[Mr Philip Hollobone in the Chair]
I beg to move,
That this House has considered support for farmers with the cost of living.
It is a privilege to serve under your chairmanship, Mr Hollobone. I wish to quickly put on record my declaration of interests: I am chair of the all-party parliamentary group on dairy, co-chair of the APPG on farming, and chair of the APPG on geographically protected foods. On that note, I shall move on to the actual business.
The importance of food is finally returning to the national conversation. From food security and supply chain costs, to questions of quality, sustainability and the locality of our produce, our country’s relationship with food is a topic that breaches all divides and impacts on us all. During the pandemic, we all recognised the importance of buying local, and it was wonderful to see people going to the farmer’s gate and talking about how proud they were to support local producers. Fewer have been doing that of late, however, as people have returned to mass marketplaces.
In the recent debate on food and the cost of living, there is one constituency that has been consistently overlooked in our discussions about how to support our constituents through the cost of living crisis. It is our farmers who are most underappreciated and underdiscussed. They are the agricultural backbone of our nation, and they are under a tremendous amount of pressure. Rapid inflation in the sector is driving up the price of everything—from fuel and fertiliser, to machinery and labour costs. The crisis has coincided—and not by the Government’s doing—with the agriculture transition plan of the Department for Environment, Food and Rural Affairs, under which the old support payments to farmers under the common agriculture policy are being reduced.
Although the Government are in the process of rolling out new support measures, the schemes are not ready for farmers to fully access them. The National Farmers Union, the National Audit Office, the Public Accounts Committee and the Institute for Government have all expressed serious concerns about the shortfall in support that is currently in place. The risks of the pressure being experienced—which, sadly, looks like it will become more and more sustained, and more and more heinous—are difficult to overstate. A recent NFU survey has demonstrated that 33% of arable farmers are planning to reduce their cropping next season; that 7% of dairy farmers plan to leave the industry altogether; and that 15% of pig producers have done so in the past six months alone.
The decline in agricultural output will spell disaster for the UK if we are not careful. It will result in food costs rising and our dependency on imports increasing, which is something that our constituents will notice. All of this will happen at a time when supply chains are buckling. Farms such as L&J Stanley in Harby, in my constituency, rightly point out that we should be making a greater effort to increase the amount of food that we grow in the UK. There are real ways in which the Government can step up and support farmers through this difficult period. As several of my colleagues compete for the privilege of serving as Prime Minister, I say to each of them—because I am certain that they are watching this debate—that a Conservative Government are a Government who support British agriculture, and that rurality and supporting our food makers and those who allow us to feed our families should be at the heart of our future policies for the economy.
On labour shortages, we all know the challenges that farmers are facing are severe, and our response therefore has to be significant. The public are acutely aware of the crisis in farming. We have all seen the photos of unpicked crops wilting in the sun, heard the stories of healthy livestock being unnecessarily culled due to a lack of abattoir workers, and felt the impact on our wallets of increased prices in shops and supermarkets. Constituents are particularly concerned when they see security markers and buttons put on products such as Lurpak, and people are unable to afford prices of £8 or £9 just to buy some butter.
A recent survey conducted by dairy giant Arla Foods, which operates in Melton Mowbray in my constituency, found that 80% of farmers looking for workers have received very few or zero applications from people with the right experience or qualifications. Looking back to my education at school and the quiz that pupils did to find out what job or profession they should do when they got older, I do not remember a single person being told they should be a farmer. Are our educationalists pushing people? In my neighbouring areas of Stanford, Peterborough, Corby, Nottingham, Leicester and so on—I have 13 neighbours; is a very busy neighbourhood—people would say that farming is not brought up as a legitimate career, even though the 460 square miles next door in Rutland and Melton offer amazing agricultural jobs. We have to start at the very base—looking at how we get people into the industry—because worker shortages are hammering farmers.
In the dairy sector, milk volumes are down by about 3%, compared with last year, and according to Arla’s survey a scarily high 11.9% of dairy farmers are considering leaving farming altogether if the situation does not improve. In the first instance, we urgently need to address labour shortages across the industry so that we can keep supply chains running and shops stocked. Contrary to certain popular perceptions, agriculture is a highly innovative and technological sector, but many of those innovations are in their infancy, and they cannot currently address a shortfall in labour. They definitely cannot do it when it is acute, quick and coming at farmers at great speed, in addition to the increased costs all around them.
We have to ensure that open positions are added to the Government’s shortage occupation list, to broaden the labour pool and help farmers keep their operations running. I also urge the Government to expand the seasonal agricultural workers scheme to satisfy the demand for labour, and ensure those seasonal visas cover work that needs to be done in the winter too, including the production of Stilton in my constituency—Stilton was invented in Little Dalby, and Long Clawson has amazing creators such as Tuxford & Tebbutt. Those businesses need workers between October and December, which is often not when the Government and civil servants think of providing additional visas.
The next issue is rising costs. We are all struggling with inflation, but the NFU estimates that agricultural inflation stands at over 25%. The Government’s agricultural price index shows that in the 12 months to April 2022, the price index for agricultural inputs increased by 28.4%.
I have spent the past few weeks speaking to farmers in my constituency ahead of this debate. One farmer, who represents I.W. Renner & Sons, which is one of our great farms in Normanton, told me that his main concern is the impact that inflation is having on the cost of fertiliser. Heavily linked to gas, fertiliser is an essential input related to crop yields, and rapid price increases have had a severe impact on output. Ammonium nitrate, a key component of fertiliser, cost £200 per tonne in January 2021, but now costs £900 per tonne if you are lucky. That quadrupling of costs is pushing farms to the brink, reducing product yields and quality and forcing them to transfer some of the costs on to consumers. Additionally, the recent closure of the CF Fertilisers Ince production site, which was once responsible for roughly 50% of domestic fertiliser production, has exacerbated the problem. The Government’s decision not to treat the facility as strategically important will have serious consequences for farming.
The significant increase in costs and the reduced availability of fertiliser will also likely reduce crop yields in UK farms in the coming years, much to our detriment. Many of my farmers are deciding not to grow any more bread wheat, and are changing to growing other types that require less fertiliser and are of lower quality.
The Government can make a real difference. Farmers in Rutland, Melton, the Vale and Harborough villages want us to boost domestic fertiliser production and secure domestic supplies as a priority. I also want to see us open our export markets to places such as Jordan and Canada, to broaden our farmers’ opportunities and move away from taking fertiliser from eastern Europe, which we know will continue to be a volatile market for a long time.
Finally, farmers ask that we increase transparency in the fertiliser market by establishing a gas-fertiliser index. Although we must accept that the Government cannot control the price of fertiliser, fertiliser markets are far too opaque. They threaten business confidence and farmers’ ability to invest for the long term. We all know that our farmers ask for as much resilience, certainty and stability as possible. The establishment of a trusted gas-fertiliser index within DEFRA, with relative global benchmark prices accounted for, would go a long way to help farmers prepare for market volatility. Given that such indices exist in the grain, dairy and meat markets, it is not unreasonable for farmers to expect greater transparency for fertiliser.
The next area of work is flexible support. As I said, the challenges facing farmers are being exacerbated by the fact that DEFRA is currently transitioning to alternative programmes of support, which most hon. Members fully support, but that is leaving funding shortfalls and hampering business confidence. Farmers are resorting to using all available support to tackle inflation and fund operational inputs, rather than look at structural investment. Jan from Northfield Farm in Whissendine in Rutland wrote to me about this, and she captured the essence of what farmers want to see from the Government:
“The support farmers most need is not some sort of handout, it is a programme that helps us to underpin our business across a wide range of areas.”
