Agriculture Bill (Fourth sitting)

Deidre Brock Excerpts

Thursday 25th October 2018 Public Bill Committees

[Sandy Martin (Ipswich) (Lab)]

Q This is a skeleton Bill, and I am getting a very strong impression that an awful lot of people are reading into the Bill what they would like to see, without it actually being there. You have talked a lot about the sustainable production of healthy food; however, the most operable parts of the Bill are subsections (1) and (2) of clause 1, and there is no mention at all of the production of food in either. Because this is an enabling Bill, it says:

“The Secretary of State may give financial assistance”,

so we do not know whether he will decide to give financial assistance to any or all of these things, but we do know that it does not say that he may give any financial assistance to the production of healthy food in a sustainable way. Is that something that you would like to see in the Bill?

Professor Marsden: That is why I tabled my amendment for a longer first clause that integrates those things so that it interlocks them. The point is not that it is the environment over and above agriculture, farming or food, but all three. This Agriculture Bill should be projecting the integration of those three priorities because they are all priorities and they are all interlinked—you cannot really have one without the other. That is the critical point, from which the rest of the Bill could be much more specified in duties and so on. It is the principal thing that needs to be right at the start. I think that it is important that the Bill gives the vision.

This is a 1947 moment; I was not around then—not many of us were— but we have all read about what happened. This is a clean sheet in terms of taking back control and delivering a much more self-sufficient, sustainable food system for the UK as a whole. So take the opportunity—that is my advice.

Professor Millstone: I certainly agree that the Bill addresses certain aspects of farming, but clearly the National Farmers Union thinks that there are rather important aspects that are not mentioned. As my colleague Professor Marsden says, it is almost completely in abstraction from food, which there is nothing about.

May I please briefly go back to David Drew’s question about institutions and pick up on Vicki’s point about education and training and Terry’s about the need for transformation? Previously, we had the Agricultural Development and Advisory Service, which performed two important functions. First, it disseminated information and knowledge about innovations and new products and processes to farmers. But it also performed a second function, which was gathering information from farmers about the problems to which they would like solutions that the research and development on innovations could provide. When ADAS was abolished, it was essentially replaced by a commercial marketing and sales system, and that second function disappeared in the UK. It remains present in Denmark, the Netherlands, Austria and many other countries, which accounts for why their agriculture is both more productive and more sustainable than UK agriculture. There is scope for important institutional development in that regard.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

Q It has been suggested to me that the switch from support for food production to support for public goods might make subsidies easier to claim for landowners who manage things such as grouse moors and shooting estates, rather than for farmers with small plots of land. Would you consider that an environmental gain, and, in that case, would the reductions in food production be worth it?

Vicki Hird: We do not have a position on that—it would be hard for me to say whether we would advocate for grouse moors. I understand that clauses on active farmers, food producers and those gaining financial reward from production of goods from the land are being mooted. I think that would restrict the Bill somewhat and make it very inflexible in supporting systems that can do both in a very extensive way. I am not necessarily talking about grouse moors here; I suppose I am thinking more about extensive livestock in a system that has other huge benefits in carbon capture or tourism. If land is producing not a huge amount of food but a bit of food, and the Bill restricts that, that would not necessarily be a good thing.

The important distinction is that we would not be advocating payments purely for being a farmer on an acre basis. In answer to Sandy’s question as well as yours, we do not think that that would be a good outcome for farmers, the taxpayer or the environment. What is in the Bill is a skeleton, which needs to be built on, and we certainly think that there needs to be an extra clause relating to agri-ecological systems such as organic, to make sure that we can cover them and very small producers. You mentioned small producers. It is really important to get rid of the cut-off, because there are some very small, very productive producers who should benefit from any possible public good payment. I will leave it there.

Professor Marsden: We clearly have a big issue here in what we are saying about the uplands. They are never going to be agriculturally productive in this sense, and they will need support for landscape purposes, amenity and so on. This is a very important element and one of the reasons why I stress this whole issue of the rural economy.

The economy in the uplands is governed not by agriculture but by all sorts of other activities, not least the public sector, which is very significant in rural areas. I think we have to look at upland agricultural systems in a completely new light. We have to look at ways in which we can support them in delivering for the rural economy, as well as for the environment.

