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30 Jun 2008 : Column 656

Food Security

Mr. Deputy Speaker (Sir Alan Haselhurst): I have to inform the House that Mr. Speaker has selected the amendment tabled in the name of the Prime Minister. Will Members who are not staying for this debate please leave quickly and quietly?

7.19 pm

Mr. James Paice (South-East Cambridgeshire) (Con): I beg to move,

At the outset, may I remind the House of my entry in the Register of Members’ Interests?

A few weeks ago in the Chamber, I challenged the Secretary of State on the subject of food security. In his answer, he asked for a discussion on the right things to do in response to the changing circumstances. I hope that he will use this debate to make a contribution to those discussions.

Three years ago, the most significant reform of the common agricultural policy since its inception took effect. The so-called mid-term review began the process of cutting the link between how much a farmer produced and how much public money he or she received. In England, the Government quite rightly decoupled totally. Many other countries did so only partially. It is ironic, however, that the price of the two basic commodities at the heart of the present rise in food prices—grain and milk—has risen because of global markets. So, far from having cheaper food as a result of ending production subsidies, the market has conspired to raise prices. The two aspect are not linked; it is a coincidence, but it demonstrates that we should not make rash assumptions about something as unique as food production. Farming cannot be switched on and off like a car plant. That is why this debate is so important.

Why are we concerned? First, we are concerned because of the considerable rise in global food prices, to which I shall return. The second reason is the impact of those price increases on consumers, both here and in the developing world. The price of wheat has risen by up to 150 per cent., but that does not explain the rise in retail prices. For example, in the past two years the price of an average 800 g loaf of bread has risen by almost 30p, but the rise in the price of wheat accounts for less than 10p of that rise. We recognise that the rise in fuel prices has hit everyone, but we have to ask how that total price rise is justified. I suggest that if the price rise had been less than 10p, there would have been much less fuss. The same applies to milk: in the past 12 months, the retail price of a 4-pint bottle has risen by about 11p a litre, but the farm-gate price has risen by just 7p a litre. So in his quite proper concern about inflation, the Chancellor must look at the whole picture.

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We all know the basic reasons for the rise in commodity prices. They include the drought in Australia, which has reduced the harvest by 60 per cent., and the increasing demands of China and India, both for grain itself and for animal protein partly raised on grain. In China, for example, meat consumption has risen by 150 per cent. in 30 years. They also include biofuels. Views differ about the scale of the impact of biofuel production. The United States Government claim that about 3 per cent. of the price rise is due to biofuels; the International Monetary Fund puts it at nearer 30 per cent. The fact remains, however, that the United States is pouring money into ethanol production, which is due to rise from 5 billion gallons in 2005 to 10 billion in 2009. That production is using corn that would previously have been sold on the world markets.

Of course, some of these factors could change. Australia could go back to full production, but I have to say that the picture is not encouraging. If we take a medium to long-term look at supply and demand, we see the world population rising by about 1 billion in the next 10 years, and by perhaps 3 billion by 2050.

We must also consider climate change. The Intergovernmental Panel on Climate Change estimates that a 1 m rise in sea level would swamp a third of the world’s crop land. That is possible before the end of this century. It is perfectly true to say that there is unused land in the world. For example, some 20 million hectares in Russia and Ukraine have been taken out of production since the end of the Soviet Union. However, it is estimated that some 10 million hectares of farmland around the world are lost each year to urbanisation, deforestation and desertification. The background is not encouraging. World cereal stocks have gone down consistently by 17 per cent. over the past five years.

I put it to the House that we should take our future food supply—including the share of it produced in this country—seriously. The question is: do the Government do so? In December 2005, a joint policy document produced by the Treasury and the Department for Environment, Food and Rural Affairs called “A Vision for the Common Agricultural Policy” made the astonishing statement that

Let me be clear: no one is suggesting that it is sufficient—we have not been self-sufficient for many centuries—but surely we cannot suggest that it is not necessary. Are the Government really suggesting that it does not matter whether there is any domestic production at all? In the past six weeks, I have challenged the Secretary of State and the Prime Minister in the House to disown that document. Neither of them has done so. It is true that both have made noises about the importance of British farming, but, as I shall show, they have done nothing of significance.

Tim Farron (Westmorland and Lonsdale) (LD): Is the hon. Gentleman aware that Natural England recently produced a manifesto for the countryside, in which it stated that too much of Britain’s countryside was being farmed? However, we now have the lowest milk yields in history and farmers are leaving the fells because of their inability to make a living. Will the hon. Gentleman seek to correct the Government’s perceptions, which are based on their quango’s manifesto?

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Mr. Paice: I hope that this debate will succeed in correcting that impression, which has been given by the Government and by Natural England.

