forward.

There may be a certain amount of frustration in the criticism of this SI. Change is, of course, difficult. Nobody likes change, least of all farmers, but we are blessed in this House in that I always feel that we generally have a consensus on this issue. I am slightly distressed to suddenly find that we are talking about a “fatal Motion” and a “regret Motion”. We have in my noble friend the Minister someone who was a colleague of mine in Defra some 11 years ago and whom we can rely on to make sure that the interests that we express here this evening are expressed within government.

I know that change is a difficult matter, but what are we trying to achieve? We are trying to achieve a diversity in farming that has not existed before. We are trying to induce a situation where farmers realise that what is environmentally beneficial to this country is also part and parcel of the way that the state, the Government, funds farming and gives farmers a chance. This SI is a step on the way. It is only the beginning of a continuing process, but we should support it at this stage. This change will be to the benefit of the country and to the benefit of the industry of which I consider myself through my family connections to be a part, and I consider it to be to the benefit of the world in which the majority of our fellow citizens want to live.

I am sorry that the noble Baroness, Lady Bakewell, has proposed this amendment. I cannot agree with her. I think it is looking backwards when we need to be looking forwards. I know that we and the Labour Party are both anxious to make sure that we have a policy for agriculture and horticulture which builds on where we are and what we want to achieve; it is something that I think we share.

[The Duke of Wellington (CB)]

My Lords, I declare my farming interest as detailed in the register.

Last week, the environment committee of your Lordships’ House—of which I am a member, as are some other Peers present—heard a very interesting presentation from one of our witnesses. She was a lady farming in the Yorkshire Dales, I think. It was a small family farm, and she was farming with her son. She explained that, in the past, they had received £12,000 per annum in farming support under the basic payment scheme. However, they were now due to receive £5,000, under the new schemes. I tell this story only because it is a very realistic assessment of what is happening to small family farms in the uplands, which are trying to farm in an environmentally sensitive way but not really being supported by the support system to which we are moving.

Like others, of course I support the idea that there should in future be payments that help the environment. In fact, I believe that most farmers already want to farm in a way that is friendly to the environment. Nevertheless, I understand that public money should be directed towards environmentally friendly systems of farming.

We all know that our Minister, who is so widely respected in this House, is not the author of the details of this transition. I do not think he was the Minister when we were debating two or three years ago the then Agriculture Bill. Many Members of this House at the time warned about the effect of phasing out the basic payments before the development of the ELM schemes and how it would affect particularly family farms in the uplands. That is indeed what is happening.

It is an uncomfortable truth for a Member of the United Kingdom Government that the Scottish Government are treating their farmers rather better than the English farmers are being treated by the centrally directed schemes here. In Scotland, they have decided to retain the basic payments until such time as the new environmental schemes properly kick in. We have been told many times in this House and in Grand Committee that there will be alternative ways in which farmers can apply for public money. We all accept that and nobody is disputing the principle. What worries me, and should be of concern to the Minister, is that there is a serious funding gap between the diminution of the basic payments and the access to and development of the new environmental schemes.

Although I of course support the direction in which the Government are taking farming, I do not rate the announcement by the Minister in January of £1,000 for helping all farms to receive advice. I am sure the Minister is aware, even though I have heard him suggest otherwise, that the complexity of the various schemes on offer quite often requires rather expensive advice. I have even been told that the expense of the advice is likely to be as great as the payments that people might possibly receive under some new schemes. It is complex—I think the Minister probably realises that—but I do not think the offer of £1,000 is really very significant or indeed very generous.