Over the last few years we have done some research in Wales which has shown that, okay, there may be some scare stories about cuts in subsidies for hill farmers, but if you look at the amount of household income, not farm business income, many hill farmers are generating a lot of income from non-agricultural activities. They are reliant on non-agricultural income for their household income. There is a lot of cost transfer from different members of the household into upland farm households. That is something we should be encouraging. We should encourage more multifunctional farms in upland areas, which can attract visitors and fulfil more amenity purposes. Again, the Bill provides a real opportunity, not a threat, to our extensive upland areas across the UK.

David Baldock: I think the public goods record of some grouse moors is highly controversial; some of the management practices of grouse moors would not score very high in the public goods test. It is more likely, as Terry has been saying, that money will go into mixtures of agriculture and forestry—agri-forestry—and different patterns in the uplands, producing more return for farmers and land managers, rather than be switched out of the land environment. I do not think that is likely to happen on a significant scale, no.

[Deidre Brock]

Q Should some sort of distinctions be placed in the Bill specifying that? I did not quite hear what you said—are you saying that that would limit the Bill too much?

Vicki Hird: If it was only for the active farmer and food production; if that was the only basis on which you could get any support at all.

Professor Marsden: A key word here is “productivity”, isn’t it? That needs to be in the Bill, but we need a broader definition of what we mean by productivity. We can see—we have evidence—that we can get productivity out of small agri-ecological farms. You can create demand for labour out of those activities. You can create much more work. So we need to redefine the notion of productivity in a much broader way to cope with this variation across the agricultural landscape in the UK.

Vicki Hird: Yes, because they might be producing good carbon capture. There are other ways of measuring.

[George Eustice]

Q I will be brief, Sir Roger, because you want to keep us to time. Part 2 of the Bill creates the power—quite a large one—to modify and sort out existing schemes, to remove some of the bureaucracy, to simplify them and to sort out mapping. If you had one or two—perhaps this is for Mr Baldock because you have had some experience of them—what would you do to clean up and sort out the existing basic payment scheme?

David Baldock: The main difficulty with the current CAP regime is its bias towards control of very often the wrong thing—micromanagement of farm boundaries and of the way data is gathered and reported. Instead of getting the big picture of what is happening on a farm and how it is complying with its broad obligations, we have a highly burdensome system that, at the end of the day, does not really add a lot of value to the public purse or public transparency. It would be very welcome if the Government were able to shift that whole delivery system so that it focused on real outcomes and was more farmer friendly.

I was involved in the beginning of the cross-compliance discussion in Brussels. At that time, the whole idea was to take out the very worst farmers—to put under scrutiny people who committed large-scale abuse of livestock and so forth. It has become a micromanagement tool for worrying about individual farmers, with ear tags for livestock and a whole process around that. It has completely disappeared into a bureaucratic process. There is a great opportunity here to change that culture and delivery system.

--- Later in debate ---

[George Eustice]

Q Could you expand on that? We have said before that we are looking at refreshing the county farm model. What would you like to see?

Ed Hamer: For many new-entrant farmers, it is quite intimidating to take out a mortgage to buy their own holding and to then try to pay that money back through farming itself. With the county farms estate, there is still the opportunity to rent a small area to start on, even if it does not come with accommodation and is just the land itself, and to then build up a business and a local market for products, to the point where a farmer can start to invest in their own land or find somewhere else to move on to.

As a stepping-stone measure, the county farms estate is a fantastic resource that has so far been under-utilised. It has been very positive to see DEFRA’s soundings on reclaiming that estate for use by new entrants.

[Deidre Brock]

Q What concerns do you have about the possibility of standards being lowered for imported food? Witnesses have referred to that already quite a lot. Mr Hamer, your website makes it clear that there is a real shortage in the supply of domestic produce, and that, if new recommendations to eat more fruit and veg were actually followed, current production could not keep up. Would cheap imports fill that gap?

Ed Hamer: We like to think not. Horticulture is quite a unique example. At the moment, in the UK horticulture receives less than 1% of public funding. Since 2005, horticultural production has declined significantly—veg by 26% and fruit by 35%. At the moment, we import 42% of the vegetables and 89% of the fruit that we consume in the UK.