We can all agree that if we keep applying sticking-plaster solutions, our farmers will struggle to innovate, to compete and to continue to provide the vital products that we all take for granted. I ask the Government to look into introducing farm business loans to provide farms with the capital they need to break the inflationary cycle.
Key to the success of such a scheme would be repayment flexibility—for example, weighting repayments to a period of good return. DEFRA must be more sensitive to the economic cycle of farming, which I know the Minister understands full well, in order to make the most out of support measures. There exists ample opportunity for creating viable investment into modem and productive farming infrastructure.
It is clear that British farming is in a state of flux, and international and domestic pressures are significantly impacting on the sector. While some of the causes are far beyond the Government’s control, we need to tackle those challenges head on; otherwise, we will see an even more significant contraction in production over the next few years. For several of the issues I have raised today, there are concrete steps the Government can and should take to support our farmers.
When I talk to my farmers, it is clear that they are united—whether they represent the most remote Harborough village, are up in the Vale providing milk, or down on pig farms producing livestock down in Rutland. We have to assist with labour schemes, introduce a gas-fertiliser index and create flexible loans to boost investment. Those are the key asks from my farmers. I believe, as I know the Minister does strongly, that our farmers have stood by us over what have been a very difficult past two and a half years. They have kept high-quality, good, nutritious food on our tables. They have fought off vegan militias invading their lands.
I urge the Minister to look at my amendment to the Public Order Bill. I know that it is not in her brief, but it recognised that farms, food production sites and abattoirs should be considered sites of national infrastructure. That would prevent those vegan militias from breaking on to their sites, setting loose livestock, and abusing, intimidating and attacking my farmers. We have seen a big increase in that. Over the summer, shamefully, activist groups are planning to disrupt national dairy supplies across the entire country. These are organised groups, with over 500 people planning to do that.
Our farmers have fed us, protected us and kept our green and pleasant land exactly that. They have stood up against those vegan militias and have continued to look after us despite an enormously challenging two and a half years. Now that they are in a grave situation that is not of their making, I ask the Government to stand by them as they have stood by us.
The debate can last until 4 pm. I am obliged to call the Front Benchers no later than 3.27 pm. The guideline limits are 10 minutes for the SNP spokesperson, 10 minutes for Her Majesty’s Opposition and 10 minutes for the Minister. Alicia Kearns will then have three minutes to sum up the debate. Six Members are standing. We are in Back-Bench time until 3.27 pm, so with a seven-minute limit, everybody will be able to have their say.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for Rutland and Melton (Alicia Kearns) for securing this important debate, and for her incredibly useful opening remarks.
A few weeks ago, I met a number of farmers and farming representatives in my constituency of North Shropshire, at a lovey farm near Whitchurch. Despite the warm welcome and a tour of the state-of-the-art calf shed, the subject matter of the meeting was very sobering. Living in a rural area, often off-grid, in older and less energy-efficient houses, and with little access to public transport means that farmers and their neighbours are experiencing the cost of living crisis to a significant degree. However, for our farmers, it is not just a cost of living crisis—it is a cost of doing business crisis.
Farmers have told me, and we have heard colleagues raise the issue a number of times in the House, that rocketing input costs are putting them at risk of going out of business. Even where increased selling prices are helping to offset that, the cash-flow impact of increased input prices, months before crops are harvested or animals sold, will be enough to put some of our critical food producers out of business. We are all aware of the scale of those input cost prices: the cost of fertiliser has increased more than fourfold; diesel prices have nearly doubled; and the price of animal feed and energy costs are all increasing. Agriflation is hitting the sector really hard.
Those price increases are compounded by other challenges, as the hon. Member for Rutland and Melton has mentioned, such as the shortage of labour for tasks such as harvesting and milking. Pig farmers face an especially tough period, with labour shortages at meat processing plants leaving pigs on farm, and they still need feeding and caring for. I have met pig farmers in North Shropshire whose only option now is to shoot pigs that cannot be processed on farm and think about shutting up shop.
The nail in the coffin for many farmers is the manner in which the basic farm payment has been phased out before its replacement—the agricultural transition plan—is ready to roll. The biggest farms are seeing 40% cuts in their payments, and smaller family farms are seeing cuts that mark the difference between staying in business and going bust altogether. Although the new support schemes are a good idea in principle and I support them, farmers in North Shropshire report that they are not ready to be implemented, require too much up-front investment and will not make up the shortfall in the time required. The National Farmers Union, the National Audit Office and the Public Accounts Committee have all agreed with that bleak assessment.
In the spirit of being constructive, I have some suggestions. As an accountant, I back the call of the NFU to introduce farm business loans to support the cash flow of agricultural businesses through that critical period between input, cost and harvest, as well as its suggestion to improve the transparency of fertiliser market prices and enable greater certainty over the price of fertiliser for next year’s crop.
I also ask the Minister for some additional support for our farmers. At a time when food security can no longer be taken for granted, the Government’s broken promise to maintain the historical levels of support for the transition period is putting the farming sector at high risk. Local farmers have been clear with me that while they support the idea of a payment system that encourages more sustainability in farming, they will not be in business to use it and exploit it after years of falling income and high levels of up-front investment. They have also expressed concern that some of the larger types of regeneration scheme proposed will discourage food production, rather than find a way to improve production on a sustainable basis.
We need an effective strategy to deal with the labour shortages affecting the ability not only to harvest but to process that food once it has been reared and sent off to processing. Farmers need confidence for the future, not just to plant next year’s crop but to invest for greater productivity. I would like the Minister to commit that trade deals done by this Government will not undercut our family farms by allowing cheaper, lower-quality food into the country. We should be proud of our higher animal welfare and environmental standards and lead the world by insisting on a level playing field when we agree to trade with our competitors.
I would like to reflect for a moment on the impact on the people whose businesses are affected by this crisis. They already suffer high levels of isolation and poor levels of mental health, and the situation is worsened by the cruel financial pressure they find themselves under. Visiting a farm close to me on Open Farm Sunday, I met representatives from Shropshire Rural Support, a charity providing a vital component of support for farmers and agricultural workers who need additional help with their mental health. They have reported a noticeable increase in people turning to them for help as the business climate has worsened.
It is vital that we remember the human cost as well as the financial one for those working hard to keep Britain fed. The challenges facing the farming industry are significant and are global in nature—we recognise that. But the Government can take steps to mitigate their impact. I look forward to the Minister’s response.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for Rutland and Melton (Alicia Kearns) for securing this important debate.
Devon is home to 8% of agricultural holdings in England—a full 514,000 hectares, of which 92,000 are in my constituency, which boasts 1,442 agricultural holdings. Our Devon farms are relatively small, with an average size of just 60 hectares, compared with an English average of 85, and that magnifies some of the challenges that they currently face. My local NFU details that, as small businesses and consumers, farmers are grappling with spiralling costs in both their businesses and households. Agricultural inflation is running higher than consumer inflation. DEFRA figures show that it is at 28.4% for all inputs in the 12 months to April 2022.
In north Devon, most farm businesses involve livestock of some sort or another. The welfare of those livestock is always a primary concern. Farmers are grappling with how to afford feed and bedding for the coming winter. Nearly all farmhouses are off the gas grid and rely on heating oil in the main, which has had massive spikes and is not protected by the price cap of the electricity market. Some farmhouses are listed buildings, so it is difficult to make them energy efficient. Farmers, like others in rural areas, rely on motor vehicles to get to shops, schools and other facilities. The massive increase in fuel costs has a higher impact on those who live in rural areas.
