Select Committee on Environment, Food and Rural Affairs Minutes of Evidence

Examination of Witnesses (Questions 640 - 659)



Mr Borrow

  640. I have still got a problem. We have talked about £3,000 million that goes into supporting agriculture at the moment and that has always been sold on the basis that that sustains a certain amount of production and it means that the British public have that guaranteed food production and it just happens to be by subsidising agriculture in a way we do not subsidise other industries. Yet if we are seeking to support rural communities in a different way but use that same amount of money we have got to be sure that the public will know what we are buying with that 3,000 million. What puzzled me was the expression that Liana mentioned about using that 3,000 million to concentrate on supporting small family farms irrespective of the market situation and I got the impression that it was important to support that structure of small family farmers. I can remember 15 years ago when there were similar concerns about supporting communities in the coal field areas where people said "we cannot continue to support and subsidise those communities" and those communities changed. I am wondering whether it is possible that the British public will continue to want to spend 3,000 million to support small family farms in rural areas when we do not provide that sort of cash to support industrial and urban communities that are dependent on dying or marginal industries.
  (Ms Stupples) I think the first part in answer to that question, and it is something again that has not been touched on this morning, is the role of food production with perhaps our vision of what sustainable agriculture will be. I really think that food is crucially important. The Curry Report, for example, has the statement along the lines of "we must maintain some capacity to produce food in the UK if we were to find we needed to do that for various reasons". I think what we would argue is that we already have enough justification for us to say that we do want to do that. If you look, for example, at the public loss of confidence in the quality of food, the reasons for that are many and varied but I think the Curry Commission and many other people have pointed out that part of that is because of the long distance now between the producer of the food and the consumer of the food. Part of that long distance means that we have to do things like use more pesticides or resort to more treatment of that food, which again is partly leading to the loss of confidence in the food. What we are hoping to be able to inspire is this idea that this is the reason why people are so keen now on these little initiatives like farmers' markets, organic food boxes, etc, because it helps engender that trust in food and we would argue has great potential for delivering better quality food. The other issue which I think points towards the need to consider more about maintaining some capacity in this country to grow and consume our own food here is the ecological footprint, the technical term, the patterns of food consumption. We would like to be able to not have such huge carbon dioxide emissions from having to ship apples, for example, all the way around the world. We have got fantastic potential, or we used to anyway, say in Kent, having our own indigenous apple orchards. We used to have 30 or 40 varieties of apples that were consistently grown and were part of our heritage and part of the daily food. Now apple orchardists in Kent are finding they are going out of business because the supermarkets are not stocking that food on their shelves. Why? Because the supermarkets are finding that they can get their apples far cheaper from somewhere else. It is all connected. We come back to this idea that, in fact, locally producing food and locally consuming food will create a lot of feedback loops and most importantly will have that money circulating in the local economy. We think it is possible to put together a package of policy measures which would be geared to that end rather than what I think is the inevitable conclusion of what has been discussed so far which is there is a wrong assumption that a certain form of free trade liberalisation is inevitable and, therefore, competitiveness rules above everything else. I do not think we have worked out the dilemma between this concept of competitiveness and whether we can have this vision of sustainability at the same time under the current market conditions.

  641. So you are not in favour of further trade liberalisation and you would think it was quite legitimate for the Government or the EU to erect trade barriers to defend sectors of its own economy rather as President Bush did for the steel industry in the United States last night?
  (Ms Stupples) We think globalisation is inevitable. Obviously greater communication. Of course there will always be products imported and exported but I think rather than call things free trade or not, what we will be saying is there are some so-called free trade policies, like the abolition of production subsidies, which we completely support, because that helps us get to what is a sustainable development end. There are some other policies that I think we should be considering how useful they could be, for example some forms of import controls, whether they be temporary or not, that might actually help us be able to grow these local economies. They might be so-called anti-free trade but they would be policies that we think we should be considering in a portfolio of policies to help support these local economies. Of course it is inevitable that there will be more discussion about liberalisation in agriculture but I feel to say further liberalisation is completely inevitable is actually putting our heads in the sand. The Curry Commission themselves have pointed out a number of places even amongst the relatively modest proposals that they are putting forward where they could be under threat from the WTO. Even the relatively modest environmental proposals on payments that they are talking about could potentially be ruled illegal. We already know of a number of other mechanisms, like Government procurement, for example, or Government favouring British made or locally made food, that increasingly could be subject to legal challenge under the WTO. I think now is exactly the right time to be questioning those, now is exactly the right time to say where do we want to get to and how can we adjust our lobbying strategies within CAP and the WTO to do what is in the best interests for the environment and for global sustainability?