Post-Brexit there will clearly be an opportunity for renewal within the horticulture sector. We would like to see UK consumers prioritise the high standards that we have here in the UK, and to see a new generation of young farmers access some of that current import market. At the moment, we spend £7.8 billion a year on importing horticultural produce that could otherwise be grown here in the UK. We would like to see an opportunity for new entrants to access that market and use that revenue to generate jobs and employment within the sector. We are certainly worried about the risk of importing fruit and veg from countries with lower environmental and social standards, which would undermine production in the UK.

Diana Holland: We see food standards and safe, healthy food as going hand in hand with decent treatment and professional, high-skilled jobs. All the evidence that we have is that recent food scandals have gone alongside severe labour abuses and exploitation, because workers are fearful of speaking out about what is going on. We very much believe that the Bill needs to cover the race to the bottom in all aspects and build in incentives to treat workers properly and ensure that decent standards are followed. That could be reflected in certain parts of the Bill.

[Nigel Huddleston (Mid Worcestershire) (Con)]

Q I have a great deal of sympathy with the argument on low pay in the farming sector—thousands of low-paid people work in my constituency—and I am trying to understand the driver behind it. I do not necessarily see exploitative farmers trying to take advantage of workers. Is it not the value chain? Do we need to be realistic and expect higher retail prices? Are the British public too used to low prices for farming produce? Looking at some of the other aspects of the Bill relating to the value chain, can we change the balance of power away from the far end—the retailers and distributors—and give a little bit more power to the suppliers? Is that not the answer?

Diana Holland: If that was true, paying workers less would mean the cost of food would have come down, and it has not. There are pressures; we have been part of various studies and commissions on access to safe, healthy food and the implications on wages. There are links that need to be made. However, we are trying to say that a minimum standard needs to be built in, below which no one should fall. Alongside that, there should be a possibility for all the stakeholders in the industry to come together in the way that used to be done with the Agricultural Wages Board—we recognise that there may be equivalent ways of doing the same thing, as has been done in Wales. All of us who are involved directly in this industry, including the workforce—not excluded and shut out, but part of it—could come together to say, “How should we conduct ourselves so that people are treated fairly, and what happens if the industry is protected?”

I completely recognise that there are issues in the supply chain. Those players all have a part to play, but we need them around the table to discuss that, rather than the current system where workers are extremely isolated in that process, in a way that they were not before. Before, their voices were part of a system, but now, in England specifically, they are not able to access that any more. That has weakened their position—their pay, sickness, holidays and so on. It has not created the improvements that it was claimed it would.

This is an opportunity. This was a very rushed abolition, as part of trying to get rid of red tape. The reality of it has not been a minimisation of red tape; it has just been a reducing of conditions, as we feared and said that it would be. If we really want people to choose to work in this industry and to feel respected in it, we need to do something about that. This is a fantastic opportunity to do just that.

Ed Hamer: Our members are largely self-employed—most of our members manage their own holdings. Consumers need to become more aware of the true cost of production, but the problem lies more in the supply chain: if you go to the supermarket now and spend £1 on produce, farmers receive anywhere between 8p and 20p. The rest goes to the middlemen and the supermarkets. Local food systems demonstrate that if you can reclaim a larger percentage of that food pound, you can generate much higher levels of income on a smaller area. One of our biggest challenges is accessing those local markets so we can reclaim the food pound. Then we can support decent livelihoods on small areas.

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[Chris Davies]

Q We have heard from other farming groups that the Agriculture Bill does not contain enough agriculture. Do you agree, or do you think that there is enough agriculture in it relative to environment?

Jonnie Hall: As I said in response to Mr Whitfield’s question, I agree that on the face of it there is not a direct and clear reference to driving agricultural production of the highest standards that delivers both on animal health and welfare and the environment simultaneously. That is important; it is the Agriculture Bill.

Food and drink as a sector in Scotland is hugely important to the economy—it is the largest manufacturing sector in the Scottish economy—but it will not go anywhere without the primary producer. If we end up in a situation across the United Kingdom where the primary producer is steered more and more to the delivery of purely public goods and not market goods, in terms of food production, then you could see significant implications for food security and our ability to generate exports of high-quality product.

