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

Examination of Witnesses (Questions 260-277)



  260. What evidence do you have for that statement?
  (Lord Whitty) I think the National Consumers Council and others would identify what they want is quality for quality and they want the cheapest and they are not necessarily all going to go to the lowest common denominator. Therefore the issues of quality and provenance and the conditions in which it is produced are important in some senses to consumers and in certain segments of consumers they are very important.

  261. How important is provenance actually to the average consumer?
  (Lord Whitty) I am not sure there is an average consumer. I think part of the problem is there are segments of consumers, if you take, for example, the growth of organic demand, there is clearly a segment of consumers which wants to see—

  262. Six per cent of consumers
  (Lord Whitty) No, more than that.

  263. That was the figure we were given in this Committee.
  (Lord Whitty) It is a different figure from the one I have seen, it is less than 20 per cent.

  264. Quite a bit less.
  (Lord Whitty) That is a segment of consumers which has led to a change in the supply chain and the way in which the retailers promote their goods, quite a significant one. There are other relatively small segments, but they all add up, which are concerned with provenance in the sense of where has it come from. Do they want British meat? A very large proportion of the consumers will say "yes", they will then put in a slight qualification of price but they would be prepared to pay some premium for British meat and want to see British meat on the shelves, for example. There is another sector which is concerned about the conditions in which the animals are kept and want to see some free range eggs, for example. All of these things mount up to some dimension of quality concerns beyond price which a lot of consumers have. It is true, also, that most consumers know about nutrition to varying degrees. One of the sad reflections, if you like, on our population is that the FSA survey shows 80 per cent of people know, broadly speaking, what they should be eating and only 20 per cent do.

  Chairman: Is that not wonderfully reassuring.

Mrs Shephard

  265. I think so. In a sense the Minister is making my point. The point I am trying to make—and we got very unsatisfactory answers from the retail consortium to be honest and from the individual retailers who were clearly making their pitch for their caring qualities—and what I am interested in is quantifying how much interest there is in provenance as opposed to price? How much interest is there really? What percentage are we talking about of people who are interested in rearing conditions and all those sorts of things as opposed to price? Certainly the retailers did not give me satisfactory answers and I wondered, given your answers are quite vague but optimistic, you seem to have some notion, is there any satisfactory quantification?
  (Lord Whitty) There is not an overall satisfactory quantification. There are a lot of surveys by the retailers themselves, by the manufacturers as well, mainly by the retailers though, by the FSA and by the National Consumers Council, all of which point in the direction of saying there is some significant element which goes beyond price in making a decision. I think part of the problem, in fact, is that one day we do and one day we do not. It is not as if there are 20 per cent of the population who are looking for high quality good provenance goods but when we are rushing at a lunchtime meal we take one decision, we go for the cheapest and most convenient, and when we are organising a dinner party on a Saturday night we take an entirely different view. I do not think there is a totally segmented area of the population. There is one area that we do have to pay particular attention to, which in a sense is segmented, which was referred to in the Curry Report and more particularly by the Consumers Council, which is the very low paid groups which (a) probably do have to go by and large for price and (b) probably live in areas where a range of choice is not accessible anyway. I do think there is a social dimension to this but in general people behave differently at different times. Therefore it is not easy, like "who are you going to vote for", you behave differently from one day to the next.

  266. I think that is a realistic answer. It would be nice if we had more of them, not only from Ministers but from all those who talk about the future direction of food production and interests and fortunes of food consumers in this country. Of course we want consumers to demand the best and to demand British produce but nobody has yet been able to give me any evidence which has satisfied me that they do. I have another question which is this. The British Retail Consortium calls for further definition of DEFRA's role as food retail sponsor to promote clear mutual understanding between food retail in Government and whatever. What is DEFRA's role as a food retail sponsor?
  (Lord Whitty) We are the first line Government Department for concerns about Government policy as a whole for the retailers to come to. In that sense, again, we are no different than the Treasury sponsoring the insurance industry or DTI sponsoring the engineering industry. We are their first port of call in Government. The nature of our sponsorship will vary a bit across the sectors but depending on the degree of regulation, the degree of international trade and so on. Essentially it is no different but it is one which has been—because of the specific ministry—closer, even though the food end of the chain generally deny it, than has often been the case between the broad bulk of manufacturing and retail with the DTI but that is one of mutual understanding rather than any particular quality indications.

