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

Examination of Witnesses (Questions 580 - 599)



  580. Have you measured any variance in terms of environmental keenness between those who continue to receive production subsidies as against the sectors that have traditionally not received any support: pigs, poultry and horticulture? Do production subsidies actually, either when they are there or when they have been taken away, make a difference to people's attitudes towards environmental payments?
  (Ms Swales) I think there is an issue about what we have in terms of our current agri-environment programme. Because there have been limited resources, schemes have not been developed largely for those sectors, pigs and poultry, and dairy is the one that comes to mind where the schemes are not really well suited or they have not been designed to be attractive to those farmers. It is clear that if you come up with a well-designed scheme with a logical set of payments that is not too complicated or bureaucratic, then again there is an appetite for farmers to go for those schemes. I would suggest that in the future pigs and poultry farmers may well be interested in looking at what they can do for the environment. We need to draw a distinction between environmental protection—and I am thinking of issues like water pollution, air quality, et cetera—and the problems we tend to associate with those very intensive sectors. On an issue such as delivering biodiveristy, if you are looking at broiler units or intensive pig units, there is not a great deal that we can do directly to benefit biodiversity but certainly we should be concerned about issues of pollution and water quality and air quality. There is a balance there between how far we regulate those industries and we apply environmental standards to them, environmental standards applied across the industry, and the extent to which we give positive incentives to promote landscape management and delivery of biodiversity, et cetera.
  (Mr Barrett) I would add to that. There is a little issue about how much you are trying to put money, as it were, directly into the pockets of farmers and to what extent you are trying to create a situation where they are the beneficiaries of a changed rural environment. There is a good case to be made that farmers would be the downstream beneficiary of improved landscape and greater access to that landscape. By creating countryside that people want to visit and walk in, climb in, canoe in, cycle in, whatever it might be, that is creating elements of thriving rural economy. A well-advised farmer is going to be in a position to exploit that situation.

  581. In the RSPB paper you refer to the idea that there would be market support payments in extreme situations where the market was adverse. The difficulty with this is how do you apply that because you could always argue, unless these palpably clear markets are doing well, that there are always going to be some sectors that are doing less well. I wonder if that will be for WTO or are we going to have to renegotiate with WTO?
  (Ms Swales) I think we make it clear in our submission that we are obviously not talking about routine management of market prices but recognise that there are adverse conditions at times and that we would take the broad market price as the benchmark essentially for the way in which trade should take place, but there may be times when, for various reasons—floods, drought, whatever—there are really difficult circumstances which farmers face. There is already a precedent, if you need some help in those situation. There are various routes to doing that. One of those we suggest is insurance or trade in derivatives. I think I am right in saying that those sorts of approaches have been applied in America where they are much more geared up to insuring their farming industry against adverse conditions. It seems to us that those are the sorts of things we might consider in a UK context but we clearly obviously should get away from the routine management of market prices.


  582. We want to do that in this inquiry.
  (Mr Wynne) Just as a rejoinder on the issue as to whether that would be done by WTO, at the moment, in the light of what has happened to farming, that would be impossible to resist, provided it was carefully constructed.

Mr Mitchell

  583. Both of you point to a lot of other users of the countryside than just the mundane growing of food intensively. The RSPB says the countryside should provide safe, healthy, affordable food. That is done pretty intensively. You add: "enhance wildlife, support diverse and attractive landscapes, and contribute to a thriving rural economy". The Ramblers support recreational use of the countryside. Are you suggesting that subsidies to agriculture are justified only if that delivers benefits other than food, such as the ones you outline?
  (Mr Barrett) At its simplest, I suppose, as long as public money is involved, there is a legitimate expectation that that is going to deliver public good. Of course we need food, and nobody would dispute that, but the notion of direct payments for agricultural production does not seem to have worked particularly well. There is a strong case for redirecting that towards environmental, social and recreational objectives. The problem at the moment seems to be that it is productivity only primarily that is encouraged rather than wide, good practice in farming methods.

