|
UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1250-ii House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE ENVIRONMENT, FOOD AND RURAL AFFAIRS COMMITTEE
"VISION FOR THE COMMON AGRICULTURAL POLICY"
The Royal Show, Stoneleigh, Coventry
Tuesday 4 July 2006 MR JAMIE BLACKETT, MR ANDREW BROWN, MRS GILLIAN HERBERT and MR GUY SMITH
MR ROBERT BARLOW, MRS JILLY GREED, MR ROGER JAMES and MR JOHN TURNER
MR CARL ATKIN, MR STEVE COWLEY, MR TONY KEENE, MR HUGO MARGLEET and MRS CHRIS THOMAS Evidence heard in Public Questions 106 - 177
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Environment, Food and Rural Affairs Committee on Tuesday 4 July 2006 Members present Mr Michael Jack, in the Chair Mr David Drew Lynne Jones David Lepper Mrs Madeline Moon Sir Peter Soulsby David Taylor Mr Roger Williams ________________ Witnesses: Mr Jamie Blackett, Farmer, Mr Andrew Brown, Farmer, Mr Stuart Davenport, Farmer, Mrs Gillian Herbert, Farmer and Mr Guy Smith, Farmer and Commentator, gave evidence. Q106 Chairman: Good morning, ladies and gentlemen. Can I welcome you to this formal evidence session being held by the House of Commons Environment, Food and Rural Affairs Select Committee as part of its inquiry into the document which the Government published last December, A Vision for the Common Agricultural Policy. By way of background, the Committee has already conducted a number of evidence sessions involving the major farming unions, landowners, and those organisations concerned with the environment of the countryside. In addition, it has made trips to Poland, Romania, France and Germany to talk about some of the politics and practicalities of the CAP and to get a European perspective on how other people look at the question of the Agenda for Change. The Committee thought there could be no finer place to come and hear directly from those involved in the land themselves, and so we decided that we would have a very special, and, in fact, unique to this Committee, evidence session here at the Royal Show. Through the assistance of the Farming Press, and I think particularly Farmers Weekly, a number of farmers have very kindly volunteered to come and give us their evidence in this particular session. This is a formal session of the Committee, and I would like to put on record my grateful thanks to Tracy, this young lady here, who is from Gurney's and is taking down every word which is said as a formal part of our evidence. The only thing I would say to witnesses is that once you have spoken it is on the record, you cannot undo that which you have done, but if afterwards when you wake up tomorrow morning you think, "Oh, gosh, I wish I had said that", whatever "that" may be, do please write to us and let us know whatever "that" might be. We have got three panels of witnesses, roughly speaking 40 minutes for each. The instruction basically is that we have invited those witnesses, some of whom have been kind enough to put forward in writing some of their views, to give a five minute presentation which leaves the Committee time to ask each one of them a few questions. If everybody is very crisp and there is any time leftover - we have, in fact, got four on the panel as opposed to five, one of witnesses, Mr Davenport, for personal reasons could not be with us - we will obviously deploy that in asking additional questions. In terms of those who are giving evidence, we will start with Mr Jamie Blackett, who runs a family farm, mixed arable, beef, and sheep on two sites in Yorkshire and Dumfriesshire. He will be followed by Andrew Brown, who farms 620 acres of mixed arable and pasture in Rutland, and he is a farmer with over 20 years' experience. The next is Mrs Gillian Herbert, who started farming in 2003 and supplies rare breed lamb and pork from a small farm near Bromyard in Herefordshire. I notice that she used to be a PA to the owner of the McLaren Formula 1 motor racing team. As someone who has a passion for that, perhaps they need your help still, Mrs Herbert, judging by what happened on Sunday. Finally, we have Mr Guy Smith, who is a farmer and commentator on farming issues based in Essex. Without further delay, Mr Blackett, would you like to give us the benefit of your five minutes. Mr Blackett: We were briefed to be quite brief with our introduction to allow time for you to ask questions, so very briefly about myself. I farm just over 1,000 acres, mainly in Scotland, which is fortunate because I think it is a country which still values its agriculture rather more than England does, and that is something which is seen in policies north of the border. I farm in arable and beef but I am also diversifying into tourism and shellfish. My perspective, briefly, is I felt the mid-term review started out well but ended up being a bit of a shambles in that the whole thing was supposed to get simpler and has actually got a lot more complicated. This is something which needs to be addressed next time round. I would like to see a world free of support payments, but unfortunately we still need subsidies in this country because in many cases we are selling our agricultural commodities for less than the price of production. This is something that politicians worldwide have engineered, partly through giving subsidies and partly by allowing, particularly in this country, cartels to govern food retailing. In working towards a subsidy-free world we need to look very carefully at making it a level playing field, and certainly from our perspective in this country it is not level. My major concern is that all the major parties seem to lean towards a policy of unilateral disarmament, partly through modulation and other means, doing away with subsidies in this country to our great disadvantage. Finally, in eventually dismantling the CAP, I would like to be given the freedom to innovate, to grow my business, and be free of bureaucracy which at the moment I am not. Q107 Chairman: Thank you very much for that succinct introduction. When you say you want to do away with subsidies, one of the things we have encountered is the move from pillar one to pillar two, and one of the first things we did here was to look at English Nature's display of environmental stewardship which represents a payment to farmers for delivering environmental goods, does that go into your box labelled "subsidy"? If you are asked to deliver environmental goods, will you do it for free? Mr Blackett: I certainly cannot afford to do it for free. We have gone into the Rural Stewardship Scheme which is north of the border, I have not done it in England. Levels 1,2 and 3, certainly I am all for environmental benefits, but they are all ways of giving us money in different ways. We should not kid ourselves, all it is is rearranging the deckchairs slightly. Q108 Mr Williams: Now that agricultural support is decoupled and not focused on production, there is an argument that we could repatriate the Agricultural Policy so we have a British Agricultural Policy rather than a Common Agricultural Policy, would you support that? Mr Blackett: I would support it if I had a bit more trust in you lot! I would like to see a bit more repatriation north of the border because it alarms me that it is Westminster that is negotiating with Europe for Scottish farmers when I think Scottish politicians have shown that they understand the rural economy slightly better. If repatriation of the Agricultural Policy is just another way of saying unilateral disarmament, we will pull out of Europe in the sense of the CAP, and our farmers will be worse off, then I would not support it. Q109 Mr Drew: Can I tease out this differential between England and Scotland. Are you thinking principally because Scotland has stayed with the historic system which, of course, is a system that will inevitably lead to problems elsewhere in Europe as other parts of Central and Eastern Europe come into it and we increase a dependency culture? Mr Blackett: Yes, it is principally because the Single Farm Payment in Scotland is a lot easier to implement, a lot less bureaucratic and, therefore, probably a lot cheaper to administer than in England. It is not just that, I think SERAD employs people who understand agriculture whereas Defra, as far as I can see, does not. There are numerous other small policies where they try to be helpful in the way that some of the cross-compliance rules are implemented. Q110 Mrs Moon: You said that you have a desire to be free to innovate, can you tell us a little bit about what that would mean if you had that freedom? In what way would you innovate? Mr Blackett: A lot of my time is spent filling in forms or having pointless discussions with civil servants. I am diversifying in lots of different ways, and I would have more freedom to do that if I was not so heavily regulated, if I did not lie awake at night worrying about whether my cattle had got out and were grazing in the wrong field because it happened to me in set-aside, or whether we ploughed too close to the hedge in one field and are going to be penalised or have not in another field. I do not think a manager of one of Stalin's collective farms would have had to put up with as many regulations as we do. Q111 Mrs Moon: I did not get a response about the innovation. Mr Blackett: The innovation is that we are trying to diversify and build new businesses on our farm. Q112 Chairman: Give us a flavour of what those would be? What kinds of businesses are we talking about? Mr Blackett: We have gone into the holiday letting market, and I am trying to start a shellfish farm, an agricultural project with mussels, oysters and cockles. I am fortunate in that obviously we live on the coast and I can do that; I appreciate that not everyone can. These are all different ways that we are going to feed the world in this century. It is extremely difficult to be an entrepreneur in this country when there are so many civil servants blocking your every move, and when the actual business of farming takes up so much time because of all the regulations. Q113 Lynne Jones: Can you give an example of civil servants