House of Commons - Environment, Food and Rural Affairs

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

Memorandum submitted by Friends of the Earth (A49)

Friends of the Earth is:

— the UK's most influential national environmental campaigning organisation

— the most extensive environmental network in the world, with almost one million supporters across five continents and 68 national organisations worldwide

— a unique network of campaigning local groups, working in over 200 communities throughout England, Wales and Northern Ireland

— dependent on individuals for over 90 per cent of its income.

INTRODUCTION

Friends of the Earth very much welcomes the enquiry by the Environment, Food and Rural Affairs Committee—"Future of UK Agriculture: Farming Beyond Subsidies". The succession of disasters that have befallen UK agriculture in the last 20 years, most recently the outbreak of foot and mouth disease, means that the attention of the public has never been more focussed on the future direction for farming. While the establishment by the Government of the Policy Commission on the Future of Farming and Food (The Curry Commission) indicates a desire for change, Friends of the Earth considers that the length of time given to the Commission to investigate and report is far too short (15 weeks) given the enormity of the task. The consultation provided by the Curry Commission did not even meet the Government's own guidelines for proper public consultation. Our analysis is that the problems in farming go back at least half a century and much more time is required to reach a consensus about which way UK agriculture should go.

FOE is also concerned that the terms of reference of the Commission are too narrow, in particular that its recommendations must be "consistent with the Government's aims for. . . increased trade liberalisation". Friends of the Earth considers that this has effectively hobbled the Commission and prevented it from tackling some of the issues that most affect the food chain. This is particularly worrying when we believe that many of the current problems and potential solutions are ultimately connected to issues of trade policy. The Committees enquiry is therefore timely.

Friends of the Earth believe that the Government should develop a policy for food and farming that tackles the problems right along the food chain and does so in an integrated way. In other words, farming policy must also reflect policies on health, biodiversity, animal welfare, environmental protection, rural economy, climate change, natural resources, transport and social exclusion.

The sustainable management of rural areas depends on the adoption of sustainable farming practices that are economically sustainable for farmers and consumers and which also reflect other sustainable development goals. For example, it would be possible to supply all of the UK's current demand for organic carrots from large farms in Lincolnshire but this would make no sense in terms of reducing carbon dioxide emissions from the road haulage industry. The challenge for Government is to come up with a set of policies that address all the current food and farming problems. Below are the key issues as we see them:

— farmer income

— the inequitable distribution of CAP payments

— corporate dominance of the food chain

— cheap imports produce to lower standards than the UK

— lack of young people coming into farming

— soil erosion and quality

— flooding and sea defences

— surface and groundwater quality

— marine pollution from agricultural inputs

— air pollution, especially from intensive units

— the impacts of major farm restructuring on biodiversity and landscape management

— the impact of farm restructuring on the rural economy and rural society

— farm animal welfare from farm of birth to slaughter house

— use of antibiotics in intensive units

— use of pesticides and the presence of pesticide residues in food

— whether or not GM and non GM crops can co-exist in the UK

— food poisoning and intensive production

— the increasing distance food travels (food miles)

— lack of traceability of many foods

— lack of a reliable labelling system for many foods

— growing dependency on imports for many staple foods, eg apples

— lack of access to a balanced diet to many households.

UNDERLYING ASSUMPTIONS

There is, apparently, a key assumption that underpins current Government thinking about the way forward for UK agriculture. That we must embrace trade liberalisation for agricultural produce and that to do this we must have bigger farms because these are more "efficient". Friends of the Earth believes that these assumptions are flawed.

Competing on world markets

The UK already has the largest farms in the EU, and in terms of output per worker, UK farming ranks top[12]. But this does not necessarily mean that UK farms will fare well on world markets. In fact, a recent study looking at UK farming against comparable EU member states[13] found that UK farms were only average in terms of cost-competitiveness and efficiency[14] and that Dutch and Belgian arable and dairy farms did significantly better. Similarly, a global survey by the Institute of Grocery Distribution gave the UK industry low competitiveness scores for the production of field vegetables, protected crops (such as salads and tomatoes) and fruit[15].

