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

Examination of Witnesses (Questions 40 - 59)



  40. Your ability to move forward any UK-developed agenda for change will be determined by what happens at the EU level. What discussions have you had with your fellow European Ministers about what they see as change? I am also interested in your own personal philosophy and your description of what this word "change" means. Your Permanent Secretary used the word "sustainable" and embodied in that are many different approaches to the production of agricultural products, but change can mean an awful lot. It can mean incremental change on the basis of what we have got. It can mean a radical alteration, for example a plan to eliminate all £3 billion of public funding into the sector of agriculture. Where on the scale of increment to "big bang" do you sit and what do you sense from your discussions with other European Ministers their feel for change is?
  (Margaret Beckett) I am trying I deal with all of those aspects. Some of what you are asking me will emerge, I hope, in our later observations and publications. Broadly speaking, I stand more on the radical than on the incremental end, and in terms of discussions and what happens at the EU level and so on, there are a variety of different discussions taking place. I have had a number of bilateral conversations with fellow ministers. Renate Künast and I addressed a conference very shortly after my appointment to this post which I believe was sponsored by the RSPB and NFU together, which was an interesting outcome. There is, as the Committee will know, a group of Ministers all of whom are keen to see substantial reform of the CAP which does meet, and in fact it would have been meeting this weekend but it was going to meet in Denmark and the Danes have decided to have a General Election instead. There is an on-going programme of discussions. There is also an on-going programme of discussions obviously with the Commission. As to where people stand, it comes and goes a little, to be perfectly honest. The German Minister is certainly showing increasing interest and determination to promote reform. The French, as you may know, have like the UK, taken advantage of the modulation to the existing CAP that the recent reform allows, to begin to divert funding and take a different approach to some agriculture issues. Indeed, I understand the Portuguese have signalled that they wish to do the same, although at this moment I cannot call to mind to what degree we have concrete information about their proposals. I think things are shifting and indeed it was the EU negotiating position in Doha that we have to contemplate radical change. While it is common ground and we have been talking about CAP reform for as long as I can remember, I do think the climate for such reform is more favourable than it has ever been, although that is by no means to say it will be achieved.

  41. You described your own position on the spectrum as towards the radical end. Earlier you indicated to the Committee the independence of the inquiries, one of which is looking into the future of farming. Will your own department therefore be making its own submission to this independent inquiry and, if it is, is it going to be published and if it is not, why not?
  (Margaret Beckett) No, we will not be making a formal submission on behalf of the Government because the whole point of having an independent inquiry is that others look at the range of ideas and philosophy and theories that have been tossed around for some time, discuss it between themselves and come forward with their thoughts. It is strongly my view (and I think it is shared) that for the Government to give formal evidence as to its own approach would run the risk of compromising the independence of the Commission and we are extremely anxious that this Commission is seen as independent and that it is truly independent of the Government's input.

  42. One of the things that you said in your speech to the Labour Party Conference was "there is no long-term future for an industry which cannot develop in line with market forces." That was an acknowledgement of the importance of the market place, and yet in the last three weeks the DTI have published their Code of Practice which is supposed to govern the relationships between agriculture as the principal customer and the supermarkets as the primary production centre. This did not get a glowing response from the agriculture industry. It is interesting on one little point that the Code specifically excluded plants and flowers. That is an important part of horticulture. What input did your Department have? I ask that in the context of the Ministerial Sub-Committee on Rural Renewal because one of its terms of reference is to look after matters relating to farming and food and to monitor the wider Government approach. I would have thought if you were going to see this market flavour developed into something which was meaningful and helpful to agriculture at this difficult time, you would have made a major input. Can you tell us first of all what you did input into it?
  (Margaret Beckett) I did not only use that phrase and description at the Labour Party Conference, I also said it to a substantial European conference held in Belfast which was hosted by our NFU but for farming organisations across Europe, so I said it to farmers first. Secondly, on the issue of market forces and the Code of Practice, of course I take your point about the issues as being issues for my Department but this is a competition issue. The Code of Practice followed, as you would be well aware, the Office of Fair Trading's observations and report and competition issues are very much an issue for the DTI and they are handled in a conspicuously independent way for that very reason.
  (Mr Bender) Can I just add a separate point on the operation of the supply chain which is that the Chairman of the Meat and Livestock Commission, Mr Peter Barr, is himself leading some work across the industry to try and look at a more effective, efficient supply chain and one that is consumer-led rather than the reverse. And informal discussions we have had with him not only informs us but informs the Don Curry Policy Commission. Getting a more efficient supply chain operating that meets consumers' needs is very much a focus of the Department's aim and work.

