Defra secretary Steve Reed has attempted to move on from the controversy around the government’s inheritance tax reforms with a series of policy announcements at today’s Oxford Farming Conference.
Reed used his keynote speech at the farming sector’s first major gathering of the year to outline the Labour government’s ‘New Deal for farmers’ in arguably ts greatest detail to date, with a pledge that the government would monitor – for the first time ever – just how much food from British farmers is sourced for the public sector.
Part of the government’s 25-year farming roadmap, the move marked a first step in meeting Labour’s manifesto pledge to “use the government’s own purchasing power to back British produce” and source at least half the food required by public bodies such as hospitals, the army and prisons from local suppliers or or those that produced to high environmental standards, Reed said.
This would ensure “farmers get a fairer share of the £5bn pounds a year spent on public-sector catering contracts”, he added.
Reed also committed to new contract regulations – as already seen in the dairy sector – for the pig industry this spring, with similar regulations for the eggs and fresh produce sectors to follow “with the government ready to intervene with other sectors if needed”.
“Risks and rewards are not spread evenly across the food chain,” he added. “We will act on supply chain fairness, so food producers and growers aren’t forced to accept unfair contracts.”
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The government’s previous commitments to reform planning rules to ensure farms could build infrastructure more quickly were also pressed home in the speech, as was its commitment to protect farmers in future trade deals, alongside a pledge to support them during difficult harvests and supply shocks.
“The primary purpose of farming has - and always will be – to produce the food that feeds the nation. Too many policymakers in Whitehall lose sight of that fact,” Reed said. “This government is putting food production firmly back on the agenda.”
However, Reed did not budge from the government’s position on IHT and changes to agricultural and business property reliefs, which led to a series of major protests over the autumn – merely stating the government would “continue to keep listening” on the issue, and would instead be seeking to improve the general profitability of farm businesses.
During the protests, many people had mentioned IHT reform as the “final straw”, he noted. “The straws are piling up, so it’s no wonder people feel that the camel’s back is breaking,” he said.
“The past few months have not been easy. I’m sorry some of the action we had to take shocked you,” he added.
But in promising to work with the sector, the prize from the changes he outlined was “long-term food security, resilient farm businesses, healthy ecosystems, beautiful countryside, and nutritious food on our plates”.
This was a government that would have food production at its core “where farm businesses can diversify their income to make a fair profit and remain viable in challenging times”, Reed stressed, adding it was also one “which recognises restoring nature is not in competition with sustainable food production, but is essential to it”.
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Change was coming, he concluded. “It won’t always be easy but it brings real opportunity. There’s a place for every farmer in that future.”
Reed’s comments, particularly the commitment to monitor and increase the amount of British food for public procurement, was welcomed by the NFU, though president Tom Bradshaw told the BBC’s Today programme this morning that the public sector often sourced “the lowest value product”, which would potentially have further negative implications for farm business profitability.
And he warned many farms were now teetering on the edge.
“There are positive elements to this announcement, but it fundamentally fails to recognise that the industry is in a cash flow crisis with the lowest farmer and grower confidence ever recorded,” Bradshaw said.
“Devastating inheritance tax changes, National Insurance hikes, crippling cuts to direct payments and delays to environmental schemes mean many businesses won’t survive to benefit from the ‘New Deal’.”
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