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Agriculture: British Pig Industry

My Lords, I am grateful to all noble Lords who have participated in this debate, particularly the noble Lord, Lord Palmer, for securing it and introducing it in such a clear and forthright manner. I recognise the points that he made in his opening contribution. Everyone has declared an interest and I have an interest in pigs as well, albeit a minor one. My younger son took all his holiday jobs with a local farmer, Peter Ashley, who wrote regularly in the farming press and was a good employer. He introduced my son to pigs and I learnt a great deal, not least the sheer joy of working with animals that are so intelligent and so rewarding to herd and look after. I was unable to sustain that interest to quite such an extent until I arrived at Defra. I greatly enjoy the opportunities that debates such as this provide for extending my knowledge, as I derive insights from all parts of the House. I recognise the point made by the noble Lord, Lord Palmer, that for many years the UK pig industry has struggled with poor pig prices, cheap imports, old buildings due to lack of investment and the problems of herd health. This led to a 40 per cent decrease in the UK pig herd and a 36 per cent decrease in production over the past decade. That trend is reversing. Noble Lords have been fair in contributing to this debate in seeing hopeful signs for the future. For the first time in more than a decade, the UK pig industry finds itself in profitability over this last year. Pig farming rose substantially in 2008-09 and the expected income for the year ending February 2010 will undoubtedly continue this trend, although we do not yet have the figures available. The increases have mainly been driven by rising pig prices. The average monthly finished pig prices have shown year-on-year increases since September 2007. There are also some reductions in import costs, particularly for feed. The noble Baroness, Lady Byford, raised the rather challenging issue of GM soil and GM foods. We support the principle underlying the existing EU controls that allow market access for GM products provided that they pass a robust case-by-case safety assessment. The British public expect us to approach GM foods and feed in these terms. I appreciate that other parts of the world move more rapidly in this direction than Europe. The UK is not at the back of the train in Europe; we reflect a general European anxiety about the issues of GM foods, which means that these things are decided on a case-by-case basis. We are pleased that, through pressure from the British Government, the speed in agreeing that certain GM products can be used has improved in recent months. The weaker pound against the euro also played its part in helping to underpin pig prices in sterling. For example, in 2008 the cost of production for UK pigs increased by 12 per cent but the increase for the rest of Europe was almost twice that. The comparative competitive position has improved as far as the UK is concerned. I accept that the industry has been starved of funding for many years during the periods of unprofitability. The investment going in now is much needed. We recognise the points emphasised by the noble Lord, Lord Palmer, in his opening remarks and supported by other noble Lords who have spoken in this debate that there are barriers to sustained profitability. The issue of the economic resilience of the industry must be addressed. I will indicate some helpful ways in which we are tackling those issues and the progress being made. The EFRA Committee inquiry, reflected on in this debate, identified some important issues and all sectors of the pigmeat supply chain gave evidence to it. The inquiry concluded that there should be more co-operation between all segments of the pigmeat supply chain. The noble Lord, Lord Livsey, asked why the establishment of the supply chain task force did not take place earlier. The stimulus came from the careful analysis that EFRA carried out, but there had to be the will on the part of the industry because this is a partnership in which all must play their part. The pig meat supply chain task force was established in February 2009 for one year's intensive work on how to improve the industry. It brought together all the key players in the industry, and a great deal has been achieved.