Single Payment Scheme

Jeremy Lefroy Excerpts

Wednesday 8th June 2011 Westminster Hall

[Jeremy Lefroy (Stafford) (Con)]

It is an honour to serve for the first time under your chairmanship, Mr Scott.

I will keep my remarks shorter than normal, because several of my hon. Friends wish to intervene and comment on the subject, which is important. It is a great pleasure to see the Minister, who is such a doughty champion for agriculture.

I am pleased that we have the opportunity today to debate this important subject, which is vital not only to farmers in my constituency and throughout the country but to ensure that food is on the table of every person at an affordable price. Food production has long been taken for granted in this country and elsewhere in the world, at least since the green revolution. Until recently, it has not been the subject of much political debate in Europe, but it is no coincidence that this year President Sarkozy has made food a top priority at the G20, which is particularly appropriate for a Frenchman.

Recent headlines from around the world highlight the importance of food production: “Devastating food shortage said to be looming in Kenya”—all these headlines are from the past week or two—“Tanzanians debate rising food prices”, “Drought affects rice production in two central China provinces” and “Regional bank warns Caribbean of impact of rising food prices”. At last, we are waking up to the importance of food security, and it is about time, too.

In our own country, according to the Office for National Statistics, the population is expected to reach 65 million by 2018 and 70 million by 2028. With 7 million more people to feed in the UK alone over the next 15 years, we must act now to ensure that we can meet our needs sustainably. We cannot consider our own needs alone. Another 2 billion will be added to the world’s population in the next 40 years, yet uncultivated land is perhaps as little as 10% to 12% of what is currently cultivated, leaving little room for manoeuvre. That presents a huge challenge, which will only be met by better yielding crops, irrigation, fertiliser and so on. It also brings opportunities for the UK.

The UK has a competitive advantage in food production. We have a temperate climate, excellent yields, efficient farmers, high standards and a strong food manufacturing industry.

[Neil Carmichael (Stroud) (Con)]

I completely agree with my hon. Friend that we need to focus on food production, which it is appropriate to discuss in the light of reform of the common agricultural policy. We need to focus on our profitability and the production of food, as well as, correctly, on protecting the environment. We have to strike the right balance. Does he agree?

[Jeremy Lefroy]

I entirely agree with my hon. Friend, and I will come on to that in a moment.

The strong food manufacturing industry is the largest manufacturing sector in the country and a vital customer for our raw materials. My own county of Staffordshire, along with Gloucestershire, Devon and many other counties represented in the Chamber today, views agriculture and food production as a business of the future and not of the past. Whereas other counties have sold off much of their farm estate, Staffordshire has largely retained its own, and continues to invest in it.

I have to declare a local interest, as about half of the county-owned farms—some 50—are in my constituency. They provide a start for the many young people who wish to farm but do not have the land or capital to do so. South Staffordshire college recognises the need for training young people on the land, and I welcome its application to establish a land-based academy at Rodbaston in my constituency, along the lines of the excellent JCB academy for technical subjects in nearby Rocester.

Last year, UK food and non-alcoholic drink exports topped £10 billion for the first time. If ever we needed a reminder of the importance of Ireland to our economy, it lies in the fact that Ireland is our No. 1 customer, followed by France, the Netherlands and Germany. Our recovery depends substantially on export growth, and agriculture is making a strong contribution. We also import £31 billion a year in food and non-alcoholic drinks, leaving plenty of room to increase market share at home. Food is also of increasing importance to the cost of living, in particular for those on low incomes. As with fuel, the more we produce ourselves, the less we depend on sources of supply over which we have no control on price, quantity and, I must say, quality.

Given the apparently rosy outlook for agriculture, why am I concerned about the single payment scheme or direct payments to farmers? Surely agriculture can survive on its own, without support. I have no doubt that it will, eventually, but that day has not yet come.

[Julian Sturdy (York Outer) (Con)]

If my hon. Friend can see a future without subsidy, can he outline how that would happen in a global context? It is one thing for the European Union to withdraw subsidy to agricultural food production, but that can only happen if the rest of the world follows suit. It would be unfair for European farmers to be disadvantaged by an American system that subsidises its farms.

[Jeremy Lefroy]

My hon. Friend makes an excellent point, and I entirely agree with him. I will come on to how I see the future and how we can eventually get to a stage at which no subsidy is required. However, that day has not yet come. As the National Farmers Union has stated:

“while we are looking forward to the day that farmers no longer need state support, this is unlikely to be within the next few years and it is vital that we maintain and develop the industry now.”

[Mel Stride (Central Devon) (Con)]

I congratulate my hon. Friend on securing this important debate. On subsidies, does he agree that hill farmers in particular represent a special case, given their incomes relative to those of lowland farmers? If we are to encourage young people, to whom he has referred, to get involved in farming in such a context, it is important that we do more.

