Cost of Living: Support for Farmers

Alicia Kearns Excerpts

Tuesday 12th July 2022 Westminster Hall

[Alicia Kearns (Rutland and Melton) (Con)]

I beg to move,

That this House has considered support for farmers with the cost of living.

It is a privilege to serve under your chairmanship, Mr Hollobone. I wish to quickly put on record my declaration of interests: I am chair of the all-party parliamentary group on dairy, co-chair of the APPG on farming, and chair of the APPG on geographically protected foods. On that note, I shall move on to the actual business.

The importance of food is finally returning to the national conversation. From food security and supply chain costs, to questions of quality, sustainability and the locality of our produce, our country’s relationship with food is a topic that breaches all divides and impacts on us all. During the pandemic, we all recognised the importance of buying local, and it was wonderful to see people going to the farmer’s gate and talking about how proud they were to support local producers. Fewer have been doing that of late, however, as people have returned to mass marketplaces.

In the recent debate on food and the cost of living, there is one constituency that has been consistently overlooked in our discussions about how to support our constituents through the cost of living crisis. It is our farmers who are most underappreciated and underdiscussed. They are the agricultural backbone of our nation, and they are under a tremendous amount of pressure. Rapid inflation in the sector is driving up the price of everything—from fuel and fertiliser, to machinery and labour costs. The crisis has coincided—and not by the Government’s doing—with the agriculture transition plan of the Department for Environment, Food and Rural Affairs, under which the old support payments to farmers under the common agriculture policy are being reduced.

Although the Government are in the process of rolling out new support measures, the schemes are not ready for farmers to fully access them. The National Farmers Union, the National Audit Office, the Public Accounts Committee and the Institute for Government have all expressed serious concerns about the shortfall in support that is currently in place. The risks of the pressure being experienced—which, sadly, looks like it will become more and more sustained, and more and more heinous—are difficult to overstate. A recent NFU survey has demonstrated that 33% of arable farmers are planning to reduce their cropping next season; that 7% of dairy farmers plan to leave the industry altogether; and that 15% of pig producers have done so in the past six months alone.

The decline in agricultural output will spell disaster for the UK if we are not careful. It will result in food costs rising and our dependency on imports increasing, which is something that our constituents will notice. All of this will happen at a time when supply chains are buckling. Farms such as L&J Stanley in Harby, in my constituency, rightly point out that we should be making a greater effort to increase the amount of food that we grow in the UK. There are real ways in which the Government can step up and support farmers through this difficult period. As several of my colleagues compete for the privilege of serving as Prime Minister, I say to each of them—because I am certain that they are watching this debate—that a Conservative Government are a Government who support British agriculture, and that rurality and supporting our food makers and those who allow us to feed our families should be at the heart of our future policies for the economy.

On labour shortages, we all know the challenges that farmers are facing are severe, and our response therefore has to be significant. The public are acutely aware of the crisis in farming. We have all seen the photos of unpicked crops wilting in the sun, heard the stories of healthy livestock being unnecessarily culled due to a lack of abattoir workers, and felt the impact on our wallets of increased prices in shops and supermarkets. Constituents are particularly concerned when they see security markers and buttons put on products such as Lurpak, and people are unable to afford prices of £8 or £9 just to buy some butter.

A recent survey conducted by dairy giant Arla Foods, which operates in Melton Mowbray in my constituency, found that 80% of farmers looking for workers have received very few or zero applications from people with the right experience or qualifications. Looking back to my education at school and the quiz that pupils did to find out what job or profession they should do when they got older, I do not remember a single person being told they should be a farmer. Are our educationalists pushing people? In my neighbouring areas of Stanford, Peterborough, Corby, Nottingham, Leicester and so on—I have 13 neighbours; is a very busy neighbourhood—people would say that farming is not brought up as a legitimate career, even though the 460 square miles next door in Rutland and Melton offer amazing agricultural jobs. We have to start at the very base—looking at how we get people into the industry—because worker shortages are hammering farmers.

In the dairy sector, milk volumes are down by about 3%, compared with last year, and according to Arla’s survey a scarily high 11.9% of dairy farmers are considering leaving farming altogether if the situation does not improve. In the first instance, we urgently need to address labour shortages across the industry so that we can keep supply chains running and shops stocked. Contrary to certain popular perceptions, agriculture is a highly innovative and technological sector, but many of those innovations are in their infancy, and they cannot currently address a shortfall in labour. They definitely cannot do it when it is acute, quick and coming at farmers at great speed, in addition to the increased costs all around them.

