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

Examination of Witness (Questions 282-299)




  282. Sir Donald, last time you came before us we rather squeezed you because you were the sort of pudding of a two-course session. This time you have got it all to yourself.

  (Sir Donald Curry) Thank you.

  283. We are very pleased to see you. Let me start with a compliment: I think it is one of the best written reports I have seen for a long time. It actually reads easily, is fluently written, and that makes a massive difference to most people. I have just been trying to read the Government's consultation paper on annuities for reasons, which I do not need to go into, and I have to say that by and large I found yours a bit easier to get into.
  (Sir Donald Curry) Thank you very much.

  284. Could I start by asking you a question I asked you before the report: Looking at the report, looking again at the people who sat on your Commission, what strikes one is how few of them have any background whatsoever in agriculture or anything really related to agriculture. Was that not a serious problem? In particular, there is not a single person on that Commission with any background whatsoever in what one might describe as agricultural technology, new technologies in agriculture. Was that not a problem?
  (Sir Donald Curry) On the last point, I think it is a little unfair, because Mark Tinsley has been quite actively involved in some of the research work and new technologies and is personally very keen and committed to developing technical capability.

  285. There was no scientist on your Commission.
  (Sir Donald Curry) No, there was not, absolutely. We were challenged at the outset on the membership of the Commission and whether we should not have had a more representative group. However, it would have been very difficult without a substantially expanded Commission to include every sectorial interest. It was initially challenging and I suspect that each person came to the Commission with a very different agenda, but the consultation process that we went through, particularly the regional visits but also the stakeholder meetings which we convened here in London - we had over 40 stakeholder meetings - did have a very big influence on the attitude of individual commissioners when they were exposed to the debate within our industry, with the emphasis on lack of profitability within the farming industry. All commissioners I think valued that consultation process in getting for themselves a much better picture of the whole industry, a more rounded picture of the problems facing the farming and food sector.

  286. Would you agree that your proposals are likely to take money out of agriculture?
  (Sir Donald Curry) Not in its entirety. It will syphon off direct payments, direct production payments, but, provided government endorse the recommendations and the funding associated with it, in the short term it will increase the funds available for the farming and food industry.

  287. Let me put a scenario to you. World trade round, direct aids come under pressure—as we know they are likely to, although we do not know what the outcome is obviously—your modulation procedures are of course predicated on those direct aids, and even if and when they are taxed out of course it is not necessarily the case that they will go back into farming or the farming business. Indeed, you say that the Rural Development Regulation must be made more flexible, by which I assume is meant that the aid should be capable of being paid to a much wider range of businesses than agriculture. Given that so few farms are actually covering their costs now, is that not actually going to make a bad situation worse, certainly in the immediate time scale, and how many would recover from that additional turn of the screw?
  (Sir Donald Curry) There is a proposal to move to a higher level of modulation. It is actually much more sustainable to challenge from WTO than the current support systems. The freeing up of the Rural Development Regulation is an essential requirement of this report. It is essential for two reasons. One is certainly to allow modulated funds, available through the RDR, to be accessible for the broad and shallow scheme which we recommend; in other words, the basic environmental and bio-diversity scheme to a higher proportion of the farming industry than the current stewardship schemes and environmental schemes are. That is a very important reason for freeing up the RDR regulation. Secondly, we do believe that farmers have an important opportunity in benefiting from a rural economy that is more vibrant and presents more attractive opportunities for farmers than is currently the case. So even if the freeing up of the RDR regulation allowed funds to be syphoned off directly from agriculture, farmers themselves, as key players within the rural economy, will have an opportunity to benefit from that too.

  288. Your report is heavily predicated upon certain outcomes of CAP reform. Who advised you that a future of farming without subsidy was a likely outcome?
  (Sir Donald Curry) We spent quite a lot of time researching the Common Agricultural Policy and how it is currently applied. We obviously were briefed and aware of the Commission's proposals and attitudes to reform, went across to Brussels and met a number of people, met Franz Fischler. We carried out considerable research in this area. We came to the view that production subsidies are part of the problem we face distracting farmers from the market, not helping the environment . . . all the statements we make in the report. Against the background of WTO, we think they are threatened. Accepting political reality was part of the conclusion we came to. We believe that the past 50 years have seen agriculture supported through the production of food. However appropriate that support has been for most of the last 50 years, we are now moving into a very different era and we need to turn over the page and begin a new chapter, and public support for public goods is a much more sustainable future than support for producing food.

  289. Could I put it to you, Sir Donald, that when you say you were accepting reality, in fact you were running away from reality and in practice there is not an earthly chance that agricultural subsidies are going to be abolished. We have just come back from a visit to Brussels, as a matter of fact. Not merely did the Agricultural Commissioner tell us that that was not going to happen, the American trade representative told us that was not even their aim. Have you not predicated the whole of your report on some wishful thinking of what you hope might happen but light years away from the reality of what is going to happen?
  (Sir Donald Curry) We do set out in our vision an industry that is not supported for the production of food but supported for other reasons. We make it very clear that we have a vision which is one in which food is unsubsidised but the industry is not unsupported. And that is very important. We also make the statement very strongly that it will take years to negotiate that through the European Union. The Americans and others will continue to support their industry but I am quite sure they will try to do it in a way which detaches their support or is seen to detach their support directly from production and is WTO compliant. We say in the report that decoupling should certainly take place for that reason.

  290. Leaving aside that the American Farm Bill at the moment is proposing to spend an additional $73 billion on support over 10 years, may I just put one final point to you. As you say, you had individuals on this Commission and some of them clearly had axes to grind. There are one or two quite simply dotty ideas. Who invented the idea of relief of business rates in respect of the regional foods which Sainsbury's or Tesco was selling? That is so hopelessly unrealistic. Did you not gasp in despair and say, "Whoever it is is not going to give up on this. We had better put it in and let them take the flak"? It is dotty, is it not? It is seriously dotty, that idea.
  (Sir Donald Curry) I do not think it is a dotty idea.

