Farming Industry: Support

Baroness Bloomfield of Hinton Waldrist Excerpts

Tuesday 11th January 2022 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I congratulate the noble Lord, Lord Redesdale, on securing this important and timely debate, and welcome the opportunity to respond on our plans to support the British farming industry. I am grateful for the many thoughtful contributions to today’s debate, and I will try to respond to many of the key points raised. However, given the time pressures, I may need to write to noble Lords after reviewing Hansard.

This Government are committed to ensuring that our food system is built on a sustainable and resilient farming sector, so that we and future generations can continue to access good, healthy and sustainable food. Thanks to the contributions of the 4 million people employed within the sector, we can proudly say that the British agri-food industry contributes about £130 billion to our economy, with the value of UK food and drink exports reaching £23.6 billion in 2019. Our high-quality produce and high standards mean that we can boast a world-class reputation for food and drink, at home and abroad.

However, we must acknowledge that this has been a particularly challenging time for many within the agri-food sector. The unforeseen disruption caused by Covid-19 and EU exit mean that pressures have been felt widely across the sector. We are more than aware of how this has impacted the supply of seasonal labour from overseas to our agri-food sectors. We hope that some of these agricultural workers may still have settled status and have returned home to family but may come back to the UK once the pandemic is over.

This Government have worked alongside industry to ensure that our sectors are appropriately supported and have put in place a range of measures to help alleviate the challenges that they have faced. Our short-term mitigation measures have included, if not exactly a Covid-recovery visa, introducing emergency temporary visa solutions, and a package of measures to help the British pork sector. Most recently, we announced that the seasonal worker visa route will be extended to 2024 to allow overseas workers to come to the UK for up to six months to harvest both edible and, as the noble Lord, Lord Redesdale, observed, ornamental crops. I can only hope that all the daffodils will be harvested in time for St David’s Day.

The noble Lord, Lord Redesdale, also asked whether the Government would support a permanent seasonal worker scheme for the UK horticultural industry. We will continue to assess the seasonal workforce needs for the horticulture and other sectors, such as the seasonal worker route, recently agreed with the Home Office, as 2022 to 2024 progresses; 30,000 visas will be available and this will be kept under review, with the potential to increase by 10,000 visas if necessary. The noble Lord also made a number of other constructive suggestions, including apprenticeships, which the department will now note.

Education was of great concern to the noble Lords, Lord Redesdale, Lord Hendy and Lord Whitty. The “free courses for jobs” offer, launched in April 2021, gives all adults the chance to access their first level 3 qualification for free. There are over 400 qualifications on offer, including qualifications which can lead to employment in the food and drink industries, such as food technology, hospitality, catering, agriculture and land management. The list of qualifications is kept under review to ensure that it adapts to the changing needs of the economy.

A number of noble Lords, including my noble friend Lord Leicester and the noble Lords, Lord Hendy and Lord Whitty, repeated the concern that the education on offer was not of the standard needed to take this industry into the next phase. The Government are contributing towards the establishment of a new professional body, the institute for agriculture and horticulture. This initiative is aimed at removing the fragmentation that exists in the current learning and skills landscape for farming businesses, enabling the industry to drive forward greater uptake of skills. The institute will drive improvements in industry capability which will cover the skill sets required to deliver future environmental land management objectives, including water and air quality, soil husbandry, woodland restoration and management, agroforestry and biodiversity.

It is through our continued engagement that food supply chains were successfully maintained through these challenging times, and we have managed to protect our farmers from the worst price impacts of labour shortages. To answer my noble friend Lord Colgrain, Defra will continue to work closely with the Home Office on the issue of visas. However, most food sectors are accustomed to fluctuations in supply chain costs, and Defra’s extensive work in this space has reinforced the long-standing view that the most effective response to food supply disruption is industry-led, with appropriate support and enablement from the Government. No better is the resilience of our food supply chain illustrated than through the recent publication of the UK’s first Food Security Report. I assure the noble Baroness, Lady Boycott, that Ministers meet regularly with the FSA to monitor and discuss its resource needs.