We have to ensure that open positions are added to the Government’s shortage occupation list, to broaden the labour pool and help farmers keep their operations running. I also urge the Government to expand the seasonal agricultural workers scheme to satisfy the demand for labour, and ensure those seasonal visas cover work that needs to be done in the winter too, including the production of Stilton in my constituency—Stilton was invented in Little Dalby, and Long Clawson has amazing creators such as Tuxford & Tebbutt. Those businesses need workers between October and December, which is often not when the Government and civil servants think of providing additional visas.

The next issue is rising costs. We are all struggling with inflation, but the NFU estimates that agricultural inflation stands at over 25%. The Government’s agricultural price index shows that in the 12 months to April 2022, the price index for agricultural inputs increased by 28.4%.

I have spent the past few weeks speaking to farmers in my constituency ahead of this debate. One farmer, who represents I.W. Renner & Sons, which is one of our great farms in Normanton, told me that his main concern is the impact that inflation is having on the cost of fertiliser. Heavily linked to gas, fertiliser is an essential input related to crop yields, and rapid price increases have had a severe impact on output. Ammonium nitrate, a key component of fertiliser, cost £200 per tonne in January 2021, but now costs £900 per tonne if you are lucky. That quadrupling of costs is pushing farms to the brink, reducing product yields and quality and forcing them to transfer some of the costs on to consumers. Additionally, the recent closure of the CF Fertilisers Ince production site, which was once responsible for roughly 50% of domestic fertiliser production, has exacerbated the problem. The Government’s decision not to treat the facility as strategically important will have serious consequences for farming.

The significant increase in costs and the reduced availability of fertiliser will also likely reduce crop yields in UK farms in the coming years, much to our detriment. Many of my farmers are deciding not to grow any more bread wheat, and are changing to growing other types that require less fertiliser and are of lower quality.

The Government can make a real difference. Farmers in Rutland, Melton, the Vale and Harborough villages want us to boost domestic fertiliser production and secure domestic supplies as a priority. I also want to see us open our export markets to places such as Jordan and Canada, to broaden our farmers’ opportunities and move away from taking fertiliser from eastern Europe, which we know will continue to be a volatile market for a long time.

Finally, farmers ask that we increase transparency in the fertiliser market by establishing a gas-fertiliser index. Although we must accept that the Government cannot control the price of fertiliser, fertiliser markets are far too opaque. They threaten business confidence and farmers’ ability to invest for the long term. We all know that our farmers ask for as much resilience, certainty and stability as possible. The establishment of a trusted gas-fertiliser index within DEFRA, with relative global benchmark prices accounted for, would go a long way to help farmers prepare for market volatility. Given that such indices exist in the grain, dairy and meat markets, it is not unreasonable for farmers to expect greater transparency for fertiliser.

The next area of work is flexible support. As I said, the challenges facing farmers are being exacerbated by the fact that DEFRA is currently transitioning to alternative programmes of support, which most hon. Members fully support, but that is leaving funding shortfalls and hampering business confidence. Farmers are resorting to using all available support to tackle inflation and fund operational inputs, rather than look at structural investment. Jan from Northfield Farm in Whissendine in Rutland wrote to me about this, and she captured the essence of what farmers want to see from the Government:

“The support farmers most need is not some sort of handout, it is a programme that helps us to underpin our business across a wide range of areas.”

We can all agree that if we keep applying sticking-plaster solutions, our farmers will struggle to innovate, to compete and to continue to provide the vital products that we all take for granted. I ask the Government to look into introducing farm business loans to provide farms with the capital they need to break the inflationary cycle.

Key to the success of such a scheme would be repayment flexibility—for example, weighting repayments to a period of good return. DEFRA must be more sensitive to the economic cycle of farming, which I know the Minister understands full well, in order to make the most out of support measures. There exists ample opportunity for creating viable investment into modem and productive farming infrastructure.

It is clear that British farming is in a state of flux, and international and domestic pressures are significantly impacting on the sector. While some of the causes are far beyond the Government’s control, we need to tackle those challenges head on; otherwise, we will see an even more significant contraction in production over the next few years. For several of the issues I have raised today, there are concrete steps the Government can and should take to support our farmers.

When I talk to my farmers, it is clear that they are united—whether they represent the most remote Harborough village, are up in the Vale providing milk, or down on pig farms producing livestock down in Rutland. We have to assist with labour schemes, introduce a gas-fertiliser index and create flexible loans to boost investment. Those are the key asks from my farmers. I believe, as I know the Minister does strongly, that our farmers have stood by us over what have been a very difficult past two and a half years. They have kept high-quality, good, nutritious food on our tables. They have fought off vegan militias invading their lands.