Ivor Ferguson: The document that we have out for consultation at the moment in Northern Ireland certainly recognises the need to produce food. Northern Ireland farmers are very passionate about producing food, but they are also very passionate about the environment. Not only do we need the ability to produce food to the high standards that we do, but we would like the ability to expand our business. We see the mainland GB market as a very big market for us and, as I said, we export 80% of our food, so there are opportunities there for us. We would certainly like the ability to be allowed to expand our food business. From that point of view, we are happy that that is already in our Northern Ireland document.

[Deidre Brock]

Q Mr Hall, I am not entirely clear why you think that we could not alter the CAP regime in Scotland. I am aware—I am sure that Mr Burgess will back me up on this—that if there is no Scotland schedule in the Bill when it is enacted, the Scottish Government will still be able to make agricultural support payments. I think that is right, is it not, Mr Burgess?

George Burgess: Yes.

[Deidre Brock]

Q It was worth making that clear, for farmers who might be concerned about that. Perhaps you can elaborate a little, Mr Hall. Also, you told us how understandable you think that the Scottish Government’s reservations are about the Bill. Would you therefore encourage the Ministers in charge of it to accept the Scottish Government’s amendments in good faith and to allow the transfer of those powers to Holyrood?

Jonnie Hall: You are making two points. First, there is no doubt that the Scottish Government will be able to continue making payments, but they would be governed by the existing rules of the CAP. We want to get to a point beyond the implementation phase—December 2020, if that is what it is—whereby Scotland is ready and able to move to a Scottish agricultural policy beyond the CAP, to deliver support in a way that is more befitting and a more efficient use of taxpayer funding, and a better outcome in terms of supporting not only Scottish farmers but everything that Scottish farming then delivers for society as a whole. That is our concern there. Yes, continuation of payments, but we need to move away from, or out of the shadow of, the CAP at some point.

On the second point you made, I think we share those fundamental concerns about some of the schedules in the Bill—in particular part 7 and the World Trade Organisation reporting requirements. As the UK is the signatory to the WTO, the powers would rest with the Secretary of State. We have been quite clear that the Secretary of State would have, essentially, in theory, unilateral power to determine the funding allocation to different types of support measure, in order to be compliant with WTO requirements. That, in theory, could then impinge on policy decisions at a devolved level, a Scottish level. That is our concern, but if such concerns can be fundamentally addressed and resolved in practice, I think we would be in a different place.

As things stand with how the Bill is written—our legal and academic advice has backed us on this—the Secretary of State has unilateral power. Where we would like to get to is a situation in which there is much more involvement by the devolved Administrations, and in which the devolved Administrations have a role in agreeing those spending limitations. The same applies to the producer organisation element and to the fairness in the supply chain element.

However, there will always be an issue around how that should work because on the one hand the Secretary of State could have unilateral power, but on the other we certainly do not want Scotland or any other devolved Administration to have a veto over the rest of the United Kingdom either. We need to meet somewhere in the middle where some sort of consensus is established and agreed, and then we can move forward.

[Deidre Brock]

Q Your colleagues were certainly clear that it should be agreed and not imposed—inside the common frameworks, for instance.

Jonnie Hall: We have always argued that there is a need for common frameworks, particularly on regulation, across the UK, but they have to be commonly agreed frameworks. It is as much about the process of getting to the framework conclusions as it is about the conclusions themselves. And this is the same.

[Deidre Brock]

Q Mr Burgess, perhaps you could shed a little light on the funding aspect of this matter that we have just been discussing.

George Burgess: As I think I commented earlier, there is no question but that the ability to fund agricultural support will continue, for day one and beyond, and I think Mr Hall has already agreed with that.

I actually agree with quite a lot of what Mr Hall has said. For the benefit of the Committee, our Cabinet Secretary has written to the Secretary of State with a number of proposed amendments to the Bill that the Scottish Government would like to see being made. I will ensure that a copy of that letter, and of the amendments, will be made available to the Clerk, to be shared with Members.

On the WTO clause that Mr Hall mentioned in particular, yes, we have a constitutional concern there that it relates to the observation and implementation of an international obligation. While international relations per se is a reserved matter, observation and implementation of such obligations in relation to devolved matters, such as agriculture, is itself a devolved matter. Therefore we see it as being entirely right and proper that Scottish Ministers, Welsh Ministers and Northern Ireland Ministers have a direct input into setting the limits within the WTO provisions and indeed into the mechanism for ensuring that the UK as a whole complies with our requirements.

