Queen’s Speech

Your Lordships may not be surprised to hear that I wish to make a few remarks about agriculture. I declare my interest as a farmer and member of several food and farming organisations. Those who have spoken about the disaster in Cumberland have spoken well and I support their views. However, as we speak and meet in this warm environment, I hope that we can spare a thought for the shepherds who, probably at this moment, are on the hills or at the base of the hills, caring for their flocks in a disastrous area. There was no specific reference in the gracious Speech to agriculture or the importance of food security or land use. I hope that we all accept that farming plays a crucial role in delivering a fair and prosperous economy for families and business. The part that it can play in confronting the first truly global recession is underestimated; it can save imports and help the balance of payments on trade. It is ironic that "digging for victory" becomes popular in times of adversity. When the pound falls to match the value of the euro, farmers, at long last, are on a level playing field with the rest of Europe, thereby creating export opportunities against imports. We could do much more, but, sadly, over the past 10 years, the number of dairy herds has halved and we import 1 million litres of milk per day. The right reverend Prelate the Bishop of Lichfield referred to modern methods of farming, to cows helping themselves and deciding when to be milked, thus increasing yields. We need a lot more plants such as Harper Adams before we reach a point of growth in the milk industry. I remind your Lordships that in the past decade some 213,000 animals were lost through TB, which continues to spread like a prairie fire across the country, causing a level of compensation of around £90 million per year. That is a total disaster. The beef herd has fallen by 10 per cent, sheep flocks have reduced by one third, from 21,500 10 years ago to 14,500 today. Now there is the added cost of electronic tagging and a movement has to be recorded for every sheep. Pig and poultry producers are facing significant costs and burdens from legislation and by far the most comprehensive environmental regime that we have seen. Arable farmers benefit from improved science and technology, but, as with all commodities, farmers face increased costs of fertiliser, seed and cultivation. All would benefit from a bonfire of red tape. However, farmers look to strengthen their businesses at a time of relatively low interest rates and borrowing which is at a record high of £11.7 billion, to cover investment and new technology against problems like the nitrate vulnerable zones and cash-flow shortfalls. But farmers will rise to the challenge—they always have. It is encouraging to note that agricultural colleges are full of young farming enthusiasts who see a future in feeding a growing population, dealing with climate change, water availability and energy. Decisions have to be based more on sound practice with science, and less on emotion, to increase self-sufficiency. Farmers have to be prepared to diversify further to minimise risk and maximise opportunities. Sadly, they have not been helped by an unnecessary and complicated system of support, and a rural payment system which was broken almost before it started when Defra chose the most complex system, creating chaos and a shambles at all levels for England, while Scotland, Wales and Northern Ireland have been more successful. Can the Minister say why it costs the RPA £350 million to pay £1.6 billion to 100,000 farmers? It is not always realised that although the common agriculture policy represents more than 40 per cent of the EU budget, it accounts for less than 0.5 per cent of total public expenditure by European Governments. Let us also not forget that 90 per cent of direct support payments have been decoupled from production since 2005. Rural development policies are growing in importance to support agri-environment schemes which support environmental enhancement of farmland. Nor is it realised that the EU is the largest market for imports from the developing world—larger than the USA, Canada, Japan, Australia and New Zealand combined. This is due to duty and quota-free access, but member states last year released more than £1 billion of unspent CAP money for agricultural investment in developing countries. Thereby, the CAP becomes more market led, but more needs to be done to help farmers to improve their marketing and competitiveness. The UK agri-food system accounts for a total estimated gross value of nearly £80 billion. That represents some 6.5 per cent of the total economy, and 531,000 people are involved in primary production. Agriculture makes a big contribution to the economy of this country. The farm-gate share of retail prices has diminished over recent years. In the decade to 1998 it averaged 43 per cent, but by the end of 2008 it had fallen to a 35 per cent share of the basket of food items. Unfair dealing damages farmers’ ability to innovate and invest for the future, and ultimately the consumer loses out through reduced availability and choice. It is understandable, therefore, that the NFU would like to see the establishment of a grocery market ombudsman, as proposed in the Competition Commission report in 2008, to see fair play between all who are involved in the food industry. I should like to hear the Minister's response to this and his views on the importance of clear and unambiguous labelling, stating the country of origin of meat products—particularly where the animal is reared. I referred to the growing importance of rural development supporting agri-environment schemes. Natural England is encouraging more progress and the best use of funds from Pillar 2. There seems to be some contradiction, however, since farmers are expected to become more entrepreneurial, but the rules of the scheme prescribe that payment should be made on the basis of costs alone. We have learnt many lessons from the past 20 years of the many CAP reforms; and now that we are part of a union of 27 countries, the next change will be difficult. We need a strategy less driven by ideology, which is more concerned to achieve reforms that meet the needs of farming and feeding the world—a simpler and more common policy. This has to be backed by more research and development, planning to encourage the use of waste and renewables for energy, and further development of anaerobic digesters, copying many countries in Europe. We seem to be preparing for the 21st century, but working on a 20th century system, often held back by local government planners when applications are made for the sort of things needed to deal with the energy problem. Therefore, the farm of the future should be not only a production unit, but one that offers all kinds of experience to the public, in particular to schools, so that people can see the countryside as a natural asset and also meet the farmers who are trying to preserve it.