Diana Organ

  642. Three quick questions. Trade liberalisation: surely that is the best way to protect the small family farmer in the developing world? If we start to put in all sorts of tariffs in the strong markets, America, Europe, elsewhere, do we not completely shut out the small family farmer in the developing world?
  (Ms Stupples) Again, from our contact with exactly those people in the developing world, one of their key principles is they think that all governments should have a right to be able to take measures to protect their own local economies. The problem that many of the farmers in the developing world have at the moment is that in some countries up to 42 per cent of their revenue that they are gaining from their current food exports are just going to pay off the debt that they owe. In many cases their need to be able to be export-driven in their economies is just a result of the structural adjustments that have been made to their economies under debt repayment provisions or through the IMF or the World Bank. In fact, many small farmers in those countries would be just as happy being able to produce food that their own families could eat and that they could sell in their local markets rather than being amalgamated and restructured themselves to have to be able to supply commodities that they can sell on the world market and be open to all those shocks in the world market, commodity price changes and that kind of thing. In our talking to local farmers in those countries they have a very similar view to what we are saying. They are completely against the production subsidies and the export subsidies that we currently have, they should go, but they are in favour of being able to find ways, and that may include controls at the border for example, that allow governments to be able to support and encourage their local food economies.

  643. When you were talking before about changes to the CAP in order to help rural economies and rural areas, you talked about protection against rural depopulation. Surely the problem in the whole of Southern England is that we have not got rural depopulation, in fact we have got quite the reverse, we have got a massive exodus from urban and suburban areas into the rural areas. How are we, therefore, going to devise a system that supports services in the rural areas where they need to be without giving handouts to Hertfordshire and Sussex and Gloucestershire which are almost suffering from congestion?
  (Ms Stupples) I think part of the answer to that question is when I argued before that we should be protecting small family farms I think what I was arguing for was a fair deal for them. I think what they get is a double-whammy of mistreatment, if you like, by not getting access to the money and the support that has been available, partly by virtue of their size and partly by virtue of the deliberate structure of those schemes. If we did put food at the heart of what they are doing and did actually include the idea of trying to support these rural communities in our policy making we could find a way of being able to do that. Some of the farmers in the South-East, for example, and I mentioned the Kent apple orchards as a good example, why can we not find a way to be able to ensure that we can have those apples stocked locally in the shops in London? That is not happening. We did surveys with our local groups just a couple of months back and we had a bumper crop of apples coming through from Kent but damn all of those apples were in any of the major supermarkets and were not on their shelves. We have got other anecdotal evidence from some of those orchardists who are saying they may have to end up throwing those apples away because they cannot get the markets for them locally.

  644. But not all rural areas are the same and they are not all driven by agriculture. Lots of rural areas, particularly those that are ex-coal fields, their background economy is that of manufacturing. The idea that we can just move things because it is some kind of garden out there is not true and the basic economy in my area and in many others represented around this table will be manufacturing. You are talking about moving the support into rural development, rural areas. Are you prepared, therefore, in the way that you want to put money in to support small family farms to move those kinds of funds into supporting other areas of the rural economy which may be the IT sector, it may be manufacturing, it may be the service sector?
  (Mr Hutcheon) If I can come in on that. What we said in our initial statement was we want an increased proportion of the funds in the RDR budget, the Rural Development Regulation budget. We are arguing that we can continue to support farming in a different way across all of England, and I think farmers in the South East should have as much access to the environmental support and rural support that we are arguing for as farmers in the Forest of Dean or up in the North of England. What we can do with the additional Rural Development Regulation money is to come up with schemes that reconnect farming with the wider economy. CAP is not the only source of European money which is coming into the English countryside, there are Objective 1 and Objective 2 funds in some areas. One area that we have not looked at enough is Objective 3 funding. Objective 3 funding is actually about education, training and skills and these are the priorities in rural areas and helping those most disadvantaged communities in rural areas to engage in new opportunities and the wider economy.

