Farming: Financial Sustainability

Debate between Andrew Murrison and David Smith

Wednesday 24th June 2026 Westminster Hall

[David Smith]

I thank the hon. Gentleman for his question. He will see this in the road map and in the Government’s approach. There needs to be the right balance between environmental approach, renewables and food production. I agree that the decision about where solar farms go is key.

We need to help British farming to develop greater financial resilience and shield it from external pressures. That starts with ensuring that imported food products meet the same high standards as home-grown produce. I ask the Minister to offer some thoughts on what guarantees he can make so that alignment with the EU and other trade deals will maintain a level playing field on quality. That subject was not heavily touched on in the road map.

Stability is also vital for our farms. Although agri-environmental schemes should not be the difference between the black and the red, they have a role to play in farm budgets. They can cover a bad year or provide extra on top, but take-up, delivery and financial sustainability demand stability. The withdrawal of the sustainable farming incentive last year dented farming confidence; I encourage the Minister to pay very close attention to roll-out of that, which we expect imminently.

Devolved economies have a role to play in developing food security, too. Farming should be part of a tightly bound regional ecosystem in which regional investment banks, devolved funding pots and local authorities work together to match up funding, skills and procurement pathways. In our manifesto, we promised that half of all food purchased across the public sector would be locally produced or certified to higher environmental standards—a great ambition. Will the Minister update us on the progress towards that, and on what work he is undertaking to create a public record of how much of public institutions’ food is sourced from the UK? We can create a virtuous circle in that way.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

The hon. Member is right to say that we need to produce more food in this country but, at the moment, farmers are telling me that they are not putting crops in the ground because they cannot afford the fertiliser to sustain them because of the situation in the Gulf. What does the hon. Member think the Government should do to support farmers right now?

[David Smith]

If the right hon. Member bears with me, I will get to exactly that point.

The second area of concern is the marketplace. The FFCC reports that farming productivity increased by 60% from the ’70s to the 2020s, but that farming incomes have not increased in line with that. The size of and competition between supermarkets have forced farmers to accept bargain basement farm-gate prices at times, and the middle men have consolidated too. The National Farmers’ Union reports that, in the ’70s, there were 2,500 abattoirs across the UK; there are now just 200. The reality for the fragmented farming sector has been bleak: its increased productivity still ends in lower prices.

One of the best responses to this high-cost, low-price trap is to create a new labelling and welfare system based on the Made in Australia approach, which the LRRG has advocated for. I pay tribute to my hon. Friend the Member for St Austell and Newquay (Noah Law) for his work on that. Every food product in supermarkets, wholesalers and catering should clearly tell consumers how much of it was made in the UK, ideally in which region and to what welfare standard. Indeed, regional identity systems should be supported and verified. Instead of superb Northumberland beef being thrown into the same mincer as low-cost, low-welfare imports, packaging can help consumers choose between different quality products at different price points and different welfare standards. The farmers who invest more in their produce can then negotiate for more at the farm gate.

The Government have to develop tighter rules on what can and cannot be claimed as “farmer-supported”, “grown in Britain” or other heartwarming slogans that do not reward the hard graft of British farmers. I welcome the fact that the Groceries Code Adjudicator has already been taken into DEFRA following the Batters review.

We should help farmers consider how to develop better collective bargaining power. My understanding is that the Agriculture Act 2020 provides a framework for producer organisations to form co-operatives. We should give that our full support. At the end of the day, we the Labour party are a party of mutuals and co-operatives.

The third and final string of the bow is innovation. There have been some major steps in this direction under Labour. I am really pleased that the road map is so committed to innovation, and that £123 million has been committed to investing in innovation this year alone. The NFU has urged the Government to implement the national policy planning framework as soon as possible, which would really help.

We need to look at how we can cut inputs and free up capital for farmers to reinvest in their farms. Energy prices are too high. The recent red diesel fuel duty cut was an incredibly welcome step and has been well received by my farmers. I am now interested to see what options are open to help farmers install renewable energy supplies on their estates via GB Energy. I support the NFU’s ask of the Government to help farmers cut electricity prices by opening a standard industrial classification subdivision for energy intensive farming.

Fertiliser prices are too high. There is massive unease about the incoming carbon border adjustment mechanism regime and its effect on fertiliser prices, which is already one of the biggest costs for farmers. We can transform the fertiliser conversation altogether by restarting ammonia production in this country. Sadly, the last plant to produce virgin fertiliser in this country was allowed to wind down by the previous Government in 2023. I know that the Minister for Industry has been working hard in this area already, and I hope that the shadow farming Minister can look at this.

All that strategic support would cut input costs, thus freeing up capital for farmers to use on developing new technologies that help them produce more for less. The Government’s farming innovation fund will have £200 million up to 2030. That is an excellent example of state-backed innovation. Farmers in North Northumberland are already experimenting with using soil and sampling and targeted purchases to cut their fertiliser bills. The Government need to find those farmers and invest in their work.

A local farmer told me recently:

“As a farming family we often accept that we are privileged to work in the profession that we do…but it is often somewhat demoralising (and distracting) to consider what little relative financial reward we receive for the work we do.”

Other industries grow and shrink as conditions change, but we will always need food, and we will always need much of our food to be grown here in the UK. The issue is that what we pay for food today is also what we are paying for our food tomorrow. While farmers remain stuck at the wrong end of the low-price, high-cost cycle, our national food security is also at risk.

It is the role of Labour, not a laissez-faire Conservative party or a rootless Reform UK party, to dignify the work of farmers by ensuring that they receive proper reward for what they do. All workers should be supported by the Labour party, whether they are blue, white or green-collar workers. By developing more resilient British farming as part of our national security, regulating the marketplace so that quality produce gets a fair price, and opening up opportunities for farmers to innovate and increase their margins, we can make sure that farming is sustainable for years to come, and we can keep North Northumberland beef on the menu.