That this House has considered energy support for farms.
As a matter of openness and transparency, I declare an interest: I come from a small, family-run farm. Thank you for chairing the debate, Mr Robertson; it is a pleasure to serve under your chairmanship. I thank the Minister for being here and for his prior engagement on the topic. I thank hon. Members from across the House for giving their time to attend this debate on this important issue.
In the constituency that I represent, the agriculture sector is vital to our economic wellbeing. In the wise words of my grandfather, if the farmer is not doing well, no other industry is or will; such is the importance of our agrifood industry. Across the wider Armagh, Banbridge and Craigavon area, we have 3,431 farms. They contribute approximately £376 million in goods value and farm support payments into the local economy. They provide employment in the agriculture sector and in the 265 local agrifood sector businesses that the industry supports. In Northern Ireland, we have 26,000 farming families. The agrifood sector is worth more than £5 billion to the economy, and we feed more than 10 million people with our top-quality produce.
As has been the case for all households and businesses, energy costs on these farms have spiralled since the outbreak of the war in Ukraine. Many farms are unavoidably energy intensive. Take dairy, for instance. Farmers who needed to renew their energy contract last autumn experienced increases of more than 400%. With an electricity price of 37p per kWh, the annual cost to an average-size dairy farm is now approximately £105 per cow. For a 250 cow herd, that adds up to £46,000 a year, which is up by £26,000.
I congratulate the hon. Lady on securing this important debate. I absolutely agree with her and want to give my own example. I represent a local seed potato farmer whose costs have increased from £10,000 to £30,000. He has a generator and thinks he may have to come off the grid entirely. He faces an increase not only in energy costs, but in standing charges. Does the hon. Lady agree that farmers face a cliff edge at the end of this month and are disappointed that the Government did not do more to support them through the Budget?
I think the hon. Member has been reading my speech. A cliff edge certainly is coming for this important industry, which is the backbone of our economy.
Another example is poultry. There has been an increase of approximately £87 a day, which equates to about £32,000 a year. That is a phenomenal amount, and only so much of that can be passed on.
Ahead of the Chancellor’s spring statement last week, our farming unions, alongside Members from across the House, had been lobbying to bring about a change in mindset from the Government in relation to support for farmers with energy costs. The Government must recognise the key role of the agriculture sector in feeding the nation. The industry needs support in the face of energy price pressures.
The current support from the energy bill relief scheme is due to expire at the end of March. It will be replaced by the energy bills discount scheme, which will run for 12 months. That scheme offers far less protection and support to businesses, with the removal of the price cap and its being replaced by a token discount. A pre-defined selection of industries has been identified for additional support under the energy and trade-intensive industries scheme. However, farming sectors have been left off this scheme, leaving them literally out in the cold without support. In the face of that cliff edge, the ask of the Government was straightforward. Our farming unions, on behalf of their members, sought the extension of the energy and trade-intensive industry scheme to include energy-intensive sectors, such as horticulture, poultry and pig production. That was a reasonable ask that the Government should have listened to.
Poultry businesses are reliant on gas and electricity to rear poultry and store fresh produce safely. Without sufficient support, there is no doubt that those farmers will struggle to absorb the huge hikes in energy prices that they will face. The same can be said for pig producers.
I congratulate my hon. Friend on securing the debate. As I am sure is the case across the UK, small farm holdings in Northern Ireland have shown great adaptability and diversification over recent years, as times and legislation have changed. Does she agree that the campaign and the pressure she is applying to the Government, to which I hope they will respond positively, needs to get them over the hump of the next 12 months, after which we hope things will improve regarding prices and the war in Ukraine, so that a more normalised structure can return?
I absolutely agree with my hon. Friend. The point is well made that there needs to be a short-term injection for those farmers, so that they can continue to produce at the same levels. We will see farming families and farms going out of business, which will not help the overall industry or the nation’s requirement for food produced locally.
Horticulture’s exposure is significantly greater not just for gas for glasshouse heating but for electricity used for lighting, chilling and storage. Without sufficient support, that sector will be under huge strain to remain viable. Yet the evidence-based appeal was ignored by the Chancellor. That reasonable ask of the farming community to extend the ETII scheme was ignored. There was no extension of ETII to support energy-intensive farms. A range of other industries continue to receive support. High-level energy relief continues to several sectors, including food processing and manufacturing, but the primary producer is forgotten. The Government once more ask the farmer to do more with less, and that is simply not possible.
