Agricultural Fertiliser and Feed: Rising Costs

Lord Carrington Excerpts

Wednesday 29th June 2022 Lords Chamber

[Lord Carrington (CB)]

My Lords, I declare my interest as a farmer, as set out in the register. I too welcome this timely debate, as farm input prices have risen by between 25% and 30%, depending on the farming sector, whereas the price index for UK agricultural products has risen by around 12%. I want to concentrate on the sharp rise in fertiliser prices, which other noble Lords have already underlined, as this has the largest impact on the cost of animal feed and, ultimately, the food we eat. There are many types of fertiliser but, basically, we are talking about nitrogen, for which there are very few effective substitutes, particularly in the short term.

Nitrogen is the essential multiplier of growth in all our major crops. To give a clear example of its importance to food production, let us take the dairy industry. In January 2018, the cost of 1 tonne of fertiliser was covered by the production of 900 litres of milk. In March 2022, the cost of 1 tonne of fertiliser required the production of 2,280 litres of milk. On dairy farms, 82% of crops and grass receive a dressing of artificial nitrogen fertiliser. Certainly, dairy farmers produce plenty of organic manures which help crop nutritional needs with potassium and phosphate, but this manure contains a mere fraction of the nitrogen needed to optimise crop quality and growth.

Alternatives to nitrogen fertiliser are already used by most dairy farmers in the shape of legumes, nitrogen-fixing plants, herbal leys, compost et cetera but they are not as effective. Saving costs by reducing artificials results in reduced forage production, an increased cost of bought-in food and lower milk output. With lower milk yields and rising input costs other than fertiliser, dairy farmers will experience lower margins and questions on the viability of their businesses. Without increased milk prices to reflect this, we will experience a reduced dairy sector and the offshoring of production. The AHDB estimates a 2% reduction in producers and a 1.6% reduction in herd size in the year to April 2022.

Turning to arable farmers, the outlook for the current harvest—weather permitting—looks good, with input costs less affected by the fertiliser hike and a high market price for their crops. For the 2023 harvest, the outlook is less clear but probably okay as although fertiliser prices are likely to remain elevated, output prices will probably remain firm. However, with rising input costs, the gross margin is likely to be substantially lower, resulting in farmers reducing fertiliser and other inputs, with the consequence of lower production and, probably, increased imports. For harvest 2024, the outlook is too opaque for any farmer to make any decision on cropping, stocking rates or other investment.

The simplest answer to protecting our domestic farming industry is either to pass the necessary rise in food costs on to consumers or for the Government to subsidise farmers. Neither option is likely to be wholly desirable, although the argument for a rise in food prices becomes more telling by the day. Government actions to date have been helpful. The acceleration of the payment of BPS money is good, while changes in the farming rules for water and urea applications are all welcome, together with various generous grants for technological improvements, slurry storage and processing, but none of these will move the dial in the current situation. As with the pig industry, speedy and targeted support should be introduced to other sectors when in difficulty. The call by the NFU for greater transparency in the fertiliser market must be correct and is, I hope, being looked at by the market monitoring core group.

We need to support the neediest people in our country in the purchase of their food, among other necessities, but surely we need to address the power of supermarkets and processors in the pricing of food so that growers get a fair deal and those who can pay for food pay the right price. The GCA covers the supermarkets, but no such mechanism exists for processors and growers. There have been increasing complaints of unfair practices in the supply chain. I would be interested to hear from the Minister how market monitoring and any necessary intervention can be strengthened using the powers under the new Agriculture Act.

With the rise in global input costs, we need to ensure that our producers are paid a fair price by the market and not squeezed. With other countries experiencing similar issues, we need to maintain sustainable domestic food production. This means the continued use of artificial fertiliser while alternatives are explored and developed.

Pig Farming

Lord Carrington Excerpts

Thursday 16th June 2022 Lords Chamber

[Lord Carrington (CB)]

My Lords, I declare my interests as a farmer and landowner, as set out in the register. I welcome this very timely debate, as many of the issues relating to the problems of the pig industry are the same as those in other farming sectors. It is also timely due to the publication of the White Paper on the national food strategy.