  267. There appears to be a conflict between your role as a food retailer sponsor and your role as a sponsor of food producers, if you like. We were given one of the most striking statistics on this Committee that really impressed all of us and it was this: five years ago only four to five per cent of all chicken consumed in this country was imported and now it is 40 per cent. How do you resolve that conflict between your role as a food retailer sponsor, and that is clearly the desire of the retailers, and the chicken producers? Is there a conflict? What do you do about it? Does it matter? Especially given the assertions, and you have only mildly joined in on them, that people are very, very concerned about provenance.
  (Lord Whitty) I think that there is a conflict within the food chain and one that if part of Government policy is to ensure that we have production facilities for most areas of domestic agriculture retained then it is one that we think should be addressed by the food chain as a whole, which is why we are backing and trying to generalise the Code of Practice that the OFT introduced for the large supermarkets, to make that more general, and looking at toughening it up if necessary. That is why we are also looking at the inefficiencies within the food chain. At the end of the day there are some economic realities here. If, on the one hand, British farmers are not getting a price which allows them to survive and, on the other, the retailers are able to get chicken to the same standard coming in from abroad, which is a separate point, then we know what is going to happen. There are two answers to that. Our answer is we try and improve the quality of British production and encourage British producers to go into the value added markets. We will not be able to compete if we treat chicken as a commodity without adding various forms of value to it and the farmers will not either. There is a degree to which we have to focus. If I take the analogy of engineering again, by and large we have had to focus in those surviving areas of engineering on the high value added products. I think there is a lesson there in relation to farming and food production as well. At the near commodity market we will not in the long run compete in Britain, nor indeed in Europe as a whole, so we have to go a bit upmarket. That is not an immediate answer but that is the sense of direction we have to give to the primary producers. In getting there we also need—I think I would not mind using the term "equitable"—a more equitable relationship between the primary producers and the big processors and the big retailers and, indeed, the big caterers. We tend to target the supermarkets but actually 40 per cent of our food comes through catering and institutional food which tends to be of a higher import content and probably lower quality. It is there that there has been a big squeeze on our primary producers. This is partly what the Curry Commission was referring to and why we have set up the Food Chain Centre and why we have looked at better collaboration between farmers and other elements in the chain because you have to change the economic balance within the chain a bit as well as trying to get rid of the inefficiencies within the chain. There are some quite difficult points here which Government would like to give a steer to but at the end of the day the industry is going to have to sort it out. We will give a bit of help to farmers and a bit of help on the transparency of it and a bit of help in ensuring we are dealing with quality but at the end of the day this is an industry problem that Government can do relatively little to determine and influence.

  268. I am interested that you come to that conclusion at the end because if that is the case and that is your view and this is the situation with the poultry sector, which after all is not a subsidised sector, what is the point? As far as I can see almost everybody we have taken evidence from has been mouthing these platitudes about people being interested in provenance and the quality and all of this stuff but they are not, that is it, and you have not been able to answer the question in any way.
  (Lord Whitty) If we go back to that, that is not incompatible at all. If they are looking for a decent bit of chicken, they are looking for—

  269. They are not asking how has it been reared and has it travelled 5,000 miles.
  (Lord Whitty) Some of them are.

  270. They self-evidently are not.
  (Lord Whitty) Some of them are and some of them are occasionally.

  271. Where is the proof? If five years ago we imported four per cent and now we import 40 per cent surely that drives a coach and horses through what you are saying.
  (Lord Whitty) No, it does not because there is still a decision to be taken every day when you go into the supermarket: are you going to go for the top of the range chicken or are you going to go for the cheapest bit? If you are looking at the cheap range then you are going to take the cheapest of the cheap. If you are looking at the quality range you are probably going to take the cheapest of the quality. In some cases that will be British and in some cases it will not. People take different decisions, different people take different decisions and the same people take different decisions on different days.

  Mrs Shephard: The statistics speak for themselves.


