Energy Support for Farms

Laurence Robertson Excerpts

Tuesday 21st March 2023 Westminster Hall

[Mr Laurence Robertson (in the Chair)]

I remind hon. Members that they need to stand and catch my eye if they wish to speak.

[Carla Lockhart (Upper Bann) (DUP)]

I beg to move,

That this House has considered energy support for farms.

As a matter of openness and transparency, I declare an interest: I come from a small, family-run farm. Thank you for chairing the debate, Mr Robertson; it is a pleasure to serve under your chairmanship. I thank the Minister for being here and for his prior engagement on the topic. I thank hon. Members from across the House for giving their time to attend this debate on this important issue.

In the constituency that I represent, the agriculture sector is vital to our economic wellbeing. In the wise words of my grandfather, if the farmer is not doing well, no other industry is or will; such is the importance of our agrifood industry. Across the wider Armagh, Banbridge and Craigavon area, we have 3,431 farms. They contribute approximately £376 million in goods value and farm support payments into the local economy. They provide employment in the agriculture sector and in the 265 local agrifood sector businesses that the industry supports. In Northern Ireland, we have 26,000 farming families. The agrifood sector is worth more than £5 billion to the economy, and we feed more than 10 million people with our top-quality produce.

As has been the case for all households and businesses, energy costs on these farms have spiralled since the outbreak of the war in Ukraine. Many farms are unavoidably energy intensive. Take dairy, for instance. Farmers who needed to renew their energy contract last autumn experienced increases of more than 400%. With an electricity price of 37p per kWh, the annual cost to an average-size dairy farm is now approximately £105 per cow. For a 250 cow herd, that adds up to £46,000 a year, which is up by £26,000.

--- Later in debate ---

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I too congratulate and thank the hon. Member for Upper Bann (Carla Lockhart) for securing this debate, in which I am pleased to be participating. It is important that the challenges facing our farming sector are properly aired, and it is a little disappointing that the debate has not attracted more interest from across the House.

Farming that uses more energy—for example, the horticultural and poultry sectors—is not included in the UK Government’s definition of energy and trade intensive industries. There will therefore be a reduction in the energy cost support for farms, which has caused understandable and great disquiet.

The omission of horticulture is particularly frustrating. The question posed by the National Farmers Union, to which we would all like an answer, is: why are botanical gardens included in the scheme, but not food grown in greenhouses? That is not to take anything away from botanical gardens, but it seems quite out of kilter and bewildering. European farmers have been supported with a €500 million package to help with production costs, but farmers in Scotland and across the UK feel that the support they have been asking for has not been forthcoming.

As the Minister is aware, it was very much hoped that the Chancellor, in his Budget last week, would extend the definition of energy and trade intensive industries. It is extremely frustrating that that did not happen. As production costs soar, many farmers and food producers face a cliff edge of support. “Cliff edge” is an expression that every speaker in the debate has used. Many producers simply do not know how they will be able to keep going. Where in the Government’s priorities does domestic food production come? Unless the definition is extended, there may well be a reduction in production, which will risk longer-running food price inflation for consumers and could negatively impact the thousands of supply chain companies sustained by the farming sector.

Recent weeks have demonstrated how important domestic food production is, but it is energy intensive. We only have to think back to the recent tomato shortage as a prime example of what can go wrong if the farming sector is not supported. The vast majority of UK tomatoes are grown in greenhouses, which is clearly energy intensive. That, alongside the soaring cost of fertiliser, has given farmers cause to review what food they can actually afford to grown. Indeed, many have opted not to grow vegetables this winter, since there is a genuine lack of confidence that they would be able to cover the costs associated with energy-intensive crops. Cucumbers, which are also energy intensive, are expected to be another casualty. More generally, a shortage of domestic produce right across the board is now expected next year. Farmers cannot be expected to grow produce when they cannot even cover their costs. The reality is that it is simply not viable to grow under glass unless farming is recognised to be an energy-intensive business.

The only way to ensure that we have fresh domestic produce on our shelves is for the UK Government to understand what everyone else understands: that food production is energy intensive. It is bewildering that that argument has to be made. If that is not recognised, a shortage of fresh domestic produce on supermarkets shelves will become a familiar sight. The disruption of international supply chains means that we cannot even have imported fresh produce, as we saw recently with tomatoes. It will not be because of rain in Spain or Moroccan weather changes, as we were told recently when tomatoes became like hens’ teeth; it will be because of inaction from this Government.

There can be no doubt that Brexit has posed huge challenges for domestic food production. Farmers were promised a Brexit bonanza, but the reality is that they have been left paying the price for the damage caused by the Brexit adventure. Some people may think, “Well she would say that, wouldn’t she?” but the chair of Save British Food has also observed:

“I keep hearing that Spain is being blamed for the food shortages in Britain and this is absolute nonsense. The reason we have food shortages in Britain—and they don’t have food shortages in Spain or anywhere else in the EU—is because of Brexit and because of this disastrous Conservative government that have no interest in food production or farming or even food supply. That’s why we are in this mess. The Conservatives with their Brexit have messed up our trade and made that very difficult. This has also impacted the labour supply as it ended freedom of movement. It has also removed the cap and food subsidies, then add on top of that the Ukraine war and Covid and all of the inflation. All of this was predicted and predictable.”

Those are not my words; they are the words of the chair of Save British Food, who I suspect knows a thing or two about British food. She is now part of a growing chorus of people who have concluded that the only way to fix the problem is to

“get back into the single market and customs union”.

The woes are not hard to find; they are piling up for farmers at an alarming rate. The Public Accounts Committee criticised the Department for Environment, Food and Rural Affairs for its “blind optimism” over the implementation of the UK Government’s alternative to the EU’s common agricultural policy funds, with a lack of detail as to how alternative funding will provide the help needed.

[Mr Laurence Robertson (in the Chair)]

Order. I gently remind the hon. Member that the debate is on energy support for farms. It is quite a narrow title.

[Patricia Gibson]

Mr Robertson, you intervened at the right moment. I was setting out the general context for farmers. I have talked about energy support, but I am putting it in the context of the bigger challenges our farming sector faces. I take your point about the title of the debate.

We can barely imagine the sense of betrayal and abandonment that farmers feel when they look at their EU counterparts, who have a £500 million support package to help with production costs. That is a lump sum to farmers and agrifood businesses affected by the significant increase in input costs, such as energy, fertiliser and animal feed. All that UK farmers are asking for is similar support. Energy costs are the obstacle that is going to hit domestic food production across the UK—there is no debate about that. On top of energy costs, farmers have to deal with chronic labour shortages, with £22 million of fruit having rotted in the fields because of the labour shortage caused by the end of freedom of movement.

The Scottish Government are doing what they can with their limited powers to support farmers. The Minister does not need me to tell him that energy support is reserved to the UK Government. It is to the UK Government that our farmers are looking and hoping; they are asking and lobbying them to take note of the devastating impact that we will see on the farming sector and domestic food production if farming is not rightly recognised as an energy-intensive business—that should be no surprise to anybody.

When we get down to it, this debate is really about whether domestic food production matters. If it does not matter, then the Government can tell us about that position. I believe, as do many others, that it does matter, and that it requires the support that has been called for today. I hope the Minister will listen, and then go back to his colleagues to make the strong, robust case to include horticulture and poultry in the energy and trade intensive industries scheme. Otherwise, the damage to our farming sector and to domestic food production will be nothing short of catastrophic.