I hope that my noble friend Lord Harlech will be reassured that the report shows that our self-sufficiency ratio is about 60% overall, though much higher for produce suited to our landscape and soils, such as some brassicas, including carrots and cabbage, and beef, poultry, milk and grain, to name but a few.

The noble Lord, Lord Redesdale, and a number of other noble Lords, raised the real issue of the increased costs faced by farmers. I agree that it is, to some extent, a perfect storm. We are very well aware of this and know that farmers are facing worrying times. We are monitoring the situation and working closely with farmers to endeavour to come up with solutions. Sadly, some of the factors contributing to cost increases are beyond our control, such as Russia restricting exports of natural gas and China of urea, and the escalation of wholesale energy prices. But the market may drive producers to look at biofertilisers, for example, or fewer applications for fertilisers. This could be seen as the beginning of an opportunity.

We want to continue supporting farmers and to work hand in hand with them on our plans for a renewed, efficient agricultural sector, including many of the suggestions made in the excellent speech made by my noble friend Lord Lilley. Now that we have left the European Union, the way we support farmers is transforming. As set out in the agricultural transition plan in November 2020, we plan to gradually reduce and stop untargeted direct payments and invest the money freed to pay farmers to improve the environment, improve animal health and welfare, and reduce emissions.

The noble Lords, Lord Redesdale and Lord Whitty, both worried about the reduction in farm incomes as farm payments are phased out, but the agricultural transition is over seven years from 2021 to 2028, giving farmers time to adapt. Direct payment reductions are proportionate, with large landowners taking the biggest cuts. As they go down gradually, new schemes will be introduced in parallel.

In answer to my noble friend Lady McIntosh’s plea for simpler forms and clarity, I will reinforce her message, but we codesign the ELM schemes with farmers to ensure that the applications are farming-friendly and that it is easier to understand all the available grants. As to her plea for livestock farmers, as part of our future farming schemes, the introduction of the animal health and welfare pathway will improve the health of our national herd, reduce the need for vets and medication, reduce the effect on the environment and underpin our international reputation for good health and welfare, bolstering our export opportunities.

As announced by the Secretary of State at the CLA conference in December 2021, the sustainable farming incentive sets out how, within a few years, we want all farmers to view producing environmental and climate change benefits as an integral part of their business, alongside food production. I am grateful for my noble friend Lord Harlech’s support.

Similarly, we will also provide significant grants that will help farmers to reduce costs, stay competitive and improve their profitability. Last October, we announced the opening of applications for the first three competitions in the new industry-led R&D partnership fund—R&D that will boost the productivity and prosperity of England’s agricultural and horticultural sectors and enable more farmers and agri-food businesses to become involved in agricultural R&D. This will maximise the impact of investment in innovation and improve the take-up of novel approaches on farms.

The noble Lord, Lord Carrington, asked about our food self-sufficiency. Our Food Security Report shows that our self-sufficiency ratio is about 60% overall, although it is much higher for produce suited to our landscape and soils. By combining efficient farming systems with leading environmental and animal welfare standards, we can make sure that British producers play their part in feeding the UK and the world, and reduce the risk of offshoring production and environmental harms to other parts of the world. We can embrace a way of farming that makes space for nature, halting species decline, reducing greenhouse gas emissions, protecting soils and improving water quality.

My noble friend Lady McIntosh of Pickering also raised housing and tenant farmers. As part of the development of our new schemes, we have considered the needs of tenants and worked closely with a number of organisations, including the Tenant Farmers Association. I believe that she had a recent meeting with the Minister and the Tenant Farmers Association. We are looking into the problem raised about access, and will work with these organisations and other stakeholders to understand whether there is anything that we need to do to ensure that tenants are not excluded from these schemes.