Although I do not think that the solution is to increase rural fuel duty relief—a very specific tax relief that applies only to Lynton and Lynmouth in my rural constituency, as it relates to the distance from the refinery —we need to look for affordable and green solutions to tackle our reliance on the fossil-fuel powered vehicles in more rural parts of the country. It is not right that one set of consumers should pay less for their fuel, as it distorts the market and results in people driving to fill up more than they need to. We need to ensure that the existing fuel duty cut reaches the pump—the Competition and Markets Authority is already investigating the matter—because doing nothing is not a solution.
I would prefer a further fuel duty cut, but until we are confident that it will reach consumers, we must recognise that it may not deliver what we wish. We urgently need better charging infrastructure to enable more of us to switch to electric vehicles, and to look at other creative ways of reducing the cost of transport. In my North Devon constituency, buses are few and far between, and are clearly of no help at all for the transport of livestock or crops.
I recognise that half the basic farm payment has been brought forward, but farmers need more. It is just a matter of cashflow management. For farmers, the uncertainty brought about by much change—new schemes coming onstream, no security of revenue streams, and such surging costs—makes leaving fields fallow preferable. At a time of food insecurity, we need to ensure that every piece of fertile land is used for sustainable food production. That is why I am so exasperated to find that a major national landowner has evicted an organic dairy farmer in my constituency to rewild the land. I know that we need biodiversity, and I support it, but it should not come at the expense of food production. We need sustainable farming, and I urge the Minister to fix rapidly those unintended consequences of DEFRA policy to prevent further evictions and ensure that our productive and fertile land is used appropriately.
I thank my hon. Friend for her point about protecting good-quality agricultural land to feed our nation. It is absolutely wrong that we have so many solar national infrastructure projects going through the Government, but no national oversight of where they are all happening. Masses of our land will end up covered in solar plants, reducing our agricultural capabilities, not least in Rutland, England’s smallest county, where there is a proposal to cover good-quality agricultural land with a 2,100-acre solar plant—it will be built with Uyghur blood and slave labour, although that is another debate. Does she agree that there should be a national strategy on solar plants?
I agree entirely. We need to work out how our land is used. We must tackle not only solar plants, but the issue of growing fuel where we could grow crops. We need to rebalance our land use to ensure that things are actually going in the right direction. I hope that we prevent further evictions.
I welcome the new support and investment schemes for our farmers—as do they—but many of the schemes are far too complex. The Minister has already met my local enterprise partnership and the NFU, which are seeking help to set up an advisory body to ensure that farmers do not have to write to their MPs to try to weave their way through DEFRA bureaucracy. I hope that the Minister will take this opportunity to help to secure the small amount of funding—just £250,000—that Devon farmers are asking for to test having an advisory board to help them through the transition from the old payments schemes to the new. We are dealing with so many small businesses, and that little leg up would enable them to achieve what they are driving for, and what we want them to achieve.
Can we also slow the pace of change between the new and old systems in recognition of the unique role that our farmers play at this time of dramatically increased energy prices, alongside growing concerns about global food security? We know that, in the main, energy prices are being driven upwards by Putin’s vile invasion of Ukraine, and we all support the investment into the war effort of our brave Ukrainian friends, but withdrawing one payment before its replacement arrives is counterproductive.
As I said in my maiden speech, farmers are the custodians of the countryside, and we need to look after them at this difficult time. Some farm-gate prices have jumped, but costs have also escalated beyond all recognition. We can all do our bit and support our farmers by buying British, which is high quality and locally sourced. We have dug for victory before. We need to look to do the same again and support our fabulous farmers to ensure they can do what they want to do—farm sustainably and improve our food security.
It is a pleasure to see you in the Chair, Mr Hollobone. I thank the hon. Member for Rutland and Melton (Alicia Kearns) for her excellent introduction and for raising a comprehensive range of issues. I will focus on just one of the issues she mentioned, which is fertiliser production, as I have a significant constituency interest in the matter.
As we know, fertiliser is critical to food production. An increase in its cost has an impact on yields. We are in a cost of living crisis and I am afraid that this could make matters significantly worse. We should want to encourage as much UK-based fertiliser production as possible. Indeed, maximising self-sufficiency is one of the aims of the food strategy. If the past few months have shown us anything, it is that the risk associated with food security leaves us exposed to global shocks. We are hearing how the recent increase in energy costs, as well as the increase in fertiliser costs, has had an impact on our farmers, but I am sorry to say that that could be just a taster of the trouble we will face if action is not taken now.
I want to make it crystal clear that I am extremely worried that we may be sleepwalking into a desperate situation of too much pressure on fertiliser costs and consequentially on food prices, because of the situation at CF Fertilisers in my constituency. As the Minister knows, CF Fertilisers is a longstanding plant in Ince, near Ellesmere Port, which employs over 300 people and has been a historical and significant source of fertiliser for the UK agricultural community. Last month, its American owners announced their intention to close the plant and begin consultation on the consequent redundancies with the trade union.
I am grateful to the Minister for her offer to have further discussions on the matter and to the Secretary of State, who met with me last month to discuss the situation. At that point, there was still some hope that a commercial solution could be found. After all, the site has been profitable for many years and has a highly skilled and committed workforce, which we want to retain in those valuable jobs. Unfortunately, various newspaper reports over the past few days have indicated that a sale agreement is unlikely to go ahead. That is extremely worrying. The concern I have, which has been conveyed to me by a significant number of the workforce, is that it is not in the parent company’s interest to sell the site as an ongoing concern.
If the site closes, CF will have no domestic competition for fertiliser sales. It plans to retain its site in Billingham in the north-east—for now, at least—but like every other site, that site can be closed at short notice for technical reasons or, as we saw last year, financial ones. It also requires shutdowns for several months at a time every three years or so. Given what we know, it is not a prudent strategy for the nation to put all its eggs in one basket, particularly when that basket is owned by an overseas company that has shown it is ruthlessly guided by the bottom line.
The fear articulated to me by many people is that CF do not want to sell the site to a potential competitor. It would rather see the machinery and plant equipment sold for scrap than lose its monopoly position in the UK market. Look at its financial performance: it makes an awful lot of money. Its earnings before interest, taxes, depreciation and amortisation in the first quarter alone was $1.68 billion. It increased its dividend by 33% in the first quarter of the year. CF could give the site away for nothing and it would not materially affect its bottom line, but it does not want to do that because it would deny them the opportunity of seizing every last penny from UK farmers. How is it in the national interest to let that happen? How is it sensible to allow a situation in which we know this course of action will put even more pressure on food prices? How is it levelling up to allow 300 highly paid, well-skilled jobs in the north-west go, when we know that there is a viable business there? If there is a way forward, it should be allowed to continue.
I cannot overstate to the Minister just how concerned local people are about the parent company’s true intentions. It is clear from talking to them just how little trust they have in CF now and how they believe the consultation process to be, frankly, a sham. The process ends in just a few weeks and, unless there is a dramatic change of approach, we will lose all those jobs and be in a hugely exposed food-security position in future. This cannot wait for a new Prime Minister. I urge the Government to intervene and for members of the Cabinet, for a minute, to stop jostling about their own jobs and to think about my constituents’ jobs, because those will be gone in a few weeks, with knock-on effects on jobs in the agricultural sector generally.
Please, will the Minister do everything in her power to keep the plant open? I want to be clear: if it is allowed to close, the ramifications of that decision could be felt for years to come. People will rightly ask, “What did the Government do to stop it?”
I congratulate my hon. Friend the Member for Rutland and Melton (Alicia Kearns) on securing this important debate on farming and our farmers. She made an eloquent speech, but she was far too kind to our Government. I intend to highlight some of my concerns to the Minister.
