Examination of Witness (Questions 360-379)|
WEDNESDAY 13 FEBRUARY 2002
360. I know you are aware of the Co-operative
Group and I know they talk to you directly in terms of what they
are trying to do in the North West. Would you go as far as to
make recommendations, which you did in the Report, if there are
structural imbalances which prevent co-operatives or collaboratives,
if you want to call them that, from operating that you would urge
that those barriers in terms of tax regimes and grant inadequacies
are moved out of the way and we find a much more encouraging environment?
(Sir Donald Curry) As you know, I have been talking
to the Co-operative Group and they are very keen indeed to participate
in this collaborative board so that they and others can bring
together whatever funds, support and resources there are available
to make this happen. Yes, indeed, we do need to see this happen.
Let me stress this is not an optional extra now, this is a fundamentally
important recommendation. We have to see co-operation/collaboration
taking place widespread across our industry today.
361. But very firmly within an enterprise culture?
(Sir Donald Curry) Focused on the market.
362. And where I found the Report too comforting
and comfortable was in how to change that culture of an acceptance
of lowest common denominator rewards and performance to one which
focused on winners and enterprise as you would normally expect
in a market framework. One of the examples of that, curiously
enough, is the approach to the various social and environmental
products that we discussed a little earlier where, certainly in
my submission to the Commission
(Sir Donald Curry)Hopefully you identified
it within the Report.
363.I urged that any funding for schemes
of this kind should be based on as close to a market-based and
competitive model of award as we could get so that there is a
consistent message throughout to the farming sector that we reward
innovation, bright ideas, whether they are delivering a social
or environmental goal or devoting themselves to introducing a
new product to the market-place. We have to be consistent right
across the board in the messages we give. Would you agree with
(Sir Donald Curry) Yes, absolutely.
364. Because the process that you hint at is
a development of the current schemes which, to be honest, are
not particularly based on competitiveness and innovation but based
instead on rather more prosaic models of bureaucracy that we are
familiar with in this sector.
(Sir Donald Curry) I am surprised that you have taken
that message out of the Report. We make it very clear that government
grants to encourage co-operation or collaboration or market development,
whilst they have been helpful in stimulating activity in the past,
have not been particularly well-focused and we believe
365. And often awarded to, if you like, "losers"
rather than winners.
(Sir Donald Curry) I think there has been the temptation
to pepper corn the funds available to relatively small initiatives
without achieving significant structural change.
366. That is right.
(Sir Donald Curry) So we recommend that government
funds available should be subject to advice from this collaborative
board based on whatever given priorities they establish and that
board should consist of people who are well-qualified, both financially
and with industry knowledge, to assess the viability of projects
that are presented to it for grant funding and, if necessary,
367. I deliberately drew out the fact that for
environmental and social goods I would expect a similar approach
of competition and enterprise and innovation being recognised
rather than simply box-ticking and compliance with bureaucratic
(Sir Donald Curry) We have that currently within the
environmental schemes. I would suggest that there should be a
separate approach in principle to this. The market delivery mechanisms
have to be commercially sustainable in the market place but they
will not succeed and the disciplines required to produce food
efficiently and process it efficiently and deliver it in a product
form which satisfies the market that it is competitive is crucial,
but in the environmental area we have at the moment schemes that
are based on tendering and are supported through the tendering
process. It is hugely bureaucratic, it is selective, and it is
not sufficiently widespread to achieve the environmental outcome
that we believe could be achieved through a different approach
with the broad and shallow scheme.
368. I think we are drawing out that there needs
to be a complete change of culture within the Ministry that administers
(Sir Donald Curry) We recommend that.
369. So consistency is the message in any scheme
administered as to the ethos that we are expecting from the agricultural
sector if they seek recognition and reward and support. Consistent
with that, one of the other steps that you dwell on but reject
is the concept of an early retirement scheme which you recognise
as being expensive and maybe ineffective in delivering the goal.
