Agriculture Bill — House of Lords, 2020-07-21
Topic: Agriculture
Olivia Bloomfield (Conservative, Centre-right): My Lords, I begin with Amendments 174 and 285, in the name of my noble friend Lady McIntosh. I recognise my noble friend’s desire to ensure that farmers are protected against chronic disturbances such as structural market changes and disturbances caused by environmental factors such as severe weather or the Covid-19 pandemic. Indeed, a number of other noble Lords mentioned their concerns. The existing powers are sufficiently broad to ensure that agricultural producers will be covered should they need financial assistance due to exceptional market conditions caused by economic, environmental or other factors. In most cases, farmers already manage the effects of fluctuating weather conditions There are also powers in existing legislation that allow the Government to act in exceptional circumstances to support farmers in the event of extreme weather conditions. For example, the National Environment and Rural Communities Act 2006 could be used to make one-off payments to farmers affected by extreme weather conditions. As we saw in response to recent flooding, the Government successfully launched a new farming recovery fund for England using powers under this NERC Act. The particular powers in Clauses 18 and 19 are framed to deal with unforeseen short-term shocks to agricultural markets rather than chronic conditions. The Covid-19 situation is exactly the type of exceptional circumstance that these new powers are intended to address. Another example would be the dairy crisis in 2015, when the ending of EU dairy production quotas led to increased production, global dairy prices being low and rationed sanctions on imports of dairy products from the EU significantly reducing demand. This caused a sudden and significant drop in the price of dairy products across the EU. This event was unpredictable and caused a severe market disturbance, which had an effect on prices, and future circumstances such as these could be considered exceptional market circumstances The noble Lord, Lord Carrington, asked what we could do to support farmers when more long-lasting difficulties appear, including the after-effects of flooding. The Government want to encourage farmers to manage their own risk and become resilient to foreseeable disturbances. The Government will help farmers to invest in equipment, technology and infrastructure, which will support high-quality research to promote innovation and productivity in agriculture, horticulture and forestry to make farms more resilient. The Bill also sets out powers to strengthen fairness and transparency in the supply chain, enabling food producers to respond more effectively to market signals, strengthen their negotiating position at the farm gate and receive a fairer return The second aspect of the amendment seeks to ensure that disturbances caused by environmental factors will be covered by this clause. These powers are triggered by the effects of disturbances rather than by what has caused them. The exceptional market conditions powers could be used to address severe market disturbances caused by economic or environmental factors, so long as there is an adverse effect on the price achievable for one or more agricultural products The noble Lord, Lord Carrington, asked what is meant by "prices achievable" under Clause 2(b). The price achievable is to be given its ordinary meaning, and includes not having a product available to sell; in that case, the price achievable on the market would obviously be zero. The current Covid-19 pandemic is a disturbance caused by environmental factors and is exactly the type of exceptional circumstance that these new powers are intended to address. We could not have foreseen that this pandemic would be as wide-reaching or prolonged as it has been, and farmers could not have been expected to prepare for the disturbances in daily life it has caused. I understand that Welsh Ministers are content that the existing powers are sufficiently broad to ensure that agriculture producers in Wales will be covered should they need financial assistance due to market conditions.