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Agriculture: British Pig Industry

My Lords, I have acute sinusitis and I apologise if somewhere in my speech it takes me over. It is a long time since I have been involved with the British pig industry. I am delighted that the noble Lord, Lord Palmer, has brought this to the attention of the House. I managed a farm in Perthshire on an estate with 70 sows producing 600 bacon pigs. In those days, the pig cycle, which ran for four years, was a classic economic model. Sometimes prices were up, sometimes they were down. The amazing thing is that this pig cycle vanished in 1998. The noble Baroness, Lady Byford, explained some of the reasons for that. It is now not as predictable as it once was but you could make some money out of pigs, somewhere in the pig cycle, in the past. We took the pigs right through from birth to bacon. The quality was superb and when we got a good price we were making a profit. In the price dip we made significant losses. It is a classic supply and demand cycle of the case that was mastered by JK Galbraith, the economist who famously was brought up on a dairy farm in Ontario and was of Scots origin. I studied the system academically, and I came to realise that 80 per cent of the variable cost of production in my pig production at that time was in the cost of feed, cereals and grain, and the volume of that was substantial. The opportunity cost of feeding cereals to pigs when our grain could be sold well on the open market, and sometimes malting barley for example, just did not add up in the lean years. Reluctantly, I came to the conclusion that this enterprise was taking the rest of the farm down on occasions. It was a 1,500 acre farm and it was an easy decision, as the farm was better suited to beef, sheep, arable and developing two dairy herds. Noble Lords will not be surprised to learn that I discovered latterly that the British pig industry was in substantial decline. Certainly from my own experience that does not surprise me. On examining the situation, the impact of legislation on the banning of sow stalls, which I certainly agree with, and the nefarious practices of the supermarkets had undermined the marketing of quality British pigs since the time I was involved. The technical advances in breeding, welfare and feed utilisation have been excellent, but the rewards have not matched the time, expertise and know-how of the British pig producers. At one time in my own country of Wales, many farmers formed co-operatives of pig weaner groups, keeping sows and marketing weaner pigs to fattener/finishing enterprises in the arable areas. That, too, has gone by the board. The development of large-scale outdoor pig enterprises has improved welfare and produced good quality pigs, so the pig farmers have done their bit and, in spite of all these desirable improvements, the UK pig industry remains in decline. The reasons for decline have been given by the noble Lord and the noble Baroness, Lady Byford. However, it is astonishing that from 1998 until today, the number of sows in the country has almost halved. Indeed, the combination of reasons for this occurring, with welfare legislation not being rewarded by retailers and the Government not enforcing their commitment to ensure welfare standards that should be rewarded by the market, means that the result has been a free-for-all and more imports have come into the country. Pig meat supply chains have been admitted to be dysfunctional, and the result has been the exploitation of primary producers. Indeed, from time to time, increases in feed prices have not been compensated either. The impact of foot and mouth and swine fever has also played its part. The pig meat supply chain task force has been an interesting matter, which has come forward as an initiative by Defra. Why we have to wait until now to have such an organisation to look at the whole supply chain I am not quite sure, when a massive amount of imports have come in for a long time from Brazil and EU countries, all with lower welfare standards. Even the public sector food initiative cannot control it; with only one-third of UK bacon and two-thirds of UK pork being of UK origin in public sector purchases. Low-energy, lower environmental impact buildings are important, yet we have lost the agricultural buildings allowance. What we want is fair treatment for the pig industry and, indeed, retailers to market whole pigs and not just choice parts of them. Indeed, the pig is a wonderful animal, and most of it can be consumed. I congratulate the Government on the creation of the pig meat supply chain task force. The first overall report, produced this February, covered sub-groups’ and workstreams’ reports, food labelling, public sector procurement, pig herd health, environmental requirements, research and development and supply chain co-operation. These are all extremely important to the industry, but it is coming very late in the day. The real worry to me is the uncontrolled power of the big four supermarkets, with 80 per cent of the retail market. The supermarket retail ombudsman has taken ages to install. We Liberal Democrats ran a six-year campaign to get a fair deal for British farmers through the ombudsman; even now the ombudsman is not fully installed, and I should like the Minister to tell us what is happening in that respect. The big four are really only interested in their bottom line. They are run by accountants and that is their main observation. The discounting of primary produce is against UK producers’ viability, not just in pig meat but in dairy produce. Seven producers a week are going out of business, our ewe flock is down 20 per cent, beef is in short supply and the UK is only 60 per cent self-sufficient in temperate food. Now we pay £23 billion in a time of great stringency to import food that we could produce ourselves here in the UK. The next Government, of whatever colour, must take urgent action, because the nemesis on the horizon is that we will not be secure in our food supply. That is an extremely urgent matter, given that the world’s population will rise from 6 billion to 9 billion halfway through this century.