  584. How would that work? Would that mean subsidies for allowing access or what?
  (Mr Barrett) Subsidies for allowing access? We do not pay the subsidies for allowing access per se, but money from management of access, management of wildlife habitats, whatever, is something that is possible.

  585. How about the other provisions? You seem more sympathetic to subsidies. You do want the outright abolition of price support but you say there is a good case for emergency aid measures to protect agriculture. You do believe that public financial support for agriculture is justified. On what basis is that so?
  (Mr Wynne) We have not had an argument well expressed to us, to be honest, nor did we during the hearings of the current commission, as to why food production per se needs subsidising. In answer to your question, we cannot see why public subsidies would be needed for the promotion of food production but farmers are the backbone of the countryside; farmers are the actors who will see that the countryside is managed. If they are delivering public goods as a result of that, which we believe they already are and they are capable of delivering a higher level of public goods, then it seems entirely reasonable to us that the public should be paying more to do that. It gets to be quite a pained dispute or discussion as to what the public should have a right to expect from an industry by way of its environmental performance and that which it should be prepared to pay for incentivised reward. We can explore this in depth. I do not think there is a hard and fast point between the two. What we can do is define the environmental quality of the countryside we expect, both in terms, if you like, of the hard parameters of water pollution, soil loss, prevention of flood waters, et cetera, and the slightly softer values in terms of landscape, amenity and biodiversity, and then we can sort out what is a practical way to encourage their members to deliver that suite of benefits. I think quite a lot of that at present will need public support and payment.

  586. That is what the subsidies should go to, rather than just production of food?
  (Mr Wynne) Absolutely.

  587. What role would you see British agriculture playing in supplying the UK market with food?
  (Mr Wynne) An important role; it seems to us that if you remove the subsidies from food, not in one immediate hit but over time, there is ample ability and capacity within the industry to adapt to provide food for the British market, and I would hope for export as well. The change, and this is grossly simplifying it, would seem to me to be that, rather than simply concentrating on almost uniform production of commodities at low prices, there needs to be segmentation and differentiation in production of commodities to hit different markets at different values. If we look at any other economic sector within the UK, and indeed within the developed world, that is what we have done. We are not producing bulk commodities at the lowest price in any other sector. Surely the future of British agriculture is to get out of that trap. Some people will presumably continue there because they have the right soil types, the right climatic conditions and right scale of operation to be able to do that. Others will have to find new markets and we believe that they are capable and adapted to do that.

  588. To compete, surely they are going to have to be more intensive?
  (Mr Wynne) "Intensive" is a word which is often thrown back at environmentalists and is slightly over-used.

  589. You are pretty critical of intensive farming but to compete on a world market, farming is going to have to be more intensive.
  (Mr Wynne) It depends on the nature of the product that is being produced. It depends on the value that is being sought to be added during the production. Some sectors of British agriculture, in all likelihood, are going to stay very intensive. I think for others, by going into specialist commodities, aiming at specialist markets and seeking added value, the traditional use of the term "intensive" would not necessarily apply.

  590. Would you envisage subsidies where there is a showing of environmental purpose but it is not profitable—hill farming, for instance?
  (Mr Wynne) As I said right at the beginning, I think there is a spectrum here from farming which is going to be pretty efficient by most normal market standards but which is going to receive an additional reward for managing the environment—and that is the low level entry into the broad and shallow scheme—through to those parts of the UK where food and fibre will be produced but I suspect almost as a byproduct; it will not be the principal economic commodity. Managing the land for the nation as a whole could become the principal commodity. The money could be earned through a mixture of open market and public reward—the market reward through leisure, tourism, recreation, et cetera, and public reward through public payments for delivering particularly high level environmental goods.