The noble Baronesses, Lady Harris and Lady McIntosh, and the right reverend Prelate have gone through a lot of depressing statistics. I will not repeat them, other than to underline that the average loss in the first quarter of this year per pig was £58, which compares to a loss of £39 in the last quarter of 2021. The last time pig farmers had positive figures was in the third quarter of 2020. There is currently a firming of the price as production falls. It is expected to fall by another 5% in this quarter, which is also depressing. At the same time, input costs continue to rise.

Against that background, pig producers currently face multiple issues, but perhaps the most important, in terms of the ability to alleviate these problems, are as follows. The first is the lack of skilled labour, particularly butchers and others in the processing industry. The second is supply chain fairness, in that the increasing move towards integrated supply chains has put more in the hands of the processers than the independent producers. The third is the decline of local abattoirs. Fourthly, the often gold-plated regulatory base has certainly motivated the decline of small producers. Fifthly, the currently limited number of options open to farmers under the sustainable farming incentive limits other income options for pig farmers and others, as BPS is withdrawn. Finally, there is a lack of indexing against inflation on government support under the Agriculture Act, despite the length of the transition period.

Characteristically, the pig price moves according to supply and demand rather than input costs, so the industry, just like the potato industry, has always been prone to feast and famine, and we are now firmly in the latter territory. As with other farming sectors, there is no expectation of a return to subsidies. The industry needs to look to three main players for the easing of their problems: the Government, consumers and supermarkets.

I will not repeat what the Government have already done to address some of the problems, but I note the Minister’s Answer to a Written Question on 25 May, which stated that increasing costs

“are creating short term pressures on cash flow”

for farmers. I would be fascinated to hear his definition of “short term” and on what his delightful optimism is based. There is an old saying that a long-term investment is a short-term investment gone wrong. Let us hope that the Minister is correct.

The issues that still need to be addressed properly are those of labour in the abattoirs, the supply contracts and red tape. The visa scheme for butchers, introduced at the end of last year, was simply ineffective, owing to the short-term conditions. I note that, in the food strategy, an additional 10,000 visas will be issued under the seasonal worker visa route, but this does not address the abattoir problem. Please could the Minister confirm that this issue will be reviewed by the Migration Advisory Committee when it studies the shortage occupation list, or by the independent review that has been announced on the quantity and quality of the food sector workforce?

The options for encouraging consumers are more limited, although efforts to publicise the predicament of pig farmers are most valuable—I am delighted that “The Archers” is following this particular storyline. A campaign to advertise the product, particularly with the summer barbecue season under way, would be a valuable involvement by major retailers. I welcome the Government’s efforts to increase exports, with the appointment of specific trade representatives overseas, but this will take time to have an effect.

I also welcome the Government’s plan to regulate more effectively the commercial relationship between producers and processors. This has been implemented in the dairy industry, and consultation is about to happen for the pig sector, but it needs to happen in very short order to prevent this heavily pressurised sector seeing more growers going out of business.

It is worth mentioning the dreadful situation at the recent British Pig & Poultry Farming Fair at Stoneleigh, where 10 major retailers were invited by the British Free Range Egg Producers Association to a crisis summit. None turned up and few replied. Happily, in the pig sector, the major retailers have been more accommodating, but there is still a need to go further.

I note that the Groceries Code Adjudicator has said that the pressure from rising prices had impaired relationships, with more than one in four suppliers experiencing a refusal by a retailer to consider paying more for their goods or experiencing unreasonable delay in considering this request. The adjudicator himself was quoted in the Times last week giving his concern that these pressures had impaired relationships and created wider problems. Could the Minister comment on the role of the GCA when placed between the devil and the deep blue sea? How can it strengthen things from the producer point of view?

I welcome the Government’s national food strategy and their recognition of the importance of domestic food production, as well as the features of highest food safety, animal welfare and environmental standards, but we are faced with a huge dichotomy. Despite everything that is said, the overwhelming majority of consumers buy on price, not because it is British and produced to the highest standards. They might wish to, but they cannot afford to. Accordingly, the Government need to focus on removing all surplus costs and unnecessary red tape, which has often pushed the small family farm, running a few pigs or hens or whatever, out of business, resulting in more and more concentration in every farming sector. Each of these sectors is now subject to boom and bust. A small family farm is often more resilient than the big, concentrated unit with high overheads and bank borrowings. Their market is the farm gate and farm shops, where price is not the issue, as it is with the supermarkets. Failure to address these cost issues will undoubtedly lead to greater imports at lower standards.