In a free market it is not necessarily UK farmers who will succeed. UK horticultural produce already competes on world markets and UK growers have only been able to hold their own for peas and carrots, with all other crops dominated by foreign imports[16].

Big isn't always better

While a Government study has concluded that large farms get a better return from inputs such as fertilisers and pesticides than small farms[17], as far back as 1955 it was realised that large farms make less effective use of their workforce than their smaller neighbours[18]. A study in 1996 found that the largest 10 per cent of farms in Eastern England were actually making less profit per acre than average[19]. A more recent study of Eastern England found that the average size of the top 10 performing cereal farms was less than the average for all cereal farms—the same relationship was found for the dairy and mixed farming sectors[20]. Studies looking at farm size and efficiency are often inconclusive and it is likely that the relationship varies between types of farming and region[21].

Even the Government and international agencies are starting to accept that big is not necessarily better. For example, a recent paper by the Department for the Environment, Food and Rural Affairs (DEFRA) noted that "scale is important as a driver of performance but other factors are equally important" such as "management, skills and business organisation"[22]. Leading economists at the World Bank now accept that re-distribution of land to small farmers in developing countries would lead to greater overall productivity[23].

Overall, studies have found that the very smallest farms cannot make use of expensive equipment, while the largest farms have management problems associated with large operations[24]. The most efficient farms are likely to be medium sized farms with one or two farm workers, as is backed up by a study from Sweden[25]. In fact, a study conducted in the late 1990s concluded that in the UK, there was no longer any clear economic benefit to farmers from increasing the size of their farms[26].

Efficiency can be measured in many ways. For instance, it could be said that some large cereal farms are very efficient at contaminating groundwater with herbicides. Alternatively, the small and medium sized farmers with many field boundaries are more efficient at creating suitable habitats for a diverse farmland wildlife. In terms of fossil fuel use large capital intensive units are less efficient than smaller labour intensive production systems. In truth, we need a more sophisticated and multifaceted way to assess the worth of different farming types.

In the following sections FOE will address the specific questions raised by the Committee.

1. THE PROSPECTS FOR PRODUCTION SUBSIDIES AND QUOTAS, AGAINST THE BACKDROP OF WORLD TRADE LIBERALISATION AND THE MID-TERM REVIEW OF THE AGENDA 2000 REFORM OF THE CAP

Friends of the Earth believes that the current form of production subsidies, and the way in which they are allocated through the EU Common Agricultural Policy (CAP), are one of the most significant barriers to the development of sustainable agriculture in the UK. In 2000, about £3 billion of taxpayers' money was paid to support UK agriculture through the CAP[27], however, this money was not distributed evenly amongst farmers. Under the CAP, production subsidies are largely linked to farm size and so, for example, arable crop payments are based on land area, and livestock payments are based on the number of livestock. This means the top 20 per cent of farmers, who control most of the land, get 80 per cent of the subsidies[28] and the system encourages the development of large farms and intensive production.

The Government has already stated its commitment to "further liberalisation of agricultural trade"[29]—moving farming further towards competition for world markets. It has also made clear in its strategy for agriculture that it favours further "restructuring" of the farming industry, in order to enhance financial performance. This will involve "some further shift towards larger enterprises" and a "decline in the total number of farms and in the number of people working"[30]. It is clear that the thinking behind government policy is that big farms do better economically, overlooking the impacts of agricultural restructuring on the environment and rural communities.

(i) Production subsidies and quotas with respect to WTO

International trade in agricultural and food products is regulated through the Agreement on Agriculture (AOA) of the World Trade Organisation (WTO). While negotiations to completely liberalise agriculture are still a long way off, FOE believes that the operation of the AOA is already contributing to decreased food security and environmental degradation. While the theoretical aim of the AOA was to reduce agricultural support and protection so as to correct and prevent distortions in world agricultural markets, what actually emerged was an Agreement that largely liberalised agricultural trade in developing countries and maintained a regulated trade system in developed countries. Key outcomes have been increased market access for companies exporting to the South, dumping of food products in other markets (particularly developing countries), and the prediction that net food importing developing countries will find themselves with higher import bills. The agreement benefits large transnational corporations and large farms, at the expense of small and subsistence farmers.