  591. I am going to ask both of you what research you have undertaken on what the public wants out of agriculture.
  (Mr Wynne) I will make a broad statement and my two colleagues have some specifics. I think the starting point goes back to this issue, first of all, of stopping the external costs for the rest of society which current agricultural systems are causing. These have been costed by the Environment Agency in some places, by English Nature, and I am sure the Committee will be very familiar with the work of Jules Pretty who brought this altogether. That has come under some criticism, but as an order of magnitude of the kinds of external, identifiable costs out there, presumably the starting point is to change policies so that those costs which are identifiable and fall on the rest of society are not encouraged. There is then a trickier issue of attributing a value to some of these public goods, such as landscape, amenity, wildlife, beauty of the countryside. They are indeed hard to pin down but quite a lot of survey work has been done and Vicki will give you a couple of examples.
  (Ms Swales) In terms of what the public want and what the public value, RSPB commissioned some market research earlier this year in January which was a representative sample across GB and 70 per cent of the great British public said they valued the countryside for providing places for wildlife to live; 71 per cent said they wanted attractive landscapes. By comparison, 33 per cent of the public said they valued the countryside as a source of food. So I think that is quite interesting. Obviously you can take what you will from this kind of market research.

  592. Those are just general aspirations, are they not? Is it saying that they will go there and see these advantages or will they drive or walk there and what do they want out of it personally, not general aspirations?
  (Ms Swales) In a sense I think you can see that people are voting with their feet. If you look at Countryside Agency figures for the numbers of people visiting the countryside, or work done in the south-west looking at why people went to those places and very high on their list was the landscape and the general amenity of those places. I think the public is, in a sense, voting with its feet for what it wants and foot and mouth, in a sense, demonstrated that very clearly.
  (Mr Barrett) We have some research to throw in and we have done it directly in answer to your question. My starting point has been that public access to a well looked after countryside is a public good, providing the scope for the primary rural economy. There are many figures that support that. The Curry Report has reference to 1.25 billion day trips to the countryside. The Ramblers Association commissioned a report before foot and mouth in fact: The Economic Value of Walking in Rural Wales. I have a copy here. It directly says that walking in Wales has created about 5,000 jobs directly as a result of walking activities alone and £132 million was spent. It goes on to say that walking opportunities in the Welsh countryside can create a job at a public cost of about £433, in contrast to a job in agriculture which costs about £4,000 to create. I do not quite know what you mean by public good but that sounds quite good to me. The other side of that, and this is more anecdotal via our membership and magazines, is that people seek out the countryside, the nice parts of the countryside, for health and spiritual benefits. Those again are public "goods". It is all around that area, if you accept the fact that a well-enhanced, protected environment is going to draw people into the countryside, that economic benefits are there to be exploited by farmers.

Mr Todd

  593. If one accepts that farmers are the backbone of the countryside and indeed its architects, good or ill, do you accept that profitable agriculture is an essential precondition of anything else that you are proposing? There has to be a means for farmers to make some money somewhere in this process to retain them. The second aspect of this is: do you actually feel that we have the people within agriculture who are able to both to make it profitable and exploit some of the opportunities that you are identifying?
  (Mr Wynne) Yes, we do accept that farming has to be profitable, otherwise no one is going to do it. Our subsidiary to that, before you put yours, would be: if that profitability comes at the expense of the environment and the countryside, then that is a contradiction in terms. We would argue that the current route to promoting profitable agriculture through production subsidies is actually a self-defeating end and not very profitable. We would rather find alternative ways of paying public money to help keep farming profitable and it is going to have to be a combination of best return of the market and best return from the public sector.

Mr Jack

  594. The RSPB has done an analysis to indicate over time by species the decline in bird numbers. Pick a species and tell me how many more birds I am going to get for every extra pound which is diverted from subsidised agriculture to buying environmental goods?
  (Mr Wynne) Probably the cheapest birds you will get, if this is a numbers game, would be those birds of the hedgerow and copse and better management therefore of field boundaries, which costs the farmer very little indeed by way of productivity. This is hedgerow biodiversity and not just birds coming relatively cheaply. I am not going to put an amount on it. I am happy to send you some figures we have from our stewardship scheme which is very cheap, and the cirl bunting work we have done in the south-west. We can provide the economics of that if that is of interest. It will be from that through to other birds which are much more expensive to deliver and other biodiversity is much more expensive to deliver. Interestingly, I would suggest again, and this refers to an earlier point I made, that the highest biodiversity values are quite often, not universally but quite often, overlapping the lowest productivity values of the farmland. Therefore, we ought to be able to design the schemes so that the farmer is rewarded most for delivering the highest measure of biodiversity, where in any case he is going to be least competitive on a straight farming basis.

