16th REPORT, SESSION 1998-99: ORGANIC
FARMING AND THE EUROPEAN UNION
Letter from Mark Stickings, Parliamentary
Clerk, Ministry of Agriculture, Fisheries and Food to the Clerk
to Sub-Committee D
I am pleased to be able to enclose the Government's
response to Sub-Committee D's report on Organic Farming and
the European Union which was published on 29 July.
The Organic Farming Scheme which was introduced
on 6 April this year has been taken up with such vigour that the
funds which were made available both for this year and for next
have already been committed. Ministers announced on 2 August that
applications received after that date would be met from next year's
budget. Ministers have today closed the scheme to new applications
(with one minor and time-limited exception) until new resources
can be provided and have announced a review. I attach copies of
4 October 1999
Government Response to the House of Lords
Select Committee on the European Communities Report on Organic
Farming and the European Union
The Government welcomes this report, which is the
outcome of a thorough examination of the issues arising from organic
production. The report is timely for a number of reasons. In the
UK organic production and the demand for organic produce have
expanded considerably over the last eighteen months. European
Union standards for organic livestock and livestock products (complementing
those already in place for organic crop products) have recently
been agreed and Member States will be taking the necessary steps
to apply them in the next 12 months. Aid for conversion to organic
farming will be a component of the Rural Development Plans which
will be submitted shortly for approval under the Rural Development
Regulation (Regulation (EC) No. 1257/1999) and the Government
has announced a review of the operation of the Scheme in the light
of the rapid take-up since April of the funds available for 1999-2000
and the following year. There is a vigorous debate about the interface
between organic farming and the planting of GM crops (on which
the Committee reported earlier in the year) and MAFF's programme
of organic R&D has recently been reviewed.
The Government particularly welcomes a number
of the Committee's recommendations. Support for farmers converting
to organic production is an important element in promoting environmentally
friendly farming. But it is one element only and it is necessary
to allocate the available resources to provide a balanced package
of funding for a range of environmental actions. The Government
agrees that organic aid should be concentrated on conversion and
that support should not be extended to provide ongoing payments
to organic farmers, for whose produce the market provides a premium.
The Government welcomes the Committee's conclusion
that a modus vivendi needs to be reached which will accommodate
the legitimate interests of both organic farmers and farmers who
wish to plant GM crops. It will play a full part in seeking to
achieve this outcome.
Consumer confidence is of paragraphmount importance
if the expansion of the organic sector in the UK is to be sustained.
A number of factors identified by the Committee influence consumer
perceptions, including the need for confidence in organic standards.
The Committee's views on these standards are a welcome reinforcement
of the Government's own position in respect of the future development
of European Union standards.
The Government shares the Committee's concern
at the pace of reform of the Common Agricultural Policy.
The recommendations in italics refer to Part
5 of the Select Committee's 16th report in the 1998-99 session
and are referred to by paragraph number.
108. From the evidence that we have
received, the claims for certain benefits of organic farming appear
to be valid. This would be so for biodiversity, soil structure,
water quality, most aspects of animal health and welfare, and
some aspects of food quality. (paragraph 65)
The Government agrees with the Committee's conclusion
that organic systems can be expected to provide a number of environmental
benefits. New R&D is being commissioned to evaluate further
the benefits which typical organic systems provide.
109. It is accepted that other consequences
of organic farming are yield reductions of crops, lower production
from animals, and, because of lower stocking rates, lower output
per unit of land. This means higher cost per unit of food, but
given the lower input costs of organic farming and the possibility
of higher prices for organic products it does not necessarily
mean lower profitability for the producer. (paragraph 68)
The Government agrees that organic systems generally
produce yields lower than those produced by conventional systems
but that the net revenue loss through lower yields is compensated
by the market premium for organic produce. The effect of conversion
on returns will depend on the individual enterprise, the system
in place before conversion to organic farming and market circumstances,
including the level of the organic premium. Yields per animal
are not always significantly reduced; for example, an organic
dairy herd can achieve yields similar to conventional herds.