Angela Browning (Tiverton and Honiton) (Con): Is my hon. Friend aware that a former permanent secretary at DEFRA volunteered the information to the Public Accounts Committee that, following 9/11, officials approached Government Ministers at the time when the right hon. Member for Derby, South (Margaret Beckett) was Secretary of State to suggest to DEFRA officials that, in the light of that event, the Department should consider the minimum amount of self-sufficiency in this country? They were told by Ministers that that was not necessary.

Mr. Paice: My hon. Friend is entirely right. I am very much aware of that statement. Of course, it was the right hon. Member for Derby, South (Margaret Beckett) who signed the statement to which I have just referred. If the Secretary of State is to achieve anything tonight, I hope that he will start by publicly stating that he has ditched that policy.

Of course, there will be those who say that there is special pleading by farmers, but I want to assure the House that there is not. There are many reasons why hon. Members want to see a vibrant and productive agricultural industry, but the real reason—which I hope the Secretary of State will agree with—is very important. In a world in which supply and demand are now at best in balance, increasing demand will push up prices. As part of the projected population rise to which I have referred, it is predicted that Africa’s population will more than double by 2050. No matter how much production in Africa can be increased by husbandry, political stability and technology, that continent will still be buying vast quantities of food on the world market. We, as a relatively rich country, might well be able to meet our needs, but we will be competing head to head with the poorer countries. Where is the morality in that? Increasing domestic production is not selfish; in fact, it is quite the opposite.

Before turning to what needs to be done, let us look at the recent past and the reality behind the Government’s claims. In the past 10 years, there has been a steady trend: production of all major food items has declined in this country. Cereal production has declined by some 19 per cent., meat production by 17.5 per cent. and milk production by 5 per cent. Overall, our contribution to indigenous food in our market has fallen from 81.8 per cent. in 1997 to 73.9 per cent. last year. That is the 74 per cent. to which the Government refer in their amendment to our motion.

It is laughable that the Government’s amendment claims that we are somehow okay because we are doing better than we were in the 1950s. The Secretary of State—or whoever drafted the amendment—seems to ignore the fact that the population of the world has more than doubled since then, and that it has risen dramatically in Britain. He might just as well have cited the 1930s, when we were really in a deep depression. The figures were even worse then, and today’s figures would look even better by comparison.

Mr. Stephen O'Brien (Eddisbury) (Con): I am listening to my hon. Friend’s excellent speech, which is putting our domestic production in context and dealing with
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the problems faced not least by dairy farmers in my constituency. Does he agree that whenever this country has most needed to be competitive and to look to its strengths, it has recognised that food production is a strategic industry, which makes it worth investing in to ensure that we remain competitive as well as to contribute to a degree of self-sufficiency in our own land?

Mr. Paice: I entirely agree with my hon. Friend and I will come on in a few moments to what needs to be done to achieve the status of food security that I believe is necessary.

Overall, we produce only about 60 per cent. of all our food, and the food, feed and drink trade deficit has now widened to £14 billion. No doubt the Secretary of State will point out that last year’s figure for self-sufficiency was marginally higher than in 2006. Of course that is good, but unless he can assure us that it marks the beginning of a completely new trend, it is pretty meaningless. If I had used the 2006 figures in my calculations, the overall figure would have been even worse than the one I have just given.

What is behind the dramatic fall in our self-sufficiency? Essentially, it is all about profitability. In the period 1998 to 2007, food prices rose by just 20 per cent. against overall inflation of 32 per cent. This year, of course, it is different, but throughout that decade, food prices failed to keep up even with inflation. More importantly, the farmers’ share of the food pound—in other words, the proportion of the retail price actually taken by the farmer—has declined by 20 per cent. over the decade. That has shown itself as a fall of 86,000 in the work force over the same period.

Let me now turn to what needs to be done if we are to halt and reverse the downward trend and to achieve greater food security by ensuring that we have the capacity to produce enough to meet the majority of our needs. Of course we will produce surpluses in some products and we will trade them for those that we need to import. It has been like that for many decades, and it will always be so. Unless we have that strong domestic level of production, it will be to the detriment of the developing world that we are buying our food.

There will be those who believe I am about to seek a return to protectionism. Precisely the opposite is the case. Those who advocate a protectionist regime and who want to cling to subsidies, including some leading agriculturists in Europe, are wrong. The real answer lies in fair and free competition—something that patently does not exist at present. We need further reform of the common agricultural policy to make it sustainable and stable. How can our farmers invest if they do not know the shape of any future policy in what is now just four years ahead?

The health check proposals on the table at the moment are, in our view, wholly inadequate. We need a phased programme to shift all funding from direct payments to development funds. We need to see full decoupling across all products in all member states. We need a programme to dismantle all the remaining trade-distorting support; and we need to see a programme of increasing co-financing by member states so that those who want to increase expenditure pay for it. The sooner we can achieve such a stable policy, the sooner our farmers will be in a position to make their long-term plans.

