Pig Farming

David Ruffley Excerpts

Wednesday 23rd March 2011 Westminster Hall

[Mr Bacon]

It does go much further than pig farming. People are beginning to exit the industry and many are worried about whether they can expect to still be in the industry by the end of this year. My point is that if we have a stronger pig farming and farming sector, that is good for Britain, for the rural economy and for the economy as a whole, and that that is good for the Tescos of this world and their like. If the supermarkets took a longer-term view, rather than just worrying about the next three months and the next quarterly results, it would be better for them in the end. It is not an accident that Morrisons’ fresh meat sales have increased by 12% since it announced its 100% British pork policy. I urge supermarkets that are not currently doing so to take a more pro-British stance. It is incumbent on institutions—and such companies are institutions—of the like, size and power of Tesco to do more than just think about one set of shareholders; they have to think about the entire community of stakeholders, of which they form such a powerful part.

Let me give an example. Tesco states on its website that it supports British farmers, and hon. Members will have probably seen the signs as they go into Tesco showing that it is the biggest customer of British agriculture. On its website, it identifies 27 farmers whom it supports: five produce apples and pears, five produce cheese, nine produce either beef or lamb or a combination of the two, one produces watercress, one produces rapeseed oil and one produces milk. There is not a single pig farmer among the 27.

[Mr David Ruffley (Bury St Edmunds) (Con)]

Will my hon. Friend explain why the economics mean that Morrisons can make a profit by sourcing 100% British pork when Tesco and the other superstores he has mentioned cannot? What is the economic reason he has divined for that?

[Mr Bacon]

My hon. Friend makes a very interesting point because one might think that if everybody could do it, they would. My point is they can do it and they should. The economic case is that when customers see that supermarkets, such as Morrisons, are backing British farmers and backing Britain, they are disproportionately likely to go and shop in those shops and buy those products. They want to see that the supermarket that they endorse by their shopping decisions—it is their spending the money in their pocket that means a supermarket is profitable—is also helping to back our community, back Britain and back British farmers. When people see that, they respond. That has an economic effect of its own, which is why Morrisons’ policy has proved to be so successful. Other supermarkets should follow suit.

The even broader point is that, even if the effects were cost-neutral in the long term—I do not believe for one moment that they are—the supermarkets should recognise that they are British supermarkets and they are succeeding only because we have allowed the planning permissions to go through, sometimes against people’s better judgment, and enabled them to have those locations. It is because we go into those supermarkets and spend our money that they are able to make such profits. I come back to the question: what kind of market are we talking about? We are not talking about the market for foreign exchange; we are talking about enormously powerful players, and with enormous power comes enormous responsibility. I am asking the supermarkets to exercise that responsibility in a more measured way in the interests of this country. I do not want to rant even more on that point, so I shall stop there.

It is certainly true that some British supermarkets can and do support British pig farmers, but only one of the big four sources 100% of its pork in Britain. That is not good enough. In addition, the biggest of the big four also seems to be slowly turning its back on British farmers, offering cheap imports in the misguided belief—promoted by the British Retail Consortium but disproved by Morrisons—that British shoppers do not care where the meat comes from as long as the price is right. Retailers will no doubt respond that they have to meet the variable demand of their customers and that in the current economic climate price has to be a factor. However, I question how much of the instability in the pigmeat supply chain is due to fluctuations in customer demand on price and how much is caused by the internal operations of the supply chain which, as I have set out, is entirely skewed in favour of retailers.

This is not simply a case of backing our heroic pig farmers against the evil supermarkets because, as we have heard, some of our supermarkets are trying to do the right thing. Of course it would be foolish to state that shoppers will buy British whatever the price, but we also know that it is possible to offer consumers British food at high standards of quality and animal welfare all at an affordable price. Morrisons have shown that that is possible and, if the producers can get a fair price for their pigs, we will have the best of all possible worlds.

When feed prices peaked in 2008, it took six months for prices to fall back to a sustainable level, during which time many pig farmers had left the industry. Today, three quarters of the remaining farmers say that they too will get out of the pig business if things do not improve within the next 12 months. That would be a tragedy for not only pig farmers, but processors, retailers and consumers. British consumers want to buy British produce because they want to support British farmers and they believe that it is the best. I have not wavered in my belief that a mandatory country of origin labelling regime, combined with the widest possible support for the red tractor and quality standard marks, will give shoppers the information they need.

The Minister acknowledged in the House last week that the pig industry receives no subsidies. That is quite correct and I am certainly not calling for that to change. However, if the Government value having a British pig industry that sets the highest standards for quality and animal welfare, they cannot simply shrug and believe themselves to be powerless in the face of global food prices and grocery behemoths. The Government must encourage the pigmeat supply chain to work as it should, so that pig farmers can make a living, not a loss. Pigs were worth it in 2008. They are still worth it today.