Farmers: Competitiveness

Question

14:43:00

Asked by

To ask His Majesty’s Government what assessment they have made of the competitiveness of English farmers with neighbouring nations and countries, and what assessment they have made of the impact of the Budget and recent policy changes by DEFRA.

In begging leave to ask the Question standing in my name on the Order Paper, I draw the House’s attention to my registered interests.

My Lords, the Government are supporting farmers with a new deal to boost growth and strengthen food security. We will protect farmers from being undercut in trade deals and back British produce. A multitude of factors influence agricultural competitiveness, and international comparisons are challenging due to factors such as differences in the structures of agricultural sectors in different countries. Defra and devolved administration officials meet routinely to share insights regarding our respective agricultural policies.

My Lords, farmers in Scotland and the EU enjoy area-based payments of around €280 per hectare, with minimal environmental obligations, while farmers in the US are reported to receive subsidies worth $30 billion. Our own farmers receive de minimis area-based payments and no further access to SFIs while planning for inheritance tax. What will this Government do to ensure that our farmers can compete on a level playing field in their trade agreements while also restoring nature in line with the obligations of the Environment Act?

We have pledged £5 billion towards farming over the next few years, which will be spent through our environmental land management schemes. We are currently working to reform SFI to allow us to align it with our work on the land use framework and the 25-year farming road map. That is designed to protect the most productive land and boost food security while at the same time delivering for nature. We have published the update of a £30 million boost to HLS that recognises and rewards the vital role played by farmers in restoring habitats. We are also looking at how we can work with the farming sector in order to target those who would most benefit from future payment systems.

My Lords, has the Minister noticed that the Opposition seem to be obsessed with millionaire farmers? Is it not about time that they worried more about families in poverty? They call for more resources for farmers, but have they indicated where that resource is going to come from? They used to accuse us of having a money tree, but I think they have found an orchard.

My noble friend raises some interesting questions. It is clearly important that we target our resources and funding on those who are most in need. That is one of the reasons why the delinked payments are reduced the most for those who have the most and the least for those who need more time to make the changes.

My Lords, in that context can the Minister explain what assessment has been made of the main factors identified by Professor Julia Aglionby behind the cause of upland farmers’ incomes falling to half the minimum wage by 2027? They include the phasing out of the basic payment scheme, the recent negligible rise in HLS, insufficient financial reward from new environmental land management schemes and barriers to scheme transition, which is being done at a much slower pace in all the other devolved nations.

I should probably declare an interest here as I know Julia extremely well and meet her to discuss exactly these issues. Julia does an awful lot of work on uplands and common land, and it is important that we are able to support the farmers, particularly in uplands, who have a much more challenging environment to farm in. That is one of the reasons why we are looking at reforming the SFI to target those who need it most. Previous schemes have not always benefited those, such as in the uplands, who need the most support.

My Lords, I declare my interests as in the register. Can the Minister confirm that in New Zealand, which is probably the pioneer of subsidy-free farming, there is no inheritance tax?

I am afraid I have to admit to the noble Lord that I know nothing about New Zealand’s inheritance tax law, but I am more than happy to look into it.

My Lords, I draw attention to my registered interests in asking this question. Does the Minister accept that it would be helpful for farmers in England, Wales and Scotland if all the supermarkets in the UK were required to show the flags of the countries of origin of meat that they sell in their supermarkets, particularly in view of the possible threats coming from imports from the USA?

I am sure the noble Lord is aware that there was a consultation on labelling fairly recently, which we are looking at. There are certain issues. What do we want on our labels? Country of origin is clearly something the public are particularly interested in. Also, what are the standards and the methods of production? There is a lot of interest in what labelling could include. We also need to be careful to ensure that the labelling that exists currently, and any future labelling brought in, is honest, because sometimes things that look British are not necessarily so.

My Lords, I declare my interests as in the register. Is the Minister aware that since the start of 2024 the level of sheepmeat imports is up by 59%? During the same period, the number of sheep in the UK is down by 40%. Why are the Government not doing more to help sheep farmers and upland areas?

As I mentioned in response to the noble Baroness, it is important that when we reform our SFI we look at how we can support upland farmers more. It is also about getting the right balance between levels of grazing and environmental support. I will give a quick shout-out for Cumbrian sheep. Herdwick sheep are extremely important to our landscapes in Cumbria. I think it is important that our supermarkets and our butchers support locally bred meats as well.

My Lords, to correct the record—I live partly in a village with very small farms—it is not just rich people who have farms. What are the Government doing to support food production in this country?

We have a number of plans to support food production, partly through the farming road map, which we are developing. We have appointed the noble Baroness, Lady Batters, to lead Defra’s farming profitability review, which will look at things like this. We are also looking at government procurement and buying British produce, which will support British farmers. There are a number of activities that we are currently doing.

My Lords, within the senior Defra team—and, sadly, I include all the Defra Ministers—we do not have a single farmer or land manager. If we did, they would explain that the last Budget and recent policy changes have created a lose-lose outcome for British farmers and the British public. Is Defra monitoring the number of farms going out of business, the increase in food prices the public are having to pay and the inevitable decline of our home-grown food security?

I take issue with the idea that our home-grown food security is declining. The data we have does not support that. Regarding the senior Defra team, including Ministers, not having any farming experience, although I spend far too much time in London these days and not enough time in Cumbria, I am actually a registered farmer on our smallholding, so that is not quite true.

My Lords, does the Minister agree that competitiveness should include not just price but environmental costs? Given that our farmers can produce meat and dairy products from our sheep and cattle with substantially reduced greenhouse gas emissions than the global and even European averages, should we not be buying British, trying to minimise imports and exporting as much as we can to protect our farming industry and benefit the planet?

The noble Lord makes some important points. Interestingly, since Brexit our exports have gone down by 21%. We are very hopeful that the new agreement we are working on with the EU at the moment will enable our farmers to export more, help our agri-food trade be cheaper and easier, and help us align more with the EU. On costs, environmental costs clearly have to be taken into account as well. It can also save farmers money if they buy into the different innovative options available at the moment. For example, grants are available to reduce pesticide use. There are lots of opportunities through the different environmental schemes for farmers to become more productive and more competitive.