Organic production and processing standards: Regulation
110. The Committee thinks it is important
that there should be a clear and intelligible basis for organic
standards for both production and processing, and so urges that
the standards should be underpinned by detailed scientific research.
The establishment of a technical committee in UKROFS is a welcome
step in this direction, and we hope that the recently increased
funding for organic research and development will also be of assistance.
The Government is pleased to note the Committee's
welcome for the UKROFS Technical Committee and for the greatly
increased MAFF spend on organic R&D. However, it should be
noted that organic standards reflect a sectoral consensus based
on established methods and developing perceptions of what is consistent
with the principles of organic farming, including judgements on
standards of animal welfare and such issues as the acceptability
of using genetically modified organisms. It follows that they
are not and cannot be entirely science based, although where regulated
substances are used in organic farming they are subject to the
same controls as when they are used elsewhere.
111. Any attempts to dilute standards
[further] should be resisted, and for this reason it is important
that the sector bodies remain closely involved in standard setting.
The standards are essential to retain consumer confidence, and
while we note that the use of copper-based fungicides is due to
be phased out, the Committee does not think that consumers would
expect such products to be used in the production of organic food.
Other anomalous substances were also cited which are not due to
have their approvals withdrawn. The Committee recommends that
research into the identification of less toxic alternatives should
be given priority, and suggests that one of the first tasks of
the new UKROFS technical committee should be to review the substances
which are currently approved by the European Commission, and then
make appropriate recommendations to the article 14 management
committee. (paragraph 74)
The Government agrees that consumer confidence
in the integrity of organic standards is of vital importance.
It is confident that UKROFS, which is responsible for implementing
organic standards in the UK, understands and accepts this. In
fulfilling its functions UKROFS pays close attention to the views
of the organic sector bodies, of which there are now seven.
The Government notes the Committee's conclusions
on the appropriateness of particular substances for use in organic
production and will seek the views of UKROFS and others on the
timetable for phasing out copper-based fungicides. Research on
alternatives is being considered but the safety of these products
is not in doubt, all must meet the usual criteria set for the
approval of pesticides
Livestock amendment to Regulation 2092/91
112. The Committee welcomes the agreement
of the livestock amendment to Regulation 2092/91, if not every
detail of it, and now that it has been adopted, the Committee
considers that the Government and European Commission should view
as a priority the adoption of standards for areas still not adequately
covered by Regulation 2092/91, such as fish farming and complex
processing. Consumer confidence is vital for the organic sector,
and the Committee urges the Government to implement the amendment
in a way which does not jeopardise this confidence. (paragraph
The Government agrees with the Committee that
the Community standards for organic livestock and livestock products
(adopted in July as Regulation (EC) 1804/1999), although not perfect,
are to be welcomed. As noted earlier, the Government accepts entirely
the importance of retaining consumer confidence. The confidence
of the organic sector in the regulatory system is equally important
and, with the Ministry's encouragement, a working group comprising
representatives of the organic sector has been considering recommendations
on the implementation of the Livestock Standards which the industry
might put to the UKROFS Board.
The Government notes the Committee's proposals
on future work in areas such as fish farming and complex processing.
Work on the former is under way in an ad hoc working group
established by UKROFS. No doubt the European Commission will also
have taken note of the Committee's views on work in these areas.
113. The Committee hopes that the Minister
will bear in mind the need for continuity on the UKROFS Board
and notes that some flexibility has been exercised in the recent
round of appointments to the Board. In relation to the funding
of UKROFS, any permanent increase in workload, particularly including
certification of imports should be matched by a proportionate
increase in funding. This is important if consumers are to retain
their faith that the organic sector is properly regulated and
they can trust the authenticity of the organic label. (paragraph
The Government agrees with the Committee that
in making appointments to public bodies due weight must be given
to the value of continuity of experience and is pleased to note
the Committee's recognition that this was taken into account in
recent appointments to the UKROFS Board. It is of course of overriding
importance that the principles set out by the Nolan Committee
should be observed and that fresh appointments to public bodies
should be made from time to time.