To be brutal about this, those who are most determined to stay
in farming are very often those who are least adaptable and least
able to take advantage of new opportunities because they are the
most durable people who are prepared to live in conditions which
very few other people are prepared to put up with and yet, to
be harsh about this, those will be the anchor chain which will
slow change in this sector. So how do we achieve that change in
personnel and skills within this sector and, I have to be honest,
assist some people to leave who would wish to do so but will hang
on to the bitter end if not given some support and recognition
(Sir Donald Curry) We certainly recognise that as
a serious challenge, which is why we gave the early retirement
scheme very serious consideration and rejected it for the reasons
I have said. We make a number of recommendations in the Report
on how we might encourage young people to come in. It is difficult
within the picture that you paint to put an age on that person,
but we are looking at an ageing population in the farming industry
currently and we need to encourage farmers to retire for sure
or stand back from the day-to-day management of their farms, which
is why we looked again at finding ways of share farming and the
like to bring young people in to take over the day-to-day workload
and ultimately the running of the farm. We need to find innovative
ways of doing that to create opportunities for young people and,
either through training or through market pull, to encourage existing
farmers to recognise that life is changing and they themselves
need to be equipped to face the challenges that lie out there
in the market-place.
370. But we need a step change in performance.
I think that is accepted in this Report but you are not identifying
the tools that are going to bring it about. You are identifying
very gradualist methods which may achieve change over 20 years
but, to be honest, and I have to say I am very unwilling because
I can see the difficulty of some cost in this, we must accept
that we need a short-term early retirement scheme to simply remove
a proportion of people from the market-place who are literally
trapped and unable to leave currently. I would certainly not want
to see an early retirement scheme in the long term but a short-term,
targeted hit which gave people a brief opportunity to go would
be, I think, money well spent in achieving the step change in
(Sir Donald Curry) It would be difficult, but not
impossible, to construct a scheme to ensure that you achieved
the change that was necessary and those who benefited from such
a scheme were clearly identified. We did have proposals put to
us by the Tenant Farmers' Association that we should look at some
sort of means testing as a way of ensuring that appropriate people
were targeted which one had to conclude would be largely the tenanted
farming sector and would probably leave the owner occupier untouched
by such a route, so it became very divisive and difficult to target.
I recognise the challenge. It is not an easy one to solve by waving
a magic wand. We have recommendations which if collectively put
together, provided they are adopted, should achieve that end but
it will not be overnight for sure.
371. Can I look at the issue of how you bring
younger people in. I was a bit surprised that although you mentioned
tenant farmers you do not look at the role of the county council
smallholding scheme, which traditionally has been one of the ways
of people coming into the industry. They are also increasingly
looking at community land ownership as a way by which we can take
out the biggest problem which any new entrant into farming faces,
which is unless they have got access to capital, no matter how
good a farmer they are, they start at a really difficult comparative
disadvantage. I wonder what your comments are on that?
(Sir Donald Curry) I think, David, it is difficult
today to see how a new entrant into the farming industry can come
in without some capital. We are suggesting that through the share
farming route, which has been successful in other countries and
which has been less successful here, where there may be an opportunity
for young people to come in and gradually take over the working
capital of the farm over a period of years. We did not specifically
address the county council smallholding issue because we talked
in general terms about the industry rather than about a specific
segment. The county council smallholding route has been, for many
farmers over the years, an important first step on the ladder
of getting into the industry. It has become increasingly difficult
to move from that step. That is a structural weakness we have.
To move from a relatively small farm to the next step up has proved
to be difficult, not impossible but difficult. It is important
we have those starter holdings available to the industry where
farmers can use alternative sources of income to support the business
until they can generate sufficient capital hopefully to move to
the next stage. It is not easy today because of the capital requirement,
to finance a viable farming business.
372. What about community land ownership where
you can develop a trust to buy the land and allow the farmers
to run the land for a period of time until they have the capital?
(Sir Donald Curry) The principle of that is very good
but all of this assumes that farmers will gradually generate capital
out of profits, and the last five years have certainly not supported
that potential, which is why fundamentally we need to have a profitable
farming industry through which all of these initiatives can be
seen as encouraging new people into our industry.
373. Page 43 represents the Captain Kirk approach
to novel ideasyou have "boldly gone where no man has
gone before". In the section on local and regional food you
imply that you can in some way roll back the stranglehold by supermarkets
and major catering outlets on producers by going local, which
is very interesting given that Sir Peter Davis was one of your
Commissioners. Can you, first of all, give the Committee some
indication of the potential for this development. 70 per cent
plus of food in the UK is sold in the supermarkets. How much of
UK's farming output could go local? What sectors would be the
ones that you think could take full advantage of that quickly?