blocking your innovation? Why do you think it is that the cohort of people who are employed by regulators in Scotland are that much more sympathetic than the cohort of people in England? Mr Blackett: To answer the first part of your question in terms of the government agencies, the Environment Agency in England, SEPA in Scottish, Scottish Natural Heritage and their English equivalent, they block every single planning application that we make. We will get there eventually, but there are delays which go on in dealing with all these different agencies. I think we are all in favour of doing away with pollution and all these things but all these agencies do more harm than good now. We farm in a very sensitive, clean way compared with many parts of the world, and to get it that one per cent better we are doing a lot of disproportionate harm to our industry. Q114 Lynne Jones: We have not got time to go into it, but can you, perhaps, write to the Committee with one or two examples of where you think unreasonable decisions have been made? Mr Blackett: Yes. Chairman: Very quickly, a question from David Taylor and then from Peter and Jamie can take them together. David Taylor: Jamie, in your written evidence you referred to the possibility of recreating, for instance, the Milk Marketing Board. We have a major deficit internationally with the processed dairy products, do we not, and you have talked about the freedom to innovate. Why have dairy farmers not innovated in the ways that you suggest they ought to, to remedy that imbalance? I know you are not a dairy farmer yourself. Q115 Sir Peter Soulsby: Again, in your written evidence you talked about the need for the balance to be tipped by the government towards biofuels, I wonder if you would like to say a little bit about what you think will be necessary to tip that balance? Mr Blackett: The first thing is in terms of innovating, not every farmer is able to exploit these niche markets because they have ceased to be niche markets, if that is what you mean by what dairy farmers should do. The other thing is that in this country we have allowed ourselves to have the structure of our food markets skewed in favour of the retailers. We have got a supermarket cartel that is dictating the price to the extent that dairy farmers, in particular, are selling their product at less than the cost of production. In order to overcome that I think you should look at other ways. The Milk Marketing Board will obviously be going backwards to an old system, but some sort of system like that where farmers are able to grab a fairer share of the value chain. It has not happened on a voluntary basis for all the talk we have had over the last few years, so it is going to have to be done through some sort of regulation. Looking at biofuels, we have missed a golden opportunity in this country to get in at the beginning of this industry. Gordon Brown steadfastly refused to lower the duty on biofuels to the point where they became viable where people would have invested in the necessary crushing facilities and plants. It is now starting to happen but very belatedly. Fuel is one of the biggest disadvantages in this country. Okay, we have red diesel, but every time we call a vet out or get a spare part for the combine, it comes via fuel on which the full duty has been paid. All this talk about climate change, the fuel duty escalating, and all the rest of it, is just hot air if this Government is not prepared to get biofuels off the mark with a reasonable chance by altering the fuel duty on them. Q116 Chairman: Thank you very much for the crispness of your answers and the focus of its content. We move on to Andrew Brown. Mr Brown: Thank you, Chairman. The issue I would like to raise is the future incentivisation of energy crops and biofuels by the CAP and the EU. Crops such miscanthus and short rotation coppice attract establishment grants which are generally taken by the end purchaser, and then there is a gap of up to four years before any realistic yield is gained, therefore, the farmer gets no income from it for four years. I have recently heard that establishment grants for these crops are being suspended as of 31 July. I have looked closely into growing miscanthus but came to the conclusion that it was not viable. Currently, the EU is offering €45 per hectare for crops such as oilseed rape and wheat for biofuels, of which the farmer receives €22.50 because the merchants and processors take the other €22.50. In the case of wheat, this equates to an extra £1.50 a tonne to the farmer. Whilst this is a welcome extra, it is not going to influence my decision on whether or not to grow combinable crops for biofuel if the price is dropped back to recent low levels. It does rather take the shine off it when huge multinationals such as Cargill take half the incentive in a spurious administration charge. Companies are investing in the biofuel market and energy crops, but without sufficient incentive to kick-start it we are going to be left dead in the water compared with Brazil, for instance, who started the process back in the 1970s, and EU countries, such as Germany and Austria, who seem to be ten years ahead of us. It may be the case that it is cheaper to import biofuels from Brazil, Malaysia or India rather than growing them in our temperate climate, but there is no point whatsoever in paying us to look after the countryside here whilst halfway around the world other people are destroying the rainforests just to supply us. Oil companies seem to have little concern for the environment and absolutely none for the rural economy. In the future not only do we need to see low food miles, we must also be looking at low fuel miles by getting locally sourced fuel grown in a sustainable way to high environmental standards, and by ensuring the oil companies get the five per cent biofuel element in their products from EU Member States and not by exploiting cheap imports from non-EU countries. We have got half a million hectares of set-aside in the UK and as farmers we want to farm it. Surely we must be able to use this to reduce our reliance on tinpot dictatorships for our fuel supplies. Through the CAP we have the opportunity to get things started now to safeguard our future. Q117 Chairman: Thank you very much indeed. In your evidence you made an interesting observation about the balance between that passionate statement about the factors which are affecting the supply of biofuels and the effect that would have on food supply, would you like to develop that juxtaposition point which you made? Mr Brown: If global warming gets going to the extent that some people are saying it is going to, in the future is there going to be a situation where we are going to have to choose between growing food and growing fuel? If the south part of Europe starts turning into a desert, obviously countries like ours, temperate climates are going to have to produce more food. You have got to have one or the other, obviously you cannot have both from the same piece of land. Q118 Mr Drew: Can I take you up on that point. When we looked at our inquiry into biofuels clearly one of the issues is the worry that there could be monoculture, what is to stop that from happening, and as a corollary of that, the issue of education amongst farmers, to the extent that they would be sensitive to how they could move towards non-food crops? Mr Brown: Obviously we have got to strike a balance between the two. You cannot incentivise one too much at the expense of the other. In my opinion it has got to be a very fine dividing line. What the answer is exactly, I do not know. Q119 Lynne Jones: I am concerned that you say it is not worth the effort to grow miscanthus and short rotation coppice, particularly because of the carbon saving from biomass as opposed to biofuel is much greater. I understand the four year problem, but what would you like to see done about it? There is a lot of emphasis on biofuels for transport, but a third of our energy nationally is going on heat, and we could get far more carbon saving if we went to biomass energy for heating or, to some extent, energy generation than for transport. Mr Brown: Yes, if we can get back to small energy production in local towns and villages, years ago they used to have a gas plant in every village, which presumably produced gas from coal and turned it into coke. We have got to get local production of miscanthus and short rotation coppice so that we do not take it more than 20 miles. If we take it more than 20 miles we have lost all the environmental benefit by burning the fuel on the road. Another problem with miscanthus certainly is that the purchasers want it at 16 per cent moisture, and basically it is like making hay in March, which, as you can imagine, is quite difficult. Apparently the average moisture content in this country is about 50 per cent and the best you can get is 25 per cent, so if you have then got to dry it before you can use it as fuel, you are wasting your time. Q120 David Lepper: Mr Brown, you talked about the lack of incentives for farmers such as yourself to get into biofuels, I understand that point. On the other hand, I think Mr Blackett was putting the emphasis on the need for a fuel duty regime to help create the market for them. Would you agree with him on that, are both things necessary? Mr Brown: They have got to run together because I think they are giving us 20 pence a litre off biofuels at the moment and that is the lowest duty rebate in Europe. If we can get that down even more and incentivise the farmer there is going to be a symbiotic relationship. It is chicken and egg, without one you are not going to get the other. Q121 Chairman: I am going to ask all of you if we have a minute or two at the end - and this is to let the subconscious thought processes work on it - what you think the purpose or the definition should be of the Common Agricultural Policy. You can all think about that and muse on that, and if we have a minute at the end I shall look forward to some answers. Mr Brown, thank you very much