In the recent negotiations of the WTO at Doha, the final ministerial declaration indicated that a commitment to reductions with a view to phasing out all forms of export subsidies and substantial reductions in trade distorting domestic subsidies. FOE considers that the EU is likely to argue that this allows the EU to move away from price support and allocate funds to direct subsidy support, which it argues is not trade distorting. In this way, FOE believes that the EU will attempt to maintain "business as usual" over the next few years with respect to production subsidies.

In the longer term, there is enormous pressure to liberalise agricultural trade. Some elements of UK trade in agriculture and food have already been liberalised through the AOA and other World Trade Organisation (WTO) agreements, including standards and to some extent market access. The main priority of the Cairns Group of 18 large agricultural exporting countries (which includes Canada, Australia, New Zealand, Brazil and Argentina) is to remove or substantially reduce the European agricultural support system. There are indications that the EU will move at least some way in this direction.

Friends of the Earth believes that this trend, towards the globalisation of food production, is severely eroding the control that farmers have over their livelihoods. Farmers are already almost completely dependent upon the huge agribusinesses which supply them, and upon the equally large companies (grain dealers, supermarkets) to which they sell their produce[31]. They are a captive market for companies that already operate in conditions approaching monopoly. For example, two grain traders—Cargill and Archer Daniel Midland—control 80 per cent of the world's grain trade[32]; while four companies (Syngenta, Dupont, Monsanto and Aventis) account for nearly two thirds of world pesticide sales[33]. In the UK, the major supermarkets now control 60 per cent of all food sales[34]. These powerful corporations increasingly dictate prices to farmers and policy to Governments, and they have not suffered during the recent farming crises—Tesco announced profits of £1 billion for the year 2000[35].

The WTO tends to benefit these corporations, who operate at every level of the food chain and view food solely as a commodity. This view has also come to dominate among governments—instead of producing food for local and national markets, land is being given over to production for export. Focusing on export and free trade leaves farmers at the mercy of international currency fluctuations or recessions in other countries (such as happened to UK pig farmers after markets in Russia and Asia collapsed[36]). Furthermore, under conditions of increased liberalisation, farmers in the UK will find it extremely difficult to compete with huge farms elsewhere, such as those in the prairies of North America. We may even lose whole sectors of farming—a recent study found that it is likely that only grains and dairy products can be produced cheaply enough in the UK to be competitive on the global market[37] while there is evidence that the UK has little, if any, competitive advantage in livestock and horticulture,[38] [39]. The loss of entire sectors of food production in the UK would have enormous impacts on rural communities, the environment and landscape, the trade balance and our ability to feed ourselves.

FOE believes that WTO negotiations will be used as a lever to reduce production subsidies and open markets up to international trade. FOE does not believe that the current system of subsidising production, based upon area, is sustainable but FOE also believes that agricultural trade must be conducted so as to meet sustainable development objectives. Importantly, domestic policies that prioritise sustainable agriculture and the production of affordable, safe and good quality food should take precedence over international trade requirements. Food should be from local or regional sources wherever possible and produced according to sustainable agriculture techniques. On the international markets, the developed world should give priority to exports from developing countries (particularly least developed countries), again from sustainable agricultural production as a means of fostering development in the world's poorest nations.

(ii) The mid term review of the Agenda 2000 reform of the CAP

The CAP is one of the biggest barriers to a move towards more sustainable agriculture in the UK. Set up in 1962, it was driven by the need for food security in Europe. The CAP was so successful at increasing production that by the late 1980s huge surpluses were being produced leading to stockpiles of food "mountains", and the subsidised "dumping" of EU surpluses onto international markets. The latter disrupts the agricultural economies of developing countries and should be banned. Various reforms attempted to rein in production—such as quotas for milk production and the "set aside" of a proportion of arable land—but these have failed to curb production and the operation of the CAP continues to be costly and to encourage ever more intensive farming.

