Farmers, Supermarkets and Food Supply Chains

Robin Millar Excerpts

Tuesday 16th May 2023 Westminster Hall

[Robin Millar (Aberconwy) (Con)]

My hon. Friend has just said something very helpful: British farmers stand ready. My farmers in Aberconwy have made the point that they are ready to step forward. However, does he agree that supermarkets have a duty to support farmers, and that they should not put undue cost pressures on farmers? Farmers need to be there tomorrow in order to deliver tomorrow, and there is a role for supermarkets in promoting farming, not just for their own interests but so that it is there tomorrow.

[Gordon Henderson]

I can only assume that my hon. Friend has been reading my speech, because if he is patient he will find that I will come on to that point.

British growers want to deliver on the Government’s vision for climate-friendly and sustainable land management, but there is a significant risk to our shared endeavour if we do not address market risks in parallel. Only profitable businesses can be sustainable and continue to invest in productivity and environmental outcomes. It is critical that retailers support British farmers and growers to be sustainable, achieve meaningful environmental gains, and invest in innovation and new technology. Food producers should have an equal stake in the value chain, with food processors and retailers sharing risk, data on performance and value gain.

Farm costs are a significant driver of food price inflation. According to the results of the 2022-23 NFU farmer confidence survey, farmers’ primary concern over the next 12 months is input prices, with 88% expecting negative effects. Data released by DEFRA in March shows that agricultural inputs have risen almost 42% since 2019. Inputs closely related to energy have seen the biggest inflation: energy and lubricants are up 58%. Although wholesale energy prices are falling, they remain one and a half times higher than normal. Fertilisers and soil improvers are up 161%, and animal feeds are up 50%. That is directly linked to the disruption caused by the war in Ukraine.

In recent months, the pressures in the horticulture supply chain have led to supermarkets rationing fresh fruit and vegetables. Soaring energy costs and the continued lack of people to pick crops pose a serious threat to the future of the UK’s fruit and vegetables industry. As a result, the industry is not able to mitigate the current supply chain shortages.

A report by Promar International in 2022 found that growers’ production costs increased by as much as 27% in the preceding 12 months, and that products such as tomatoes, broccoli, apples and root vegetables were most affected. The main drivers are energy, fertiliser and workforce costs. Farmers and growers across many sectors are doing what they can to mitigate rising costs, but they cannot be expected to absorb the additional pressure and risk in the supply chain alone.

--- Later in debate ---

[Mark Spencer]

I understand my hon. Friend’s statement. It is right that we have a sharing of risk and responsibility in the supply chain and that primary producers get a fair price for their products. We also have to bear in mind that our consumers and constituents want to enjoy reasonable food prices. We do not want to drive food price inflation through the market, so it is important that we co-operate and work with retailers and those who manufacture in the food sector.

My hon. Friend referred to the Groceries Code Adjudicator and hoped that we would commit to keeping that as a separate authority. I can tell him that the Prime Minister announced this morning that we will keep the Groceries Code Adjudicator as a separate authority and it will not become part of the CMA, which I think is an indication of how important the sector is and that it requires its own Groceries Code Adjudicator.

Farmers should be paid a fair price for their produce. We have introduced new powers through the Agriculture Act 2020 to support the sector. We have made great progress in our reviews of the pig and dairy supply chains. We have recognised the impact of global events on the sectors in recent months, and the next reviews will take place in the egg and horticulture sectors, as I have already mentioned.

We can confirm, as I have said, that the proposed merger of the GCA will not go ahead. My Department has championed precision breeding, as my hon. Friend the Member for Sittingbourne and Sheppey indicated, through the Genetic Technology (Precision Breeding) Act 2023. Building on the successful passage of the Act, we will convene a working group to bring plant breeders, food manufacturers and retailers together to agree an approach that enables precision-bred products to reach the shelves as soon as possible.

We will also improve future support for horticulture by replacing the retained EU fruit and vegetable producer organisation scheme when it closes in 2026 with an expanded offer, which will include controlled environment horticulture as part of our new farming

schemes. We will help the controlled environment horticulture sector overcome barriers to accessing future support and make it easier to build new glasshouses through changes to national planning policy.

[Robin Millar]

I welcome the support that the Minister is outlining, including that farmers should be paid a fair price. Right now in Aberconwy, upland farmers are being told that their land is no good and that it would be put to better use if planted with trees to help the environment. They are being told that meat is not a good part of the diet and that they should not raise livestock. Does he agree that meat does form part of a balanced diet, that raising livestock is among the best of upland farming practices, and that supermarkets have a role to play in talking about that because they occupy a privileged position right next to the customer?

[Mark Spencer]

I hesitate slightly because agriculture is a devolved issue, so it would probably be better for my hon. Friend to lobby the Welsh Government, although I acknowledge what he says. The beautiful landscapes on Dartmoor, Exmoor and the North York Moors are created by the sheep that graze those uplands. We as consumers can play our role in eating the view, as it were. The view that we see is directly related to the food that we consume. If we want to eat beautiful, top-quality Welsh lamb, we must do our bit to support beautiful, rolling landscapes such as the Brecon Beacons—I call it the Brecon Beacons because I have no idea how to pronounce the name that it is now called.

Recent global events facing growers and the wider food sector underline the importance of working together at every stage of the food system, from farming to manufacturing, distribution and retail. Following productive conversations at the summit, I am pleased to say that food security is still at the heart of the Government’s farming agenda. Fulfilling the Prime Minister’s priority on economic growth, we will continue working with the industry to champion UK food and drink at home and abroad, helping more businesses to invest in domestic production and innovation.

I am grateful for hon. Members’ contributions to this important debate. It has been a stimulating debate and I am grateful for the support, comments and questions. Together we will support our great British farmers.

Question put and agreed to.