Finally, whether the current crisis is short or long term, could the Government expedite the agriculture transition plan? There is still far too little detail for growers to make informed decisions. The full scope of the environmental land management schemes is unclear when it comes to a farmer planning a sustainable and resilient food business. Farmers have largely accepted the changes initiated by the Agriculture Act and in particular are aware that they can no longer rely on BPS cash as it is steadily phased out, but this makes it imperative that they be given the full picture on what replaces BPS. Bringing forward the current payment is welcome but, as the pot gets smaller, short-term measures like this will become less supportive, and not just pig farmers will be in trouble.

Ukraine War: UK Food Security

Lord Carrington Excerpts

Tuesday 26th April 2022 Lords Chamber

[Lord Benyon (Con)]

I absolutely understand people’s concerns about the current situation and its effect on farming. The basic payment scheme and area payments have had their day and are indefensible. Some 10% of landowners got over 50% of the BPS budget, and the smallest farmers—one-third—got less than £5,000. What we are proposing is different and it offers farmers much more choice to support their businesses. My noble friend raises a very important point about the market, and we are working very closely through the UK Agriculture Market Monitoring Group, which monitors UK agricultural markets, including price supply inputs, trade and recent developments, and we have increased our engagement with the industry. There is much we can do to support farming at this difficult time, and we will continue to do so.

On seasonal workers: we have 30,000 visas agreed and that can be extended to up to 40,000. Our current negotiations with the industry suggest that this is enough, but we are keeping it under review.

[Lord Carrington (CB)]

My Lords, I declare my interests as a farmer, as set out in the register. In view of the current inflation figures of between 24% and 28% for farming inputs, and the considerable uncertainty of being able to pass these costs on to the food retail sector, there is a substantial danger that farmers will turn away from food production to less risky and guaranteed income provided by the countryside stewardship scheme, hence exacerbating the food supply problem. Can the Minister tell us what measures he is taking to protect and encourage food production and supply in this country?

[Lord Benyon (Con)]

Food production remains of central importance to our agricultural reforms and there is much that we can do and are doing to help farmers at this difficult time. The noble Lord is right to talk about the massive increases in input costs, such as fertiliser. We have announced recently a whole range of measures which will ease this for farmers, but we recognise that they are making decisions about next year’s cropping today—now—and we have to support them and encourage as many as possible to produce food. The strong price for wheat and other crops seems to suggest that they will continue to do so, but we will keep that under review.

Water Industry Reform

Lord Carrington Excerpts

Tuesday 25th January 2022 Lords Chamber

[Lord Benyon (Con)]

I have heard that one before. This is a very important matter for my department. I can assure the noble Lord that I and my fellow Ministers talk to each other about this on a weekly basis. A whole range of measures is being brought forward, and together these measures will continue to make a difference. What we need most of all is continued investment in the infrastructure, some of which goes back to Edwardian times and does not reflect the fact that large numbers of new houses and businesses now exist and require that infrastructure to service them.

[Lord Carrington (CB)]

My Lords, I declare my interests as a farmer, as set out in the register. Can the Minister please confirm that any measures to reform the UK water industry are taken after full consultation with all the interested parties in that industry? The Environment Agency’s interpretation of the 2018 farming rules for water did not do that, and as a result farming companies, water companies and microbiologists all witnessed damage to the environment, their businesses and so on. Please can there be consultation?

[Lord Benyon (Con)]

I entirely understand the point the noble Lord makes; that measure was brought in in a less than perfect way. But we have a problem; we have rivers that need to be cleaned up. Government tries to sit between, on the one hand, requiring business to do something and, on the other, supporting the regulator. We hope we get it right, but we do not always.