The Agenda 2000 reforms of the CAP introduced the Rural Development Regulation (RDR), which allows national governments to redirect a small proportion of subsidy payments away from production and into rural economies and the environment. The UK Government has the option to modulate up to 20 per cent of production subsidies (around £1 billion) to the RDR programmes, with matching funds from the Treasury. However, the Government has opted to redirect only 2.5 per cent of subsidies into rural development and the environment (rising to 4.5 per cent by 2004) and will take this amount away from all farmers, big and small—further squeezing the UK's smaller farmers. FOE believes that this move will do nothing to ease the current crisis in UK agriculture and will further consolidate the position of corporate farming in the UK.

The opportunity presented by the upcoming review of Agenda 2000 is for the UK Government to take the modulation option seriously, and use it as an immediate tool for redirecting UK agriculture towards sustainable goals. Friends of the Earth believes that this modulation should be structured in such a way that support payments are taken away from the biggest farmers who so unfairly benefit from the current system. In contrast, the Government apparently views modulation as a means by which it can further the process of farm restructuring in favour of larger sized farms.

(iii) Imbalance in the food chain

In the past 20 years the proportion of household expenditure on food that goes directly to farmers and growers has steadily declined to the point that less than 10 per cent now reaches the primary producer. Often this means that farmers are receiving little more than the cost of production. This imbalance has arisen because of the power of the supermarkets and large food companies to force down farm gate prices by playing off farmers in the UK against one another and increasing UK farmers against those in other countries. An increase in food trade liberalisation will only make matters worse not only for UK producers but also for the millions of smaller farmers around the world. It is hard to see how such a system will produce a more sustainable farming system when landowners will be constantly trying to maximise yields and minimise costs in the hope that they will be the ones that get the sale. It inevitably leads to bigger and bigger farms which are more intensive.

It is a system that ignores the environmental, economic and social implications of any agricultural restructuring.

To redress the balance in the UK, FOE believes that the power of the large supermarkets and food companies should be controlled through legislation to ensure that no producer is forced to sell at an unprofitable price or expected to respond to unreasonable financial demands for such things as promotion and packaging and even store refurbishment. An independent regulator should oversee the regulations with powers to impose meaningful penalties on companies that break them.

2. HOW BETTER STEWARDSHIP OF AGRICULTURAL LAND CAN BE PROMOTED

With the right help, farmers can produce high quality, safe and affordable food in a way that develops a wildlife rich countryside, protects natural resources, promotes animal welfare and leads to vibrant rural economies. But they need to get a fair income for farming in this manner. Friends of the Earth considers that the ultimate aim of CAP reform must be to move away completely from production payments to payments which reward good practice and invest in the rural economy. While many conservation organisations are arguing for full environmental cross-compliance for support payments, FOE does not hold to this view. The danger with cross-compliance measures is that they will be used as an excuse to continue farming intensively but with a token gesture towards the environment.

However, FOE would argue that no public subsidies for agricultural activities should be available for environmentally damaging activities—production based subsidies fall into this category. Friends of the Earth's view is that agri-environment schemes should encourage farming which protects and enhances the environment as an intrinsic part of the system. Where financial measures are used there is value both in payments for positive action (eg converting to organic farming or protection of valuable habitats) and penalties for harmful activities (eg tax on pesticides) which can contribute towards the funding of positive action.

The focus of agri-environment policy at present is very much on enhancement. This is extremely valuable in those areas where degraded habitats require restoration. However there is an insufficient recognition of the value of maintaining the highest quality habitat. For example in the South Downs ESA the highest quality land, ancient chalk downland, receives the lowest payments. In most parts of the country (although predominantly in the west) there are farms which remain under traditional low input management and which provide islands of higher biodiversity. The current agri-environment schemes do not recognise the value of such holdings and it is up to the farmer/tenant to apply for support rather than the schemes themselves identifying areas which require support to enable biodiversity goals to be reached. Higher payments are given for restoration and while payments for restoration are not wrong, the payments for habitat maintenance represent an insufficient incentive to maintain them in high quality over the long term.