  43. The issue of reform of CAP is often encapsulated in discussions about the price of food. Some people say food is too expensive but if you talk to farmers they have a different view, they will say, "We do not get enough of what is paid for food, we do not get an adequate return." If sustainability is to be affordable by farmers and good environmental practice is to be followed, they need to have profitable, well-run businesses. Again, Secretary of State, where do you lie on the spectrum? Do you want profitable farmers who can be sustainable in their practices or do you want the public to have cheaper food, or do you think it is possible to have both?
  (Margaret Beckett) I think it would be entirely wrong not to see whether it is possible for us to have both. I certainly want to see farming have profitable, well-run businesses and perhaps diversified businesses too, although that will not always perhaps be the case. But it has always seemed to me, going back over a period of some many years, that one of the many problems with the CAP was that it was a policy which was designed to keep prices up, and that seems to me to be in itself undesirable interference with the market. How and what shape of structure eventually emerges is another matter. It does seem to me there are areas, and I believe I am right in saying that for example in the arable sector we are now closer to world prices than we have been for quite a long time, so I think we have to try to get that balance right between what provides a decent living for the farming community who, I completely accept, have really struggled and had tremendous difficulty in recent years and also how we get a fair price and the most efficient price for consumers.

Paddy Tipping

  44. One of the things that has surprised many people is the importance of visitors to the countryside. Foot and mouth disease came in and tourism stopped and there were real problems. The radical approach to the countryside would be to say to farmers and landowners that what we want you to do is produce a backdrop for people to visit the countryside. So in a sense they would provide the landscape and the environment into which people visit. Clearly that is a radical approach. It has real consequences for farming practices. What is your thinking about that?
  (Margaret Beckett) I think that is absolutely right and I think it came as a shock to many people to realise just how great a component of the rural economy and of rural prosperity were a range of other activities and organisations rather than just the farming interest, which is of course at the core of the countryside, and not least, as you say, in terms of their responsibility for landscape and issues of that kind. I know that a number of the schemes that the Countryside Agency is beginning to implement do look—and they have had various experiments and pilot projects and so on—at the role of the countryside in that respect. I think that provided a lot of importance and stimulus. I think the other thing that I would say is that certainly as big a surprise to me, not having focussed on these issues in quite this way before, was the degree to which the involvement of the tourist industry is very much an issue of domestic tourism too. I think a lot of us when we talk about tourism, we tend to think about the international market. To use the usual shorthand, how do you get the American visitors back. I recall, in fact, the Chairman saying this to me when we were discussing the difficulties that were being experienced in Yorkshire that actually the tourists in his part of the world come from Bradford and Leeds and this was an element we needed to stimulate. Yes, a lot of people have learnt some important lessons, what we need to do is to gather that experience and put it to good use.

  45. Following a point that Mr Jack was making earlier on, you acknowledge that farming has had a very difficult past five years. If we pursue a radical approach, if we fundamentally change farming support systems, does that imply there is going to be a fairly prolonged period of severe change? One can see, for example, how niche markets, organic or welfare friendly markets could grow and survive. One could see how big arable farmers could become more efficient. What is the real future for the traditional family farmer? Surely they face a very difficult prospect?
  (Margaret Beckett) I take your point. I suspect that if we are—and this is taking something of a step forward—successful in getting agreement to substantial change to the CAP, I would guess that will be on a transitional basis. It is a matter of discussion and argument I suppose whether it is better to have a kind of big bang change or incremental step by step because the incremental approach means that it will take longer. On the other hand, I think many might find it preferable and easier to adjust. I believe there is a real and prosperous future for the traditional family farm. I am very mindful of the fact that there are sometimes slightly different issues, depending on whether farms are in ownership or are tenanted and that also creates a different number of concerns. Yes, I do believe that perhaps in some cases on a more diversified basis, although I know very many in the farming community have already taken such steps, certainly perhaps in a slightly different context we will see the continued development of farming but I would be astonished and dismayed if we were to see the disappearance of what one might call the traditional family farm.
  (Mr Bender) Can I add, if the Committee will forgive me, just two quick points on that, two areas where my Department has thought it right to provide assistance. One is on the provision of business advice and skills to help skill the farmer to continue to survive in the environment. How we rationalise that, how we join it up, how we continue it is one of the issues we will be reflecting on in the future. The other is various schemes the Committee will know either for marketing support or indeed encouragement of assurance schemes and again that should be a benefit to the traditional farm.


