Examination of Witness (Questions 320-339)|
WEDNESDAY 13 FEBRUARY 2002
320. Can I put to you the comments of Professor
McInerney, two weeks ago today, who said that it was only possible
to measure public demand for environmental goods "with great
difficulty" and that "to do it for the mass of the UK
countryside, I think is almost impossible." How can society
assess whether or not what is being delivered is what indeed it
(Sir Donald Curry) I think it is difficult to answer
that question in detail. But we do know that substantial external
costs are being incurred at the present time to clean up the water,
etc. We have to take that seriously. It is becoming a bigger issue
in the eyes of, certainly, the environmental lobby and in the
eyes of government, and we know from work that has been done within
the existing schemes, the existing stewardship schemes, the existing
examples of where good bio-diversity habitat management has taken
place, that we can change trends. Over the last 10 years, with
the introduction of a number of these schemes, the downward spiral
of deterioration in environmental measurements has to some extent
levelled out, certainly using a number of parameters. I believe
that is a good indicator that sound environmental management and
management of habitat can improve the current situation. So, recommending
the introduction of this scheme widespread across the countryside
in England we believe is a sound recommendation based on historical
321. Would you believe that the British public
would want to see high standards of animal husbandry and animal
welfare in general terms? Should they not have had a reference
in your report?
(Sir Donald Curry) The British public is very sympathetic
to animal welfare and in any bit of consumer research it comes
through very strongly as an important issue so, yes, we need to
deliver very good animal welfare standards and we recommend that
the animal welfare standards within the assurance schemes should
be re-visited and reviewed to ensure that we are delivering good
animal welfare standards within our food supply chain.
322. In your broad and shallow scheme you say
it is going to be widespread and apply to the majority of farmers.
We talked about cereal growers earlier on in East Anglia. We also
mentioned High Peaks. I know both areas well. On the environment
there is a lot more to be gained in places like the High Peaks
and upland areas. Why should we not be focusing resources on areas
of real conservation and outstanding beauty rather than on, dare
I say, the deserts of East Anglia?
(Sir Donald Curry) Nothing in our Report actually
prevents that from happening. First of all, we believe that every
farmer has a responsibility to manage his farm in an environmentally
friendly way and deliver environmental outcomes and create appropriate
habitats. But within our recommendation we envisage a pyramid
with the broad and shallow scheme at the bottom and a number of
options within that pyramid that any farmer can opt to buy into
and raise his environmental participation. For farmers in the
High Peaks, they may want to move right up to the top of that
league and participate in the elite schemes within the pyramid.
It is there as a option and we believe that is the right approach.
323. So the elite schemes, the outstanding athletes
as we would say, depend on a pyramid, a hierarchy and a hierarchy
dependent, I guess, as David Taylor was saying, on delivering
the public goods, delivering environment for example and delivering
access. I struggle with this notion of "public goods".
I do not know what the public is to begin with and there are arguments
about what the goods or the "goodies" to be produced
might be. I know, for example, that the RSPB have got aspirations,
the Woodland Trust have got aspirations, the Ramblers' Association
have got aspirations around public goods. How do we define public
goods? That is a tough question. An even tougher question is how
do we measure public goods because the public goods are going
to deliver an income into farmers' pockets?
(Sir Donald Curry) Let me turn that around by saying
that our view and our vision suggests that on-going support for
the farming and food industry is much more secure and sustainable
by delivering what we call public goods than continuing to subsidise
production. We recognise that to deliver environmental outcomes,
to maintain stone walls in the Peak District, to plant hedges
and maintain hedges, to provide public access, and all of those
things is in today's tough economic climate extremely difficult
to finance from food production. And yet, these things are regarded
as important, important from a visual point of view in the specific
character of different areas of Britain. When the public visits
on their holidays or weekends that is what they expect to see.
They want to see walls standing upright, not flat on the ground.
They want to see the character of individual areas maintained.
It is for that reason we have gone down this route and also to
deliver habitats and try and turn round some of the downward graphs
on sky larks and other things. These things are important and
in my own experience it is a very long time since I saw sky larks
in our area and yet they used to be frequent. We cannot just dismiss
the reduction in specific species as a consequence of modern agriculture.
We really have to try and address the problem. We believe that
that can run alongside and be very compatible with food production.
324. I agree with all of that. I do not dismiss
that at all. But I want skylarks, other people want stone walls,
other people want access. How are we going to define what we are
going to pay and how are we going to put in a system? It is a
process question I am asking.
(Sir Donald Curry) I understand that and you will
recall that in the Report we have suggested that there now needs
to be a discussion between all the stakeholders who have an interest
in this area. That includes all the sector stakeholders you have
mentioned, particularly practical farmers, from different areas
with different farming systems to agree on the broad outlines
of the scheme as it should apply in different farm situations.
That discussion needs to take place very quickly.
325. Involving the environmental groups?
(Sir Donald Curry) Absolutely.
326. I support that vision, I think it is the
right way to go forward, but your Report tells us, and all my
reading tells us that we are in a highly competitive sector. It
is an international sector where things are going to get tougher
and tougher. I do not think there is a painless solution. I think
there is going to be more pain before things get better and I
do not think the competitive edge or drivers are going to go away.