The Government notes the Committee's views in
respect of support for UKROFS. In accordance with the rules governing
Non-Departmental Public Bodies, UKROFS will be subject to a Review,
beginning this autumn, which will consider its performance of
the functions it was set up to carry out and how best they might
be carried out in future. The Committee's views and those of UKROFS
itself will be taken into account in that Review.
Enforcement of standards and imports
114. Given the increasing likelihood
that producers and processors will be attracted to the organic
sector by the available profits, and the current impossibility
of testing produce to prove its authenticity, we do not think
it is sufficient to rely on a paper-based system for organic imports.
For produce entering the EU we recommend that the Commission works
closely with IFOAM to develop a system which includes on-the-spot
checks by inspectors working for the EU. In the longer term globally
recognised standards should be established and observed. (paragraph
The Government notes the Committee's views and
agrees on the need for more work to be undertaken by the Commission
on the equivalence of third country and Community standards, work
which at present is largely left to Member States. As to the vehicle
for achieving greater confidence in third country systems, greater
involvement of IFOAM may prove to be a way forward if consensus
on this can be achieved between Member States.
Genetically Modified Organisms
115. The Committee considers that the
Government must help the organic movement and conventional farmers
who intend to use GM crops to reach some kind of modus vivendi,
respecting as far as possible the wishes of both sides. Both UKROFS
and the new Agriculture and Environment Biotechnology Commission
should have central roles in this process. It will be vital to
find an acceptable compromise over minimum set distances between
organic and GM crops, similar to the rules for preserving seed
purity, which specify required distances between crops grown for
seed production and all other crops that could result in cross
pollination. (paragraph 86)
The Government agrees that the interface between
organic farming and the planting of GM crops requires urgent attention.
The Government agrees with the Committee's view on the need for
compromise and is working to facilitate this. Discussions between
the interests concerned and the relevant Government Departments
have been set in hand and are continuing.
Should the Government set a target
116. The Committee does not think that it
makes sense to set an arbitrary target the achievement of which
will be dependent on factors outside the Government's controlsuch
as the state of the conventional farming sector and the strength
of demand for organic food. Having said that the Government should
not be tied to an arbitrary target, the Committee does consider
that organic farming brings benefits, and that Government support
is justified. (paragraph 89)
The Government is pleased to note the Committee's
welcome for support for organic farming from public funds and
endorsement of the Government's conclusion that setting a target
for organic production is not appropriate.
117. We do not think that the Government
should introduce a new scheme which provides ongoing subsidies
exclusively for organic farmers. The Committee is not convinced
that organic farming is the only way to achieve environmental
and other benefits; there is a large amount of evidence that it
is possible to produce similar outcomes using different farming
systems. Organic farmers will of course always be strong candidates
to be accepted onto existing agri-environment schemes, such as
Countryside Stewardship and the Environmentally Sensitive Areas.
An excessive targeting of funds towards organic farmers can only
reduce the amount of money available for the achievement of environmental
and other goals in the farming community in general. (paragraphs
91 and 92)
The Government is pleased to note the Committee's
endorsement of the view that environmental objectives need to
be addressed by a variety of means and agrees that it would not
be appropriate to rely on on-going support for organic systems
alone to achieve these objectives.
118. The Committee does, however, think
that there is a strong case for continuing to provide support
for farmers converting to organic methods. If there were no support
during conversion farmers might be prevented from converting by
the temporary extra costs involved. Once through the conversion
period, organic farmers should expect to rely on the prices they
receive through the market, and any extra payments through general
agri-environment schemes. (paragraph 93)
The Government welcomes the Committee's endorsement
of its conclusion that, whilst support over a limited period for
conversion to organic farming can be justified, long term support
is not required for holdings which have converted to organic farming
and that organic farmers should look to the market for the returns
needed to sustain organic systems.