I thank the hon. Lady for giving way again. Wholesale energy prices are already falling. The Government have not spent the amount of money that they had expected to spend on their energy-relief schemes. Does she agree that the Government have the headroom to go over and above what they announced in the Budget and to date? They could use those additional funds to support our farmers.
I absolutely agree with the hon. Lady. There is the headroom and available money. I encourage the Government to do the right thing by the industry and to support those farmers at this time of need. This decision will have consequences; the cliff edge will be too much for some farmers. They will exit the industry and others will reduce output, unable to absorb the cost of maintaining their current output. Consequently, UK food production will fall, processors and manufacturers in the supply chain will be impacted, food inflation may well increase, and consumers ultimately will end up paying more.
No one wins from this decision. I believe it is still in the interests of the Treasury and the Government as whole, the agrifood industry and consumers that this decision is revisited. I ask the Minister to undertake to explore this comprehensive case once more, and to step up with the support these farms need to face the challenge and conditions they find themselves in. I also invite him to visit my constituency in his ministerial capacity to witness at first hand the value that these farms add to our economy and the pressure that they are currently feeling.
We need to back British farming. The Government demand the highest standards of our farmers and must repay their endeavours to produce world-class produce to the best animal welfare, environmental and sustainability standards with sufficient levels of support to enable them to do just that.
It is indeed a pleasure to serve under your chairmanship, Mr Robertson, and an even greater pleasure to support my hon. Friend the Member for Upper Bann (Carla Lockhart). She has outlined very clearly the problems that her constituents in Upper Bann are having, and I want to reflect on those problems as well.
It is also a pleasure to see the Minister in his place. He reminded me at 11 o’clock that this debate was on— I was already going to come, by the way. It is a real pleasure to be here. I think that he has already told me that whatever I ask for, he will respond in a positive fashion. I am not quite sure how that will work out, but perhaps my hon. Friend the Member for Upper Bann could give me a list of things to ask for. I say that in jest, by the way, but I know that the Minister will reply in a very positive fashion and I appreciate that.
My hon. Friend the Member for Upper Bann is truly an advocate, in every sense of the word, for her constituents. She is also—I say this respectfully—a credit to her constituency and to us as her colleagues. We are very pleased to have her here alongside us today and we are equally pleased to support her.
I declare an interest as a landowner and a farmer, and a member of the Ulster Farmers’ Union. As my hon. Friend and I both hail from rural constituencies, we are often of one mind and one voice. Everyone else present is also of that one voice because the issue raised by my hon. Friend affects many constituencies across this whole United Kingdom of Great Britain and Northern Ireland.
It is hard to know what more can be added to the comprehensive case that my hon. Friend has made today, but I will certainly do my best to contribute to this debate in a positive fashion. Farmers and farm businesses are heading towards crisis, which will not be a matter of a few “Closed” signs and a closed door; instead, it is a matter of food security, which is of the utmost importance to this House.
I am grateful to the hon. Gentleman for giving way and I remind the House of my entry in the Register of Members’ Financial Interests. He touches on the most important part of the debate. The issue is not just that farmers face increased energy costs, but that that is part of the overall package. They have labour shortages and are under the cosh in just about every way imaginable. Consequently, if they are not able to meet the demand, other food sources will come through trade deals, and once they fill that gap in the market, we will never get them out.
The right hon. Gentleman is absolutely right. I will refer to that shortly and give an example. There are many issues with workforce and the supply of products as well. We have had problems over the last year, before and after Christmas, and I wish to refer to them as well.
Over the years, Government have encouraged farms to diversify and modernise, providing grants for new equipment and technology. However, Government have not taken into account the fact that costs have quadrupled in the space of a year for many farmers, and grants and subsidies certainly do not meet those rising costs. When I speak to farmers in my constituency about the possibilities for renewable energy—there are quite a few who are trying to do it—I learn that, unfortunately, they have heard too many stories of fields being used for solar energy with only £100 being saved on the electricity bill. They would be better off renting out their field for a birthday party bouncy castle, which would bring in more revenue than £100. The numbers do not seem to add up for many and that is why we must now step in and sow solutions into the problem. Hopefully, the Minister will give us some ideas about what can be done to assist and help.
The lifeblood of this nation lies in self-sustainability. The right hon. Member for Orkney and Shetland (Mr Carmichael) referred to that. The UK does not produce enough fruit and vegetables for its population to get the recommended five portions a day. Even without taking waste into account, the United Kingdom would need to produce or import 9% more fruit and veg for everyone to be able to eat the recommended amount. That is not possible while farmers do not have the ability to produce and process in profit.