I very much enjoyed a young farmers’ event in Much Wenlock, which I visited the other day, just on the border between my constituency and that of my right hon. Friend the Member for Ludlow (Philip Dunne). I met so many young Salopian farmers who were at the conference. I saw the energy, dynamism and conviction they all have, and it gave me real hope for the future of farming, bearing in mind how thriving Shropshire young farmers are and the tremendous work they do and continue to do.
I campaigned for Brexit to ensure that regulations and rules affecting our farmers were made here in Westminster, not in Brussels. As the Minister knows, farming is very different in each of the 27 European Union countries. Clearly, the one-size-fits-all system under the common agricultural policy has failed spectacularly, in particular for our farmers here in the United Kingdom. Now, we are freed from those regulations, so the Minister and the Government are solely responsible for the regulatory and taxation framework affecting our farmers.
The opportunities are vast, but I am not satisfied that the Government are doing enough to support our farmers. I say that from the great deal of feedback that I received from my local Shropshire farmers. More than that, the Government are not turning this industry into one of the most exciting opportunities for young graduates and young people looking for work. In 2002, the Labour party abolished the Ministry of Agriculture—I am not sure why, but perhaps the representatives of the Labour party might explain why—but we now need a new Ministry of Agriculture and Fisheries, and that is why I am speaking in the debate.
I have sent a message to all the candidates standing to be the next leader of the Conservative party to ask whether they will commit to creating a new Ministry of Agriculture and Fisheries, and to a dedicated Secretary of State sitting at the Cabinet table, responsible for farming, responsible and accountable to the NFU and to farmers, and someone who can be challenged here in the House of Commons on all aspects of agriculture.
I pay tribute to the Minister. All my interactions with her have led me to believe that she is not only very efficient, but highly capable and knowledgeable about agriculture. However, she is not a Secretary of State. I would like her to be a Secretary of State—she would make an outstanding Secretary of State. We need that voice for agriculture round the Cabinet table.
We have all the attributes of being one of the most highly efficient and productive agricultural countries in Europe. We have some of the best agricultural institutions in Europe, one of them in Shropshire—the Harper Adams college. We are extremely proud of that extraordinary, world-beating institution in Shropshire. I hope the Minister will agree in her winding-up speech to come before too long to Harper Adams to see the work taking place there. We have the talents of young farmers and arguably some of the best soil conditions in Europe and the best climate conditions to turn this country into an agricultural superpower in Europe, unconstrained by the dead hand of EU bureaucracy. But that is not happening and it needs to change.
I met the other day the new chair of the EFRA Committee, my right hon. Friend the Member for Scarborough and Whitby (Sir Robert Goodwill), and we had a one-hour online call with my association chairman, who is involved in agriculture. I am extremely pleased that the new chair of the EFRA Select Committee has an agriculture degree himself. I wish him every success in holding the Government to account.
Skills and education not only help people get on in life, but help drive forward our agricultural sector and really turbocharge it and make sure that it is fit for the future. Colleges such as Lackham in my constituency are right at the front and centre of that. Will my hon. Friend pay tribute to all land-based colleges across the country?
I will of course join her in paying tribute. We are all seeing her meteoric rise up the ranks of the Conservative parliamentary party, and I will pay tribute as long as she takes the message back to the Cabinet that we need a Secretary of State for agriculture.
My association chairman, Mr David Roberts from Halfway House, runs GO Davies, Shropshire’s largest agricultural feed and seed merchant. He has been bending my ear almost on a daily basis about fertiliser costs and the security of production in the United Kingdom. He is not satisfied by the responses that we have had to date. We have been tabling a lot of written parliamentary questions on the issue. As others have said, ammonium nitrate has gone from £200 per tonne in 2021 to over £900 per tonne today. Fertiliser plants in the United Kingdom have closed and others are vulnerable.
I shall say something now that I have not said before in my 17-year career as a Member of Parliament: we need to nationalise the plants. I never thought that as a Conservative I would call for the nationalisation of anything. I am normally highly opposed to the concept of nationalisation, but I agree with the hon. Member for Ellesmere Port and Neston (Justin Madders). Bearing in mind how extraordinarily important food security is becoming—the consequences of the war in Russia are only just starting to have an impact—and how vulnerable the plants are, I fundamentally believe the Government have a responsibility to take control of the plants, nationalise them and guarantee the future security of fertiliser production in the United Kingdom.
I am running out of time, but, finally, I concur with the sentiments about mental health. We here in the House of Commons benefit from the health and wellbeing team that can help us at times when we suffer mental health problems. We do not have that support across many rural areas, and I am extremely concerned about some of the anecdotal evidence I have heard about mental health problems and increasing suicides in farming. We should celebrate our farmers and our British agriculture, and I look forward to hearing what the Minister says in her wind-up.
It is a real pleasure to serve under your chairmanship, Mr Hollobone. It is also a pleasure to follow the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski). It might surprise him and other Members to hear that I very much agree with many of his remarks, especially his point that farmers in Shropshire, like those in my constituency, have long felt that Governments have not always appreciated the importance of their contribution to the nation’s wellbeing, and the importance of food security. I also associate myself with his comments about the strategic importance of fertiliser plants. He proposed the good idea of greater state intervention in those strategically important sites, and I will touch on that in a moment.
I congratulate the hon. Member for Rutland and Melton (Alicia Kearns) on securing this important debate. She eloquently set out the grave backdrop to it and the many challenges our farmers face. It is sobering to reflect on the fact that so many farmers, facing rising input costs and cost of living challenges, are considering leaving the industry. She said that 11.9% of dairy farmers are contemplating that, and I know anecdotally that a number of livestock farmers in Ceredigion are considering whether they have a future in the industry. It is little wonder, given that agflation, or agricultural inflation, stands at 28.4% according to the agricultural price index. The latest estimates from independent consultants the Andersons Centre have agricultural inflation standing at over 25%.
I spoke to some farmers in Wales recently. Many people say that they have better prices at the market, and that of course is true, but we do not always hear about the rising cost of production, so farmers very much need those higher prices. Although the prices have risen, they have seen little difference in their profit margin, and that is fuelling a great fear of a departure from the industry, which we can ill afford given the many concerns that have rightly been raised in recent months about our food security. The war in Ukraine has brought that into sharp relief. The challenge before us is to increase, not reduce, our agricultural productive capacity.
The hon. Member for North Devon (Selaine Saxby) made several important points, but one that struck a chord with me was about the need for more co-ordinated land use planning to overcome some of the many competing challenges. We need to return to that matter in earnest, because we cannot waste much time.
We have heard about rising fuel prices, and there is room for us to explore expanding the rural fuel duty relief scheme, although I appreciate that that is not within the Minister’s remit. Fertiliser has been mentioned a few times. To add to the remarks of the hon. Member for Shrewsbury and Atcham, I know of farmers who, just this last year, have seen orders for fertiliser increase significantly. They were quoted prices of about £200 per tonne last year, and now it is not uncommon to see prices upwards of £700 per tonne, plus VAT. The inability to plan amid such volatility is a real challenge for our farmers, and puts pressure on their margins. It is often said that farmers find it very difficult to eke out a living even in the best of times, but the added volatility and the price hikes that they have to navigate make it an almost impossible task.
In Wales, the average farm holding is 48 hectares. Anybody who cares to look at farm business incomes in Wales will know that most farms in Wales do not have much discretionary income with which to absorb these additional prices. It is time that we look at interventions to support farmers with rising input prices, particularly the cost of fertiliser.