Organic Farming Scheme
119. Although the Committee did not
examine the subject of double funding in depth, we are concerned
that the rules could result in disproportionate, even unfair,
reductions in payments to some farmers, and we ask the Government
to seek ways to avoid this happening in future. (paragraph 96)
120. The Committee welcomes the new
Organic Farming Scheme but regrets the confused circumstances
of its launch, and hopes that appropriate lessons are learnt for
the future. In particular, potential applicants need to have sufficient
information about when money will be available and what other
grants they may lose, well in advance of the need to make a decision
to apply. (paragraph 97)
The Government notes the Committee's comments
about the launch of the OFS and about dual funding. The rates
of aid for the scheme and the need to deal with dual funding were
considered in the report of the Review of the Organic Aid Scheme,
published in April 1998, a year before the Scheme was launched.
The Committee's views on double funding and the need to learn
lessons from experience will be taken into account in the review
of the operation of the Scheme. The availability of funding will
be a material consideration in determining future priorities.
121. The Committee recommends that when
MAFF next review the scheme the organic sector should be consulted
to determine whether there has been a failure to attract certain
types of farmland into the scheme, resulting in under-supply of
the market in certain products. The payment rates for different
kinds of land or types of farming could be adjusted to take account
of any discrepancies. For example, it might well prove necessary
to offer a higher rate for fruit and vegetable producers, as much
of the land now entering conversion is grassland. (paragraph 98)
The proposed review of the Organic Farming Scheme
will be undertaken in close consultation with the organic sector.
The review will look at the aid structure to consider whether
the rates have unduly skewed aid to particular types of land or
enterprise. The review will also need to consider the implications
of seeking to attract enterprises, particularly those in the horticulture
sector, for which especially high rates of conversion aid are
likely to be necessary.
Common Agricultural Policy
122. We look forward to the day when
EU agricultural policy is not so blatantly contradictory, and
the inefficiencies of the production subsidy system are removed.
In general, the direction in which the CAP is (very slowly) moving,
with the redirection of support towards environmentally beneficial
practices, should benefit organic farming. (paragraph 99)
The recent Agenda 2000 deal did represent a
significant step towards securing an industry which could be both
competitive and sustainable. The Rural Development Regulation,
in particular, provides a sound, though far from perfect, basis
for member states to select and target measures which suit their
particular circumstances. However, the Government agrees that
it would have liked more radical changes in the policy and a more
rapid shift in emphasis away from production support to rural
development and environmental measures. To achieve that end we
have to carry other Member States with us and many of them have
been less enthusiastic for reform than the UK. Both enlargement
and the WTO negotiations are likely to produce pressure for further
Research and development
123. The organic research and development
budget should be steadily increased. Given the relative youth
of the sector, its recent growth, and the potential for organic
research to cross-over into the conventional sector, we think
that the proportion of the overall research budget devoted to
organic farming should be increased until some, at least, of the
evident gaps in current scientific knowledge have been filled.
The organic R&D budget has been doubled
over the last three years and aspects of most of the high priority
topics identified in last year's review of the organic R&D
programme are now being addressed. It will be necessary to consider
the results of this work before developing it further. The Government
agrees that there are potential cross linkages between research
on organic and conventional agriculture and these will be kept
in mind in commissioning future work both in the organic programme
and in other parts of the research programme.
124. In order to ensure that the available
funds are spent in the best possible way, the Committee recommends
that well in advance of any funding decisions MAFF should consult
the UKROFS research committee on what projects should be supported.
The Government notes the Committee's conclusion.
The organic R&D programme is established following consultation
with UKROFS and more widely with the organic sector and other
interests and reviews of the R&D programmes are undertaken
with the participation of these and other interests.