  46. Secretary of State, it is part of the conventional wisdom now, I suppose, that the aim must be to move from support for production to what one might call, broadly speaking, public good assistance for agriculture, of which one of the most frequently mentioned must obviously be environmental schemes, and countryside stewardship is I suppose a flagship project in that area. Do you think that the volume of those schemes would ever be such that they make up for a cessation of production aid or will there inevitably be a requirement on the farmer to look for income from other sources to bridge the difference between the two?
  (Margaret Beckett) If you like, that is a 60,000 dollar question. Certainly it has to be the case that it is not easy to judge to what extent this different range of programmes—and I share your view that the countryside stewardship scheme is an excellent scheme but obviously it is very much in the beginning—can take the place, if you like, of production subsidies. I think it is more a matter, not just of saying "oh, well that will completely replace" as of breaking the link between headage, for example, in livestock and the support that is given. These are issues which are important in farming terms where artificial behaviour patterns do seem to have been created. I think that is common ground, I do not think that is disputed, both in terms of the future of farming itself and also in environmental terms, breaking such a link we believe would be highly desirable. Obviously how you can get the right level of support and for what means is absolutely a key component of thinking about how you develop the issue of public good and not just of food production, livestock production or whatever.

  47. These programmes and the related ones have got to keep quite a large degree of flexibility, have they not?
  (Margaret Beckett) Absolutely.

  48. I refer to the Organic Conversion Scheme, for example. There is now a surplus, I understand, of organic milk.
  (Margaret Beckett) Yes.

  49. The Northern successor to Milk Marque is now meeting the market for organic milk, it is then pooling its organic milk into the wider pool and equalising the price. There is a real danger that people might find organic milk in their conventional milk, as it were, to turn the logic on its head. Does that lead you to believe that in your Organic Conversion Scheme, for example, you should be turning off the tap for conversion in the dairy sector? There is always a risk, is there not, in these schemes that unless one retains the flexibility to react very quickly to the market conditions, you simply reproduce in a new sector the abuse that existed in an old sector?
  (Margaret Beckett) I entirely share that view. I strongly believe that what we need is the maximum degree of flexibility. Indeed one of the concerns we have about the ERDP and about the implication of modulation is that there is a degree of complexity and inflexibility which is actually rather hindering attempts to develop better and wider schemes. I entirely agree that one of the reasons for wishing to retain flexibility is because of the danger of replicating in new sectors, or newish sectors such as organic farming, some of the features which everybody so much deplored in the way that CAP worked conventionally. Indeed, not only have I said to farming audiences that farming has to find its place in the market place but I have also said to Green audiences that I am not the slightest bit interested in providing funding to build up surpluses in organic food which the market does not require, any more than we wanted to build up surpluses in more conventional foods that the market did not require. Neither of these, I have to say, were entirely welcome messages to the audiences to which they were addressed.

  50. Further applications for conversion in the dairy sector, are they not being entertained?
  (Margaret Beckett) Pass. I will look at that. As a matter of general principle. Of course, you will appreciate that in terms of organic production this is very much the exception. One of the things that does concern us and one of the things that we are seeking to encourage—and I hope one of the things that may come out of the Policy Commission is encouragement is that we seek to satisfy more of the market that there is in the UK for organic produce from within the UK.

  Phil Sawford: On the point of a reduction in subsidies, there are those that argue that over the past 50 years subsidies have been part of the problem rather than part of the solution. They have distorted markets and propped up inefficient sectors of the industry. If we are to phase that out and keep cheap food, I think you said we want both, that will obviously have a major effect on agriculture. I wonder what thinking, what models you have looked at? The point on diversification, there is a finite number of trout farms and bed and breakfasts and farmers markets.

  Mr Jack: Caravan parks.