  291. It is totally undeliverable as an idea.
  (Sir Donald Curry) I think the encouragement of regional food is a move which is clearly pressing on an open door. There is an interest in regional food, in local food, and we want to do what we can to encourage that. It provides local food producers with an opportunity to add value and gain a greater share of the market. It may always be a relatively small segment of the market, but it is a growing market and we need to do what we can to encourage it.

  Chairman: None of us disagree with that. We just think you happen to have chosen a mechanism which I cannot imagine the Archangel Gabriel could turn into a modification of business rates, let alone anybody else. Anyway, two quick interventions and then we are going to move to the next area. Michael and then Diana.

Mr Jack

  292. Why does the report contain no economic assessment with real numbers about the effects of your proposals? Who are the winners and losers in the Curry report?
  (Sir Donald Curry) We have obviously had to carry out an economic impact from the Government point of view on the report and the likely cost of delivering this report. We arrived at the £500 billion figure as a consequence of that. We do not believe there are many losers as a consequence of our recommendations. You could argue that the large arable farmers who will be modulated to 10 per cent are losers. I would argue very strongly, because we envisage the modulated funds being used to introduce a broad and shallow scheme largely, that they will have an opportunity to earn that back. We would also very strongly argue that the current programme of modulation up to 4.5 per cent is taking place anyway, is committed to, without an opportunity for those farmers to earn anything back. So I do not think there are many net losers as a consequence of our report; there are potentially significant gains.

  293. Why was there no attempt, apart from giving a global sum of the cost, to give some indication of the economic impact? Different parts of the country, for example, have the potential to gain at different levels from some of your proposals. It is almost like a menu without prices.
  (Sir Donald Curry) I think, with respect, within the time scale that we had we have produced a very weighty document. There is a need to take that on and analyse the impact of individual recommendations on different sectors. That I believe is the next stage that needs to be undertaken, along with, hopefully, support for some of the recommendations and their early introduction.

  294. Why was there not at the beginning some overview of what was actually happening in the food market place, because agriculture exists to satisfy the food market place and the consumer? You have been very strongly involved in your previous incarnation with part of that, with the Meat and Livestock Commission. I would have thought a good starting place for the future of farming was to look at food, but we do not get to that until a lot later on.
  (Sir Donald Curry) We do cover that in the second chapter. We do cover the issue of the status quo, where we are now, within the farming and food industry in the second chapter.

Diana Organ

  295. You have placed quite a lot of emphasis in your report on an option for both local and locality food. One of your suggestions is this idea, which the Chairman is not very happy about, of giving support to producers through some help with the business rate. I wonder if you could outline how you imagine a rural district council will interpret that scheme. In my area, which is run by a rural district council, I may have a producer and he may have a dairy herd and sell his milk on to others, but he may have an apple orchard and he may sell those apples into a local shop or a local farmers' market of whatever. How is this scheme going to work where farmers are going to be assessed for a section of their produce? How do they prove that they are putting it into a local area? I would like to know a little of your thoughts about this scheme.
  (Sir Donald Curry) Are we talking about the business rate?

  Diana Organ: Yes, the business rate. How is the local authority going to give support to producers for local food?

  Chairman: Or shops.

Diana Organ

  296. Or shops. Because you say about the support from the business rate, I wonder if you would give us an outline of how you would imagine a local authority would administer this scheme and some of the sort of cut-off levels there might be.
  (Sir Donald Curry) If I can go back a few steps. There has clearly been a significant rise in farmers' markets. There is also an increasing interest in local food, locality food and regional food. Throughout our consultation we identified a number of obstacles to the expansion of local, locality food opportunities. The availability of processing or lack of it was seen by some as an obstacle. Adequate distribution was an obstacle. We have the desire to reduce food miles and then we have two dozen white vans driving around the countryside delivering individual allocations of specialist food. The distribution systems that are in place, that the major retailers have put in place, are an obstacle because most of them rely on centralised distribution. So we tried to address the obstacles that are in the way and make sensible recommendations to try to overcome those obstacles. We have given the RDAs a responsibility to develop a regional food strategy and included in that to look at distribution as an important role. We have asked that Food from Britain take on the key role of driving speciality foods and local food initiatives. It is not clear at the moment who holds the responsibility: that needed to be clearly identified. The recommendation on business rate relief was to encourage particularly the major retailers to identify a section of their shelving which they can use to promote local food, despite the distribution challenges which that presents them, which is an obstacle.

  297. So a Tesco in the Forest of Dean at Linley may source some of its cabbages, some of its apples and a little bit of its cheese. How do they get a relief on their business rate for that? I do not quite understand how this is going to work. You have not really answered the question, which is: How is this scheme going to work so that there is benefit to encourage local foods?
  (Sir Donald Curry) With respect, out of the 100-and-odd recommendations you can ask that question 50 times: How is this recommendation going to apply?


  298. We probably will.
  (Sir Donald Curry) There is a need now, through the implementation of the report, to tease out the recommendations, find ways of applying them, and then ensure that they can deliver the benefits that we believe the report as a whole needs to deliver for the benefit of the farming food industry.

  299. I think we need to recognise that you had relatively little time to produce the report. Perhaps had you had longer you might have wanted to go into some more practical details. I think it is also relevant to say that Sainsbury's denies that it is the origin of this recommendation since the Chief Executive was on the report.
  (Sir Donald Curry) Peter Davis did not influence the inclusion of this recommendation.

  Chairman: No, I know. They have specifically said they did not.

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 27 March 2002