Provision of information advice and training
125. Farmers considering whether to
convert to organic farming seem to receive a good service from
the OCIS and its Scottish, Welsh and Northern Irish counterparts,
and also from the sector bodies, and we hope that MAFF will match
any long-term increase in demand for the information services
with an increase in funding. There is, however, a gap in the provision
of information, advice and training for farmers and their farmworkers
once they have converted, and the Government and the organic sector
should consider how that gap can be filled. One solution would
be the establishment of appropriate training courses for those
in the organic sector which could be part funded by the EU, under
the new Rural Development Regulation. (paragraph 105)
The Government is pleased to note the Committee's
view of the work of OCIS, for which additional funding was made
available in the CSR. The Committee will wish to know that the
OCIS service is to be reviewed, with other free advisory services,
in the Autumn. The Government notes too the Committee's view that
wider support for advice and training on organic farming is required;
this must be seen in the context of the Government's view that,
as a general principle, it is for farming businesses to seek and
pay for the advice they require and for the market to provide
such advice, drawing on the results of relevant R&D. The Government
will consider with the organic sector and others whether new provisions
should be made through the mechanism of the Rural Development
Marketing and infrastructure
126. The Committee considers that the
Government should do all in its power to alleviate the pressure
on small abattoirs. For organic producers, the formation of co-operatives
with specific brand names will help to build consumer loyalty
and reduce packaging and distribution costs and the Committee
hopes that the Government will assist their development. (paragraph
The Government recognises the importance of
small abattoirs for the organic sector. Whilst no new hygiene
regulations have been introduced recently, we are aware that the
prospect of increased charges for veterinary inspections in abattoirs
is causing deep concern, particularly to smaller operators. As
Nick Brown announced on 20 September, in the light of fresh advice
we have obtained from the European Commission, low throughput
slaughterhouses will not be required to have full-time supervision
by a vet during post-mortem inspection (although it will be required
for ante-mortem inspection). The Meat Hygiene Service is now reviewing
its levels of inspection in individual low throughput premises.
Moreover, the Government has launched, with the National Farmers'
Union, a joint review of the regulatory burdens on the slaughtering
industry and this will include the impact of charges on the industry.
We wish to ensure that these charges are as low as possible while
being consistent with public safety and EU legislation. Nevertheless,
our primary concern remains that meat should be produced hygienically
in all abattoirs.
The Government agrees that greater collaboration
amongst producers, whether through formal co-operatives or other
forms of grouping, can result in marketing advantage. The benefits
of collaboration include increased scale, access to professional
marketing, technical and administrative support, cohesive negotiating
ability, improved supply chain communication, and the many other
benefits that come through bigger businesses. MAFF joined with
the NFU in November 1998 to launch "Building Business Advantage",
an initiative to encourage primary producers (including organic
producers) to consider membership of a collaborative marketing
group. This initiative was a major feature of the MAFF exhibit
at this year's Royal Show, and a programme of follow-up events
is under development.
127. The Committee agrees that farmers'
markets, box schemes and other direct links with the consumer
are useful ways of selling organic products and should be supported.
But it is also inevitable that some, perhaps most, organic farmers
will have to deal with the major retailers, and the formation
of co-operatives should enable them to obtain better deals by
being able, for example, to ensure continuity of supply. (paragraph
The Government notes the Committee's view of
the value for organic farmers of establishing co-operatives to
market their produce (see also the response to paragraph 126,
above). It should be possible to explore this further in regional
discussions on the development of the Rural Development Plan.
The organic sector will need to consider what contribution it
should make to this process.
Review of support to organic farmers MAFF
A review of the support for farmers converting
to the expanding organic sector is to be undertaken by the Government.
This follows the allocation of more than £16 million of aid
to the sector in the last six months.
More than 700 farmers have now been accepted
into the new Organic Farming Scheme (OFS), which doubled the rate
of aid offered to farmers wishing to go organic. The Scheme has
brought nearly 60,000 hectares into organic farming contributing
to a five-fold increase in the amount of organic land in the country
over the last year.
Speaking today Countryside Minister Elliot Morley
"We believe that consumers should be able
to have the choice of whether to buy conventional or organically-produced
food. The scheme has helped many farmers take up the opportunity
of producing organic food to meet the burgeoning demand.
"I am delighted the scheme has been so enthusiastically
taken up by farmers. There will be more money available, but before
we decide how it should be allocated, it makes sense to take stock.
The sector is evolving rapidly and we need to be sure that the
money we have available is being put to best possible use."
The expectation is that a new organic aid scheme
will open in 2001-02, under the Rural Development Programme (RDP)
to be put in place next year until the review is concluded applications
for aid under the Organic Farming Scheme will cease to be accepted.
Applications received after 4 October will be returned.