You are recommending a more benign, more environmentally friendly,
greener kind of agriculture. I do not say that is incompatible
with the competitive pressures, but certainly there is a tension
there and I think as a farmer and landowner one would want to
have a profitable business and one would need to become more and
more efficient. That may, as some of the history suggests, put
the environment a bit on the back burner. That is quite a hard
horse to ride, is it not?
(Sir Donald Curry) We certainly envisage a greener
farming industry, you are quite right, and we also identify very
clearly in the Report that the competitive pressures are intense
now. Little profit is being made, which is why we deliberately
chose "Profit" as the title for our third chapter. Nothing
happens without profit. Investment cannot take place, new entrants
are not going to come in. Profit is fundamental, and the challenge
for English farmers and food producers to compete in this intensively
competitive international market-place is, as you quite rightly
say, not going to go away, it can only ever get more intense,
which is why we tried to identify the key components that we need
in our industry to help us compete and the recommendation like
the one that farmers need to collaborate much more than they have
done historically. As I have said a number of times, this is not
a new message. I have been preaching it myself for the past 20
years but we now have no choice actually. What may have sounded
like a good piece of rhetoric now needs to happen and farmers
have no alternative but to collaborate together, co-operate together
and to integrate with food processing, and in the process to have
available to them all the knowledge that they need in terms of
benchmarks and in supply chain analysis to help them drive down
costs. I am concerned that the take-out from this Report is "greening"
everywhere without recognition that these recommendations in the
Report are crucial to having a profitable farming and food processing
sector. We are operating in the dark at the present time. Individual
farmers do not know what their own costs of production are, never
mind what benchmarks they should be measuring themselves against,
and throughout the chain we need to use soundly-based information
to drive our costs down, improve our efficiency and allow us to
327. And improve the profit.
(Sir Donald Curry) Absolutely, at the same time.
328. In delivering these schemes on page 64
of the Report you talk about advice to farmers and you are offering
them three days of advice from a local accredited adviser, then
in the special offers section at the bottom of the page we are
told that farmers should receive a £250 training credit annually.
You go on to say it is essential that all farmers that want and
need it receive some advice. How much is the three free days going
to cost and how much is the £250 for three years going to
cost, and who is going to pay it?
(Sir Donald Curry) The cost of providing this advicethe
three free days and the three years of £250 creditwere
built into the figures which we provided Government and they are
included in the £500 million figure which the whole package
will cost. Do not ask me
329. Could you pack them out for us?
(Sir Donald Curry) I am sorry I cannot, Michael, because
I have not got the breakdown of those costs with me.
Chairman: Could you let us have a breakdown
of that £500 million, not now, on a piece of paper?
Mr Jack: Yes is the answer we are seeking!
330. May I formally request you to let us have
a breakdown of the £500 million?
(Sir Donald Curry) I will do my best but they were
only ever calculated into blocks of funding to cover the broad
area envisaged in our Report over a three-year period.
331. Can I just tease this out as you are going
to be very helpful in this respect, I read out page 65 "we
regard it as essential that all farmers..." Does that mean
that pig farmers, poultry producers, horticulturalists, potato
farmers, fruit farmers, hop producers are all going to be eligible
for those goodies and in the context of modulation, because they
do not receive any subsidy, is it the others, the "Peters"
who are going to pay these "Pauls" for their participation
in these schemes?
(Sir Donald Curry) The funding for this is, as I said,
built into the total package. We recommend that this advice service,
the three days' free advice and the three years' advice, actually
should start from next year. There is considerable up-front funding
of this recommendation before modulation can kick in.
332. So I am clear, £400 million has got
to come from somewhere and £100 million comes from recycling
via modulation, is that right?
(Sir Donald Curry) The figure envisaged is £100
million a year over two years of recycled funds matched by another
£100 million a year from the Treasury, but the new money
is £500 million. So you will have an additional £100
million over two years.
Mr Jack: Is that £300 million for all these
333. New money is defined as new money generated
by the industry and by the Government's contribution?
(Sir Donald Curry) No, the new money is new money
provided by Government.
334. I just wanted to be clear.
(Sir Donald Curry) Considerable up-front funding is
required before modulation can kick in in order to fund these
335. I read out a list of people who do not
get any subsidy.
(Sir Donald Curry) They would benefit from this.
336. So, in other words, the people who receive
money are going to pay for the people who do not receive any?
(Sir Donald Curry) No.
(Sir Donald Curry) Because if every farmer wanted
three days' free advice next year none of that would come from
modulated funds because modulation would not have kicked in by
Mr Jack: I appreciate that.
338. Just a quick one on profit. I think we
all understand there is no profit in the farming industry to carry
on many of the things. Do you believe that there is insufficient
profit within the total food chain to fund that?
(Sir Donald Curry) There is insufficient profit being
generated at the moment within the farming and food processing
and manufacturing sector in order to reinvest.
339. The chain is a bit longer than that.
(Sir Donald Curry) It is.