My Lords, I decided to table Amendment 52 having read the detailed concerns expressed by the Welsh Government and NFU Scotland. In this Bill, the Government propose incorporating agricultural subsidies into the same scheme as subsidies for other businesses. That is not the usual approach to agricultural subsidies. The WTO and, of course, the EU have separate and distinct agricultural subsidy regulation.
My amendment does not refer to them specifically, but there are similar concerns about fisheries subsidies. I read the Minister’s comments at Second Reading with care. He said that the Government believe that having agriculture and fisheries in a single scheme
“will help to protect competition and investment.”—[Official Report, 19/1/22; col. 1748.]
However, he did not mention levels of production or the supply of food. That is an important omission because it is the reason why the WTO and the EU treat agriculture separately. Agriculture is subject to the vagaries of weather and disease and is prone to much greater market volatility than other products. If we do not manufacture our own TV sets in the UK, it does not have the fundamental significance that not growing our own wheat would have. For well over 100 years, regular supplies of domestically produced foods at reasonable prices have been regarded as fundamental to our national security. That applies even in the modern world of global markets.
At Second Reading, the Minister also said that the Government’s decision
“was supported by the majority of the respondents to the UK Government’s consultation who answered the question on agriculture and fisheries.”—[Official Report, 19/1/22; col. 1749.]
I have three things to say about that. First, the pattern of agriculture is different in one part of the UK and another. The devolved nations have a very different view on this, and that needs to be reflected.
Secondly, the Government’s response reveals a worryingly majoritarian approach. England is always the majority in any consultation of this nature by sheer weight of population size. This does not mean that it fully reflects the different requirements of the country.
Thirdly, the Government’s justification is that 81% of people who responded to the question in the consultation were in favour of one or both—agriculture or fish—being included. That is tempered by the fact that only 20% of respondents answered that question, so only 80% of 20% were in agreement. That support does not look so great now, does it?
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There are good reasons why agricultural subsidies are separated; they have a much broader base, and in some ways they are very different. Unlike almost all other fields of business and production, agricultural subsidies are accepted as normal and necessary. If a devolved Government or local authority, or indeed the Secretary of State acting as an English Minister, decides to subsidise a car plant, then one large flat empty space is much like another. Infrastructure problems can be overcome, roads built, 5G installed, local employees upskilled and suitable courses run at local tertiary colleges and universities.
It is very different with agriculture. You cannot grow peas for the frozen food industry, or strawberries or wheat, on top of a Welsh mountain, but you can grow sheep. Unlike skills and infrastructure, you cannot create new large flat fields in the middle of Wales; you have to live with what you have. Both Scotland and Wales have large areas where farming is, at best, marginal and difficult. The devolved Governments need to be able to take that into account in agricultural subsidy policies. They cannot be expected to compare and compete with the benign climate and landscape of southern England. I would like to make a similar point about, for instance, Cumbria because England has the same variation in its type of countryside that needs to be taken into account.
Farms do not come alone; they need the processing infrastructure to support them. There are profound environmental impacts that flow from farming techniques, and social structures must be maintained. Depopulation undermines agricultural communities and the ability to conduct farming. Agricultural subsidy schemes have to take all that into account.
I would be grateful if the Minister could set out how agricultural subsidy schemes would avoid breaching the restrictions on local content subsidy. The audio-visual sector is already exempt on this point, and surely agriculture should be too. The prohibition on relocation would make a nonsense of efforts to develop associated food processing industries.
There is another distinct reason why the special circumstances in the UK after Brexit dictate that it is important to be able to keep track of funding specifically for agriculture. Very specific promises were made during the Brexit referendum about the advantages for farmers of leaving the EU. More generous schemes were promised, and schemes free from what was criticised as an overly bureaucratic EU-sponsored system. Many farmers became supporters of Brexit—although their unions were very much more sceptical—so it is an item of faith for the farming community that the Government must be clearly accountable for delivering on those promises. That can happen only if a separate and distinct scheme exists for agriculture. It would of course be more difficult to track if it were all part of one grand scheme.
Both the Welsh Government and NFU Scotland make it clear that they accept the need to replace the basis of the EU schemes that have governed agriculture since 1973, but they challenge the approach taken. Existing schemes may be covered by grandfathering rights and legacy schemes from the EU regime, but there is an urgent need for much more detail on how exactly agriculture will be supported against the seven principles that the Government have set out. It is essential that the devolved Governments are properly consulted and agree to the arrangements, whatever they are, because agriculture is devolved, so the mechanism for financial support must be effective as well.
I recall somewhere along the line reading that the Government would outline further information specifically on agricultural principles. I look forward to the Minister’s explanation, as well as an explanation of how all this will fit within WTO rules.