CONCLUSIONS
241. Reform of the CAP, and moving towards a more
market-orientated system, will expose farmers much more to the
ever-changing demands of consumers. This suggests opportunities,
as well as threats, for United Kingdom agriculture in general
and individual farmers in particular. We believe that both can
flourish. However, as with any market there will be no future
for those who cannot provide consumers with what they want at
the price they want it. So the structure of a flourishing United
Kingdom agricultural industry could be very different from the
structure of today's industry.
242. The United Kingdom has an ideal climate for
grass growth and, we have been repeatedly told, it could become
a major producer of milk products and beef in a liberalised market.
It is also a competitive wheat producer, amongst other crops.
There will also be opportunities for fast-moving, market-orientated
farmers seeking to exploit niches in the marketplace at local,
regional, national and international level. It is a mistake
to argue that the United Kingdom can never compete in a free marketplace
with North American producers: Kansas cannot feed the world, and
there is room for efficient European producers in the world market
- although the success of British farmers will be affected by
the regulatory regime in which they operate, and their adoption
of new technologies in an increasingly competitive market success
requires innovation, flexibility and fleetness of foot, not the
inertias and rigidities of a production system distorted by subsidies.
243. In order to harness the opportunities that are
undoubtedly in the marketplace, British farmers and all the other
participants in the food chain will need to change. The conflict
and 'blame' culture that is so apparent in the food chain, particularly
in the milk supply chain at present,[465]
must be replaced by a culture of openness and trust. This is
likely to involve significant change in the personnel and training
of those involved in United Kingdom agriculture. A flaw in the
Policy Commission's report is its relative silence on this issue.
Land cost and family history does not facilitate change and market
forces often remove the youngest farmers who have borrowed most,
not the older generation with their own capital.
244. A lot has been said about the need for farmers
to reconnect with consumers. In some ways this is an oversimplification.
The changes in both agriculture and consumer behaviour mean that
farmers and consumers can easily become disconnected as more and
more of what we eat is in prepared or processed form, yet they
are linked through a greater number of channels. There is certainly
an argument for farmers gaining a better understanding of those
channels, but in many cases relationships with consumers will
continue to be conducted through intermediaries. We believe
it is essential that links and trust between farmers and those
intermediaries, particularly retailers, are restored and reinforced
. Messages to farmers are delivered mainly by the supermarket
chains which need to respond rapidly to the preferences of consumers.
We saw for ourselves, both in New Zealand and more importantly
in East Anglia, that even though it is not possible for farmers
to control the market for food it is possible for them to gain
a good understanding of what consumers want, to respond to that
and be rewarded for it, although this necessarily involves taking
risks.
245. There has been much talk of the impact that
the development of 'local foods' can have. Selling local products
either to retailers or directly at farmers' markets will benefit
farmers. But local food initiatives are not a universal panacea.
In order to have a sustainable future, most farmers will need
to produce in bulk, rather than addressing only small niches.
There may also be considerable merit in building up regional
or even national brands. Doing so may allow more value to be passed
to the farmer. Such projects are likely to be easier to pursue
if a more sensible attitude is taken to collaboration and co-operation
between farmers. Too often a regional product is defined as one
with a purely local circulation. The real meaning should be a
product on national (or international) sale which has a clear
regional identity which earns a premium - a high proportion of
home-produced foodstuffs in fact have a national sale on the basis
of a strong regional identity, including many cheeses, and some
meat. Money spent on branding and marketing regional identity
products, whether diverted from CAP subsidies or coming from Regional
Development Agencies can make a greater contribution to the development
of markets for farmers than subsidy or grant flowing into individual
farm accounts.
246. In the agricultural sector the existence of
the CAP and the European single market mean that decisions about
competition issues should take account of the wider European market
rather than just the domestic market. There is obviously a balance
to be struck between equipping 'national champions' with the muscle
to compete effectively abroad and maintaining competition in the
domestic market. This is undoubtedly an easier matter for countries
with very small home markets but we are not convinced that the
balance of priorities in the United Kingdom is yet the right one.
Moreover, if United Kingdom agriculture is to compete on the world
stage it is worth noting that it will do so against very large
companies - we cite the example of the New Zealand dairy company
Fonterra. The Government should clarify what it considers to
be the marketplace for British farmers. It must then address the
nervousness felt by farmers about the attitude of the competition
authorities towards co-operative enterprises, making clear that
it looks at farming co-operatives in the light of global rather
than domestic circumstances.
247. The speed with which the farming industry
has responded to the recommendation to take forward the English
Collaborative Board is commendable. It is crucial that the industry
has ownership of the solutions to its problems and believe that
the positive but very limited involvement of the Government in
this initiative is helpful. If, as the result of the activities
of the Board, co-operatives or new collaborative arrangements
are taken forward in response to market developments and then
remain focussed on the market in which they operate, we believe
that they will have more chance of success. It is very important
that the industry as a whole can shed the image described to us
of many farmers waving goodbye to their produce once it leaves
the farmyard.[466]
248. Another way of adding value is by creating brands
which tell consumers that a product is safer than others, produced
in a more environmentally friendly way, or according to higher
standards of animal welfare. Assurance schemes allow farmers to
do so. However, although different assurance standards may appeal
to different market niches, the confusion caused by the large
number of different quality assurance schemes is a concern. Some
rationalisation of the number of farm assurance schemes would
be welcome. Farmers themselves will need to reach decisions on
how many and which assurance schemes they want to participate
in, but to do so they will need adequate information about the
costs and benefits and consumer perceptions of such schemes. We
believe the provision of such information is something that either
the Food Chain Centre or the English Collaborative Board could
undertake and suggest that the whole food chain initiates such
a study.
465 Evidence taken on 27 February 2002, Ev 97, QQ.439-441. Back
466
Evidence taken on 8 May 2002, Ev 303, Q.1026. Back
|