Mr Todd

  645. Protection cannot be locked into one particular sector, so to protect agriculture the consequence, as President Bush may well find on steel, is people respond in other sectors of the economy. I think this idyllic concept that we can somehow protect small farmers in the UK by imposing controls without substantial consequences in other parts of our already globalised economy is, to be honest, quite naive. Also, as Diana correctly pointed out, it is potentially damaging to farmers in developing countries who every study of economic history has shown are the first motors of economic growth towards industrialisation and development. A curious theory is being expounded. Can I just take up the point about supermarkets. Are supermarkets seen to be part of some conspiracy against their customers in which they deliberately do not stock apples from beautiful English orchards because of some obsession of theirs? Are they not effectively responding to perhaps mistaken views amongst customers that they prefer apples from New Zealand or even from France rather than the ones that are available from traditional English breeding?
  (Ms Stupples) I think we can clearly dispel the myth that the supermarkets are deliberately the devil incarnate. I think what they are doing is responding to the market signals that they are finding, although I think the point that we would make, and indeed many farmers are making, is that the supermarkets are increasingly very powerful players in the food chain. There was an inquiry quite recently and 52 separate practices had been identified where supermarkets could be construed as abusing their power, whether that be through acquiring new suppliers to pay for promotion in-store, whether that be for not having written contracts for their suppliers. Essentially the supermarkets are increasingly in a position where they can be price setters rather than price takers. I think that is the squeeze that is putting a lot of farmers in the UK under. That is increasingly one of the contributory factors to the fact that we might not be able to maintain anything near the current structures that we have. The supermarkets are doing what the market is telling them to, I guess I am questioning is that the way we want the market to be structured? To come back to your point about perhaps the naivety of trying to build a special case for agriculture, under the WTO agriculture already does have a special case, the Agreement on Agriculture is in fact a separate agreement, it has negotiated quite a lot of different concessions, it is not treated the same as other trade and I think there is a very good reason for that. We would go one step further and argue why perhaps should agriculture be under the WTO at all, why is it not negotiated under a separate—

  646. It will take us about ten years back to the Uruguay Round.
  (Ms Stupples) I think it will take us forward. The thing about the supermarkets, very quickly, is obviously—economics 101—more free trade leads to greater competition, greater international imports usually and a drop in prices. In some cases that might actually be something that is not very good for that particular sector. We know Dyson quite recently, a great UK business, had to relocate to South East Asia because of its import costs. Unfortunately, we cannot do that with our farms, we cannot export our farmers to China and say they can set up there, it is not possible, they are tied to the land. There is not a level playing field that exists in agriculture. Here we have a certain climate, we have a certain biodiversity that is intrinsically linked to our farmers and we have a certain way of life and I do not see why we cannot actually—

  Chairman: We have a certain amount of time as well.

Mr Borrow

  647. I just want to explore a bit more this notion of sustainability and environmental sustainability. We have had quite a good idea from Friends of the Earth what they mean by sustainable agriculture and I note that the CPRE in your written submission said you would encourage the sustainable use of land.
  (Mr Hutcheon) Yes.