Food and Farming: Supply Issues

Lord Carrington Excerpts

Thursday 20th January 2022 Lords Chamber

[Lord Benyon (Con)]

The noble Baroness is of course right that we should not be concerned just with short-term fixes. However, if she will forgive me, I think that she is a little out of date. We have agreed, through to 2024, to allow 30,000 people to come from outside the UK into this country under the seasonal workers scheme. In addition, we have people under the EU settled status. We are also trying to encourage more domestic employment and innovation through automation. All these things will ease the pressures that existed last year—and still exist, to an extent—but the situation is better. We are not complacent and it will continue to improve.

[Lord Carrington (CB)]

My Lords, can the Minister tell us what action is being taken to improve the facilities available to long-distance and other delivery drivers on the motorway network? Together with the long hours that these drivers spend waiting, the lack of facilities is a main concern in the recruitment process. It is not about pay and, in some ways, it is not about quotas for foreigners to come in. The concern is about the facilities.

[Lord Benyon (Con)]

The noble Lord is absolutely right. We have worked with other departments, including the Department for Transport and the Home Office, in the development of our scheme to encourage more drivers, to ease the difficulties caused mainly by the pandemic but also by our withdrawal from the EU, which have resulted in a shortage of drivers. The noble Lord is right: it is the quality of their lives that we need to look at, alongside all the generous incentives that we are giving to encourage people to come here and fill this gap.

Farming Rules for Water

Lord Carrington Excerpts

Monday 1st November 2021 Lords Chamber

Asked by

[Lord Carrington]

To ask Her Majesty’s Government what assessment they have made of the application of the Farming Rules for Water on the use of organic forms of nitrogen in (1) the autumn, and (2) the spring; and in particular, the implications of using organic manure, slurries and biowastes on ammonia and phosphate levels at different points of the year.

[Lord Carrington (CB)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and, at the same time, declare my interests as a farmer.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)]

My Lords, some agricultural activities can be harmful to the water environment, which is why it is essential that farmers follow the farming rules for water and apply only the nutrients needed to feed their crops. Cropping patterns change from year to year, so the amount of nutrients needed will vary. Provided farmers follow the rules and related best practice, manures may be used safely at any time.

[Lord Carrington (CB)]

My Lords, I thank the Minister for his response. However, while his response is welcome, key areas of uncertainty remain. There is a reluctance by the Environment Agency to discuss the interpretation of rule 1. Farmers need to know what compliance with rule 1 means in practice: what soil and what the crop need is, when it can be satisfied and how pollution risk is judged. Farmers are struggling to make sense of the Environment Agency’s regulatory position statement. Please can the Minister either instruct the Environment Agency to retract the RPS or provide far greater clarity to farmers?

[Lord Benyon (Con)]

I am sure the noble Lord will agree that there is a problem here, with watercourses and rivers affected by a variety of different pollutants, some of them from farmland. The Code of Good Agricultural Practice, going back to 1985, was the basis of the rule that now applies. We understand that it is challenging for farmers and are working closely to achieve clarity. The Minister for Agriculture, my friend Victoria Prentis, has set up a working group with the NFU, the Environment Agency and others. It is seeking to iron out these problems urgently so that, from next year, farmers will be much clearer on how to apply the rule.

Trees: Ips typographus

Lord Carrington Excerpts

Monday 1st November 2021 Lords Chamber

[Lord Benyon (Con)]

I am very happy for the noble Baroness to have a detailed briefing on the measures we are taking, but we have an extensive trapping system, using pheromone traps to attract the beetle. We are counting it in infected sites and working in the containment area and beyond to make sure that it is not spreading. The phytosanitary measures we have put in to retain diseased timber in that region are also very important.

[Lord Carrington (CB)]

My Lords, the emergence of this dreadful disease affecting spruce underlines the need to encourage the development of pesticides if we are serious about combating these new diseases, particularly if biosecurity measures are not effective. Please will the Minister confirm that the Government will support research and development in this sector and resist attempts to introduce further disincentivising and unnecessary restrictions?

[Lord Benyon (Con)]

The noble Lord is aware that this is a very difficult area to get right. The beetle in question affects only mature spruce trees. It is very hard to use an insecticide on mature trees that would, first, be effective with the beetle, and secondly, not be further damaging to other species. It is part of the ongoing discussion with the Forestry Commission and its scientific experts.