[Jeremy Lefroy]

I entirely agree. That is a particular concern in my hon. Friend’s constituency in Devon. I do not have hill farmers in my constituency—I do not have enough hills—but in nearby Staffordshire Moorlands we do. If I understand the statistics correctly, hill farmers have suffered the greatest decline in income in recent years—the decline is greater than for any other form of farming. The problem with the single payment applies in particular to smaller farms in the livestock sector. It has been estimated that in 2009 59% of all farms would have been loss-making without their single payment; in the livestock sector the figure was even higher at 87%.

Last week, I had the privilege of attending the Staffordshire county show in my constituency. At the same show, some years ago, I met the Minister for the first time—he kindly came along and showed his support for Staffordshire farmers, as he does for farmers up and down the country, which all of us welcome. Talking to farmers at the show, many of whom have smallish holdings, it was quite clear that without the single payment they would eventually go out of business.

The single payment is essential for the short-term sustainability of agriculture. In the longer term, one might argue that farmers should look to diversify their income so as to reduce and eventually eliminate the need for support, and that that continuing support somehow makes them put off that evil day—or that day. However, no hon. Members who have farmers in their constituency agree with that. Farmers are constantly looking at ways of diversifying their income away from food production. They are taking matters into their own hands, and they do not want to rely on subsidy, in the same way that any other private business man or woman does not.

In any case, the single payment is not simply a subsidy. The payment recognises the vital public functions carried out by farmers: the management of the land in a way that provides an attractive and diverse landscape for those who live in the countryside as well as for visitors; and sustainable production, which meets the highest standards of food safety, traceability and animal welfare.

[Roger Williams (Brecon and Radnorshire) (LD)]

My hon. Friend makes an important point, but does he not agree that the direct single payment is also a buffer against volatile commodity prices? While commodity prices except for milk are reasonably buoyant at the moment, there could come a time when they are in decline, which would be difficult for farmers to sustain.

[Jeremy Lefroy]

I entirely agree with my hon. Friend. He speaks with vast experience from his own Brecon and Radnorshire constituency which is one of the largest, if not the largest, in England and Wales. I ask the Government to recognise the importance of maintaining direct payments to farmers at the heart of the common agricultural policy after 2013. I recognise the importance of environmental management, but it is vital that the primary need to produce high-quality, safe food is kept firmly in mind. Schemes must be flexible and practical to operate for smaller farmers, as well as large landowners.

[Julian Sturdy]

I congratulate my hon. Friend on securing this important debate. He has touched on food security, and I agree entirely with him on that. He has said that farming is going through a rosy patch at the moment, and that is certainly so in arable farming, but not in livestock farming. Does he believe that, despite the need for subsidies, certainly in the short term, supermarkets will play a key role in driving up incomes for farmers and how they are dealt with in future?

--- Later in debate ---

[Jeremy Lefroy]

I agree that livestock farmers have been going through a difficult time for many years. Arable farmers, particularly on the eastern side of the country, are seeing better incomes, but that is not so for all farmers. I will address my hon. Friend’ comment in a moment.

We must ensure that markets work more efficiently, so that there is less need for support. Increasing demand from Britain and around the world will do much of the heavy lifting in the long term, as it raises prices.

[Andrew Griffiths (Burton) (Con)]

As my hon. Friend’s neighbour, I know that Staffordshire farmers appreciate his work to raise their profile and their issues. We have heard about the problems for arable farmers and livestock farmers, but we have not yet mentioned the terrible situation of dairy farmers, which has been an ongoing problem for many years, driven particularly by the supermarkets forcing down the price of milk as a loss leader to tempt people. Does my hon. Friend agree that we desperately need to do something to support our dairy farmers if we are to have a sustainable industry going forward?

[Jeremy Lefroy]

I entirely agree with my hon. Friend. That is why the Bill that proposes a supermarket ombudsman is welcome, but we need that as soon as possible, because in some parts of the dairy industry, despite recent small improvements in prices, there is a crisis, with people going out of business every week.

[Neil Carmichael]

Does my hon. Friend agree that it is surprising that only Government Members are here today to support this debate?

[Jeremy Lefroy]

I thank my hon. Friend, but I will not comment on what he has said. This is an extremely important matter, and I am sure that many hon. Members who would have loved to be here are not in their seats because they are otherwise detained.

I shall conclude, because I know that at least one other hon. Member wants to speak, and I must rightly give him time. The discussions about the future of the CAP after 2013 are critical for Britain. If the outcome is right, British agriculture will thrive and deliver high-quality, fairly priced food to the British people and to the world. There will be increasing employment in rural areas, with increasing exports and a narrowing of the trade gap. We will also ensure our own food security and that of those to whom we are net exporters of cereals, as we are in many years. Essential to getting the CAP right, in my view and that of many others, is the maintenance of direct payment to farmers, which keeps so many of them in business through the ups and downs of farm-gate prices.