indeed, again, for the succinctness and focus of your evidence. Now we are going to move on to Gillian Herbert. Mrs Herbert: I come from a slightly different background to many of the farmers here. I have spent five years as a civil servant in the dim distant past, 15 years working for the McLaren motor racing team and have only been in farming full-time for three years. Reading the CAP Vision, I was struck by the complacency of the assumption that food would always be available for everybody. It is my job to produce food, it is your job to ensure that the population of this country is fed. As a farmer there are so many things you see, you realise how desperately fragile the world is and how extremely difficult it is sometimes to produce food. The Government wants farmers to manage risk by diversification, that means you work full-time as a farmer and then you find another job to bring you up to the minimum hourly wage. You have to get to page 27 of the report before it says, "We have to ask ourselves if there is anything unique about farming which justifies it having its own system of support payments". For most of this report you could substitute the words "washing machine manufacturer" for "farmer" and it would not read any different. Further on, on page 42, there is a brief mention of food security and the fact that developed nations are worried about it. There are so many things that could go wrong with the world supply of food: a terrorist could drop a nuclear bomb, there could be a meteor shower, I do not know, you think of your own man-made or natural disaster. Farming takes time, it cannot be turned on and off with the flick of a button. It takes a season to grow a crop, from conception to slaughter it takes two and a half months to grow a chicken, nine months to grow a pig or sheep, two years to grow a cow, you have got to be worried about food security. It makes no point at all, as far as I can see, to run down European food production when you have got global warming being accepted as a reality, China industrialising, and the population of the world set to exceed nine billion within a generation. It does not make sense. When I worked for Ron Dennis, the owner of the McLaren team, he used to say, "There is no such thing as luck, there is only meticulous planning and preparation so that when a certain set of circumstances arise you are in the right position to do something positive". Unless something a lot more positive happens about European farming this whole section of the world is desperately vulnerable. I am seeing it from a different perspective, I have no particular axe to grind. I have got my own tiny little niche with the rare breeds, but overall I see farmers around me struggling and the way the Single Farm Payment was so appallingly mismanaged. It says the Government wants farmers to manage risk by diversification, and I think the idea was that a lot of farmers would maybe use that Single Farm Payment to start that process, but by the time they got it most of the farmers around me were using it just to pay off the overdraft because they should have had the payments at the end of last year, and some of them are still waiting for them. If the whole process of further CAP reform is managed to that standard, heaven help us all. It is the kind of standard that one would expect if you lived in Guatemala or somewhere but not, please, in the UK. The CAP reform document seems to address everything. It seems to suggest that we should use it to make the world a greener place and encourage imports from environmentally sound places and, also, that we should prop up struggling Third World economies and help them to compete on the world market, all with the use of the CAP reform, and it is such a scattergun. It is not very detailed and I think, particularly in the international part of it, very naive. It does not give solutions, it just says what would be nice. Chairman: Thank you very much indeed. Q122 David Taylor: You referred to RPA, and I can assure you, Mrs Herbert, no group of people more than this Committee have been critical of what has happened there. You make interesting points in both what you have said there and in your written submission in terms of food security. Towards the end of your written submission you talk about the US being moribund in terms of growth and "China doesn't have enough land to grow the food her burgeoning population will require as she industrialises" and I do not dissent from that. But in essence will that not drive up world food prices and will that, therefore, not make some types of food production more profitable and bring back the core to agricultural activity, the sort you are describing? Mrs Herbert: Possibly, but there is only a finite amount of world that one can grow crops on, and that may be changing, as Andrew Brown said, because of global warming. The population of China is growing enormously, she is diverting three rivers to the north of the country to give more water but that is going to take 50 years. The population of China can grow an awful lot in 50 years. Q123 Mr Williams: The review of the Common Agricultural Policy is set against the negotiations on the World Trade round which basically is promoting free trade. Part of that would be to reduce our export subsidies which would lead to a decrease in the price of products produced in Britain. In terms of food security, do you think it is justifiable to keep our export subsidies in order to keep the price up and stimulate production in this country? Mrs Herbert: Whatever we do it has to be in line with the rest of the world. I do not think Europe is strong enough to take unilateral action, when you have got places like Japan and the USA strongly supporting their own farming industries, to go out on a limb and do it just us. Q124 Lynne Jones: The document bemoans the fact that much of the subsidies do not reach farmers, do you think that is true? Mr Brown was more or less saying that was the case. If so, do the Government's proposals solve that problem? If they do not, what would you like to see done about it? Mrs Herbert: That is a very sticky one. The document does give the example of France where the money would go to the landowners who have 80 per cent of the land and not to the people who farm. I think if you do mange to get it to the farmers in places like France, all that is going to happen is the landlords are going to put the rent up to take account of that. That is one of the problems where you decouple it from production because the money can go anywhere. Where I live lots of people are getting SFP but they are people who have bought up small holdings, using them as pony paddocks and they produce nothing. I think it has gone too much the other way in some cases. Q125 Lynne Jones: What would you like to see being done about it? Mrs Herbert: I do not really know. I do not know how you get the money to the right people. Q126 Lynne Jones: Being somebody who lives in a town with a centrally heated home and an air-conditioned car, I have not got the answers, but I thought you might have! Mrs Herbert: Not on how you arrange the economics, no. Q127 Mr Drew: Can I ask you a couple of questions about yourself. I am intrigued, why did you come into farming, which obviously is a personal question that you may choose to hedge your answers around? Also, do you think it is a good thing that people like yourself are coming into agriculture, given that there is this view that agriculture is a dying industry with lots of older people, the average age is 59 now? What would bring newer people in? Is that something we should be particularly trying to do? Mrs Herbert: I entered it because about 12 years ago my husband and I got very concerned. We were living in the South, near Staines, and we could see that what was happening was not sustainable, particularly in the south of the country. We planned, saved and trained - I went to Berkshire Agricultural College in my spare time - and then we made the move three years ago. It was so unusual that we did get several articles written about us in the local newspapers. We are sure we made the right decision, but we obviously made it at a time in our lives when we had a certain amount of financial security. I think to encourage young people in there is not a great deal at the moment. It is something that one sees constantly bemoaned in Farmers Weekly, that there is not much encouragement in the way of grants and things which there are in other countries. I believe France has a good start-up scheme for new entrants to agriculture. I think we are unusual. Many farmers around us are fifth generation farmers and you can see the results of it. One of the problems is that it is a very instant culture in this country. There is fast-food and instant celebrity, and the idea of farming and me planting a tree which is going to look wonderful 200 years after I am buried, or going out to a show like this one and investing thousands of pounds in good genetics to bring into my herd or flock which will not really begin to show fruit for five, ten, 15 years is not in line with current culture. Q128 Sir Peter Soulsby: In your written evidence, Mrs Herbert, you argue against the reward to farmers for using land for activities other than providing food. You said why should they then continue to work 84 hours a week, or however long it is. It is really following from Lynne Jones' question, how would you tie the reward to farmers from the CAP in such a way that it was doing something useful? Mrs Herbert: It depends on the Government as to how much they value the environment as opposed to producing food. I think there is probably a balance to be struck somewhere, but at the moment I find it quite ridiculous that when I get the digital map of my farm, which I have been waiting for for nearly two years for, I shall be able to apply for ELS and I will be paid for not cutting my hedges, when I think I should be paid for producing food for the population. I will manage my farm in a certain environmentally sensitive way as it has been for the