Where there are priorities for enhancement of habitats the approach adopted must be able to target resources at particular land where there is a wider public interest. This would require a range of mechanisms. For example, one of the ways of reducing the threat of increased levels of flooding as a result of climate change might be to restore wetland habitats which serve the function of absorbing floodwaters and preventing floods downstream. This in turn would have an impact on land use policies such as planning (reducing development and relocating in targeted areas) as well as agricultural policies. The principle is to be able to target particular land for action.

The system of French modulation is worth closer examination—elements of the French approach could usefully be implemented here. The principal tools in the French scheme are Land Management Contracts (LMCs)—an agreement between farmers and the Government, and more broadly with society. The farmer undertakes various commitments which could be related to animal welfare, job creation or environmental enhancement and in return is provided with Government grants, funded through modulation. LMCs are based on projects, both for the individual farm, and for the area. Each farm will therefore have a management plan, and there will also be a wider, area plan, which will be drawn up in consultation with the local community and neighbouring farmers.

In the longer term, FOE believes that a radical shift in policy and agricultural support is needed. The CAP must be entirely scrapped and replaced by a Rural Sustainable Development Policy that supports rural communities, encourages farmers to protect the environment and wildlife, aids the development of high animal welfare standards, promotes organic farming, and develops local food economies. Decision-making over the payment of subsidies should be devolved to a regional level.

Such new income streams should be targeted equitably to reflect the wider social and environmental benefits which farmers deliver. For example, in the case of the arable sector this could be related to the adoption of farming methods that protect water supplies from pesticide and nutrient pollution. In the case of the smaller, family, livestock farms of the uplands and the west it would be for management of the landscape. All sectors would have a responsibility to protect and enhance on-farm wildlife. A substantial proportion of funding would be set aside for ensuring that the UK had a viable organic sector which would account for 30 per cent of the land by 2010.

Finally, FOE does not believe that farming can be viewed solely as a method of landscape management. The production of high quality food should continue to have a place at the heart of rural economies. To this end the Government should encourage the growth of local food related businesses. Networks that link food producers, manufacturers, retailers and consumers on a local and regional basis could be used to reduce the amount of long distance trade in foods that can be produced locally, thereby reducing the distance food travels and CO2 emissions. Local food economies can provide great benefits to the local communities as a whole, because more money is re-circulated in the local economy[40], rather than adding to the profits of large corporations elsewhere. Such systems can also encourage retailers and caterers to use more locally produced food. More focused direct marketing schemes, such as farm shops, community shops, farmers' markets and local delivery schemes allow customers to get fresh produce and the farmer to get a decent price by cutting out the go between. Strengthening links between producers and consumers can also help to encourage more environmentally friendly farming and/or better animal welfare by helping to diminish attitude differences between farmers and the general public.

However, we cannot simply rely on the market to provide the solutions—particularly when there is a long history of Government intervention—both financial and regulatory. Regional Development Agencies must put strong local food economies at the centre of their policies, rather than out-of-town supermarkets or factories, through provision of improved food processing infrastructure, support for co-operatives and local branding and marketing initiatives. This must include financial support for local producers, processors and retail markets. Subsidies could also usefully be diverted towards rural development measures including assistance with setting up farm shops, development of infrastructure (eg small abattoirs), local processing of agricultural products, training and advice for farmers.

3. THE OPPORTUNITIES AND DIFFICULTIES FACED BY AGRICULTURE AS A RESULT OF POSSIBLE REDUCTIONS IN PRODUCTION SUBSIDIES

The only farming sectors which currently receive production subsidies in the EU are arable, livestock and dairy. Other sectors are already open to competition. In market gardening competition has led to larger and larger holdings. In fruit, the acreage has shrunk and the remaining holdings are getting bigger. Recently, a 1,000 acre orchard in Sussex (one of the largest) went on the market indicating that the UK top fruit sector is still in decline. Yet it is clear that there are huge potential benefits for landscape, biodiversity and employment from a more vibrant sector.