I will now cover the hugely important aspect of trade, which many noble Lords clearly have many worries about and have spoken about. As mentioned, British food and drink has a world-class reputation. This Government are committed to encouraging people, both at home and abroad, to buy British. I point out that 81% of beef sold in the UK is British, and every Aldi, Budgens, Co-op, Lidl, M&S, Waitrose and Morrisons stocks only British beef.

We will help our farmers capitalise on the enormous global demand for British food and drink. In November, we launched a refreshed export strategy on tackling trade barriers, opening new markets and providing the services that our exporters need to compete in global markets. As a newly independent trading nation, we are pursuing new opportunities for British farmers previously denied to us.

I fear that I do not recognise the rather gloomy portrayal of the Australia trade deal, as illustrated by my noble friend Lord Harlech, as being of marginal benefit. The deal is expected to unlock an estimated £10.4 billion of additional trade.

This is about not just free trade agreements but the removal of various barriers to exports. For example, just before Christmas, the US lifted its export ban on lamb from the UK, paving the way for our farmers to start exporting some of the finest lamb in the world into US markets for the first time in two decades. This follows on from the opening of US beef markets to UK exports in 2020, which the industry estimates will be worth £66 million over five years.

I recognise that concerns have been expressed about the impact of new trade deals on our farming and food sectors. I would like to reassure noble Lords that our recent agreement with Australia, as will be the case with New Zealand and indeed any future partner, does not compromise our high standards. The agreement with Australia does not create any new permissions or authorisations for imports. All products imported into the UK will have to comply with our import requirements, as they do now.

Furthermore, we have secured a comprehensive partnership to work with Australia on animal welfare. The non-regression clause on animal welfare that we have secured with Australia is the first in a free trade agreement and will help demonstrate that both countries are committed not to lower their animal welfare standards in a manner that impacts trade. The UK has also secured the exclusion of pork, chicken and eggs from tariff liberalisation, reflecting the importance of animal welfare to the UK and the level of trade between Australia and the UK in these products.

Let me also take the opportunity to alleviate the concerns of some colleagues regarding meat imports from Australia. Strong demand from the Asia-Pacific region will continue to attract Australian supply. In 2020, more than 75% of Australian beef exports, and more than 70% of sheepmeat, were exported to these markets. Moreover, increased imports from Australia are more likely primarily to displace imports to us from the EU—the origin of roughly 230,000 tonnes of our beef imports in 2020—than to hurt UK farmers.

We have also secured a range of measures to safeguard our farmers. The first is the tariff rate quota, which lasts up to 10 years, depending on the product, and automatically applies higher tariffs to imports above a certain volume threshold. The second, from year 11 to year 15, is known as the product-specific safeguard and applies to beef and sheepmeat. Additionally, if volume thresholds under the tariff rate quotas or product-specific safeguards for sheepmeat are consistently filled, the UK can periodically reduce the volume thresholds of the quotas or safeguards by 25%.

The final measure, a general bilateral safeguard mechanism, will provide a temporary safety net for industry if it faces serious injury, or threat thereof, from increased imports as a direct consequence of the FTA. This applies to all products. It is a protection that will last for a product’s tariff liberalisation period plus five years, in order to allow domestic industries time for readjustment. We are committed to ensuring that any deal we sign now and in future will include protection for the agriculture industry and will not unfairly undercut UK farmers.

The noble Baroness, Lady Bakewell, asked whether we had sold farmers out. No, we strongly believe that this deal balances open and free trade with protections for the agricultural industry. The UK has secured a range of measures to safeguard our farmers, including these tariff rate quotas for a number of sensitive agricultural products, product-specific safeguards for beef and sheepmeat, and a general bilateral safeguard.

I must end. I thank noble Lords for taking part in this debate and for raising some extremely important points. Our food system is complex and we recognise the challenges that farmers face, but the UK has a highly resilient food and farming system, as demonstrated throughout the Covid-19 response. I hope I have reassured your Lordships that we will always champion our farmers and producers, supporting them to grow more of our great British food and to provide a reliable and sustainable food supply to the British public and beyond.