1. Aid on valid OFS applications received
by 2 August this year is being paid in the current financial year.
Applications received after 2 August are being funded from the
budget for 2000-01. However it is likely that formal approval
for the most recent applications (and consequently payments) will
need to be deferred until 2001-02. Where that is the case the
first three years' payments would be paid together. However, any
of the farmers concerned who wishes to withdraw an application
because of the timescale for payment will be allowed to do so
2. Any application under the OFS deferred
until 2001-02 would attract aid at the rates provided for in the
OFS rather than any subsequent scheme made under the RDP.
3. The Organic Farming Scheme was opened
by Nick Brown on April 6. Parallel schemes run in Scotland, Wales
and Northern Ireland.
4. In April 1998, there were around 55,000
hectares being farmed organically. By April 1999 around 100,00
hectares were fully organic and 175,000 hectares were in conversion.
5. Organic rates:
£ per hectare
|Year 1||Year 2
||Year 3||Year 4
|AAPS eligible land and land in permanent crops
|Other improved land||175
|(AAPS=Arable Area Payment Scheme)|
In addition, participants in the scheme receive a lump sum
of £300 in the first year, £200 in the second year and
£100 in the third.
Organic Growth: Ministry Scheme Uptake 1999: MAFF Press
The amount of farmland in organic production in the UK has
increased five-fold over the last year, Countryside Minister Elliot
Morley announced today.
The boom is being spurred on by the Ministry's new Organic
Farming Scheme (OFS) which opened in April.
More than 450 farmers in England have applied to join the
scheme since April and a further 53 applications have been made
to transfer from the old to the new scheme. Applications to date
will add a further 42,000 hectares to the land already in organic
The Scheme is aimed at encouraging farmers to convert from
conventional to organic production. Aid rates for better land
under the scheme have been almost doubled and spending on the
scheme increased from around £1 million in 1998-99 to £6
million this year. There will be a further increase to £8.5
million next year.
Mr Morley said:
"I am delighted that this Scheme has been so enthusiastically
received by farmers and that it is helping to kick-start the organic
"The sector is expanding rapidly and both retailers and
consumers are taking an increasing interest. We are determined
that consumers should be able to buy organic produce if they want
to so that they can exercise a fair choice.
"Of course I wish there was enough money to satisfy all
applicants straight away. It is a fact that we haven't enough
money to do all the things we would like to, not just in the organic
sector, but also for our other agri-environment schemes.
"However, the Scheme has made a strong start and I look
forward to the Ministry being able to make more money available
next financial year."
The budget for this year is now fully committed. Further
applications will continue to be processed and, if eligible, approved
in principle on a first come, first served basis with a view to
payment being made in the next financial year.
Farmers who have recently completed registration with one
of the organic sector bodies but who have not yet applied to join
the OFS will need to do so within the required three months of
registration with a sector body. Farmers who have not yet completed
registration will wish to consider whether to carry on with that
process and submit an OFS application or to delay it to enable
them to apply when further funding for the OFS becomes available.
Subject to Parliamentary approval this is expected to be on 1
April 2000. Year two payments on application already receiving
funding and applications approved in principle will have first
call on this funding.
1. The Organic Farming Scheme applies only in England.
Parallel schemes run in Scotland, Wales and Northern Ireland.
2. In April 1998, there were 54,834 hectares being farmed
organically. This had increased to 274,519 by April 1999.
3. The Organic Farming Regulations 1999 (SI 1999 No 590)
allow the Minister to suspend the payment of aid under the Scheme
should the financial provision become exhausted. The budget for
the 1999-2000 financial year is £6.2 million and this has
now been committed. About £8.5 million is available for 2000-01.
Year two payments on applications already receiving funding will
have first call on this but the balance will be available for
applications approved in principle. Payments to farmers whose
applications are approved in principle for funding from the 2000-01
budget will be subject to the usual Parliamentary approval of
4. An explanatory booklet on the Organic Farming Scheme
and application forms can be obtained from the Ministry's Regional
(1) ORGANIC AID SCHEME
(2) ORGANIC FARMING SCHEME
||No data at present||No data at present