last 550 years, thank heavens, but I do not think you can decouple those two things entirely. There has to be a balance struck, and I do not know what it is, it is for wiser heads than me, but I think there has to be a balance. Q129 Mrs Moon: You have expressed a lot of concern about food security and cited as an example that China, for example, will not be able to feed its own population and there will be problems with the EU feeding its population. One of the things we have certainly discovered as we have been on our travels is there are whole parts of the European Union, certainly in China, that are farming in a way which has not been seen, for example, in Britain for perhaps 200 years. As they move towards the current farming practice, as we have here, their food production will change dramatically, their capacity to feed themselves will change dramatically and they will then obviously have the capacity to compete. How do you see that competition affecting the way our farmers operate? How do you see farming in ten years' time in this country? Mrs Herbert: I think the idea that, yes, they will become more efficient is an interesting one, but I think also the number of people in farming, as has happened all over the world as countries industrialise, will move to cities and the whole country will become more industrial. Once that happens, there is always a greater demand for food, so the countries which become more efficient, I would think, looking historically, will only be supplying their own increased demand rather than the food going onto the world stage, as it were. Mrs Moon: Part of the problem at the moment is - for example, we saw in Romania - that farmers are literally strip farming, so they cannot produce the mass, there is not the land base in farms to produce a critical mass. In fact, I think in Romania it was 60 per cent of the population were still on the land? Chairman: Four million farmers and they do not need two million of them. Q130 Mrs Moon: There has to be that move, that move is going to be vital for those countries to grow their economies and become less reliant on subsidy and free up subsidy to allow the countries to grow and develop. Mrs Herbert: Again, that is why I found it rather naive that the policy says there should be a free, fair and level playing field throughout the EU. That is a long way down the line because those countries in Eastern Europe, the new Member States, have got a long way to go to catch up with the efficiency of the Western European farmers. Q131 Chairman: I think we have got to move on. As much as I would love to ask you whether Formula 1 should be using biofuels, I think we must give Mr Smith the opportunity to give us his views. Mr Smith: Thank you, Chairman. No doubt you were all pouring over my written evidence as you went to bed with your Horlicks last night, but I will briefly remind you of the nub of my argument. It is that British agriculture has certain structural costs that other agricultures do not have in terms of high labour costs, high land costs and in terms of regulation on the environment, welfare, and food safety. Because of these relatively high costs I think it may struggle to compete on a free global agricultural market. I would suggest that there is one big ray of hope for our farmers in Britain and that is our proximity to 60 million affluent consumers who call themselves British citizens. If we can secure some of that market for British farmers then we have a future. My problem is I think traditionally there is not an effective promotion of agriculture in this country and agriculture must promote itself in three keys ways. First of all, in the way it produces a world-class, affordable, low food mile, safe-assured, traceable product in that it has a world-beating animal welfare record and it looks after the countryside in a good way. If we can promote the role of farmers to the British population in that way there will be a return to British agriculture which may secure its future. This is the controversial bit: I think Government has a political obligation to help with this, and I would suggest that there is a lack of political will in this country to do so. No doubt you are all in denial about this and I am trying to shake you out of your denial. Chairman: Consider myself well shaken! Thank you very much indeed. Q132 David Lepper: Yes, Government has got its responsibility, you have rightly said that, to help farmers reach the --- how many million did you suggest? Mr Smith: Sixty million or thereabouts. Q133 David Lepper: --- Sixty million potential customers out there. But you have used the phrase in your written evidence: "British farmers should seek to promote their products", and in your comments just now - I have jotted down your phrase - "Agriculture must promote itself". We will take as given the fact that the Government ought to be doing more, but can you say a bit more about the farmers' input into doing more? Mr Smith: Traditionally I do not think farmers are particularly good communicators or promoters of their industry for a number of reasons, but that is changing with a new generation which is much more switched on to communication. I think Government has a responsibility to help nurture that and get farmers to promote themselves in a positive and strategically effective manner in terms of markets. Q134 David Taylor: You are based in Essex, Mr Smith? Mr Smith: That is correct. Q135 David Taylor: I do not know whether there is a Tesco in Chelmsford, there probably is, if I was to stand outside there on Saturday morning with a petition urging people to campaign against low poultry standards or pig production, whatever, the same people who would be keen to sign that petition would then go in and buy chickens produced perhaps in Thailand or Brazil to standards that are relatively low, which bears out your sentence in your written statement, "the killer irony for farmers is that British consumers seem happy to buy on price, preferring cheaper imports produced to lower standards". How do you think we can bridge that gulf between what they say their values are and how they deliver them in practice? Mr Smith: For starters, as our elective representatives, you will want to think this through before you pass the regulation. I think you assume that there is a political will amongst the British electorate to have high welfare standards in this country, I hope you are right, but you must realise that if that is correct then it would manifest in the way they make purchasing decisions. If it is not manifest in the way they make purchasing decisions, then maybe you are over-regulating us, and the pig industry would be a perfect example of that. Q136 David Taylor: Do you feel there is more that can be done in terms of labelling to bring out the high environmental and welfare standards that are often associated with British food which are less often the case with the imported equivalents? Mr Smith: I think as regulators you could do more to ensure correct, accurate and openly honest labelling of British food and its source. You could also do things like relax the over-restrictive interpretation of state aid rules whereby even my money as a levy payer is not allowed to be used to promote my product to my home consumers. Q137 David Taylor: Do you feel the EU inhibits this in any way? Mr Smith: You are the first port of call as my elected representatives, but if you will not help then I will go to the EU. David Taylor: I fully agree with what you are saying, Mr Smith, I am just asking the questions, I can assure you. Q138 Mr Williams: The message that you give that British farmers produce to high standards in terms of the environment, animal welfare and various other criteria is one that is mirrored by farming organisations in Germany and France. But it seems to me that if farmers in the EU are going to sell at a price which represents the cost of production and get public support in terms of subsidy, then they have got to re-engage with the British people and the people across the EU. That engagement seems to have been lost recently. Have you got any idea how that engagement can be encouraged and re-established? Mr Smith: Often it comes down to money. If you want to promote yourself and your goods then you need a budget to do so. Tesco spend £60 million a year promoting themselves, British agriculture spends about two and a half pence a year promoting itself. I think you have got to be serious about budgets and you have got to be strategically sophisticated with the way you use communication. I also think - and here is another bit of controversy for you - in this country there is almost a culture to demonise agriculture as being responsible for a myriad of problems, and that is often well reflected in Westminster, and I would like to see a change of that culture as well. Q139 Mr Drew: What you have been saying suggests that you would agree with me that the problem is the price of food is too cheap and the only way you are going to be able to overcome the problems is if the price of food goes up. The real dilemma is if you were to deregulate, if you were to lessen some of the controls, the danger is that you will further drop the price. How do you square this circle? Mr Smith: The problem is people want it both ways in this country, they want cheap food and they want it produced to high standards. It has got to be made clear to the consumers that you cannot have it both ways. I am told that there is a burgeoning market for ethical consumption in this country, but to make an ethical decision you have to be aware of the ethics around the marketplace. I would suggest that people should be made aware of the fact that British farmers have very high animal welfare standards and, therefore, there is a premium to their product in terms of their ethical consumption. I am positive that they are not particularly aware of the fact that a British pig is treated a lot more kindly than one from wherever. Q140 Lynne Jones: A lot of the chickens and eggs that are sold in the supermarkets are British