(Sir Donald Curry) We deliberately have not put a
figure on this. It is like asking how many farmers are there going
to be in ten years' time? You are a hostage to fortune and it
is inappropriate to put a precise figure on it. What we see is
a growing interest in local food, in locality food and in regional
food. There is from all the consumer research available an attachment
and an affinity with food produced in one's own locality. The
growth of the farmers' markets has demonstrated that people are
interested in procuring local food if they can. We believe that
should be encouraged. We then looked at what, as I said earlier,
were the barriers to progress, and I have spoken about those earlier,
but we do believe that particularly for farmers on relatively
small to medium sized farms who are prepared to, either themselves
or with their family, take this on to the next stage of processing
or retailing, they can add significant value to the products leaving
their farm. We have significant evidence of that. We visited a
farm shop in Cumbria and there were 40 other businesses that were
producing food products being sold through that farm shop. So
it is not the only single point of contact with the customer,
it is all of those businesses that are actually inter-dependent
through that retail outlet and providing employment and added
income opportunities for those farmers that is important. With
a mobile population, it is people touring around the countryside,
stopping off and wanting to enjoy whether they are staying overnight
or whether they are there for the day, local food.
374. You use language like "we believe
that one of the greatest opportunities" and yet in your reply
you have just said it is medium-sized and small farmers in as
yet unspecified sectors who may be the ones to benefit. I strongly
support the local movement, I am the President of Keep the Fylde
Farming, and I am anxious to see our small and medium-sized farmers
survive but they have co-operated in the dairy sector, they supply
a major dairy producer, but their product is anonymous, and it
is very difficult for them to communicate back to the consumer
locally where the product can be bought. Can I focus on this business
of "local", "locality" and "regional".
Give us some definitional feel as to what is local, what is locality,
what is regional and would it be easy for consumers to understand
these delicate differences between these three terms?
(Sir Donald Curry) If I can start with the regional
first. We strongly believe that the regional development agencies
should take a much keener interest in food production than many
of them are doing currently. Perhaps, quite rightly, they have
focused on urban regeneration, yet rural regeneration is important
and the part that regional food production can play in that. Regional
food strategy for them is an important recommendation in this
Report. In terms of regional products they have a responsibility
and there may be within the region a regional identity which they
could explore and encourage in identifying food from a particular
region, a branding exercise maybe. As far as locality goes, when
you move to marketing food produced from a particular locality
into some of the major retail outlets, it is necessary to identify
the source of that product. And so we see locality as moving product
away from its immediate locality but within sufficient geographic
distance for consumers to be able to identify it and identify
where it comes from.
375. Give us an example of the name of a locality
so I can focus geographically on what you are getting at.
(Sir Donald Curry) If we were talking about a particular
brand of cheese, for example, which is produced from a particular
locality, there is no reason why that product could not find a
market beyond its immediate locality on the shelf of a major retailer,
provided it retains that identity. We encourage the registration
of these various foods under the European schemes.
376. Which sectors are going to be the ones
which you think have the greatest potential to exploit this? For
example, in dairy there is hardly a supermarket shelf now that
does not include regional cheeses. What other sectors could benefit
from this approach?
(Sir Donald Curry) Cheese is a good example. There
may be opportunities in the meat sector, processed products sector,
there may be opportunities in other dairy products, whether it
is ice-cream or whatever. It is more difficult to envisage it
on the field vegetable front but in the further processing of
meat and dairy products
377. What you describe all sounds terribly bitty
(Sir Donald Curry) The reality is that the market
is segmenting and there are opportunities within a segmented market.
378. This is supposed to be "the greatest
opportunity" for farmers to add value it says here. It all
sounds very difficult to me.
(Sir Donald Curry) If you look at where there are
growth opportunities at the moment within the British farming
and food industry, there are growth opportunities in organic,
and we may want to explore that. There are growth opportunities
in the production of local food and locality food. We have simply
identified a growth opportunity. It is there, it is fact, it is
reality, and we believe that should be encouraged.
379. Tesco's in their evidence to the Committee
said, and this was after extensive consumer research, that "actual
buying habits show that whilst British food is requested, the
majority of consumers will not pay a premium for British food
products." That is really damning evidence from Tesco's about
that locality point. It does not exactly show a huge enthusiasm
(Sir Donald Curry) I think it is a little mischievous
to suggest that that applies to local and locality food. That
is a general statement; and that is their view. If you are looking
at the marketing of local foods through local outlets I suspect
you might have a rather different picture. We encountered within
the tourist industry, for example, a serious opportunity for them
to source local produce to feed to people who are staying in local
establishments. What they found difficulty with is sourcing the
product through an adequate distribution system. What they have
not got time to do is tour around the countryside and stop off
at six or seven different places in order to fulfil their requirements.
That should be addressed. There are opportunities there for local
people to get value from supplying local food to local outlets,
whether it is retail or food service or catering and hospitality