The hon. Member for Rutland and Melton said that the Government need to establish a gas-fertiliser price index to help improve transparency in a very opaque market. That might not necessarily help to bring down prices, but it would at least offer a bit of a helping hand in planning and managing a bit of the volatility.
With regard to how we help with the costs of fertilisers, in addition to those points made by the hon. Members for Shrewsbury and Atcham and for Ellesmere Port and Neston (Justin Madders) about the strategic importance of fertiliser plants, is it perhaps time for us to consider again the VAT treatment of some of those inputs into agricultural production? I appreciate that that is for the Treasury, but perhaps the Farming Minister could consider having a discussion with Treasury colleagues.
In the short term, many Members representing rural constituencies will know that the price of heating homes is a real concern, especially for those in properties off the mains gas grid, including farmhouses. Under the energy bill support scheme, some £400 is due to come in the autumn, but a question remains as to whether farmhouses will be eligible, primarily due to how they tend to have commercial electricity contracts as opposed to domestic ones. The Department for Business, Energy and Industrial Strategy is looking at options to ensure that farms do not lose out under the scheme, but will the Minister impress on it the importance of us finding a way to include farmhouses in the scheme? Although it might not make the world of difference, every little will help in the coming economic storm, so it is important that we ensure that farmers do not lose out.
I congratulate my hon. Friend the Member for Rutland and Melton (Alicia Kearns) on securing this hugely important debate, which is fundamentally important to the people of Cornwall. I speak as the Member for Truro and Falmouth, an area with a long history of farming and with 82% of its land used for agriculture.
Farming is a vital industry in Cornwall and has helped to shape the landscape that we see today. Almost every type of farming practised across the UK can be found in our Duchy. Our food industry is worth about £2 billion, and one in three jobs in the county—equating to about 60,000 people, and growing—has some attachment to the Cornish food and drink production industry. We have hundreds of fantastic farmers from all backgrounds who are passionate about growing an abundant supply of food, produced to world-leading standards and sustainability. We must enable those farmers to produce food efficiently if they are to continue to play their essential role in the south-west’s rural economy and deliver environmental benefits.
I recently met the National Farmers Union and farmers at Sixty Acres farm in Truro. That was a really positive meeting at which farmers raised many of the issues that we have heard about today. They also voiced their appreciation for what the Government have done to help support them so far.
A couple of weeks ago, I visited Carruan farm in the constituency of my hon. Friend the Member for North Cornwall (Scott Mann). We heard from farmers about how we can meet our net zero and carbon targets, deliver on nature recovery and boost sustainable food production. At the farm, they are successfully trying to do that. They are finding out which of their fields are non-productive and doing more with that. I will come to some of its concerns later on.
As we have heard, the key concern shared by farmers throughout Cornwall is the struggle to absorb rising input costs, which are increasing three times faster than the headline UK inflation rate. As we have heard, agflation topped 30% in April and is currently at about 28.4%. The war in Ukraine has pushed up the already sky-high input costs of the three Fs: fertiliser, fuel and feed. This year, fertiliser trebled in price, and red diesel, as I have heard from my fishermen and farmers, has doubled in price, which is a much larger increase compared with road diesel. In March, concentrate animal feed prices had increased by about 15.6% compared with the previous year. Those price rises come at a time when the industry faces longer-term challenges due to not only the transition away from the basic payment scheme but labour shortages and the impact of new trade and environmental policies. Alongside the variable role of the weather—of course—the decisions that farmers are making feel more like a gamble than ever before.
I thank the Government for listening last winter and extending the seasonal agricultural workers scheme to our daffodil pickers in particular, because there was going to be a disaster in the making. It took a lot of effort—it was not the Minister but the Home Office that we needed to convince—but we were listened to in the end and that saved an awful lot of jobs and gave security to our farmers.
Those challenges are impacting on the food we are producing as a nation, and leading to a crisis of confidence among our farmers. The cost of living crisis will only worsen if our domestic food security is undermined. Although they are larger than they used to be, farm businesses in Cornwall are smaller than the national average, and they are more likely to be livestock-oriented and still family-based. Small livestock farms have higher costs and smaller revenue, and they are more reliant on support payments for now, meaning that BPS reductions have hit hard and early in the transition.
In 2020, Cornwall received £51.6 billion in BPS payments. The reason for highlighting that figure is not to suggest that we are merely swapping this for a smaller-size replacement, but the future of sustainable farming will not be built on the same old subsidy models. I raise this issue so that the Government can think proactively about mitigating the adverse impacts on the farming community and the business ecosystem of the Cornish countryside of simply withdrawing that payment, and I urge the Government to produce on-farm business advice to support the transition. I believe we heard that earlier, and it was one of the main points that come out of our farm visit in North Cornwall a couple of weeks ago.
There seem to be a lot of grants available for farmers—a huge number are out there for them to access—but the time-consuming and complicated nature of the grant application is causing them huge issues. What they are really looking for are people who have local knowledge on the ground in the county and who can help guide them through the cost of living crisis, be it through the local enterprise partnership, the council or DEFRA agents. Farmers really need on-site support, and they also need effective business plans with a clear direction of travel to improve productivity.
The Government have taken a range of actions to tackle the challenges, including delaying the introduction of changes to urea fertiliser for at least a year and the recent launch of the new grant scheme for storing slurry on farms. The Government have also committed to spending £600 million on farm-based innovation over the next three years, and have laid out further details of the sustainable farming incentive. That will reward farmers for promoting the common good and bolstering our food security.
However, farmers are still under real pressure, and the Government have a range of options available for further support. The Government must focus on protecting UK food production and security by assisting farmers and managing the high costs. That includes working with farmers to diversify inputs, and investing in new technologies that will improve their resource and efficiency. We must also support farmers to find new ways to manufacture more organic-based fertiliser products and utilise techniques, including using nitrogen as an alternative fertiliser. The other thing that I learned on the farm visit a couple of weeks ago, and from speaking to other farmers in Cornwall, is that one size does not fit all, even in Cornwall. Somebody three miles down the road will have completely different soil, so what works for them will not work for their neighbour, which is why we need people on the ground who can really help in these situations.
The Government should look at encouraging the uptake of regenerative farming to reduce input costs, encouraging more pasture-fed livestock to reduce feed costs, and supporting new production methods in the forthcoming food strategy White Paper. I also support calls from the NFU for Ministers to assess the impact of any new policy or regulation on domestic food production, which is hugely important at the moment.
Our farming industry is facing very difficult circumstances, with many farmers struggling to pay their bills. That is threatening food security and worsening the cost of living crisis for us all, but they are a resilient bunch. I look forward to continuing to meet our farmers, listening to their concerns and talking to our Government. I will work with the Minister and my neighbours on both sides—the Secretary of State and the new Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for St Austell and Newquay (Steve Double)—to make sure that we back this vital industry going forward.
It is great to see you in your place, Mr Hollobone, and I warmly congratulate the hon. Member for Rutland and Melton (Alicia Kearns) on bringing forward this very important issue. I will never tire of stressing the importance of farming and agriculture to all our lives, never mind to all our constituents and constituencies. It is also important for us to recognise the severity of the crisis that farmers are all facing.
If you ate today, thank a farmer. Farmers are fundamental to our existence as a species, never mind as a society. What they do is integral to how we see our land, how we steward the animals on it, the quality of our water and where people live, and it is vital for vast chunks of the four nations of this Union.