  648. And encourage environmental sustainable farming policies. I wonder if you could give us a little more detailed idea of what you mean by that. I wonder if you would agree with the National Farmers' Union who said in their submission to us that they believe very firmly that with very few exceptions modern agriculture is environmentally sustainable?
  (Mr Hutcheon) Thank you for that question. I suppose a short definition would be that we think sustainable development is about meeting economic and social objectives in ways that protect, restore and enhance environmental assets and resources. In the case of farming we see that farming has a multipurpose role, it is about producing high quality food at a fair price, a diverse, accessible and beautiful countryside and contributing to vibrant rural economies and communities. In the past farming has been environmentally unsustainable. We have heard from previous evidence about the loss of environmental quality, biodiversity, soil erosion, the loss of wild hedgerows, something that CPRE care about quite passionately. These are not farmers acting out of malice or out of a desire to destroy the environment, they have been encouraged by production subsidies and the direction that CAP has been pushing them. What we would argue for in the future is that the environment should be seen as an integral part of every farm business. We would agree that farming needs to be economically viable and to do that we see four different models. The bulk of farmers will continue to produce bulk commodities to sell on global markets, we think that is a reality in many areas. We would argue that increasingly those commodities are going to be marketed on the basis of quality, and quality is the way forward where UK farmers can actually compete because I think they are unlikely to be able to compete on price in the longer term. An environmental dimension built into that market sector is actually a competitive advantage. The second route where we think farmers should be looking to is on added value, going into the niche markets and getting a better price for the products that they produce. A third area is in delivering the environmental public goods, some of the public goods that we have heard a lot about today. The fourth area is a new area, I guess, in paying farmers for carbon sequestration, in managing flood and water issues and water resources and the harder environmental resources too. Those four strands with a mix of market incentives and a mix of market support offer viable, economic and environmental objectives and outcomes.

  649. Have you given any thought to what effect putting those policies into practice would have, for instance, on employment in rural areas?
  (Mr Hutcheon) There is a lot of evidence which shows that environmental support schemes actually generate employment in rural areas. There is support too, on which you have spoken a little about, for local food economies with Friends of the Earth. CPRE is also very much in favour of the development of local food economies. We have shown that those schemes that try to link farmers directly with consumers actually help to generate jobs and generate greater amounts of revenue within local economies and actually contribute to rural regeneration.

  650. There is just one other issue that I would like to direct to both organisations. Professor Bainbridge in a session of oral evidence to us talked about GM technology and said that the arguments about the reduction of herbicides and pesticides are starting to come through as people relate the environmental concerns that they have with the advantages of GM. She was suggesting there could be advantages to GM. There was a report in the Sunday Times on 17 February which you might have seen, and may have been in other papers as well, in which Professor Alan Gray, Professor of Farm Genetics, said it was becoming clear that declaring GM crops to be either all good or all bad was simplistic and naive and that report talked a little about evidence that shows in growing GM modified maize the use of herbicides had been cut and what had been encouraged was the growth of grasses, weeds and seeds that prevent soil erosion. I wonder if I could have broadly the views of both organisations about GM technology in the light of those comments.
  (Mr Hutcheon) We do not think GMOs are necessarily a panacea, nor do we think they are inherently bad, what we are concerned about is that more effective testing of the actual environmental and health implications of GMOs is done before we actually take it forward.
  (Ms Diamand) I think we support that. The other point to make is in terms of the environmental benefits that are often touted for GM crops, they are false benefits in a sense because there is always an alternative: reductions in pesticide use, reductions in herbicide use. There are existing alternatives that are cheaper, that do not send benefits back to these big companies but they are not being developed because there is no profit to them. They are often more environmentally friendly and they are already existing.
  (Ms Stupples) Can I just add one thing in respect of those two particular cases that you say. We are about to come to the end of a rather controversial set of farm scale trials. We have already heard from a number of different august bodies that we now know the experiments that were set up were not enough to be able to decide one way or another that we should go ahead with GM crops in the UK. So farm scale trials may well have contributed to some aspects of our understanding about the impacts of GM crops. The pesticide use was something that those trials was set up to look at. However, what the trials were not set up to look at, or indeed answer the question about whether we should go ahead with GM crops or not, were some other issues, and I will just mention one. That would be the whole issue of cross-contamination through the travel of pollen and whether or not on a small island like the UK we can simultaneously have non GM agriculture, organic agriculture, which does not want any GM, and GM. I think there is increasing evidence to show that may not be possible, certainly with the current generation of crops. I think that debate still has to carry on and, indeed, Michael Meacher has announced that we do have to have a wider public debate that considers those very narrow definitions of environmental benefit or not and the wider social and ethical considerations that it involves.

