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Agriculture: British Pig Industry

My Lords, I congratulate the noble Lord, Lord Palmer, on securing this debate, the last set-piece debate of this Parliament, if I am not mistaken. I declare an interest as a member of the NFU, which has submitted a briefing, and as a farmer, although we keep no pigs. In that latter declaration lies clues to the changes that the pig industry has undergone. We kept a pig or two and every farmer kept a few pigs; fed on waste, they were part of farming activity and country living. However, the buildings which we used to house the pigs are now rather smart offices, and thus things change. I shall not turn to Wodehouse and his Empress of Blandings, but the fictional world of Lord Emsworth—not known, I believe, to have taken his place here—epitomised pig-keeping in the pre-intensive era. I remember the defunct local pig club, whose assets were used to fund a local playing field some 40 years ago. I wonder how many accounts still lie dormant across the country, memorials to a time when keeping a pig was an integrated social activity. These are different times and modern pig production, as my noble friend Lady Byford and the noble Lords, Lord Palmer and Lord Livsey, described, is a very different business. That is the operative word; it is now a business, and the Government should regard it as such. Despite better recent returns and profitability, the industry remains vulnerable and volatile. Added to the conventional pig cycle of our economic textbooks are the pressures of increased fuel and feed costs. When feed, which represents 50 per cent of the cost of production, spiked in 2007, there was an immediate decline to widespread loss-making in the industry. More problematic has been the differential with other pig producers on animal welfare standards. In 1999, the UK quite rightly introduced a ban on tethers and close-confinement stalls for breeding sows. Pig World magazine has estimated that the move from stalls to loose housing with straw costs the industry £323 million. BPEX, the British Pig Executive, claimed that this added 6.4p per kilo to the ongoing costs of production. Even if that is disputed, the costs of British production and welfare standards undoubtedly place us at a disadvantage. Noble Lords have talked of the decline that there has been in British sow herds; as a result, the industry is no longer able to supply the market here in the UK—added to which, there were outbreaks of classic swine fever, in 2000, and foot and mouth disease, in 2001 and again in 2007. Both of those hit the industry hard, leading to movement restrictions and the closures of export markets. There has been a slow recovery, but this is a difficult industry to be in because continued competition from cheaper imports within the EU means that the British pig industry has lower and less efficient production than its EU counterparts. As a result, parts of the retail, hospitality and public sectors choose to buy the cheaper products from overseas producers. We know this from the debates initiated by the noble Lord, Lord Hoyle, who is not in his place but who has presented a series of Questions on this issue to the Chairman of Committees. We only have to look at the River Room, where none of the bacon or sausages is actually from British produce. Food labelling of pigmeat products has been described as ambiguous. People are not sure whether they are buying domestic pigmeat; labelling often does not tell the consumer whether the meat was raised to British standards of welfare. The industry believes that more accurate and helpful labelling would enable the consumer to make more informed choices about the pigmeat that they wish to eat. The financial and administrative burden placed on the producer by environmental regulations, in particular the integrated pollution prevention and control directive, and the waste and nitrate directives, has meant that pig farmers are faced with constantly having to combat what are, quite rightly, those public interest directives. As the noble Lord, Lord Palmer, has said, pig producers are proud of their welfare standards and would not wish to return to the use of stalls, but they had expected both government and retailers to play their part and meet the pledges they made at the time always to source pork to equivalent UK welfare standards. Unfortunately, the reality has been very different and retailers later found it to be commercially unpalatable to source their imports from stall-free systems. Under pressure, they quietly reneged on their commitments. In 2005, the British Pig Executive estimated that at least 70 per cent of the pigmeat imported into this country would be illegal to produce in the UK due to our welfare rules. The British pig industry has been decimated partly as a result of being undercut by cheaper, lower welfare imports. This has more or less halved the national herd. The figures have been mentioned by all noble Lords who have spoken. An additional concern is the EU stance on animal welfare in the WTO negotiations. In the interests of free trade the EU must not concede on animal welfare and puts its livestock producers in a position where it cannot block the import of meat below current and future EU welfare standards. That is why the noble Lord, Lord Palmer, is right to say that honest labelling is essential if British farmers are not to be put at an acute disadvantage in a highly competitive market. Mention has been made of the supply chain. There have no doubt been many analyses of this, not least by the Defra Select Committee report in December 2008. I should be interested to hear from the Minister the Government’s response to that report and what they have done as a result. The Government could take other measures to help the pig industry such as getting the Office of Fair Trading to provide clear guidance on permitted supply chain discussions. At the moment, as the Minister will understand, there are restrictions on the way in which the industry can combine in its price negotiations with supermarkets. Above all, we need a Government who will seek to ease the burden of regulation on all farmers and growers. The good news is that the NFU and the Environment Agency have launched a pig and poultry assurance scheme to reduce the effect of the environmental permitting regulations on farms by about £850 per annum. This must be the way forward. It will result in a fall in Environment Agency charges consequent on farms attaining a high state of compliance with the regulations. Inspections will be reduced to one a year from the current three. Those inspections will be carried out by the certification bodies using staff trained by the EA. The new scheme is supported by Assured Food Standards, the National Pig Association, the British Poultry Council and the British Egg Industry Council. Following the successful introduction of the voluntary initiative, it is to be expected that the scheme will work well, but £850 per farm will not resuscitate the industry all by itself, albeit it is a very worthwhile development. I anticipate that the Minister will make it clear that the Government know all about this. What the UK’s pig farmers are looking for is a Government who actually believe in them and create an environment in which they can be a competitive and successful supplier to the British consumer and make sure that it is British bacon and British sausage on the plate at breakfast.