At present, those sectors that receive production support would be hard pressed to survive without substantial tax payer support. Even the arable sector would be in a precarious position without area payments. Friends of the Earth believe that there would therefore be serious environmental and social consequences of a reduction in production subsidies without having developed alternative income streams for UK farmers. Prior to the foot and mouth epidemic, MAFF expected another 40,000 farmers to leave farming by 2005. After foot and mouth it is likely that many affected livestock farmers will decide to give up farming altogether. A policy of reducing production subsidies without clear means to address the consequences is likely to exacerbate this process. It is unlikely that these farmers will be replaced—the high cost of land means that it is usually only existing, larger operations or corporations that can afford to buy up more land—accelerating the process of amalgamation and restructuring in farming. There are likely to be several consequences of this.

Negative impacts on rural communities

Smaller, family owned farms provide vital functions for society and the environment, apart from food production. Researchers in the United States have found that when family farms disappear from an area and are replaced by corporate owned farms, less income goes into the rural economy, rural communities start to break down and distrust between farmers and the local community increases[41].

Many rural communities in the more remote areas of the UK still depend upon agriculture for their survival. For example, in rural parts of the South West, Welsh borders and Northern England agriculture can account for up to 25 per cent of local employment[42]. These areas have been identified by the Government as being particularly affected by the agricultural recession because these communities have few economic alternatives to farming and limited options for changing the way they farm[43]. The loss of large numbers of farms in such areas will have a further impact on the local economies—a recent study in West Lancashire found that for every two jobs lost in agriculture one would be lost in a related industry[44]. This will worsen the social deprivation that many rural areas already experience—42 per cent of rural parishes have no shop, 49 per cent have no school and 83 per cent have no doctor[45].

Loss of skills and knowledge

The restructuring of the farming industry implies a loss of succession in farming. Instead of farms being passed on to a successor, such as a son or daughter, many farmers are likely to leave the industry entirely—selling their land which is then bought up by incomers or amalgamated into other farms. Farmers can have a large knowledge of the biodiversity on their farm and how to maintain it, but this knowledge is not necessarily passed on if they leave the industry and their farm is bought out[46]. Traditional landscape maintenance skills, such as dry stone walling and hedge laying can be lost in similar ways.

Impacts upon the landscape and the environment

In the UK, farming is the industry that has the single greatest impact on our wildlife, landscape and rural environment. The size and distribution of farms affects both wildlife and landscape. For example, small farms (less than 50 hectares) are more likely to have woodland than larger ones and this woodland is more likely to be native and deciduous rather than conifer plantations[47]. Similarly, smaller farms tend to have smaller field sizes and so more hedgerows.

Farmers under economic pressure change how they farm and the amount of land they farm. For example, in a survey in the South West of England, farmers stated that their preferred technique for surviving falls in incomes would be to buy up more land, while at the same time cutting costs and intensifying activities[48]. This trend is most marked in the dairy industry, where farmers tend to increase grazing rates and the area of land given over to fodder crops in an attempt to increase milk yields[49]. More intensive farming could lead to the loss of wildlife and more environmental pollution. When questioned, East Anglian farmers felt that one of the first things to go during a financial squeeze would be money and time spent on conservation[50].

The result of removing or reducing payments would be to push farmers towards more intensive production methods. UK farmers would have great difficulty in reducing their production costs any further and will never be competitive against producers where the climate is more favourable, where land holdings are bigger, where labour is cheaper, where employment law is less stringent, where health and safety laws are less tight, where animal welfare standards are lower, where biodiversity is much less dependent on farmland management, or where environmental protection is less of a priority. In the absence of alternative support systems, FOE cannot see how such a policy would be anything other than disastrous for the UK environment.

SUMMARY

In conclusion, FOE believes that the following policies should be adopted in order to shift UK agriculture towards a more sustainable path.