production and are not produced to very high welfare or environmental standards. What does the Government have to do to help you market the products that are produced to those high standards? What about the supermarkets themselves, should they not be enlisted here? Although Government, because of world trade rules, cannot impose regulations that are not accepted, the supermarkets or retailers can require certain standards but, of course, they have to pay for them and they have to require their customers to pay for them. Mr Smith: It is interesting that you are of the opinion that they are not produced to high animal welfare standards. All standards are relative, and I would suggest that those standards are high in relative ways. Q141 Lynne Jones: Yes, but not in absolute terms, battery production of poultry and eggs. Mr Smith: You cannot give every chicken a three-piece suite and room service to make sure it has got high welfare standards. Q142 Lynne Jones: Who said they wanted that, that is just ironic. Mr Smith: Because you were telling me that British welfare standards were in some way wanting, that was what you suggested. Chairman: Before we get into a debate, we are up against our time deadline. Q143 Lynne Jones: You can go into a supermarket and pay for a hierarchy of different types of products. Mr Smith: I would suggest that you must accept that welfare standards are relative, and relatively British welfare standards are higher than imported products. Therefore, I would suggest that if you promote British products as having a high welfare standard rather than, as you suggested now, wanting in some way, you would do more to secure our markets. Lynne Jones: Supermarkets do not sell Thai chicken. Chairman: Lynne, I think you have made the point. Q144 Mrs Moon: Mr Smith, I am more than happy to have a written statement from you of examples where you see agriculture being demonised in Westminster. I would like you to send us some examples of that. Mr Smith: I can give you War and Peace on that. Can I leave you some written evidence which is a booklet called, Farm, Food and Countryside. I will leave it with your secretariat. It gives you dozens of good reasons why British consumers should buy vouched for farm produce. Chairman: I love your Blue Peter approach, "These are the answers I prepared earlier". Thank you very much indeed. Can I thank our first four witnesses for their contributions. Witnesses: Reverend Robert Barlow, Agricultural Chaplin, Mrs Jilly Greed, Beef Farmer, Mr Roger James, Hill Farmer and Mr John Turner, Organic Farmer, gave evidence. Q145 Chairman: We welcome four new witnesses. Can I introduce the Reverend Robert Barlow, the agricultural chaplain, I was going to say from Worcestershire, but that perhaps extends your theatre of responsibility too wide, whereabouts in Worcestershire? Reverend Barlow: My responsibility is for the whole of the Worcester diocese, which is Worcestershire but not Tenbury Wells, which, for some reason, gets lumped in with the Hereford diocese, but also includes up into Dudley, the Black Country. One of the joys I have had is being able to go into urban areas and talk about some of the issues in rural areas and in agriculture. Q146 Chairman: Thank you for that geographical clarification. We have Mrs Jilly Greed, who is a beef farmer with a closed herd of 200 suckler cows on a 500 acre family farm in the delightful county of Devon; Mr Roger James, a hill farmer in mid-Wales, who is responsible for 1,000 breeding ewes, producing 1,500 lambs and 50 suckler cows; and Mr John Turner, who farms a mixed 100 acre organic farm of beef, sheep, cereals, medicinal herbs - just have a look at the Committee to see if we need any help - near Stamford in Lincolnshire. We had hoped to be joined by Mr Richard Stubley but I understand that for personal reasons he has not been able to join us. You are extremely welcome. If we can start this time with Reverend Barlow. Reverend Barlow: My work brings me into close contact with agriculture. I would not dare to claim to speak on behalf of farmers nor to represent them, but I believe I have a pretty accurate picture of how the industry feels. Among the farmers I meet there is a significant number who would welcome an end to the whole subsidy system if, in return, they had that level playing field which you write about in your report. If there was fairness in agriculture I think many would be happy to see the end of subsidies because UK agriculture has got much going for it. It has got a good climate, rich soils, skilled farmers and a market of 60 million, as we heard, on its doorstep. If everything were fair and equitable then our farming could compete with the best in the world. For that fairness there needs to be consistency, both across the EU and beyond the EU. An example of inconsistency would be the different circumstances that beef and dairy producers in Worcestershire find themselves in in comparison with those in Ireland. In Worcestershire, TB is endemic in wildlife and that adds enormous costs to the dairy and beef industry in trying to have bio-security measures to make sure that their animals do not catch TB, or the additional costs which occur if and when their herds go down with TB. In Ireland it is different because they have had a resolute cull of TB in wildlife and they do not have all those additional costs. Another example of inconsistency would be with egg production, we have heard a little bit about that. The EU Directive 99/74/EC has meant that in this country we have had to tool up with new cages of a higher standard; that has not been implemented in the same way in the rest of Europe. I understand that not only has the rest of Europe avoided those costs, but the Spanish egg industry has been able to expand, buying up cheap second-hand equipment from the UK which does not do any good. Exporting production does not solve welfare issues. Likewise, stalls and tethers with pig meat, we have heard about that. As with animal welfare there are questions about environmental standards. The Water Framework Directive is to be welcomed if it cleans up the rivers in this country and the Thames, the Severn and the Avon are all clean, but not if that is only done by putting additional costs onto UK farmers so that we end up polluting the Seine, the Rhine and the Danube or the Mississippi, the Amazon and the Plate. I heard somebody speaking just over a year ago and he was telling me that he was standing at the mouth of the River Plate, a great wide expanse of water going out, and it was dark brown with the silt soil that had been washed off. It is the kind of standard which would not be acceptable in this country. As we are putting so much money from Europe into agri-environment schemes it would seem bizarre if we end up wasting it by transferring production to places where animal welfare or environmental standards are not so high. There needs to be a consistency across Europe and beyond for fairness and for farming to compete. The second area where there needs to be fairness in farming is in respect of the market. We say that we all believe in the free market but I sometimes wonder whether the market is free as Adam Smith meant when he wrote In the Wealth of Nations. He talks there about multiple producers and multiple buyers and we simply have not got that both in this country and the world, we have countless must-sell-producers and a handful of might-buy-buyers. The Competition Commission's investigation into the role of supermarkets has been affirmed in their positive role in terms of prices for consumers, but as one Oxfordshire farmer said, "There are 200,000 farmers dealing with basically three supermarkets, two grain merchants, four fertiliser companies, not a chance. They have got power, real power, that is not a level playing field". Worldwide, six corporations handle about 85 per cent of the trade in world grain, eight corporations account for 55 to 60 per cent of world coffee sales, seven account for 90 per cent of the tea consumed in Western countries, three account for 83 per cent of the world trade in coco and three account for 80 per cent of the world trade in bananas. The long-term effect of world food trade being dominated by a handful of large companies both in the UK and overseas has to be questioned in terms of its effects on producers, the environment and animal welfare. We ought to remind ourselves that there is a demand for food. There are 850 million people in the world who have an inadequate diet, there are 25,000 people who will die today, and 25, 000 who will die tomorrow and the day after and the day after that because they do not have enough to eat. A market which is truly free and gives freedom to our producers and producers worldwide to meet that demand would be welcome. A market that gives freedom to a handful of companies to exploit differences in environmental standards, living standards and animal welfare is not the free market of Adam Smith. With consistency across Europe, across the world, and a market free from the stranglehold of a few companies, there can be an excellent unsubsidised future for UK agriculture. Finally a plea, getting from where we are now to where you want to be in ten or 15 years' time will involve tremendous change for those in the industry. I would urge that during that transition, which I hope we will make, you will make support available in terms of realistic funding to the various agencies that work to provide help to stressed and distressed farmers. Chairman: Thank you very much indeed. Q147 David Taylor: In your written statement, and I do agree with a lot of it - as a Christian in a rural village I wish you were the chaplain in our area, and perhaps we will try and send a transfer fee for you - you talk about 800 million people who do not have an adequate diet, which is an affront to God sent to justice or, indeed, any God of any religion, you would want to make it clear, but early on in that submission you also talk about foot and mouth being eradicated at an horrendous cost to the UK industry and