  651. Will that need a further round of farm scale trials?
  (Ms Stupples) I would not advocate a round of the type we have currently had precisely because, again, Margaret Beckett has had to already admit that the separation distances used were not adequate in order to protect neighbouring farmers. We do not yet know whether there will be a decent liability scheme in place for neighbouring farmers to have any kind of recourse if they are damaged. Certainly the political and administrative environment is not right for further trials and I doubt that there is justification for that current generation of crops to go through that system again. I think the GM companies would be better served to go back to the drawing board.

Paddy Tipping

  652. I want to keep my questions fairly focused on can-do questions, how we change things. In the course of the evidence this morning and the written submission you have used this phrase a few times of "public goods". I am interested in public goods. What are the public goods that your membership of CPRE want? How do you measure that? Most importantly, how do you pay for that?
  (Mr Hutcheon) The kind of public goods that get CPRE volunteers going are things that are hard to measure. It is almost a spiritual relationship with the countryside, it is the landscape that gets them going most.

  653. This is a can-do question.
  (Mr Hutcheon) I am getting on to that. When you actually look at what the landscape comprises of, it comprises of hedgerows, field boundaries that can be distinctive to localities, whether it is the Cornish bank or a Derbyshire Dale dry stone wall, it can be about bird populations, our volunteers care about wildlife too, they care about vibrant rural communities and we were very passionate about the threat to rural post offices recently. How we get there is through enhanced support for the England Rural Development Programme, it brings a number of benefits. In particular, it is clearly focused on agri-environment and rural development measures. It brings a regional sensitivity to the delivery of agricultural support. It also engages a huge range of stakeholders. We have members on all of theregional consultation groups, as do a whole range of other organisations, it is not just farmers and Government. We would support what we heard earlier from the RSPB for a ten per cent modulation to get on with delivering this new approach now. In particular we would support the broad and shallow schemes because it will make sure that these schemes are available to all farmers, including small farmers. I should say as an aside that the CPRE does not necessarily think that small farmers are intrinsically good, what we care about are farmers who deliver the public goods that I have just articulated.

  654. You have listed a whole list, and I do not disagree that people want those, but how do we decide the priorities within those and how do we actually get the money across? Okay, we have got a vehicle to do it but it is the measurement that I am interested in.
  (Mr Hutcheon) One of the areas that we would like to explore where I think we would provide a unique contribution is in using the countryside character approach, which may be new to Members of the Committee today. It is an approach that has been led by the Countryside Agency. It maps the whole of England and defines what is unique about the characteristics of different landscapes across rural England. There are 159 character areas at the moment at a regional level but that is being taken forward by local authorities to define what is distinct about their landscapes in their area. Because that information is there already, it is on GIS, it could be used to start targeting the support that we would like to see farmers receive.

  655. In our earlier discussions we talked a little bit about wilderness areas and the countryside going back to nature. What would be the views of CPRE members of this because if I were cruel there is a perception that they are rather twee people who like to keep things as they are.
  (Mr Hutcheon) I think you might be surprised. For your information, we have just removed the word "Preservation" from our Articles and we now use "Protection". I think the idea of wilderness is something that we should be considering now. Again, the character assessment process can actually begin to help local people identify what it is they value and what they would like. It is not about pickling landscapes in aspic, it is about what you might want to continue and also what you might like in the future.

  656. Both organisations list the need to change agri-environment schemes and Friends of the Earth say "We would like a Rural Sustainable Development policy that supports rural communities, encourages farmers to protect the environment and wildlife, aids the development of high animal welfare standards, promotes organic farming and develops local food economies." You are going to devolve the decision making on that to a regional level. That seems pretty hard to do with one policy.
  (Ms Stupples) I am not apologetic for having something that is about trying to look at food and farming and its relationships to local economies in the round.

