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Supermarkets and Regional Farming

Thank you, Mr. Speaker, for allowing this debate to take place. It is an important debate; it is a debate about the power of a supermarket and the future of farming in the United Kingdom. I am sure that the importance of the subject is agreed by nearly all parties in the House, and we should certainly be able to ensure a fair debate. I hope that we can get the points across. The Minister is in his place, ready to answer, and I am sure that we will hear some positive comments coming back. Of course, as we know, farming has been under the cosh. It went through foot and mouth disease and bluetongue. Indeed, farming in the UK has been through all sorts of other problems. Of course, farming has overcome whatever has been thrown at it— farming struggles on and has kept going. However, there remains a persistent problem that severely limits the ability to maintain a viable farming business: the power of the supermarkets. With constant pressure to reduce prices, farmers are often unable to make profits. The way to address the issue for the benefit of farmers and consumers alike is for the Government to follow the advice of the Competition Commission and introduce a watchdog to oversee supermarkets and to implement a local sourcing policy for the larger chains. With regard to the mounting pressure for an ombudsman—one was supposed to be appointed in August this year, following consultation—the Competition Commission failed to secure voluntary agreement between retailers. I really do think that that was a let-down. Unfortunately, a great opportunity to show a real will began to fall through. The commission's chairman, Peter Freeman, who headed up the groceries inquiry, said that smaller chains have recognised the problem; but, regrettably, the majority of them have not. That is a sad indictment, when someone has worked so hard to try to achieve an understanding to work together. Of course, the introduction of an ombudsman to police the way that supermarket supply chains operate is called for and supported by the National Farmers Union, the Campaign to Protect Rural England and Friends of the Earth, just to name a few who believe that that is the right way forward. [Interruption.] As my hon. Friend the Member for North-West Leicestershire (David Taylor) says from a sedentary position, there are others who will express such support. To highlight the dominance of the supermarkets, I should mention that £1 in every £8 in the UK is spent at Tesco's. That proves how successful Tesco is; it shows that it is a great British company, with a great ability to get customers through its shops. No one can argue with that. However, the strength and the success of Tesco has allowed it to dominate the market, and it has the power to drive down prices. Because Tesco has such a dominant position and is so powerful, it ought to use that power not to drive down prices, but to ensure that a fair farm-gate price is paid to farmers in the UK. We should stand by our farmers. We all know that farmers are vulnerable to market conditions, and that supermarkets are placed to exploit that vulnerability. Farmers always risk being driven out of business, as we have seen in the dairy industry, which has been decimated by prices being driven further and further down. The average net income of dairy farmers in Lancashire in 2002 was £32,700. By 2006 that had fallen to £13,300—less than half. I know the Minister will say that it has now gone up, and rightly so, because that level was not sustainable. The problem is that when net income fell so dramatically, we saw a wave of family dairy businesses going out of existence, never to return. That is the issue. If we are not careful, we will not have young people coming into farming. Farming will not have a future. We have to make sure that farming is attractive and that it has a future. We must stand up for the farmers and ensure that farming in the UK will continue. We must make sure that the UK is not totally dependent on foreign imports of everyday items such as milk. That would be good for UK farming and industry. The same applies to arable farmers, beef producers, the pig industry and poultry farmers. All those foodstuffs could be produced in the UK and must be protected.