Agriculture will always be close to my heart. I served very proudly on the European Parliament’s Agriculture Committee for the best part of 15 years, designing the current common agricultural policy. I represent the Stirling constituency, which is the size of Luxembourg and has some of the best—and, indeed, some of the worst—farmland in Scotland, and I am proud to work with and for Scotland’s farmers and growers.
In all our countries, agriculture is a hugely sophisticated, science-intensive, innovative business. In Scotland, it employs 67,000 people directly and supports a further 320,000 people, with a gross output of £3.3 billion annually, as well as producing the food we eat, which is quite important.
Of course, agriculture is largely a competence of the Scottish Parliament. We have made several different decisions where necessary, but many of the issues that our farmers face cross borders within this Union, but also on a far wider, global scale. Many of the ideas we need to share are things we need to work on together. We are in a crisis, in Scotland, England, Wales and Northern Ireland. Farming is in crisis right now, and we need to be real about it—we need to be serious.
Many policy levers are reserved to this place. I am talking specifically about trade policy, competition policy, procurement policy—especially in the light of the passing of the United Kingdom Internal Market Act 2020—energy policy in part and, ultimately, budgets as well, given the financial situation of the current devolution settlement.
The Scottish Government are taking this seriously, and we would like to do more. The EU is taking this seriously, creating a £1.5 billion crisis fund to support EU farmers. I am calling on the UK Government to do more and am pledging my support for anything that helps farmers anywhere. Now is the time to put our differences to one side and to focus on where we can make a difference to the people we all serve. That is not to say I am putting them aside forever, because that might be part of the solution from our perspective. I suspect we will come back to that point.
Food security has to be viewed as—from the contributions in the debate I think we agree on this point—if not part of our national security, then certainly as part of our national resilience, however nationalis defined. As we face a summer of increasingly high temperatures and possible drought, we need to be serious about where our food is coming from and how it is produced.
We are all agreed we need to support farmers. The best way to support their incomes is to ensure profitable market return. That is my first point about UK Government policy. Too many farmers find that the market is stacked against them. There are many ways that we could boost demand, including through increasing local, domestic demand. That could be more money for buy local, buy Scottish, buy British schemes. There have been a number of good examples and now is the time to put more resource to that. There should also be more support for quality schemes, such as run by Quality Meat Scotland north of the border, and various farm assurance schemes elsewhere. We are seeing some farmers walking away from those schemes, which is deeply regrettable because consumers want local food produced to high standards.
Procurement policy is one area where I might agree there could be a benefit of Brexit. I have struggled to find many, but this might be one. I can point to parliamentary questions I have asked in Brussels and Strasbourg where the European Commission said, quite explicitly, that carbon emissions could be used as a procurement criteria, boosting local procurement of food, however local is defined. Even within the EU that was possible. Surely, outwith the EU, there is now lots more that could be done through procurement policy to boost local demand for agricultural products, providing a better market for our farmers.
Ensuring a fair market also needs more attention on monopolies and opaque markets. I think particularly of supermarkets and the fertiliser sector. We have a supermarket regulator. That regulator needs far more powers and far more teeth to do what needs to be done.
Market conditions are pressing for farmers. We particularly need action on input costs. There is a need for temporary support and the Scottish Government are looking at various ways of taking that forward. This is an opportunity for the whole of the UK to support farmers. Fuel, fertiliser, labour and feed are all going up at unsustainable levels. Farmers need help now.
On fuel, there is already red diesel support, but we need gas support as well. As we have heard, many farm holdings are off-grid and are becoming increasingly expensive. On fertiliser, there is a clear need for market intervention and support for fertiliser costs. On labour, there is the seasonal workers scheme and we need action on visas to allow more people to help with the work. Many costs have gone up 25% to 45% in recent times. That is absolutely unsustainable for working an agricultural balance sheet. There is a strong case, which I appreciate is outwith the Minister’s remit but I make the suggestion constructively, that we could find ways in which to support those points, including through soft loans and loan guarantees.
Agricultural policy is entirely distinct between Scotland and England, and I am glad that we have made the decisions we have made in Scotland, especially to maintain direct payments. During the current period that is a great safety net for Scottish farmers and I urge the UK Government to revisit that, although that it is a competence outwith my remit.
We also need to see policy coherence over land use. Photovoltaic plants and rewilding have been mentioned, but I would add forestry to that discussion. It is right that we see competing land use purposes, but we must agree that food has to come first. Anything that cuts across food production needs to be deprioritised. I am not hostile to any of the things mentioned, but when I was on the Agriculture Committee of the European Parliament, the intention was to see the bits and parts of unproductive land go to those purpose. Surely it cannot make sense to take prime agricultural land in any of our countries out of production.
We have already had many happy adventures with the Minister about our difference of opinion on trade policy. I am not hostile to trade deals with countries on the other side of the world, but I do not want to see those trade deals undercut domestic food production. Putting that to one side, the closest, biggest market to the UK is the EU, in both directions. Our farmers are struggling with particularly sticky customs routines and the phytosanitary and veterinary checks. I was in Brussels two weeks ago, and it is quite clear that there is a huge appetite for a specific veterinary and phytosanitary agreement with the UK that would help all our farmers to export and import, freeing up production and hopefully lowering prices. That is on the table in Brussels; it needs to be taken forward by a Government that is going to take this, and indeed international law in Northern Ireland, seriously.
It is a pleasure to sum up in this debate. There have been several good suggestions for the Minister to take forward to her colleagues. Where there are sensible suggestions to take forward for the benefit of all our farmers, I will work together with colleagues to make that happen.
It is a pleasure to serve with you in the Chair, Mr Hollobone. I congratulate the hon. Member for Rutland and Melton (Alicia Kearns) on securing the debate. I do not always find myself in agreement with her. She is an eminent plotter, of course, but I certainly found myself in agreement with many of the points she made today.
I noted the comments made by the newly liberated hon. Member for North Devon (Selaine Saxby), who has discovered the horrors of DEFRA bureaucracy made in Britain. It is interesting to see how the last week has panned out, Mr Hollobone. We also had a fleeting appearance from a former Secretary of State for Education, the right hon. Member for Chippenham (Michelle Donelan), which was fascinating.
All the powerful contributions from across the House indicated that these are very tough times for farming, just as they are for the wider environment. We need support for both, not least because on the Government’s watch I am afraid the farming sector has suffered crisis after crisis. Prices may be good at the moment, but just look at input costs—and shudder and be worried. Look at the continuing pig backlog, with tens of thousands of healthy pigs already culled, as we heard from an earlier speaker. Look at avian flu—the worst for many years—which many fear may become a recurring annual issue. At these times, when other nations in the UK and in Europe, have provided the farming sector with much-needed support, this Government have consistently refused to lend a helping hand to English farmers. The basic message is that they are on their own and the market will sort it out. Some of them will go to the wall, but “them’s the breaks.”
The current challenges bearing down on the agricultural sector are the most severe that many farming businesses have ever faced, with inflation, lack of seasonal agricultural labour and a botched roll-out of the environmental land management scheme all putting British agriculture and food security at risk. The Opposition take a different view. Intervention is not alien to us. We back British farmers and have consistently raised concerns that many farms will be unable to cope with soaring inflation.
We have heard many figures. The Government’s own agricultural price index shows that in the 12 months to April 2022, the price index for agricultural inputs increased by over 28% and Andersons’ latest inflation estimate for agriculture is over 25%. We all know the effect of the war in Ukraine and significant gas price rises worldwide. Not only do they put farms at risk; they also threaten Britain’s food security.
The Lea Valley Growers Association has warned that the UK will harvest less than half its normal quantity of sweet peppers and cucumbers this year after many greenhouse growers chose not to plant in the face of surging energy prices, and producers have warned that yields of other indoor crops, such as tomatoes and aubergines, will also be hit. Far from producing more food in the UK, under this Government we risk seeing less being produced.