  657. I am not interested in the round, I want you to tell me how it will work in practice.
  (Ms Stupples) Speaking quite immediately there is already a draft bill around, an Organic Targets Bill, which is talking about being able to increase the level of organic production in the UK to about 30 per cent of the land. That is not pie in the sky, it could definitely be done and, indeed, other countries across Europe have done that. I do not think there is even any barrier now within Government against the principle of doing something like that and you could definitely measure that, that could be a key part of how you use the rural development money and that is a definite target. The other thing is the reduction of pesticide use. The survey that we have done of consumers and certainly of our members shows that people are increasingly very concerned about pesticide contamination of their food as well as the impact that has on our drinking water and on wildlife in the countryside. I think we could set some very reasonable targets about reductions in pesticide use and, indeed, the elimination of some of those older pesticides or the ones that are now emerging to be hormone disrupters. There are plenty of mechanisms for doing that. One of the things we have not talked about, for example, is perhaps having some kind of levy on pesticide manufacturing and that money would be used to help farmers make the transition off that treadmill of having to use pesticides. A key way you could achieve that would be to get the supermarkets to come clean on what their spraying requirements are and to adjust those so that the farmers do have some room to manoeuvre. Another key thing I do want to add is about targets for reducing food poverty. We know that in this country there are tens of thousands of people essentially living in food deserts, who simply do not have access to certain types of foods. One of the problems I have of only going down this niche market route of organic food or farmers' markets in the middle of West London is that they effectively consign a lot of the food poor, those on low incomes, to not being able to eat the correct food, to put it in a nasty way. I think everybody should have a right to eat food of a certain standard. Last but not least, something you can measure is actually recirculation of money in local economies. This might be better if some of our regional bodies were more politically accountable. If you did have those then you could take into account some of the things that Diana was talking about in terms of the whole mix of the economy in the area. One other thing that we have not touched on is the issue about having processing capacity as being a key block why we cannot have more local food economies at the moment. It is okay if you are growing apples or rearing sheep because you do not need to do that much to them but if you are growing organic wheat and the only organic mill happens to be over the other side of the country then you are not going to be able to build up those local markets. I think that is another key role for the regional rural development focus, making sure those infrastructures are in place.

  658. Are both organisations arguing for reformed agri-environment schemes? Both of you argue for targets, regulations, incentives. What is the balance? What is going to work out of that list?
  (Mr Hutcheon) What we have argued for is to use the ERDP, the England Rural Development Programme, and the regional chapters as the mechanism for agreeing and targeting what your objectives are so that you can actually tailor your rural policies and support to the different regions and their different priorities in a way which is open but has farmers involved and a wide range of stakeholders. We do not support the Organic Targets Bill for that reason. We do support organic farming, we would like to see a greater encouragement for farmers to go organic, but we do not support the target in that way.
  (Ms Stupples) I think there is, of course, a mixed approach. There is definitely an element of the carrot that does need to be brought in, that goes without saying, and I think farmers are particularly the ones where we should talk about the carrot. There are other players in the food chain who I think got off relatively easy at the stick end of it. Particularly I would point to the voluntary code of practice on the supermarkets at the moment. The voluntary code has only got four of the big players participating. I think there is a far stronger case there to be able to almost balance the market power that they have with clearer responsibilities to suppliers and to the economic wealth here in the UK. Perhaps a more legally based code of practice for the supermarkets would be an example where I think the stick still has a role to play.

Mr Breed

  659. We touched on modulation a little earlier but perhaps I could put this to the CPRE. You indicated that you believe that the current flat rate system disproportionately disadvantages the small and medium sized farmers. Can you just briefly say why you believe that is the case? Secondly, can you tell us what system of modulation you would prefer?
  (Mr Hutcheon) We recognise that modulation at the flat rate could adversely affect the smaller farm businesses because they are on closer margins and are getting a smaller proportion of the money already. We are not in favour of supporting small farmers for the sake of being small farmers, it is about delivering a wide range of public goods and those are the farmers that we should be supporting, not just by the nature of their size. We welcome the Curry recommendation of a flat rate ten per cent now, particularly because it was linked to the delivery of an effective and accessible and well-resourced broad and shallow scheme which we hope will be tailored in a way that those smaller farmers who perhaps are feeling most vulnerable will be able to access and perhaps offset some of those losses. That being said, I think the reality is that maybe there will be some restructuring in the farming industry and that restructuring may happen in any case in the future if we took a different line. We think the general thrust of what modulation is trying to deliver might be a bit uphill in some areas but it is taking us in the right direction which means we will have a sustainable industry and environment that will be sustainable in the longer term.

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