Phil Sawford

  51. Even caravan parks. Farmers in my constituency are looking for a direction, they want to look forward, they want to look to the future. They seem to be looking into a vacuum. We talk about sustainability in the long term of agriculture but they want some clear framework, some clear idea of where we are going. Are we simply intent as a Government on paying for their husbandry of the countryside? Where do they go in difficult times? Where do they look for their future or do we have to face up to it that many farmers will go, that there will be a significant reduction in the number of small family farms in the longer term? I think we want more clarity on that direction.
  (Margaret Beckett) I accept that and I understand that concern. Of course this is again precisely why the setting up of the Policy Commission was in our manifesto to get a wider group of people, a wider range of people, not just those in Government or in the relevant departments to think about and to address these issues. I ought perhaps to say that although clearly none of us wants to see high priced food if it can be avoided, of course I do recognise that there are those who argue that one of the problems that we have is that we do not pay enough for our food. There is a distinction I make there between seeing what is the right price and having a system, as the CAP does, that actually kept prices artificially high in all circumstances. You asked what sort of models. I think it would be dangerous to try and say "oh, we want to do what X did" because we have to look at our own circumstances but at the farming conference in Belfast, to which I referred, there was a very interesting presentation from a New Zealand farmer about what New Zealand had done when forced by the change in their relationship with the United Kingdom as we entered the European Community, not least among other influences. You know, what they had done and how they had sought to address the market situation in which they had found themselves, what they had actually done, which of course was to phase out all subsidies, and how they had sought to satisfy markets. Now let me say at once I am not suggesting for a second that we should simply say "oh, well, we will do what New Zealand did" because they are in extremely different circumstances from ourselves. I think that an encouragement, if you like, that we can take from what was done in New Zealand is that they were able radically to transform their approach to agriculture and to do so successfully. It seems to me it is important for us to take encouragement from the fact that within our own very, very different circumstances, we should be trying to look, as they were forced to do, at what our market situation is, what potential solutions there are for us and how we could move towards those solutions. I will freely tell the Committee that I think it would be madness as well as arrogant for me to say that after the comparatively short time I have been in the Department I know the answer to all these questions, but at least I hope I know what some of the questions are. As to the other issues, no I accept it is not just a matter of diversifying into particular kinds of small enterprise and I accept too the fact that there may be not enough of a market for all who may be concerned. This is one of the reasons though why we are extremely keen—and I know it is not always welcome to people in the farming community—to see good quality business advice provided to the farming community about the way forward for them and that advice being sought by people in the farming community. I know that there are many in farming who believe that there are grounds to look at perhaps more co-operative ways of working, for example, than has been the case sometimes in the past and that will help to create a new future, particularly for the smaller farm which one does not wish to see disappear but which may find its future through different ways of working than in the past. Also I think we need to encourage and stimulate innovation and innovative thinking. For example, it potentially satisfies all the interests in my Department if we find that there is a good market for energy crops. There are a range of potential answers emerging from the mist of these questions.

Mr Drew

  52. If I could just make a comment on your last point about farmers working co-operatively. Some of us have spent quite a long time trying to persuade them of such. I think it would be very useful if the Department might take the lead and at least look at the idea of a national conference to establish good practice which might begin to help the dissemination. It is a struggle on the ground, I can tell you now. That is just a comment, you might like to take that up rather than refer to it.
  (Margaret Beckett) If I could perhaps say, Mr Drew, the Government does not intend, as I said, to give formal evidence to the Policy Commission but there is nothing to stop Members of Parliament or Members of this Committee doing so.

  53. Thank you. I look forward to that. If I can move on briefly, you have mentioned it many times before, what we mean by the sustainable development agenda that the Department is signed up to. Could you give me some tangible examples—perhaps the Permanent Secretary might like to engage in this—of what the Department has done so far and what it would like to do in this area?
  (Margaret Beckett) If I could pick up on your second point, and perhaps ask Brian, as you say, to deal to a degree with your first point. In terms of what we have done so far, the one thing I will say briefly is that as the Committee may be aware, and certainly I think will expect, we are working on our own sustainable development strategy for the Department which we hope to publish in due course. What I would like to focus on, because I think maybe it might be more illuminating than a sort of list of "well we have tried to do this" or that is what we would like to do in the context of the World Summit on Sustainable Development in Johannesburg next year. One of the things that is the source of considerable anxiety to the South African Government, and of concern to many who are engaged in preparations for that Conference, is that there is a danger of it being seen—and this goes back to the point that I think David Lepper made to me earlier—as an environmental conference. Actually it is not an environmental conference—and it was one of the reasons why I was very pleased that we were able to settle some of the climate change technicalities in Marrakech—it is meant to be, we wish it to be, a conference that looks at the overall package of issues that we mean by sustainable development, that is the economic and the social issues as well as the environmental. People are focussing on the list of potential things that the Summit could try to do which have emerged from the regional discussions that have been held already, saying that we want to reduce that list but many people are saying that as that list is reduced to a smaller number of things on which the Summit should focus that they wish it particularly to focus on the economic and social, not least because particularly in Africa, and in the context of the conference held in Africa, there is such a clear link between the poverty that exists and environmental degradation. It is a vicious circle. So what people are beginning to say we should look for to emerge from the Summit are concrete projects and proposals in terms of providing, say, clean water, sustainable energy in continents like Africa which can begin to transform both the economic and social prospect and also in that context and by those means the environment. I think these are part of the "what we would like to do" issues and, of course, it is also very strongly my view that while there is a general public recognition of problems vis a" vis the environment and not least of climate change, a general concern and goodwill towards these issues—much of what has been discussed so far, even though we hope it will in the long term be beneficial—is just way over people's heads and always will be. If, however, we can begin to focus more as we move forward on things like developing the practical projects to provide clean water, energy and so on, then not only is that a good thing in itself, and particularly a good thing in the developing countries, but it actually shows people what we are doing as a world to start to tackle the problems of the environment rather than just discussing it at a rather high minded and philosophical level.