We had a good discussion about the fertiliser issues. I pay tribute to my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) for the fight he has been conducting on behalf of his constituents and the wider points that he made. I will not repeat those points, but I ask the Minister to set out, after months of dither and delay from the Government, what steps her Department is taking to help farmers to access affordable energy and fertiliser now. What are the Government doing in response to the powerful points made by my hon. Friend? How do the Government intend to curb agricultural inflation, and does the Minister have any plans to help support domestic fertiliser production?
If farmers were only facing inflation, that would be more than bad enough. However, as we have heard, there is a chronic shortage of seasonal agricultural workers. That is a crisis of the Government’s own making; they initially announced 30,000 horticultural seasonal worker visas, but then that number was upped to 40,000— although 2,000 went to poultry workers. Throughout that debate, the NFU and others estimated that we needed 70,000 workers. Why did the Department’s calculations differ so much from those on the ground and in the industry? I am sure the Minister will remember the woeful performance of the Immigration Minister, the Under-Secretary of State for the Home Department, the hon. Member for Torbay (Kevin Foster), before the Environment, Food and Rural Affairs Committee—Committee members were certainly not convinced.
Survey data from the NFU for April showed an estimated national seasonal worker shortfall of 12% in horticulture—three times the figure for the same month last year. Industry experts say that labour shortages on British farms this summer have led to catastrophic waste of homegrown fruit and vegetables. A survey by British Berry Growers showed that annual food waste almost doubled, from £18.7 million in 2020, to £36.5 million in 2021, due to worker shortages. It could be even higher this year. I ask the Minister what support she will be offering farmers struggling to find seasonal labour, and what plans her Department has to put an end to the shortage.
The latest crises take place against the backdrop of the slow and painfully complicated introduction of the environmental land management scheme. The Government are currently phasing out direct payments and farmers have already received significant cuts to those payments, with further to come this year. The Government always suggested that the payments would be replaced by the environmental land management scheme. While the Opposition support the principle of paying farmers to provide environmental goods, the Minister will remember that I warned during the passage of the Agriculture Act 2020 that farmers would be unwise to imagine it would be a straightforward replacement. That has turned out to be the case.
The NFU, the National Audit Office and the Public Accounts Committee, as well as farmers and Opposition Members, all warned that those new schemes are simply not ready for farmers to access them and start making up the shortfall. Will the Minister confirm how she intends to support farms struggling with the transition? What plans does her Department have to speed up the introduction of the ELM, and the sustainable farming incentive in particular?
Will the Minister confirm the budget allocated to the landscape recovery scheme tier 3, following the extraordinary story briefed to newspapers a few weeks ago that it would be hugely reduced? In The Sunday Times, it was described as being reduced to just £50 million over three years. The paper said that DEFRA insiders believed that the scheme was likely to be scrapped after that. Will the Minister clarify whether that story was put out ahead of the Tiverton and Honiton by-election to buy a few votes, or is it actually Government policy?
Although the Conservatives may be unwilling to support British agriculture, Labour takes a different view. On ELM, we have supported the NFU’s calls for basic payment reductions to be paused for two years to provide more time. Frankly, we think that it will take that time to get it sorted out. We do not want to see more stewardship agreements rolled out so that people get paid for doing what they are doing already. We want genuine environmental gain. We would reprioritise ELM to secure more domestic food production in an environmentally sustainable way as part of our plan to support farmers to reach net zero. That plan is conspicuously lacking in DEFRA.
On seasonal labour, through our five-point plan to make Brexit work, Labour will deliver on the opportunities Britain has, sort out the poor deal signed by the—I was going to say previous, but he is still in place—Prime Minister, and end the Brexit divisions once and for all. We will seek new flexible labour mobility arrangements for those making short-term work trips. On inflation, Labour will support struggling agricultural businesses through our plan to make, buy and sell more in Britain, invest in jobs and skills and use the power of public procurement. There is another away: a fresh start to get us to net zero; a fresh start for our food system; and a fresh start for our farmers. That is what support for farmers looks like.
It is a great pleasure to serve under your chairmanship, Mr Hollobone, as it has been to listen to the constructive suggestions across the House on how to deal with the very real difficulties in the sector, largely caused by high rises in input costs. I will start by addressing the various issues that colleagues mentioned, and will do my best to answer the very wide-ranging group of issues raised as comprehensively as I can.
I thank my hon. Friend the Member for Rutland and Melton (Alicia Kearns) for securing the debate. I also thank our former DEFRA Parliamentary Private Secretary, my hon. Friend the Member for North Devon (Selaine Saxby), who served the Department with great distinction and a great deal of hard work. She is a real champion for Devon farmers. I have heard her and have met her farmers with her on many occasions as they tell her what they need. I reassure her that the advisory board conversation will continue in the next few weeks.
My hon. Friend the Member for Truro and Falmouth (Cherilyn Mackrory) made a comprehensive speech. Again, she frequently buttonholes me on behalf of her farmers and her fishermen. The future farming resilience fund is available to give exactly the sort of advice that she envisages. I would love to talk to her about that outside the debate, if that would be helpful to her.
I have frequently discussed farming issues with my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) and the farmers he represents so well. I agree that the opportunities for the future of agriculture are vast. Let me put on record how pleased I am that we passed, with agreement broadly across the House, Committee stage of the Genetic Technology (Precision Breeding) Bill last week. In a week that was perhaps difficult for the Government, that was a high point and is exactly what my hon. Friend means when he says that there are real opportunities for the future of agriculture if we are able to grasp the regulatory space. I would be delighted to visit Harper Adams, although my hon. Friend the Member for Bury St Edmunds (Jo Churchill), who so recently and sadly departed from the Department, visited extremely recently and came away full of ideas.
I was interested to hear what the hon. Member for Ellesmere Port and Neston (Justin Madders) said. He and I have spoken, as he has with my Secretary of State, about the difficult issues facing Ince. My understanding is that discussions, which are commercially sensitive, are still under way. I would welcome the opportunity to talk to the hon. Gentleman directly about the current situation. I am also very happy to make his points across Government if he feels that would be helpful. The situation with Ince is worrying for all of us who care about fertiliser prices, although I recognise that it is particularly difficult for those whose jobs are at risk.
These are not easy times for our farmers, who face increasing costs, particularly for fertiliser, animal feed, fuel and energy. Undoubtedly, that is creating short-term cash flow pressures. The Government have announced a series of measures to help farmers with those pressures and to support them through an undoubtedly difficult time. From the end of July, we are bringing forward half this year’s basic payment scheme payment as an advanced injection of cash to farm businesses. That is a practical and appropriate solution to current input problems. Payments will be made in two instalments each year for the remainder of the agricultural transition period. I am very pleased with that policy decision.
I am fully aware of the cost of fertiliser. The current cost is a little lower than my hon. Friend the Member for Rutland and Melton suggested—it is between £700 and £750 a tonne, although I accept that that is considerably more than usual. As a purchaser of fertiliser, I am always extremely aware of that market, as are most farmers. Although cereals farmers, such as me, often buy ahead and will be able to manage for this year at least, livestock farmers often buy much later in the season, and we need them to have the confidence to make purchasing decisions and put in orders so that we are assured that enough fodder crops will be grown in the next 12 months.