government. Does not God, any God, also want to avoid cruelty to all living beings? Was that an appropriate approach to get rid of foot and mouth? Were we not in a position when the NFU at national level were urging on the government, amongst others, to go for their culling policy where many individual farmers in areas like ours were perplexed by this policy? Is there not a gap between the way in which farming is represented at the national level and some of the many people who are doing their best to provide at the local level? Do you not see that gap? Reverend Barlow: I said at the beginning that I would not dare to speak on behalf of farmers. Q148 David Taylor: The rural community then? Reverend Barlow: I think you can put three farmers is one room and end up with four different opinions. There will always be people who have different views about how foot and mouth was handled and whether it was done appropriately or inappropriately. I always remain aware of the tremendous personal cost to all sorts of people involved, both farmers and those involved with MAFF. Q149 David Taylor: And the millions of animals? Reverend Barlow: I have a concern for animals as well. I do not think we need to be over-sentimental about animals, and I get concerned with some of the more extreme things that seem to come from the animal welfare lobby. Whether we handled foot and mouth, or whether you handled foot and mouth, well or not we can debate at length, the point I made in my written submission is that it is handled differently in this country as it is in Brazil. Those costs are borne not just by government - obviously it put tremendous costs on government - but there were tremendous costs on farmers, many of whom were caught up in the whole thing but were not involved with the compensation of it. David Taylor: In particular, Chairman, I welcome - and this is a statement, not a question - the Reverend Barlow's perspective on this. There are moral issues involved here, and there is a spiritual dimension which is in this submission which I think is very worthwhile and useful. Chairman: Perhaps that is why it is called "A Vision for CAP Reform". Q150 Mr Williams: Your analysis of world trade in commodities rightly highlights the fact that we have got many I think you called them must-sell-producers and a few might-buy larger companies, but trade is not free also because we have got export subsidies and import tariffs as well. Would you like to comment on whether we should be getting rid of export subsidies in the European Union, in the CAP, and whether we should be reducing import tariffs which we are told have a terribly detrimental effect on Third World countries? Reverend Barlow: In an ideal world I would like to see an end to all subsidies, it is a question of how we cope in an un-ideal world. My personal view would be that for the average farmer in this country the distortion of the market caused by the handful of transnational corporations that dictate price is much, much more of an effect on the freedom of the market than import and export subsidies; I think they are peripheral and secondary. The major distortion of a market which is truly free is that there is dictation of price by those who hold power and, incidentally, who have accountability to nobody. In theory the large corporations are accountable to shareholders but that is pension funds, and there is not the ethical and spiritual dimension brought in to question how those things happen. You are accountable to your electorate but here you are dealing with corporations and many of them have an economic activity larger than small countries and seem to be accountable to nobody. Q151 Mr Williams: As I understand it, you are advocating fair trade as opposed to free trade because the circumstances do not allow free trade to take place. Would you advocate fair trade for British and European farmers as well as for Third World farmers? Reverend Barlow: I would advocate fair trade for everybody, you cannot make a distinction between the UK and overseas. With the advantages that we have of our good climate, our good soils, our skilled labour force and a market on the doorstep, if it were fair I think our agriculture would flourish. I see a lot of very good farmers who if they were not fighting against prices which are set for them that they cannot produce to would be very happy. Q152 Chairman: Thank you very much indeed. We now move on to Jilly Greed. Mrs Greed: Thank you. First of all, I would like to say well done to the Committee for coming here to the Royal Show and hearing our submissions and evidence. I would perhaps like to take it one stage further and offer a warm invitation to come down on our farm, if you would like to, and see some of the good things we are doing and also some of the difficulties that we have effectively on the coalface. I am very passionate about my farm and farming, and I am very concerned about the way in which farming is being marginalised. What I want to talk about is the beef suckler industry and also the impact of international global trading, and I experienced a trip to South America earlier this year which opened my eyes. Briefly about the farm, I am a fourth generation farmer in Devon, farming with my husband Edwin on a 500 acre family farm. It is in the river valleys of the Exe and Culm which are both flood plains. Every single field on our farm is in a NVZ, a Nitrate Vulnerable Zone, and we are also in a SSSI, a site of special scientific interest, so we have strict environmental regulations. We have got 200 herd of beef suckler cattle, breed specific, South Devons, a traditional breed, and Blond d'Aquitaines. We also produce arable crops, split 50:50 between feed and also energy crop in the form of oilseed rape. We are in the Countryside Stewardship and also in the Environmental Level Stewardship as well. I have to say, we have only really known it tough. We came into farming in 1997 after the BSE crisis when my father became ill, and then we eventually took it over in 2000. Then we experienced the foot and mouth outbreak and, as you know, Devon was particularly hard hit. We were about six miles from a very bad outbreak, but it concentrated the mind. We moved on again and we embraced CAP reform very positively. Then we had this year with the RPA payment, or non-payment, eventually it came through at the end of last month, and that has concentrated the mind very much. We do not have a God-given right to farm, but we are working hard to respond to the marketplace by producing high quality beef, high yielding energy crops and looking after the countryside. Through the Stewardship Schemes we have seen species thrive on our farms: skylarks; otters on the river; kingfishers; hedge sparrow; and we are also in a scheme to enhance the species of snow bunting and grey leg partridge. We have cut production costs to the bone, including labour. This is a good illustration of how this family farm ran: 25 years ago there were six men employed by my father; seven years ago, again by my father, four, and now there is only one man and my husband, and we are perpetually running. In our drive to be linked to the marketplace we are also in a supply chain on the beef side with Bay Farming South West. This is the only integrated supply chain which gives a forward price and a guaranteed margin. This has been very good for us in terms of technical and cost-reduction support. We have also done a lot on the farm as well. We believe in using the farm to connect with the consumer. We have had about 100 chefs, hoteliers and restaurateurs out to see how we produce beef, we have had school children, supermarkets, fresh meat counter staff, and also producers as well. We have also been on about 35 million labels in Tesco on the standard beef range. We have been there quite a long time, but I think we have come off now, it was with a little bit of a description about the farm. It is interesting that we have had letters from the public writing to us about what we are doing and about the quality of the beef. The misfortune is perhaps to think that Jilly and Edwin in Devon are producing all the beef in the country, so perhaps it is slightly misleading. As a result of that, I was able to go to Brazil and Argentina at the end of January the beginning of February. As I said earlier, it opened my eyes to the scale of production, the low cost of production and the natural resources. Our cost of production is £2.04 per kilo, in Brazil it is 70 pence and in Argentina it is 90 pence. We simply cannot compete on that same level playing field. To give an illustration of the scale of one farm in Brazil, one of eight that was owned by this organisation, they had 35,000 cows producing 35,000 head of cattle in one year. They could take water from the river whenever they needed it, they did not have to pay for it. We are licensed on our river. This is the central issue. With support gradually being removed, will the marketplace meet the difference? Will the supermarkets be prepared to pay more? If I was an idealist I would say, yes, but I am a total realist. Although the consumer may be willing to pay some more, but at the moment the supermarkets are reluctant to charge more for quality beef from this country, so I do not think we are going to bridge the gap. My small family farm will not stand a chance in an international global marketplace, and the suckler herds, which are already under intense pressure through CAP reform, and it is probably the hardest hit sector, will be under continual pressure. I have to say, sometimes it is easier to give up than to carry on. What is my message? I do not think the UK suckler beef industry can survive without some form of support in the global marketplace, but I think through the suckler beef herd system there is very good environmental practice that can bring a perceivable public benefit by the production of high quality local and regional food, and also in the management of the landscape which has a huge tourism benefit. We must not underestimate our own domestic tourism business and our