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In the meantime, there are things that the Government should do or, in some cases, undo. First, we have to lift the burden of regulations. We know the Government’s rhetoric and I am sure that the Secretary of State will use it in his speech, but I have to tell him that in the past five years we have seen a net increase in DEFRA regulation of about 20 per cent. a year. Whereas in 2002, one regulation was revoked for every two new ones, last year it was just one scrapped for eight new ones. It is not just a matter of numbers. Some regulations are necessary, but how they are applied is the important thing. There is no justification for the continued gold-plating of EU regulations; it should be removed if we are to have the free and fair competition that I mentioned.

The legion of inspectors who turn up on our farms needs to be slashed and, in some cases, merged. Even more importantly, however, it is the culture that has to change. In France, a farm inspector sees his job as helping the farmer to meet the regulations’ requirements; here, it seems that the inspectors are on commission to see how many penalties they can impose.

While on the subject of regulations, let me deal with two specific ones that are currently of considerable importance. First, the nitrates directive, which applies at the European level, is obsolete and far too prescriptive. There is no excuse at all for DEFRA to go beyond the minimum necessary to comply with it, while hopefully working to have it reformed. The idea of setting in statute what will effectively be national muck-spreading day is ludicrous. It is compounded by the Prime Minister’s decision when he was Chancellor to abolish the agricultural buildings allowance, which would have been of some help in meeting the £50,000 or so estimated costs to the average dairy farmer.

Daniel Kawczynski (Shrewsbury and Atcham) (Con): My hon. Friend is talking about regulations. I can tell him that certain agricultural companies in my constituency are sending employees to eastern Europe to undertake some training because the regulations are so over-imposed in this country, but not in other EU countries.

Mr. Paice: I am very much aware of my hon. Friend’s immense support as chairman of the all-party dairy farmers group. I am not surprised to hear what he has to say.

Let me refer to the proposed pesticides strategy, which I understand the Secretary of State spoke against last week. I am grateful that he did, but I understand that he did not vote against it. No doubt he will wish to explain that. At its worst, this strategy could reduce grain production by more than half, not just in the UK but throughout Europe. So much for food security. I find it unbelievable, but some pest control products that are to be banned on account of this strategy are actually allowed by organic farmers. These pesticides—copper sulphate and the natural pyrethroids, for example—are so safe that the organic movement allows them, yet they are to banned by Europe.

Mr. Peter Atkinson (Hexham) (Con): The pesticides directive would make it difficult to grow many vegetables, including potatoes, carrots and other root vegetables, quite apart from cereals. Indeed, they would be made virtually uneconomic in this country.

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Mr. Paice: What my hon. Friend says applies across the whole sphere of what we might call horticulture and field-scale vegetable production, as well as fruit. The size of the market is such that, in the absence of the present products, it is very unlikely that any company will go to the expense of developing replacement products.

Mr. Stephen O'Brien: I am grateful to my hon. Friend for giving way to me a second time. One of his examples was the NVZ—nitrate vulnerable zone—regulations. Is he aware that the cost of gold-plating is met on the ground, when farmers have to go to the expense of digging their pits and fencing them to ensure that they are not a danger—even though someone falling in would be trespassing on their land? The real issue is seen in my constituency, where the river Weaver has for the last 12 years recorded reduced nitrate levels in the water from the natural fall-off, yet the farmers have to meet this enormous expense for a nitrate problem that does not exist.

Mr. Paice: My hon. Friend makes an important point. We all know that nitrates in water can be caused from run-off of recently applied chemicals, but we also know that they can have a very long historic lead-in. Some work has been done in Rothwell in Lincolnshire to show that nitrate levels in water can reflect actions taken decades or even centuries ago. It is therefore very short-sighted to rely solely on the current situation.

Since my hon. Friend has referred us back to the NVZ proposals, it is worth pointing out that I challenged the Secretary of State only a couple of weeks ago about this problem and the gold-plating issue. I heard various sotto voce comments to the effect that there was no gold-plating in the proposals, but I have to tell the Secretary of State that there is— [Interruption.] I would be delighted if he intended to drop them, but let me give him one example—the requirement to have cover crops on the land all through the winter. That is not in the directive, and if the Government are going to drop it, I know that most farmers would be very pleased to hear it, but let us not hear any profession that there is somehow no gold-plating in the drafting.

I could add many other issues to do with double-tagging of sheep, electronic identification and many more, but unless there is a clear benefit to be gained from a regulation, it is pointless. I question considerably the need for them, but the key point in this debate is that all those things restrict farming’s ability to increase production.

Let me move on to animal welfare. We in this country rightly pride ourselves on having some of the highest standards, but equally we must look hard at the standards used in food production overseas. There is no point in raising standards at home only to destroy our own producers by importing produce reared under less humane, and therefore perhaps less expensive, standards.

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