I have worked extremely closely with farmers’ representatives—the NFU, the Country Land and Business Association, and the tenants—to build confidence through cross-Government and industry working, and by ensuring that the Government pull all the levers we can to make the situation better, short, frankly, of writing the cheque for everybody’s fertiliser bill. We have issued updated guidance to provide clarity to farmers about how they can use slurry and other manures during autumn and winter. We have delayed the changes to the use of urea fertiliser, and we have introduced new slurry storage grants to help farmers to comply with the farming rules for water. The aim of all that, of course, is to reduce the dependency on artificial fertiliser.
My hon. Friend asked about the potential to increase transparency in the fertiliser market through the NFU suggestion of a gas fertiliser index. We are currently working with the Agriculture and Horticulture Development Board, the Agricultural Industries Confederation and the NFU on how best to achieve fertiliser price transparency. My hon. Friend should please keep talking to me about how that can be best achieved. Some sensible suggestions were made today, not least by the hon. Member for Ceredigion (Ben Lake), but there is a bit more work to be done. We need to continue to work on this policy area to get it absolutely right. The fertiliser taskforce, which I chair with my hon. Friend the Member for Bury St Edmunds, is very much continuing, and I believe we have a meeting next week. This is ongoing work. It is not easy, but we are doing our best to be flexible and react where we can.
We recognise that feed is a particular issue for the pig and poultry sectors. As of 1 June, we successfully concluded the removal of section 232 tariffs, allowing us to remove the 25% tariff on US maize imports. That was a key industry ask and should be an important step in opening alternative sourcing options. Again, we remain very open to working with the industry on specific asks.
We are the only sector with a carve-out for seasonal labour, and I think that is absolutely right. I am convinced that seasonal worker visas are a critical part of how we bring the harvest home. I am happy to continue to make the case for them across Government. We have achieved an extra 10,000 visas through the seasonal agricultural worker scheme route, so we have 40,000 visas for this summer and winter, which are critical to maintaining the agricultural labour provision.
Through the Agriculture Act, we have taken powers to look at supply chain fairness in more detail. We started by dealing with the dairy sector, and we plan to take regulatory action in it as a result of our work later this year. It is complex and we need to get it right. We are about to launch a review of the pig sector supply chain. I look forward to announcing that formally shortly and to giving more details of the consultation process.
My hon. Friend the Member for Rutland and Melton asked about farm business loans to support farmers with rising costs. My officials in the Department regularly meet the agricultural leads of major banks, and I have done so on several occasions. I have also had a special meeting with agricultural leads about the pig sector. In the most recent meeting, on 7 July, the banks suggested that the level of debt among UK farmers is low in comparison with other European countries, and that they are very willing to view farmers as a good industry to lend to. We will continue to engage closely with banks to monitor the situation, but as yet I am not hearing evidence from the industry that it is not getting loans where that is appropriate.
In the briefing that the NFU prepared for this debate, it called for mandatory food resilience assessments of new policies. I reassure Members that the Ag Act already commits the Secretary of State to consider the need to encourage the production of food. That is the basis of our new schemes and is very much part of the food strategy that was published a few weeks ago and embedded in departmental policy.
I want to briefly touch on the NFU survey that was mentioned by my hon. Friend the Member for Rutland and Melton, which suggested that a certain proportion of farmers are intending to reduce production or exit the industry. Surveys are useful and a helpful gauge of what is happening, but not all farmers are members of the NFU. It is important that we continue to monitor the situation closely. I am confident that we have strong and resilient food production in this country. The pig sector in particular is facing challenges. We believe that close to 60,000 sows may have been taken out of production over the last year, but we must put that in context: in 2021, the pig herd grew by nearly 10%, to the biggest it has been in 20 years.
I have worked extremely closely with the pig industry over the last nine months. There is still money being made in the pig world—not by the producers, I agree, but I am determined that the supply chain review is the way to go. I encourage anybody involved in the sector to lean in extremely heavily to the work we are about to launch in that sector. We need to make sure that the supply chain is fair, and we need to eat more British pig. We produce in this country about 60% of what we consume. I would very much like that figure to go up, not least for animal welfare reasons. I will do everything in my power to work with the pig industry—producer, processor and retailer—to achieve that.
In the arable sector, we are expecting increased yields this year, although I must confess that, as a cereal farmer, I look out of the window at very dry weather and worry—that will not surprise anybody—although our wheat area is in fact forecast to be up a little, by a percentage point. Winter barley is up about 10% and rape up about 9% from last year. There are of course real concerns about profit margins, and we have rehearsed the reasons why, although current indications are that the crop is expected to be good—as a farmer, I almost cannot say that sentence for fear of upsetting the harvest, but at the moment we are hopeful and confident in this year’s supply.
On the agricultural transition, direct payments are not a system that I am prepared to defend. Some 50% of direct payments go to 10% of the largest farms and landowners. There are better ways of spending the agricultural subsidy pot. Smaller farmers might well need further intervention if input costs continue to rise, but I am convinced that there are more targeted ways that we can help.
We opened the new sustainable farming incentive on 30 June and are pleased with the application rate so far. I should emphasise that throughout the agricultural transition, which is by its nature slow—we have purposefully worked over a seven-year period to enable farmers to adapt, change their ways and plan for the way that they run their businesses—the pot of money available to support farmers will remain the same for this Government. It will, however, be more targeted and be used to support public goods. We have ambitious environmental goals, which are generally supported across the House. Farmers want to help us to achieve those, and we want to reward them for doing so.
There have never been arbitrary divisions in how much money attaches to each sector of future farming schemes. Those schemes are very much designed to be stacked, so the SFI is not in itself intended to replace fully BPS, but should be stacked with the other schemes to ensure that farmers are properly rewarded.
In my view, subsidy is useful in agriculture, and I am very happy to argue across Government for the pot to remain at £3.7 billion. I think that is a good figure for us to spend on helping our farmers to produce public goods.
As I said, I do not think that direct payments are defensible. We as farmers received money for doing nothing but owning our land. In the future schemes, farmers may have to change their behaviours or work in a slightly more environmental manner. In some cases, they may have to change very significantly what they are doing on parts of their land. I accept that. This is change. This is difficult, but it is worth it for those nature gains and environmental and carbon capture gains, on which I know there is great consensus across the Chamber.
Farmers are dealing with this period of change and transition by voting with their application forms. Now, more than half of farmers, including myself, are in a stewardship scheme. Those are mid-tier schemes, and we have said that we will seamlessly transition farmers in such schemes into the mid-tier of the new future farming schemes. That is not a complete solution but it is a coherent interim one while we continue to work on the agriculture transition to get the policies absolutely right.
I think the food strategy will be welcomed by all Members who have spoken. The goal of food security has been mentioned across the Chamber, as has buying British. The land use strategy, which we will work on in 2023, will deal with some of the specific points raised in the debate, not least by my hon. Friend the Member for Rutland and Melton. As ever, I am happy to meet any Member’s farmers if they would find that useful. I accept that change is difficult. We need to help farmers to manage that and to continue to produce not only the food we love, but the public goods for which we are very keen to continue to pay them.
Thank you for your chairmanship, Mr Hollobone. I thank all those who have spoken with such unity. I particularly thank the Minister for her comments about land-based colleges—Melton Brooksby is one such exceptional establishment—and her commitments to the land use strategy and to continue conversations on labour schemes, gas fertiliser indexes and flexible loans.
This may be my last Westminster Hall debate with the Minister in her place, because she may be the Secretary of State by September—who knows?—or anything else. I thank her for her constancy, for her meaningful and heartfelt support for farmers across our country, for how hard she works, and for genuinely knowing her brief and fighting for it. I thank her on behalf of us all.
Question put and agreed to.
That this House has considered support for farmers with the cost of living.