Animal Welfare (Sentience) Bill [HL]

Lord Carrington Excerpts

Committee stage
Tuesday 6th July 2021 Grand Committee

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

In that case I call the noble Lord, Lord Carrington.

[Lord Carrington (CB) [V]]

My Lords, I declare my interests as a farmer, as set out in the register. My remarks on the Bill are as a farmer, particularly as a livestock farmer. I support Amendment 10 in the name of the noble Baroness, Lady McIntosh of Pickering, but my remarks apply also to other amendments to Clause 1, covering the issue of the membership of the animal sentience committee.

It is the vagary of intention, purpose and operation of the Bill that causes worry among those who deal with animals in the course of either work or play—or any number of things in between. The farming sector in particular is concerned by this lack of detail. In this situation, the best assurance that can be provided is a balanced and knowledgeable committee that can properly and impartially adjudicate on the issues before it.

To illustrate my point, the following concerns have been highlighted but not thoroughly resolved: the lack of definition of animal sentience, respect of religious and local customs, distinction between wild and tame animals, control of predators, the agenda of the animal rights lobby, the position on the welfare of foreign animal imports—dead or alive—and consideration of public interest. I could go on. Others have spoken and will speak eloquently on all those points, but the list explains why the composition of the committee is so important. Reassurance is required.

Most importantly, it should be specified, as in Amendment 10, that there should be at least one of the following: the commercial livestock farmer, the vet and someone with knowledge of slaughterhouses. I add to that a representative from the food service and retail sector. In order to ensure a representative range of expertise and insight and to enable informed policy oversight, the committee must include those with practical animal husbandry experience in the agricultural sector. Farmers are involved in the day-to-day care of livestock and have a practical understanding of their animals. It is therefore vital that a proportionate number of members of the committee has this background and expertise in order to provide a practical insight into how livestock husbandry can support improvements.

In other amendments, there are lists of potential membership qualifications, such as scientific knowledge, expertise in animal behaviour and neurophysiology, or experience in fishing, game shooting, animal welfare, ethics, law and public administration. A committee with all these will agree on nothing, particularly if it is full of scientists and lawyers, who will even argue about what is black and what is white. Add to this a failure to define “sentience”, and we end up with the ingredients of indecision and worse. The Minister needs to add some clarity on all these issues and to tell us why there is the need for a learning period—how long will this be?

These decisions affect real people and real livelihoods; they are not academic. I therefore request that the Minister clarify the membership of the committee as a matter of urgency and to ensure that it is composed of people with practical knowledge and, most of all, common sense.

[Baroness Hayman of Ullock (Lab)]

The amendments in this small group look particularly at the make-up of the committee’s membership, some of which align with our Amendments 5 and 14, which we have previously debated.

Amendment 4, in the names of the noble Lord, Lord Forsyth of Drumlean, the noble Baroness, Lady Mallalieu, and the noble Lord, Lord Hamilton of Epsom, provides that the composition of the committee and its terms of reference must be set out in regulations and approved by both Houses. It is clear that the committee’s composition and terms of reference are considered extremely important by noble Lords, but, as the noble Lord, Lord Forsyth, said, we have covered this in the previous debate, so I shall move on.

Amendment 9, in the name of the noble Lord, Lord Moylan, would provide that a committee member’s term may not be longer than three years and may not be renewed after the first term. As the noble Lord explained in the explanatory statement to his amendment, this is to ensure that the committee

“benefits from fresh knowledge and new perspectives”.

We have some sympathy with that proposal and agree with the noble Lord that the term should be no longer than three years, but we believe that there may be circumstances where it would be helpful to reappoint a member for a further term of office if that was considered appropriate.

