Agriculture: Global Food Security

Earl of Shrewsbury Excerpts

Thursday 12th May 2011 Lords Chamber

[The Earl of Shrewsbury]

My Lords, I congratulate my noble friend Lady Byford on securing this important debate today. My noble friend is of course a formidable expert in agricultural matters and a stalwart supporter of the industry and those involved in it. I should declare an interest: I used to farm, very badly, in Shropshire and Staffordshire, and my youngest son is a producer of free-range eggs in Lincolnshire. I agree entirely with all the right reverend Prelate said regarding supermarkets.

It is both right and important that British agriculture should contribute to global food security. Our agriculturalists are renowned worldwide for their expertise. Our methods and practices are the envy of the world. Our standards of animal welfare are among the highest. Yet the UK has allowed her self-sufficiency to decline steadily over the years. Since 2008, Governments of all political colours have realised the need, in the face of high prices and shortages of raw materials and energy supplies, as well as a less benign geopolitical climate, to ensure that the UK has adequate food security. That is to be welcomed but, for example, the proportion of home-grown vegetables fell from 70 per cent in 1997 to 58 per cent in 2007, while self-sufficiency in eggs fell from 87 per cent in 2000 to 80 per cent in 2010. It is the egg industry on which I wish to concentrate today and, as my noble friend Lord Lyell just mentioned, the fowl sector.

Free-range egg production has been one of the few bright spots in agriculture over the past couple of decades, but that star has waned somewhat of recent months. Year-on-year growth has been steady and, most recently, in double figures, which is remarkable in that industry. It has been consistently profitable for producer and packer alike. However, two events occurred last autumn which have made life very difficult for all free-range producers. The first was a massive jump in feed costs—and the industry would very much welcome GM crops—over which the industry has absolutely no control. Secondly, at the same time, the egg market in general was in oversupply both at home and on the continent. The cage sector situation was probably down to some parallel-running of old conventional cages which were closing, with some of the new enriched colony cages already in production. In most cases, the moves on cages have meant building new farms rather than re-equipping existing ones. I understand that the industry has had to invest well north of £400 million in the move to the new colony cages in order to comply with the new EU legislation, which is the welfare of laying hens directive. The oversupply in the cage production sector has been rapidly eliminated by the market conditions and has hastened the closure of the old cage farms.

At this stage, I should like to ask the Minister what message Her Majesty’s Government have for egg producers in the United Kingdom who, at considerable cost to themselves, will have complied with the requirements of Council Directive 1999/74/EC—the welfare of laying hens directive—as against other producers elsewhere in the EU who have not, and will not do so by 1 January 2012, but none the less will still enjoy unfettered market access to the United Kingdom.

Free-range egg production is still suffering. The overexpansion of this sector probably came about by some packers encouraging expansion when they did not have a market for those eggs. Because the market had been growing so well, they simply assumed that they would be able to sell them somewhere to someone. In addition, capital grants available in Scotland and Wales for free-range production have not helped and have encouraged production in areas where the egg is not going to be consumed locally. In addition, because of this glut, the packers have been unsuccessful in achieving a price rise to justifiably cover the increased cost of production. This is where the supermarkets come in. That is a typical example of supply and demand.

Significant changes to the way in which egg production is allowed across the EU threaten to impact on the UK’s egg sector. This new legislation, which prohibits the use of conventional battery cages for laying hens from 1 January next, has already cost UK producers around £25 per hen housed. That is a massive cost for producers to bear. However, while this country will be fully compliant, as we always are, not all producers in the EU will comply with the ban.

What view do Her Majesty’s Government take of a partial derogation, for a defined limited period, of the requirements of this Council directive, which would allow the continued production and sale of eggs and egg products produced from conventional cages not in compliance with the requirements of the directive within the member states producing such eggs and egg products?

In conclusion, the United Kingdom egg industry employs 10,000 people directly, with a further 13,000 indirectly. It has a turnover of some £1.5 billion annually and is a massive user of cereal corn. Ninety per cent of eggs produced in the UK meet the stringent standards of the Lion quality code of practice. British Lion quality eggs are consistently rated the safest in the world and are produced to the highest possible welfare standards. This really is a huge success story for British agriculture and we need to support it.