  272. I am going to take a couple of decisions in a minute. Two last questions, Lord Whitty. What are your priorities on research?
  (Lord Whitty) DEFRA is the second biggest Government spender on research and there is a real question as to what the balance of that should be. I think some past decisions are questionable in that respect. One of our priorities, which is generally agreed, would be to do more horizon scanning research and try and look at where technology and industry and production are going to be in ten or 20 years' time and how we ought to get the industry in a regulative structure to that position. We do need to shift more into that long-term research. We also, regrettably but necessarily, will probably have to ensure a very adequate level of research to avoid disasters, or at least to make us better able to cope with disasters, and obviously the most acute of that is animal health. There are other areas of environmental problems where more research is needed in terms of being able to deal with the problems of potential disaster. Neither of those are obviously financed from the private sector and, therefore, there is a big Government role in that area. I think because of the nature of the agriculture sector and the horticulture sector and its largely fragmented role there is still a role, probably a reducing one over time, for trying to support that industry in keeping up with world technology because I think any individual firm is unlikely to be able to finance it and we do not yet have the collective mechanisms for the private sector financing it. I think that will be a diminishing role over time. If you are talking about scientific areas then I think there are some important centres of excellence issues we need to keep up: climate change, horticulture and botanical research, because we are responsible for centres of excellence in those areas, and there are other areas where the changing technology means that we are going to have to perhaps fund more research in those areas and less in the traditional production areas in future. Some of those are social. We have very little research based on the rural communities, the rural economy.

  273. The 250 million figure is slightly misleading because about half of that is monitoring, is it not?
  (Lord Whitty) Yes, it is monitoring. There are two sorts of monitoring. Some of it is monitoring directly in relation to regulatory powers and some of it is monitoring our disease status or our flood status or whatever in our management of disasters role, if you like, or avoidance of disasters preferably. Some of that scientific effort is directly for those purposes. It is still a big proper research budget and it is still one that we need to look at carefully as to how we change the balance and also probably how we deliver it.

  274. But it is important that your research expenditure should be directed towards the delivery of your broad policy aims, is it not?
  (Lord Whitty) Indeed.

  275. That it should be joined up, to use a well-known phrase.
  (Lord Whitty) It is also important that one of our policy aims is to maintain an excellence of science in these areas, some of which is funded directly by us, some of which goes through the universities and private sector.

  276. A final question. If you look at your annual report there is an absolute constellation of quangos and bodies, many of whom have been around for quite a long time. Do you not think that now and again there should be a systematic policy of culling and reorganising, deciding whether they are still serving any purpose whatsoever, that there should be a ministerial order that says every year at least ten per cent should be abolished? How often do you review to see whether they are still doing what they are supposed to do, whether they are constituted to do what they are supposed to do, whether they are engineered to do what they are supposed to do and whether what they do is satisfactory?
  (Lord Whitty) Well, at the moment, of course, most of them are agencies so we review them every five years and most of the NDPBs as well. Of course, that does tend to look at them as individual entities rather than, if you like, look at the constellations. I think there is something in the view that certainly we should look at all the scientific agencies and quality agencies together, which we are doing now, and likewise probably we should look at all the countryside and related areas together as to how we deliver our objectives. That does not necessarily mean that the objective is to reduce the number, it is to reduce the overlap and focus the effectiveness of them. There may be some conclusions that at present the present status is not necessarily the most appropriate. In some ways MAFF is slightly behind the rest of Government in the way that it deals with some of its agencies.

  Chairman: Mr Jack wants a final sting in the tail, as it were.

Mr Jack

  277. You have developed, if I may say, Minister, a delightfully conversational way of answering many of our questions which indicates what you would personally like to see. You said in response a second ago to the Chairman's question "Well, yes, I think we should look at these agencies". Are these "we shoulds" that you have given us in many of your quite candid answers to us going to be crystallised into something—now the Department is, if you like, coming out of the implications of foot and mouth and can see with a year or so under its belt more clearly where it is going—with the sharpness that we might be seeking to turn these aspirations into plans? You have produced, for example, recently two documents full of some wonderful phrases, high minded aspirations. What we are searching for are the specifics. Is there going to be volume three with the "this is what we are going to do" answers in?
  (Lord Whitty) I trust there will be several volumes in the areas of policy, not too lengthy volumes but which will say exactly that, what we are intending to deliver and what we have delivered. I think it is important that we do focus on delivering those. Very much the developing DEFRA programmes, management performance priorities within DEFRA and Minister's priority is to turn this into delivery. In so far as you related that to the previous question then in relation to assessing the science agencies, we are engaged already in that process.

  Chairman: Lord Whitty, gentlemen, thank you very much indeed, we have had a couple of hours, longer than that really. You have padded up with great effectiveness, and I come from the county of Boycott. You have been extremely helpful to us and we are most grateful to all three of you.

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