[Deidre Brock]

Q I have one last very quick question. Mr Clarke, I was delighted to hear your comments about Quality Meat Scotland, or QMS. As you know, the Scottish Government have been pursuing that for a long time and I hope—I have certainly tabled an amendment to this Bill and I am aware that other Members have as well—that something actually gets sorted there.

I wanted to ask you about protected geographical indications, or PGIs, and how damaging they could be, particularly to the meat sector, and to what extent. I wonder whether you could give us some information on that.

Alan Clarke: First of all, PGI is very important to Quality Meat Scotland. I mentioned earlier that we have Scotch lamb PGI and Scotch beef PGI, and we are able to promote those world-class brands—both of them—in Scotland, in the UK and worldwide.

We have been doing a lot of work with other partners, including Scotch whisky, Scotch salmon and so on, and they care about what the implications of this are. We really hope that there is a seamless transition for PGIs going forward; we would be very, very concerned if there was not, particularly if we ever had to reapply for a PGI. That would be a major concern to us.

We also know that the current consultation has identified that there would be a need for a new logo, for example. Our concern would be the packaging costs for the processing sector to do something like that. More importantly, would we confuse consumers? They have trusted this logo and it is something that they have recognised. Over the years, we have invested millions to try to establish that logo in the minds of customers, and we have a real concern that all that really good work could be lost. That is one area within the red meat industry in Scotland, but we really are part of the much wider food and drink sector, and that synergy has really benefited us as well.

[Chris Davies]

Q I represent a constituency right on the border of England and Wales, and many of my farmers have land on both sides of the border. Currently, they have to abide by what one could say are two slightly different regimes. Mr Hall, regarding the farmers that you represent on the Scottish side of the border that also have land in England, so that they farm both sides, do you think the Scottish Government’s approach to this Bill has given them extra concern and worry?

Jonnie Hall: We do have members who farm in different parts of the United Kingdom under the same business and it has always been something of a challenge in terms of which Administration deals with which component—whether it is land inspections, the payment claims and so on. I suspect that the lack of a publicly clear strategy from the Scottish Government poses some doubt and questions in the minds of those farmers who straddle borders, but equally it probably poses a lot of uncertainty for any farmer in Scotland, not just those who straddle the border.

One thing that will be vital—it goes back to common regulation—is that when you have cross-border farmers, you have to apply the same regulatory approach in terms of pesticide use, animal traceability issues, food hygiene, feed rules and all the rest of it across the United Kingdom in a uniform fashion. That goes back to the statement that all farming unions have always agreed: we need a commonly agreed regulatory framework. We are playing to the same rulebook, but we are not necessarily supporting farmers in the same way; the support requirements for a hill farmer in Argyll are different from those of someone growing fruit and veg in Lincolnshire.

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[George Eustice]

Q Mr Clarke, the Government are under pressure from the other Mr Clark around the table, my hon. Friend the Member for Gordon, and from my hon. Friend the Member for Brecon and Radnorshire, to give consideration to an amendment that would enable some transfers of levy payments between levy bodies, but only with the agreement of the relevant Governments or of the Secretary of State and the Scottish and Welsh Ministers. It is a bit problematic in the absence of a legislative consent motion, because it would explicitly affect something that Scottish Ministers could do. If that amendment were to get some support, should the Scottish Government bank that advantage and grant the LCM on the Bill?

Alan Clarke: I made the point earlier, when I was asked whether there was a particular vehicle that could be used, that I thought the amendment was a really good vehicle, because it is timely and it is opportune. The reality is that we need a solution.

We have shown that the three organisations can work really well together, but we are not maximising our potential. If we can get the full £1.5 million back to Scotland, and the same value back to Wales, using a mechanism that the three organisations would agree, we will have a real opportunity. If that amendment were made to the Bill, and a process was put in place to make it happen, that could happen very quickly. That would be a real benefit, particularly to us in Scotland, and to Wales. We can show evidence of what we have done working together over the last 18 months, and, as I said earlier, we would continue to do that.

George Burgess: The Scottish Government have been seeking an amendment to deal with the red meat levy issue, as Mr Clarke said earlier, and have been asking for the Agriculture Bill to be used for that. I prepared a detailed policy paper on the subject more than a year ago and I have been discussing it with DEFRA officials since.