overseas tourism business, particularly in the South West. Thank you. Q153 Chairman: Thank you very much. I note from your written evidence that you said this eye-opening tour to Argentina and Brazil was, in fact, with Tesco's to see their supply chain, I hope I have quoted that correctly. Mrs Greed: Yes, it was. Q154 Chairman: It opens up one of the paradoxes which is the first question, what did Tesco's tell you as to why they needed a supply chain from South America in the first place? During the course of your discussions with the Tesco people, did they acknowledge that they had any responsibility or special relationship with farming in Devon that made them say, "In spite of the fact that we have seen production at 70 pence a kilo we are still willing to support production at £2.04 a kilo"? When you talked about "we need support", should that support come through Tesco's till or should it come from the taxpayer's pocket? Mrs Greed: To answer the first point about Tesco, the relationship and what we saw there, we saw the showcase farms that are supplying Tesco in the UK and in Europe. In Argentina they are coming into what the British product would be competing with with prime beef, which is the standard range, and then in Brazil it is much more in the valuing range. They are creating their products within their shelf system. Where they see the UK British suckler industry is in the finest brands, so in the premium sector. Like other supermarkets, they are looking to develop a price position which enables them to have a future supply trade so that they have products on their shelves 24 hours of the day, and that is the key thing. They must have it there 24 hours of the day, day in day out. The second point, your suggestion that consumers will be willing to pay and will support the product, I think there is a huge revolution taking place, and perhaps it is not quite so visible up here but it is certainly down in the South West. The "buy local", "buy regional", the identification with local foods, how it is produced, the environment, is driving a renaissance and a demand which the supermarkets are now beginning to grasp. They are beginning to fall over themselves to do buy local and buy regional within their stores. There still is a ceiling, and it is a psychological ceiling, because they had a captive marketplace in the beef industry for 11 years. The price of beef paid at farm gate level is still 15 per cent below what it was 11 years ago. I think we are the second lowest still in Europe, which is great for our export trade and it is opening up opportunities, particularly now with the mature beef being available in those sectors. Q155 Chairman: Can I be clear, in terms of the price you are getting for your beef from the supermarket. You gave the impression that because of the change in the CAP and the change of support through the alteration of the suckler cow arrangements that you have taken a big beating, effectively. Mrs Greed: Not at the moment, no. Q156 Chairman: At the moment is the price enabling you to make a return on the capital that you have invested in your beef production unit? Mrs Greed: The Single Farm Payment is the only profit area for the farm from our arable and our beef. Our cost of production is £2.04 and our average price that we are getting is £2.08/ £2.10. Q157 Mrs Moon: I would like to thank the Chairman for stealing my initial question in relation to Tesco's! That is the benefit of being the Chairman. My sister and brother-in-law farm in Devon so I am aware of the problems that you face down in Devon and I am aware of the opportunities down there as well. I would also particularly welcome your role in the high level Stewardship Scheme, I think you should be commended from the description that you gave of the work that you are doing there, well done. I see my farmers on a regular basis. We have a cycle of visits where we have an agreement, we spend 50 per cent of the day on the farm looking at practical issues on the farm and 50 per cent of the time talking about the issues. I met with them last Friday, and one of the things they were raising is something which has come out in a few of the presentations and it is around food miles. They tell me that they are appalled at the situation they have where they have hauliers bringing stock down for slaughter in Wales and then filling up with Welsh cattle and taking them into the Midlands for slaughter. How do we get out of this nonsensical cycle of cattle moving around the country? Everybody has said they want less regulation, but would it be reasonable and practical to bring in regulations which brought in those shorter food miles which said cattle had to be slaughtered within a defined geographical limit? Is there potential for that? Otherwise, how do we get those shorter food miles which you have said are important and others have said are important? Mrs Greed: I would be very concerned about putting in any further regulation on slaughtering in terms of travelling. It is wrong, but what is happening at the moment is farmers chase the extra pence per kilo. The slaughtering situation in the UK within the processing is that you are seeing it being concentrated in certain plants. In the South West, we have two large plants and they are the largest suppliers to Tesco. You will see that there has been a rationalisation between Sainsbury's where Lloyd Mauder for example, is no longer slaughtering lambs. That created quite a big lamb problem here in the South West for us as well. There needs to be much bigger thinking, and it needs to be much bigger joined-up government thinking, where we get added-value added into our commodity products through planning and investment from the business sector, which is the food industry. After all, although my beef may taste really lovely and it is giving lots of environmental benefit, when it is on the shelf in Tesco nobody really knows where it comes from, and certainly I do not know where it has gone. When you can turn that beef into ready-meals and other quality products, indeed milk and fish and vegetables and such like, you need much more infrastructure in the industry. I have been involved in something called a "Southwest Food Park" - and I do not want to talk about that now, but perhaps there might be an opportunity at another time - where it needed a lot of government joined-up thinking and a lot of governance from the Regional Development Agency in order to make that happen, and now it is not going to happen. It was a £27 million private sector investment in the South West at a strategic location and it could have made a huge difference in terms of having a central processing distribution. Distribution is the key. The other key is one of brands. It is about what one witness here was talking about earlier in terms of we need to have a stronger image for farming and we also need to be much more promotional and branded about the food we are producing from this country, from our regions, and also at a local level as well. There is a lot which is not right on that front at the moment. Butchers are seeing a resurgence as well because consumers are now understanding much more about the meat they are buying, they trust and want to know where it comes from and that there is a fair return as well. Q158 Sir Peter Soulsby: I want to follow up that last point because we heard earlier on from Mr Smith and, indeed, I think it is implicit in what others have said about the difficulty and the importance of promoting home loyalty and local and regional preferences broadly. I think we are aware that there is a cultural problem in the UK as against the attitudes in France or Germany and, indeed, apparently also in Devon, because clearly there are successes at a local level there. I wonder if you can say a little bit more about what you think can be done to help extend what you have described as a revolution in Devon on a more UK-wide change in attitude, and what other agencies might do to assist in that process? Mrs Greed: There are various sectors of it. I think the supermarkets' labelling, certainly on the fresh beef side, is very tight, but if you take the food service sector, particularly the hospitality sector, the tourism area, you will find that 70 per cent of the beef which is served in there is from overseas and it is travelling miles. There is very little in terms of menu transparency. There is no audited system which tells the consumers this, unless the restaurateur or the hotelier or the publican want to promote. When they do promote they invariably find that they are on a completely winning formula. Perhaps that is one area where we are in the promotion of it. Coming back to the point about state aids, I have been involved with EBLEX and they were very good in supporting one of the initiatives in terms of the event for the hospitality trade on the farm, but we ran into all sorts of state aid rules, the fact that it was West Country beef, and it was exasperating. I think the fact that our levy is taken in order to give some marketing and benefit and yet it cannot be used directly back to that particular region is frustrating. Q159 Chairman: Thank you very much indeed. Because of the quality and interest of the information we have had we are sadly running a little bit behind time, so I hope our next two witnesses will be willing to co-operate a little bit. Roger, if you would be kind enough to make your presentation to the Committee and then, John, if you would follow straightaway afterwards, and then colleagues will put questions individually to you. Mr James: My name is Roger James. I am 46 years old. I have been farming in my own right and have been my own boss in farming for 20 years. The farming industry in this country, especially the hill areas, is completely reliant on subsidies. With no subsidies there will be no farmers, or very few farmers, left in the hill areas. Whether you like that statement or not, I do not care, but that is the truth of the matter. The youngsters are going out of farming in mid-Wales at an alarming rate. They are