Amendment 10, in the names of the noble Baroness, Lady McIntosh of Pickering, and the noble Lord, Lord Carrington, provides that the committee’s membership must include, among others, a veterinary surgeon, a farmer or person with knowledge of livestock production and land management, and a person with knowledge of slaughterhouses. On this amendment and the other amendments we have looked at about who should be on the committee, I take the point made by the noble Earl, Lord Caithness, that we need practical experience—that is important—but although we have talked about Defra legislation, we need to remember that the committee will be looking right across government. It will also need people who have experience in how to manage that and what needs to be looked at. I am beginning to think that we are going to have the largest committee ever created if we have all these people on it. The Minister needs to take away the debate that we have had on both this group of amendments and the previous one and think about how we can practicably move forward to ensure that the committee has the membership it needs but is also flexible enough to cover all the work that it will need to do.

Amendment 8, tabled by the noble Lord, Lord Moylan, the noble Earl, Lord Caithness, and the noble Lord, Lord Hamilton of Epsom, would require 50% of the committee to have had recent commercial experience of farming or managing game or fish stocks. I appreciate that the noble Lord, Lord Moylan, said that it should not be interpreted as stacking the committee, but we need to make sure that we do not end up with a committee with a bias towards one group—the noble Baroness, Lady Mallalieu, said that it was important that we make sure that we do not have an imbalance one way or another. We need recommendations that come from a diversity of viewpoints and proper knowledge bases. It is absolutely right that we look at all these membership criteria, but we need to think about where we are going, what we want the committee to achieve and what its priorities will be. We need more clarity about its focus; otherwise, we will have membership of the committee from everything under the sun. On that basis, I will hand over to the Minister to take that headache away.

Pesticides

Lord Carrington Excerpts

Tuesday 25th May 2021 Lords Chamber

[Lord Benyon (Con)]

My noble friend is right about DDT. I am afraid that tsetse fly is not covered in my brief, but I agree with him that there are occasions where the use of pesticides is vital and has saved millions of lives. I am glad to say that we do not have tsetse fly in this country, and I hope that global warming will not bring it here.

[Lord Carrington (CB) [V]]

My Lords, I declare my interests as set out in the register. Farmers are well aware of the dangers of the incorrect use of pesticides. Training, equipment testing, stewardship incentives and the development of integrated pest management plans are ongoing. Please could the Minister confirm that this, as well as the science, is the basis on which to build better pesticide controls, rather than outright bans which will adversely affect food production and increase imports with lower standards and larger carbon footprints?

[Lord Benyon (Con)]

My Lords, I can confirm that that is our approach. The key focus of the Government’s national action plan for the sustainable use of pesticides is to minimise the risks and impacts of pesticides to human health and the environment, while ensuring that pests and pesticide resistance are managed effectively. The national action plan supports the development and uptake of integrated pest management and ensures that those using pesticides do so safely and sustainably. The plan covers all UK pesticide users and is key to delivering our wider environmental goals. The Government’s consultation on the plan sets out the ambition to improve “indicators of pesticide usage”, their risks and their impacts.

Environmental Land Management Schemes

Lord Carrington Excerpts

Monday 24th May 2021 Lords Chamber

[Lord Benyon (Con)]

I entirely agree with my noble friend that our soil is a vital resource. I hope he will agree that our sustainable farming incentive scheme provides a range of opportunities for farmers to be paid for protecting and enhancing the quality of their soil, including the management of tillage. Two of the eight standards that will be piloted are focused specifically on soil management: the arable and horticultural soils standard and the improved grassland soils standard, which both include actions to reduce tillage on at-risk soils at the intermediate and advanced levels of ambition.

[Lord Carrington (CB) [V]]

My Lords, I declare my interests as set out in the register. Please can the Minister—whom I congratulate on his appointment—tell us what steps will be taken to protect good agricultural land from being taken out of food production to accommodate environmental impact measures such as biodiversity, net gain, offsetting and other schemes that might affect food production? What are the Minister’s views on the establishment of a land use register to ensure national food security?

[Lord Benyon (Con)]

I am grateful to the noble Lord. I think he will be reassured that, in moving from area payments to a more nuanced system of supporting environmental activities, farmers will be encouraged to farm their best land as best they can and look at those corners of fields and other parts of their farm that are less productive and are economic only because of the basic payment scheme. I hope he will see that kind of, if you like, market-led push by the Government as moving in the right direction. As far as a register is concerned, that will have to happen as part of further schemes, which will require local authorities, or local government at some level, to be involved in their rollout.