Mrs Shephard

  595. I certainly accept that we could not trouble your organisations which enjoy huge respect for what you do. Nevertheless, it is a phrase that has a lot of currency at the moment. You say in answer to the question about your research that 75 per cent of people want to see an attractive landscape. I have paraphrased what you said. It could not be expected that 75 per cent of people wanted to see an unattractive landscape, surely? Your questions must have been more complex than that, although your answer gave the impression it was a single dimension question. Would you like to illuminate that a bit for us?
  (Ms Swales) You are quite right that the research asked a series of questions and, in a sense, was trying to get a priority from people. You are right that people would not say they wanted an unattractive countryside. It was to get a sense of their priorities, if you will, for what they do want from the countryside. They were asked a long list of questions about landscapes, wildlife, places for recreation as a source of food, providing jobs, rural housing, et cetera. In a sense we were trying to get the priority. What came out of that was that those aspects, wildlife and landscape, came out extremely highly compared to other priorities into which people might wish government to put public money. That was what we were trying to get.

  596. I would have expected that from your membership.
  (Ms Swales) This was not our membership. It was a national GB survey.

  597. I merely make the point that if people are also asked if they would like cheap food, which we know they do for everything, I suppose more than 75 per cent of people might have said the same thing. This is the problem with this kind of statistic, although it is clearly genuine and I know from my own constituency that is what people would say, although it is an agricultural decision. There is a real tension, is there not, between the kind of information generally put out by your organisations and really the overall economic questions of not just what happens to agriculture but the impact that that will have on the economy as a whole. It is so difficult. Your statistics are absolutely genuine but where you put them is a bit simplistic.
  (Mr Wynne) We would be the first to acknowledge that the valuation of the environment is not easy. I never want to pretend otherwise. Could I slightly perhaps cheekily suggest that the public was never asked whether it wanted to subsidise a system which produced 120 million pounds of pesticide clean-up costs in their water.

  598. That is a very fair point.
  (Mr Wynne) What we have tried to do is illuminate some of the values the public do put on the environment. As I have said before, the difficult area is the soft aspects. There is a very large clutch of hard environmental issues which have been costed in terms of their external impact on society, which come to several billions of pounds, however you cost them, and assuming the first step is to structure a policy and a system of incentives to farming which at lease decreases that level of external costs which are hard and measurable.

  Mrs Shephard: Please push those arguments because it helps inform the debate.

Phil Sawford

  599. The recurring theme throughout much of our discussion is this need to shift from food production but we must maintain our countryside, we must preserve our countryside. I want to know why, in terms of habitat, wildlife and access for walking or rambling. We cleared the shrubland and we cleared the forest and encroached into wetlands and moorlands. Why do we need to keep it as it is? Why could we not let some of it go back as it was? I question the idea that farmers are the custodians and we must pay them for this wonderful patchwork, which you can only see from an aeroplane. Why not let some of it go back as it was? It did not look like that before.
  (Mr Wynne) Certainly in terms of the wildlife, part of the wildlife that the north-western European population has come to value is associated with the farming landscape. As we are talking about asking people to pay to some extent to conserve what is there, I suspect one would be wise to take note of that. If the question is "does all of the landscape need to be farmed?", I think I agree with you that the answer is "no". One option is to take the least productive part of the countryside and effectively take that out of farming. Even there, it is quite likely that there would be herbivores, grazing animals of some kind. It might look a bit like farming but effectively you could take that out. I think it would be a comparatively small part of the countryside to which you might do that. That seems to me an entirely legitimate option.

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