  54. Current examples?
  (Mr Bender) I have been given a couple of minutes to think. Can I inform the Committee of two management changes and two policy things we are doing. On the management changes, we set up two divisions in the Department which did not exist before the election bringing together different parts. One is a division in the Food, Farming and Fisheries part of the Department that leads on sustainable agriculture, and that brings together some thinking from what you might call both sides of the fence. In the Land Use and Rural Affairs Directorate-General we have a division called the Farm Management Improvement Division which again brings together some of the business skilling issues, some of the land management issues, some of the environmental issues that were done on different sides of the fence before the election. On policy outcomes, policy issues, perhaps two points to mention. One is the Department launched in August outlines for an emissions trading scheme. Secondly, work was taking place in the two separate departments before the election and now is taking place within DEFRA for, I hope, publication in the spring of a soil strategy.

  55. Can you just again, very briefly, map out besides chairing the Green Ministers Group, which obviously Michael Meacher does, in what other ways are you taking forward the sustainable development mantle within the Government itself?
  (Margaret Beckett) I think those are the key means at present. We are in discussion, as I said we are developing our own sustainable development strategy, so too are DTLR. We are keeping the discussion going between ourselves about these issues so that they progress in parallel.
  (Mr Bender) Two specific further examples. One is early this year, I think it was, the then DETR published a White Paper on Sustainable Development. DEFRA will be publishing the next one, the follow up one, I hope early in 2002. Secondly, we will want to carry forward, through various collective machinery, including the Green Ministers but including also, I suspect, the Cabinet Committee on Public Expenditure, sustainable development as an underpinning theme of the forthcoming spending review.
  (Margaret Beckett) Indeed, I should have said that, actually. I have got to the stage that I take it for granted and I think everybody else does too. It has been agreed to be an underpinning or if you like an overarching theme of the whole approach to the next spending review.

Patrick Hall

  56. Secretary of State, commentary on the new Department has sometimes said that because it is ambitious in looking at the environment and environmental protection and sustainable development, therefore the Department should take on planning, transport and everything. Of course that cannot be.
  (Margaret Beckett) No.

  57. Therefore those issues have to cut across, do they not? I am not quite sure from the answer that has just been given by Mr Bender and yourself that the mechanism is well and truly there to ensure that the leadership that is necessary to ensure that those matters are constantly on the agenda and addressed by all departments is going to be possible, not because of lack of will but because of a lack of the mechanism to do it from DEFRA, led by DEFRA to actually sustain that effort across all departments.
  (Margaret Beckett) If I may say so, I do not think that is right because, as you have just been saying, the issue of sustainable development is underpinning everything that is going to be done in the spending review. That will make a difference. We have the strengthened Green Ministers Committee. We have already referred to the concordat on some of these specific issues with DTLR and, as I indicated earlier, there are bits of the different departments which have already been working together and will continue to do so. We have made a small announcement on the issue that we are setting up a group with the Office of Government Procurement to try to encourage the right approach across Government. I think from memory it is a task force or a cross cutting committee or something but basically drawing in the Office of Government Procurement and that I think is a very important indicator of the degree to which this approach is accepted across Government, and not least within the Treasury, because as you will appreciate for the Treasury to agree not only that sustainable development is a key theme that runs throughout everything that is going to be part of the considerations of the spending review but also to agree that the Office of Government Procurement should be taking into account not only as it must, quite rightly, value for money but also sustainable development is potentially an important step forward.

  58. Yes, that is a very radical change indeed.
  (Margaret Beckett) Indeed.

  59. If it was really to be achieved, that would be fantastic, it would change entirely the short-term outlook on budgets and programmes to a totally different way of judging what is cost effective.
  (Margaret Beckett) That is right. Yes, properly cost effective.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 10 January 2002