Examination of Witness (Questions 282-299)
SIR DONALD
CURRY OBE
WEDNESDAY 13 FEBRUARY 2002
Chairman
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?
Chairman
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.
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