Memorandum submitted by UK Agricultural Supply Trade Association Ltd (UKASTA) (A29)
Thank you for your letter of 30 November, which reminded us of the need to put our views into the Select Committee Inquiry.
The attached statement is short, but is of necessity accompanied by two papers we submitted recently to the Policy Commission on Farming and Food. [1]
We have (just) managed to keep within the requested 10 sides of A4 overall.
The UKASTA Board met recently and discussed the Policy Commission and Select Committee Inquiries. Members were disturbed at the lack of original thinking in public statements about the move away from production subsidies. They were particularly anxious that UKASTA should seize any opportunity to develop its views before the Committee in an oral hearing.
While I myself will be on holiday during the middle part of January, we could arrange a team for a hearing even if that were the only possible timing. I hope that such an opportunity might be offered.
INTRODUCTION AND GENERAL APPROACH
1. UKASTA, the largest agricultural supply trade association, represents some 300 members whose combined turnover is just under £5 billion. It is an integral part of the farm-to-fork food chain. After the banks, member companies are, collectively, the most important source of working capital in farming, mostly by providing extended credit for goods supplied. This, together with the cost of biosecurity measures and loss of business in some sectors, put great pressure on members during the FMD outbreak and they have not been compensated in any way. In particular, a bid to the Rural Task Force to level the playing field by exempting all agricultural premise from business rates has brought no response from the government.
2. We support the need for a new policy direction in agriculture and land management, so that the farming industry can respond to new market challenges in an increasingly globalised food industry, and land managers of all sorts are enabled to take better account of public expectations of their role as guardians of the rural environment and heritage. However, we are concerned that many interest groups argue currently for the withdrawal of CAP support for farming without proposing broad alternative measures sufficient to keep commercial farmers—the most important land managers—in business. A holistic approach to policy-making is essential both at UK and EU level.
SUBMISSIONS TO THE POLICY COMMISSION ON FARMING AND FOOD
3. As a contribution to the Select Committee's inquiry, we want to refer to the ideas submitted by UKASTA to the Policy Commission on Farming and Food. The first UKASTA submission dated October 2001 is attached. [2]The key points are:
Agricultural policy
— fundamental reform is needed but must be sensitively handled;
— voluntary Environmentally Friendly Farming schemes could replace output related payments such as AAPS; and
— food safety assurance schemes should encourage local sourcing.
New opportunities
— future policy should encourage technical innovation, exploitation of new markets;
— integrated farm management (eg LEAF) is a middle way between organic and conventional production, both economically and environmentally sustainable; and
— biotechnology, if shown not to harm the environment, could offer big benefits.
Countryside
— farmers and non-farmers need to recognise each other's views; and
— expectations for countryside should be linked to diversity.
Food and farming sectors
— farming is different, because it is subject to more variables, including weather; and
— society should expect reasonable care for the environment and safe food.
— good land management and a healthy rural environment;
— good quality food but needs to adapt more to changing market.
Potential improvements
— short term priority: survival with help of existing instruments;
— longer term: new policy instruments for safe, commercially viable and environmentally sound domestic food production; and
— more government help for marketing and processing.
Equalisation and Stabilisation funds
— could help farmer confidence when CAP supports go and markets are freed; and
— stabilisation funds could be self-financing after launch aid from reformed CAP.
4. That submission was subsequently raised in a meeting involving four representatives of the agricultural supply industry with Sir Don Curry and other members of the Commission. During this short discussion UKASTA explained the concept of an Environmentally Friendly Farming Scheme offering all land managers financial support for a menu of countryside benefits including landscape, habitat and access improvements, and how stabilisation funds might operate. On the latter point, we were asked for a supplementary paper, a copy of which is also attached. [3]We later participated at their request in another meeting with Commissioners specific to biotechnology.
ADDITIONAL COMMENTS ON THE SELECT COMMITTEE INQUIRY
5. We have doubts about the ability of British farmers to compete in several key sectors in the face of imports from an expanded EU and the rest of the world, unless their businesses receives public support in some form. We hope therefore the Select Committee will recognise the strategic importance of commercial farming producing food and non-food products in the UK, and the contribution that makes to a healthy and diverse rural environment, to the establishment of better animal health, welfare and food safety standards, and to keeping the growth of "food miles" within reasonable bounds.
6. The progressive shift away from CAP production subsidies to forms of rural support more acceptable to the WTO, which we regard as inevitable, should not be allowed to lead to a steep decline in UK farming activity. Instead, farmers and other land managers need to be given a new vision of their role and encouragement to achieve a wide range of beneficial outputs desired by the general public, including nutritious food that can compete because the total return from farming activity does not depend solely on the price paid for food in an increasingly free market.
7. We would welcome the opportunity to develop our ideas further in any oral hearings to be held by the Select Committee, or to assist in any other way we can.
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