We do not yet have a commitment from the United Kingdom Government to use the Bill as a vehicle to deal with the red meat levy, but we hope that that commitment will be forthcoming. I have heard that two amendments deal with the subject, and we will look at those with great interest. It is certainly something that the Scottish Government have been seeking.

Jonnie Hall: May I add the weight of NFU Scotland to that, to support the Scottish Government and Quality Meat Scotland? The Bill is a clear opportunity to resolve an issue that has been ongoing for several years. We have waited for the right legislative vehicle. This is a clear moment to get the right amendment in the Bill and make it happen.

[Deidre Brock]

Q I have a question about Northern Ireland for Mr Ferguson and Mr Aston. There is a geographical conundrum in your market, given that some production chains straddle what may be a UK border with the EU. What kind of support are farmers in Northern Ireland likely to require after Brexit? What impact might the different possible outcomes have?

Ivor Ferguson: The level of support we need in Northern Ireland will largely depend on our trade deals. That will be a big deciding factor. If the trade deals are against us in some way, we will certainly need more support. A lot of the support will depend on that. The difference in livestock between north and south does not really come into it. In Northern Ireland, we produce under the Red Tractor quality assurance scheme. As I said, we supply more than 80% of our product to the UK mainland market. That is not complicated by southern Irish livestock, because the standard is not the same as in Northern Ireland. I am not saying the standard is any lower than ours, but the Bord Bia standard is completely different from Red Tractor assurance.

[Deidre Brock]

Q Is there any other support you might be looking for?

Ivor Ferguson: We have £300 million of support in Northern Ireland. We certainly would like to continue to avail ourselves of that level of support. If the trade deal went against us, we would probably need more support than that. We are taking the opportunity with our new framework document to look at the system differently. We think we can develop a more efficient system than the CAP system in Northern Ireland. As I said, we would like to retain a small amount of area payments, but looking forward, we want to give opportunities to progressive farmers who are efficient and do a good job. That is one of the changes we would like to see. Of course, we would also like to increase our share of the UK mainland market. We see opportunities there for us as Northern Ireland farmers.

Wesley Aston: My president has outlined the key issue—we will not be sure what type or level of support we need until we see the outcome of a trade deal. However, in a scenario in which existing market access continues, we see scope to regionalise agricultural policy in Northern Ireland. As I mentioned, the schedule to the Bill that deals with Northern Ireland gives us scope to do that; there is sufficient scope in the Bill. We are keen to take forward measures that are best suited to the Northern Ireland circumstances. We are also keen to pilot ideas.

In broad terms, we are keen to look at two broad aspects. One is to encourage more young farmers into the industry. We see this as an ideal opportunity to do that. We also have a particular issue in Northern Ireland with land tenure and the ability to develop and improve land. We have an 11-month conacre system, which is a short-term let of land, and there is no certainty for either the landowner or the tenant that they will be dealing with the same person the following year. From that point of view, there is no investment in that land. About a third of all Northern Irish land is farmed on that basis. We see that as coming within the scope of developing our own agriculture policy. We would like to address those two broad areas fairly quickly.

We are keen to pilot ideas. Northern Ireland is a small region. We are flexible and we talk to one another. The document my president keeps referring to was drawn up in conjunction with our own Government and our industry, including environmental stakeholders, so it has high-level agreement. We are very keen to implement that. In fact, that is one of the recommendations in the Northern Ireland Affairs Committee report about Brexit that I mentioned. That Committee states that it is keen to support such measures and for Northern Ireland to pilot them.

There are some things we can do of our own accord within the scope of our abilities, but there are others—particularly fiscal measures—for which we do not have devolved powers. We are keen to look at whether we can do something in those areas through measures such as tax incentives for longer-term land tenure, which would not be direct support. That is a fundamental issue in the restructuring we need to become the changed industry we ultimately need to be.

[The Chair]

Thank you very much. Mr Hall, Mr Clarke, Mr Burgess, Mr Ferguson and Mr Aston, you have come a very long way for a relatively short time, but I hope you feel it has been time well spent. I am certain that it has been of value to the Committee. We are indebted to you. Thank you very much.

Ordered, That further consideration be now adjourned. —(Iain Stewart.)