The recent debacle with the fruit and vegetable shortage highlighted a pertinent point: the UK depends on Morocco and Spain for vegetables during the winter. It does not have the workforce to sustain and gather all the fruit and veg in the summer. There are opportunities to do that better and to work ahead. Because of heavy rains and floods, suppliers have been hit by the problem of ferry cancellations, which has, in turn, affected lorry transport. At one stage, the Secretary of State for Environment, Food and Rural Affairs had to reply in the House as to why food was so scarce. To be fair, it was not the Secretary of State’s fault, but ultimately the need to find a solution fell at her feet.
I too congratulate and thank the hon. Member for Upper Bann (Carla Lockhart) for securing this debate, in which I am pleased to be participating. It is important that the challenges facing our farming sector are properly aired, and it is a little disappointing that the debate has not attracted more interest from across the House.
Farming that uses more energy—for example, the horticultural and poultry sectors—is not included in the UK Government’s definition of energy and trade intensive industries. There will therefore be a reduction in the energy cost support for farms, which has caused understandable and great disquiet.
The omission of horticulture is particularly frustrating. The question posed by the National Farmers Union, to which we would all like an answer, is: why are botanical gardens included in the scheme, but not food grown in greenhouses? That is not to take anything away from botanical gardens, but it seems quite out of kilter and bewildering. European farmers have been supported with a €500 million package to help with production costs, but farmers in Scotland and across the UK feel that the support they have been asking for has not been forthcoming.
As the Minister is aware, it was very much hoped that the Chancellor, in his Budget last week, would extend the definition of energy and trade intensive industries. It is extremely frustrating that that did not happen. As production costs soar, many farmers and food producers face a cliff edge of support. “Cliff edge” is an expression that every speaker in the debate has used. Many producers simply do not know how they will be able to keep going. Where in the Government’s priorities does domestic food production come? Unless the definition is extended, there may well be a reduction in production, which will risk longer-running food price inflation for consumers and could negatively impact the thousands of supply chain companies sustained by the farming sector.
Mr Robertson, you intervened at the right moment. I was setting out the general context for farmers. I have talked about energy support, but I am putting it in the context of the bigger challenges our farming sector faces. I take your point about the title of the debate.
We can barely imagine the sense of betrayal and abandonment that farmers feel when they look at their EU counterparts, who have a £500 million support package to help with production costs. That is a lump sum to farmers and agrifood businesses affected by the significant increase in input costs, such as energy, fertiliser and animal feed. All that UK farmers are asking for is similar support. Energy costs are the obstacle that is going to hit domestic food production across the UK—there is no debate about that. On top of energy costs, farmers have to deal with chronic labour shortages, with £22 million of fruit having rotted in the fields because of the labour shortage caused by the end of freedom of movement.
The Scottish Government are doing what they can with their limited powers to support farmers. The Minister does not need me to tell him that energy support is reserved to the UK Government. It is to the UK Government that our farmers are looking and hoping; they are asking and lobbying them to take note of the devastating impact that we will see on the farming sector and domestic food production if farming is not rightly recognised as an energy-intensive business—that should be no surprise to anybody.
When we get down to it, this debate is really about whether domestic food production matters. If it does not matter, then the Government can tell us about that position. I believe, as do many others, that it does matter, and that it requires the support that has been called for today. I hope the Minister will listen, and then go back to his colleagues to make the strong, robust case to include horticulture and poultry in the energy and trade intensive industries scheme. Otherwise, the damage to our farming sector and to domestic food production will be nothing short of catastrophic.
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I chair the all-party parliamentary group on eggs, pigs and poultry. There is no better APPG to chair, by the way; I love telling people about it. Everybody says, “Well, you’ll have a good breakfast every morning”, and I probably do. I always have two eggs every morning; I do not always have bacon or sausages, but I always have my eggs.
In my constituency of Strangford, the eggs, pigs and poultry sectors have intensive businesses with high energy usage. They have been encouraged to produce more food over the years, and to invest to do so. They have done that. The old saying, “You need to speculate to accumulate”, only really works if someone can speculate in a way whereby they know they will get a return. The problem is that with energy costs being so high, that speculation is now looking rather doubtful for many farmers, which is why we worry.
In my constituency of Strangford, we have the world-famous Comber spud. There is no spud like it; there are no potatoes like it in the whole world. By the way, Europe recognised that and I have to say that I had a small role to play in getting the Comber spud recognised by Europe. My colleague at that time was Simon Hamilton. He and I pursued that objective and the Comber potato is now highly recognised and valued, not only right across the whole of the United Kingdom of Great Britain and Northern Ireland, but as far away as Europe.
