Food Prices and Food Poverty

Baroness McIntosh of Pickering Excerpts

Monday 23rd January 2012 Commons Chamber

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

I congratulate the hon. Member for Wakefield (Mary Creagh) on calling the debate. In welcoming it, I draw attention to my declaration in the Register of Members’ Financial Interests. However, there are many other issues that the hon. Lady could have mentioned, which exercise those who live in rural communities. I recognise that Wakefield may not be quite as rural as Thirsk, Malton and Filey, but if we consider poverty among the farming community over the past 10 years, particularly in small upland farms, it is fair to say that farmers are not in a position to employ many outside their own family. Normally the farmer, his wife and his family work on the farm, and that has led to diversification when possible. In some of the most successful examples, such as Shepherds Purse cheeses and Get Ahead Hats, the wife has diversified or gone out to work separately.

The hon. Member for Wakefield also failed to tackle the increasingly important issue of farm-gate prices, as opposed to rising supermarket prices. I would like to draw attention to that. In my constituency, I can point to pockets of rural poverty in the Hambleton district. In the Ryedale district there is a poverty gap, for those on low incomes, between their low wages and the particularly high cost of housing.

DEFRA’s farm business income report showed that the cost of fertiliser and animal feed rose by nearly 30% each in 2010-11, the last year for which figures are available. That means that the livestock and horticulture sectors have suffered falls year on year. I draw the attention of the hon. Member for Wakefield to the fact that livestock farm income fell by 29% in lowland areas and by 19% in upland areas, with horticulture income down 27%.

The hon. Lady did not consider exchange rates, which my right hon. Friend the Secretary of State mentioned. What if the unthinkable were to happen and the euro failed—or what if even one member country fell out of the euro? The question being asked coming up to spring in auction marts, particularly in the north of England, where most of the lambs are exported, especially to France, is: how and in what currency will farmers be paid? They are starting to wonder whether they will be paid at all. We had the opportunity to cover some of those issues in today’s debate, and I am disappointed that we did not.

I welcome the debate, but, as my right hon. Friend the Secretary of State explained, we are looking at the high cost of fuel as well as the increased costs of feedstuffs and fertiliser. As the Chancellor of the Exchequer has said on so many occasions, oil prices are set globally. The price of cereals and many farm commodities are set internationally.

I want to focus on the role of supermarkets, and particularly the part of the motion that deals with the groceries code adjudicator. I draw the House’s attention to a successful one-off evidence session that the Environment, Food and Rural Affairs Committee held. The hon. Member for Wakefield has included kind words about the Committee in her motion. At the evidence session I was very moved by a category of people to whom, again, the hon. Lady did not refer—individual fruit and vegetable growers and horticultural growers, who have the loosest possible arrangement with supermarkets and virtually no protection. We were shocked to realise that their contracts could be terminated at a moment’s notice. They need protection and the ability to make a complaint anonymously. As we said in the letter that we submitted to the Chairman of the Business, Innovation and Skills Committee:

“For many years there has been a ‘climate of fear’ in the groceries supply chain. We therefore endorse the provision in the draft Bill that will allow the Adjudicator to receive anonymous complaints from direct or indirect suppliers about retailers breaking the Groceries supply Code.”

I hope some good can come out of today’s debate and urge my right hon. Friend the Secretary of State to use her good offices to put pressure on the Secretary of State for Business, Innovation and Skills; that is the responsible Department.

I commend all the Committee’s conclusions without hesitation, but I shall draw attention specifically to two of them.

[Philip Davies]

My hon. Friend will know that the vast majority of suppliers to supermarkets are, by definition, huge organisations—multinational companies such as Mars, Coca-Cola, and Proctor and Gamble. Does she think that they need the protection of a grocery ombudsman, or does she agree that they are more than big enough to look after themselves?

[Miss McIntosh]

I am so fond of my hon. Friend that I have great difficulty in saying that I must draw his attention to the remarks I have just made. His big organisation—Asda—is revered in north Yorkshire because it stemmed from Associated Dairies, which not only set the price but provided a market for local milk suppliers. Individual growers need protection, because they are unable to speak for themselves. We all have big constituencies and may not always be aware of such individuals. I hesitate to say whether big companies are “good guys” or “bad guys”, but Asda and Morrisons source a lot of their food locally—almost 80% or 90%. We need to protect the small individual growers.

The Environment, Food and Rural Affairs Committee believes that two of its conclusions could have an impact if the Secretary of State for Environment, Food and Rural Affairs can persuade the Secretary of State for Business, Innovation and Skills to amend the draft Groceries Code Adjudicator Bill. First, the ability of suppliers to make anonymous complaints is fundamental to the success of the groceries code adjudicator. Secondly, the adjudicator should have the power to launch investigations. We are all agreed that he should have the power to fine, but he should also have the power to launch investigations.

[Laura Sandys]

I have just established a not-for-profit company called Ugly Food. The strapline is “Tasty but imperfect, just like you”. There is a phenomenal number of small suppliers who have food rejected because their produce is not perfect. We should look to create a market for that food, so that we do not waste it.

[Miss McIntosh]

The House will draw its own conclusions about my hon. Friend’s self-advertising.

I understand that the powers of the Competition Commission are based on the powers of the Commission in Brussels. The EU directorate general for competition has the power to swoop when it believes an investigation should take place. I urge my right hon. Friend the Secretary of State to make the same plea to the Business, Innovation and Skills Secretary to adopt those two recommendations—and, indeed, all the Committee’s recommendations.

The Secretary of State for Environment, Food and Rural Affairs will be aware of the Committee’s work on food security. I hope she will remove any inconsistencies between trying to supply a secure strand of food and sustainable food production. There is an inconsistency at the heart of the Government on that. She will be involved in discussions on common agricultural reform in Brussels. Greening the common agricultural policy could take productive land out of production. It could also be hugely expensive and involve the introduction of more complex regulations, which we should be aiming to simplify.

[Mrs Spelman]

My hon. Friend will know that I acknowledged that problem when I gave evidence to her Committee last week, and that we will try to ameliorate the Commission’s proposals in that regard.

[Miss McIntosh]

I am most grateful for my right hon. Friend’s clarification.

In conclusion, we should say, “Keep it simple.” With all the regulations coming forward, whether to do with the adjudicator or not, the powers should be clear and allow individual growers, under a cloak of anonymity, to raise such issues, either directly or through a third party. I welcome this debate, although I regret that many of the issues that I have raised are not covered by the motion. However, we can have a positive debate today and see an early completion of the adjudicator code, with an early introduction of the adjudicator in the next Session.