I urge the Minister to look at my amendment to the Public Order Bill. I know that it is not in her brief, but it recognised that farms, food production sites and abattoirs should be considered sites of national infrastructure. That would prevent those vegan militias from breaking on to their sites, setting loose livestock, and abusing, intimidating and attacking my farmers. We have seen a big increase in that. Over the summer, shamefully, activist groups are planning to disrupt national dairy supplies across the entire country. These are organised groups, with over 500 people planning to do that.

Our farmers have fed us, protected us and kept our green and pleasant land exactly that. They have stood up against those vegan militias and have continued to look after us despite an enormously challenging two and a half years. Now that they are in a grave situation that is not of their making, I ask the Government to stand by them as they have stood by us.

[Several hon. Members rose—]

--- Later in debate ---

[Selaine Saxby (North Devon) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for Rutland and Melton (Alicia Kearns) for securing this important debate.

Devon is home to 8% of agricultural holdings in England—a full 514,000 hectares, of which 92,000 are in my constituency, which boasts 1,442 agricultural holdings. Our Devon farms are relatively small, with an average size of just 60 hectares, compared with an English average of 85, and that magnifies some of the challenges that they currently face. My local NFU details that, as small businesses and consumers, farmers are grappling with spiralling costs in both their businesses and households. Agricultural inflation is running higher than consumer inflation. DEFRA figures show that it is at 28.4% for all inputs in the 12 months to April 2022.

In north Devon, most farm businesses involve livestock of some sort or another. The welfare of those livestock is always a primary concern. Farmers are grappling with how to afford feed and bedding for the coming winter. Nearly all farmhouses are off the gas grid and rely on heating oil in the main, which has had massive spikes and is not protected by the price cap of the electricity market. Some farmhouses are listed buildings, so it is difficult to make them energy efficient. Farmers, like others in rural areas, rely on motor vehicles to get to shops, schools and other facilities. The massive increase in fuel costs has a higher impact on those who live in rural areas.

Although I do not think that the solution is to increase rural fuel duty relief—a very specific tax relief that applies only to Lynton and Lynmouth in my rural constituency, as it relates to the distance from the refinery —we need to look for affordable and green solutions to tackle our reliance on the fossil-fuel powered vehicles in more rural parts of the country. It is not right that one set of consumers should pay less for their fuel, as it distorts the market and results in people driving to fill up more than they need to. We need to ensure that the existing fuel duty cut reaches the pump—the Competition and Markets Authority is already investigating the matter—because doing nothing is not a solution.

I would prefer a further fuel duty cut, but until we are confident that it will reach consumers, we must recognise that it may not deliver what we wish. We urgently need better charging infrastructure to enable more of us to switch to electric vehicles, and to look at other creative ways of reducing the cost of transport. In my North Devon constituency, buses are few and far between, and are clearly of no help at all for the transport of livestock or crops.

I recognise that half the basic farm payment has been brought forward, but farmers need more. It is just a matter of cashflow management. For farmers, the uncertainty brought about by much change—new schemes coming onstream, no security of revenue streams, and such surging costs—makes leaving fields fallow preferable. At a time of food insecurity, we need to ensure that every piece of fertile land is used for sustainable food production. That is why I am so exasperated to find that a major national landowner has evicted an organic dairy farmer in my constituency to rewild the land. I know that we need biodiversity, and I support it, but it should not come at the expense of food production. We need sustainable farming, and I urge the Minister to fix rapidly those unintended consequences of DEFRA policy to prevent further evictions and ensure that our productive and fertile land is used appropriately.

[Alicia Kearns]

I thank my hon. Friend for her point about protecting good-quality agricultural land to feed our nation. It is absolutely wrong that we have so many solar national infrastructure projects going through the Government, but no national oversight of where they are all happening. Masses of our land will end up covered in solar plants, reducing our agricultural capabilities, not least in Rutland, England’s smallest county, where there is a proposal to cover good-quality agricultural land with a 2,100-acre solar plant—it will be built with Uyghur blood and slave labour, although that is another debate. Does she agree that there should be a national strategy on solar plants?

--- Later in debate ---

[Alicia Kearns]

Thank you for your chairmanship, Mr Hollobone. I thank all those who have spoken with such unity. I particularly thank the Minister for her comments about land-based colleges—Melton Brooksby is one such exceptional establishment—and her commitments to the land use strategy and to continue conversations on labour schemes, gas fertiliser indexes and flexible loans.

This may be my last Westminster Hall debate with the Minister in her place, because she may be the Secretary of State by September—who knows?—or anything else. I thank her for her constancy, for her meaningful and heartfelt support for farmers across our country, for how hard she works, and for genuinely knowing her brief and fighting for it. I thank her on behalf of us all.

Question put and agreed to.

Resolved,

That this House has considered support for farmers with the cost of living.