The very famous Comber potato is produced by farmers in my area. They are immensely proud of that product, as they rightly should be. In my constituency of Strangford, we are blessed with precisely the right climate to be able to produce three crops of potatoes per year instead of the standard two. As I say, that is due to the climate, but it is also down to the soil. I would say, without fear of being contradicted, that there is no better soil in Northern Ireland to do that. And what a joy it is to represent that constituency, which has, as I say, the best soil there is.
The difficulty for the businesses in my constituency is that the cost of production has risen but the cost to the agrifood industry of converting potatoes into mash pots—which is where nearly all potatoes seem to go now—or whatever form they take, means that they cannot provide as much food as they potentially could. That is due to the rising energy costs.
Supermarkets have also had shortages of broccoli and citrus fruits and we were left with rationing. I am not an avocado man, but my wife mentioned that they were in short supply as well. We never eat them, by the way, so I do not know why she told me that. I could not figure it out because it did not really make that much difference. However, farmers know they could fill the breach with other seasonable vegetables if they had the capacity to do so in a profit-making venture. If it comes to speculating, to accumulate we need to encourage the farmers to do just that.
Generations of farmers are prepared to carry on with the family farm and the back-breaking, morale-destroying and socially isolating nature of their work. We may not give farmers enough credit for all they do. They work away. I have always lived in the countryside, so I am aware of that from friends I went to school with and others I know quite well. Also, I live on a farm and my neighbours are all intensive farmers. But they cannot do this without support and the recent payment does not even make a dent in what is needed.
I back my hon. Friend the Member for Upper Bann in her calls for meaningful support. This is not only a matter of saving a job; this is about saving the nation’s ability to survive alone, and that is worth any investment in my eyes and hopefully in those of the Minister.
Recent weeks have demonstrated how important domestic food production is, but it is energy intensive. We only have to think back to the recent tomato shortage as a prime example of what can go wrong if the farming sector is not supported. The vast majority of UK tomatoes are grown in greenhouses, which is clearly energy intensive. That, alongside the soaring cost of fertiliser, has given farmers cause to review what food they can actually afford to grown. Indeed, many have opted not to grow vegetables this winter, since there is a genuine lack of confidence that they would be able to cover the costs associated with energy-intensive crops. Cucumbers, which are also energy intensive, are expected to be another casualty. More generally, a shortage of domestic produce right across the board is now expected next year. Farmers cannot be expected to grow produce when they cannot even cover their costs. The reality is that it is simply not viable to grow under glass unless farming is recognised to be an energy-intensive business.
The only way to ensure that we have fresh domestic produce on our shelves is for the UK Government to understand what everyone else understands: that food production is energy intensive. It is bewildering that that argument has to be made. If that is not recognised, a shortage of fresh domestic produce on supermarkets shelves will become a familiar sight. The disruption of international supply chains means that we cannot even have imported fresh produce, as we saw recently with tomatoes. It will not be because of rain in Spain or Moroccan weather changes, as we were told recently when tomatoes became like hens’ teeth; it will be because of inaction from this Government.
There can be no doubt that Brexit has posed huge challenges for domestic food production. Farmers were promised a Brexit bonanza, but the reality is that they have been left paying the price for the damage caused by the Brexit adventure. Some people may think, “Well she would say that, wouldn’t she?” but the chair of Save British Food has also observed:
“I keep hearing that Spain is being blamed for the food shortages in Britain and this is absolute nonsense. The reason we have food shortages in Britain—and they don’t have food shortages in Spain or anywhere else in the EU—is because of Brexit and because of this disastrous Conservative government that have no interest in food production or farming or even food supply. That’s why we are in this mess. The Conservatives with their Brexit have messed up our trade and made that very difficult. This has also impacted the labour supply as it ended freedom of movement. It has also removed the cap and food subsidies, then add on top of that the Ukraine war and Covid and all of the inflation. All of this was predicted and predictable.”
Those are not my words; they are the words of the chair of Save British Food, who I suspect knows a thing or two about British food. She is now part of a growing chorus of people who have concluded that the only way to fix the problem is to
“get back into the single market and customs union”.
The woes are not hard to find; they are piling up for farmers at an alarming rate. The Public Accounts Committee criticised the Department for Environment, Food and Rural Affairs for its “blind optimism” over the implementation of the UK Government’s alternative to the EU’s common agricultural policy funds, with a lack of detail as to how alternative funding will provide the help needed.