— To save food and farming from unfair global trade rules, the UK Government must start the process in the EU to remove food and agriculture from the World Trade Organisation (WTO)'s control. The Agreement on Agriculture should be dismantled and agriculture removed from other WTO agreements, such as Technical Barriers to Trade. There must be a new and binding agreement, independent of the WTO, to be developed under the auspices of a strengthened and reformed UN. The purpose of a new international agreement on food and agriculture would be to promote and protect human rights to safe, healthy and nutritious food; high rural employment and labour standards; and a healthy and sustainable environment.

— The UK Government must immediately undertake to modulate the full 20 per cent of production subsidies to programmes covered by the second pillar of the CAP. This modulation should be structured in such a way that support payments are taken away from the biggest farmers who so unfairly benefit from the current system and directed to smaller farmers who manage the countryside in areas where rural tourism is so important to the rural economy.

— The Common Agricultural Policy has failed. Farmers' incomes are too low to sustain them, the rural environment is being damaged and depleted and the public are suspicious of food quality. The CAP should be scrapped by 2006 and replaced with a Rural Sustainable Development Policy which would reward landowners for good stewardship of the land, biodiversity, and natural resources and support diverse local food production and distribution. Individual member states and regions would control how and where funds are deployed.

— With the right support from the Government, 30 per cent of our farmland could be organic by 2010. The Government must produce a strategy, including financial subsidies and incentives, to ensure that the target is met.

— Regional Development Agencies must put strong local food economies at the centre of their policies, rather than out-of-town supermarkets or factories, through provision of improved food processing infrastructure, support for co-operatives and local branding and marketing initiatives. This must include financial support for local producers, processors and retail markets. This will regenerate and sustain local business and employment.

— The imbalance of power in the UK food chain has to be addressed so that farmers and growers receive a greater proportion of the expenditure on food than at present. This means that legislation that goes beyond the current voluntary code of conduct for supermarkets announced by the DTI in November 2001. Tough enforceable standards have to be in place to prevent unfair trading practices which push farm gate prices down and result in unreasonable demands being placed on producers. Such a statutory system would require an independent regulator with power to impose significant penalties if the supermarkets and food companies erred.

Friends of the Earth

20 December 2001

12 Brech, 1961. Economics of agriculture-an economic analysis of the efficiency of British agriculture over time Journal of Agricultural Economics Vol 14(4) pp 446-65; Kawagoe, T & Hayami, Y, 1983. The production structure of world agriculture Journal of developing economies Vol 10 pp 143-52. Back

13 EIRE, the Netherlands, Belgium, France, Denmark and Germany. Back

14 Parsons, S & Cameron, N, 1998. The comparative efficiency of British agriculture: implications for the countryside Presented at the Royal Institute of Chartered Surveyors Research Conference-ROOTS 98. Back

15 Survey underlines UK's low level of "self-esteem" in produce trading The Grower 19 April 2001 p 10. Back

16 Dixon, G, 2000. So who, exactly, is your competitor? The Grower 11 May 2000 pp 22-23. Back

17 The Structure of Agricultural Input Costs: The Impact of Input Prices and Input Utilisation Working Paper: A Discussion Document Prepared by the Economics and Statistics Group of the Ministry of Agriculture, Fisheries and Food May 2001. Back

18 Clark, C & Jones, JO, 1955. The "production functions" for the average and marginal productivity of land and labour in English agriculture Journal of Agricultural Economics Vol 11(2) pp 117-40. Back

19 Grant Thornton, 1997. Client data analysis-Harvest 1995 Bedford: Grant Thornton Accountants. Back

20 Lang, B, 2001. Report on farming in the Eastern Counties of England University of Cambridge, Rural Business Unit, Centre for Rural Economics Research. Back

21 Hadri L & Whittaker J, 1999. Efficiency, Environmental Contaminants and Farm Size: Testing for Links Using Stochastic Production Frontiers Journal of Applied Economics Vol II, No 2 pp 337-356. Back