getting educated. They want to work for five days a week, not seven days a week, and if we are not careful we will not have another generation of farmers in our area. I have got a young son and his attitude is, "Dad, I am going to get a proper job", and I think to myself regularly, "He is right, I am wrong". They all want more spare time. When I read the reform, the crux of the matter was money, and everything boils down to money. They want to get rid of all subsidies, so how do you go about getting rid of subsidies? Do you leave all of your farmers in the UK flat and dry or do you keep pumping the money in? I will agree that the money is pumped in in a very irresponsible way. You tend to talk to people and you get a compromise, and by getting the compromises when you are talking to people you are missing the point and you are not directing the money in the right direction. Eighty per cent of the money goes to 20 per cent of the farmers. I feel there should possibly be a maximum payout per working farmer, whether you cut that to 300 acres, 500 acres, or what, I do not know, but that is how I feel the money should be directed. We should put a lot more people back on the land. There are a lot of people unemployed in this country, so I feel it would put more people back into the rural economy. I feel the rural economy is very important. We live in a very small rural area, everybody helps everybody else, and it would be a pity to lose that. A lot of the houses on the farms in Wales are getting sold off. The English are coming from the South and buying them up, and the young people in our area cannot compete, so that is another thing, we need the money to compete with those. People should not claim a pension and subsidies. I think my head might roll for that statement, but people are getting two subsidies. If you are 65, you are getting the subsidy for farming and you are also getting the pension. You are not leaving room for our youngsters to get into farming. We are supposed to be able to compete in a global economy, does Tony Blair compete when he goes for his wages in the economy? I feel he does not. It should be like-for-like. We cannot compete because very few others compete. A level playing field, we have got no chance of a level playing field. Our live export is very few and our lamb would be worth at least 50 per cent more if we could get it into Europe at the right money. That would be the difference between survival and sinking for people like me. In your notes on the Vision reform, it says New Zealand's subsidies finished in the 1980s, well do not compare the UK with New Zealand because we cannot. They have got a climate where they feed animals in the summer and we have got a climate where we feed animals for seven months in the winter, so do not think we can compete with New Zealand because we cannot. Reading on in the report, it is costing a family of four €950 in subsidies to keep farmers throughout Europe. The way I read it, it is €950 as an insurance policy to put food on the table. It has not been many years since this country was short of food. Do you want to go back to that? It is all about money and food. I have got a full belly, I am not complaining, and the majority of people in this country have full got bellies. Do not complain on a full stomach, it is only money. Q160 Chairman: That is very clear. Mr Turner: I will try and keep my introduction brief. I have described myself as a traditional farmer. We have heard a number of different viewpoints expressed by witnesses today which I think reflect the dynamic that is there in most farming businesses between the need to run them as a massive business, in other words awareness of commercial markets, global trade and the impact that might have, but we are also dealing with wider values within farming, such as animal husbandry, environmental husbandry, and they have always existed in all farming businesses. Quite where that balance falls very much depends on an individual perspective but also the market opportunities. I was driven to respond to this because when I saw this Vision document, which was published by Defra and the Treasury, I felt it was a very dry document that took a very limited perspective. Sure it was a vision, but it was from a very limited perspective which was framed by international agreements, the need for addressing global issues, but local issues hardly figured at all. If you put a word search in here for "local produce" it does not figure once, yet "international trade" figures on a number of instances. Therefore, what I would like to have seen in that was this wider perspective brought into it. We hear a lot of talk about moves towards environmental payments and moves away from production but, at the same time, I think what it fails to reflect is that the environmental damage which has happened over the last 40 or 60 years in farming has been the result of the policies and the markets that it is framed in. It is not always down to farmers being the bad guys, they are responding to external constraints and drivers in the market. A number of people have already made the point that if we export production to other countries there is absolutely no guarantee that those same drivers will not follow it out there and there is going to be a similar impact on their environment. There was also mention made of this move from Pillar 1 to Pillar 2 payments, but the Pillar 3 payments, the social aspects of farming, have hardly figured in that. Farming is interwoven into every community throughout the country. Somebody mentioned that within the report you could quite easily have put "washing machines" as the commodity, and it is certainly true that you could replace the word "farming" with "shipbuilding" or "mining" or "steelmaking". It seems to me that it is being treated as one of those commodities, but if you pull farming out of a lot of local communities it will have an absolutely devastating effect on them. The number of industries that are related to farming, the number of people who are potentially involved in farming, has been seriously underplayed and not reflected in this document. There are a lot of ways the Government could support farming which do not fall under the word "subsidy" which has been a milstone to farming. Farming never really benefits from the word "subsidy", it is a subsidised food production, the farmers very rarely benefit. In the 1970s and 1980s farming benefited from the Farm and Horticultural Development Scheme which allowed farmers to develop their businesses. Once that ended, we are now seeing a point 20 years later where that investment in infrastructure has dried up, those buildings are in need of repair and renewal, and farmers do not have the confidence in the future to invest anymore. One thing, above all else, that farming needs is clear guidance for where we need to go, and we need the confidence to invest in a market that we know is going to be there in ten or 15 years rather than what we are getting at the moment, which is every two or three years having a different objective put in front of us, trying to turn round a very complex business and trying to align it with different sources of funding and different streams of support. Chairman: Thank you very much indeed, gentlemen, for two challenging and very interesting perspectives on the Vision document. I have got four colleagues who have indicated they wish to ask questions. I am going to ask David Drew and Roger Williams if they will put their questions one after the other and then ask our two witnesses if they would respond. Mr Drew: Picking up on what both of you say, in a sense one of the weaknesses of farming is it does tend to come from a compromised position, and that is the way that politicians may want it to at least be perceived. I believe strongly with what Roger says. I think it is disgraceful that we give the greatest amount of money to the richest people for reasons that are very unclear. How would you get farming to respond? I think it would help politicians if we had a diversity of opinion on the way that things might be taken forward to at least have this argument rather than it being a messy compromise all the time. Q161 Mr Williams: I think Roger James makes a very good case for hill farming, and at the moment hill farming is only supported marginally in the Common Agricultural Policy. At the moment, the Common Agricultural Policy would give the same amount of support for land which has good soil, good climate, good growing conditions as for somebody farming in the most upland areas. Is there a case for having not such a level playing field but supporting people farming in the most disadvantageous regions rather than the people who can compete on a world market producing commodities such as wheat and milk? Mr James: We live in the hills and we are 35 miles from what I would determine as good land. Our rainfall is very high, so basically we have got seven months of winter. There is nothing wrong with that, I love living there, I love the people, I love the economy, it is brilliant, but we do need money to survive one way or another. Possibly they are going into environmental payments, but the biggest problem is the people who are in charge of the environmental payments are educated, they do not quite know what to do with them, I am afraid to say. A prime example is a friend of mine has got butterfly orchids and SSSI have told him the minimum stocking rate, you are not supposed to graze this, you are not supposed to do that, they have lost them. He has managed that land for over 20 years and they were there until they told him how to manage them. You might all laugh but I am afraid that is happening everywhere. The latest thing we have had to do is biannually trim the hedges. The population of birds has gone down 50 per cent in about 20-odd years. One reason is badgers eating the ground eggs, and if we biannually trim hedges it opens the hedge up which enables the big birds to get into the little birds. They do not know that, I do. I am not educated, but you have got to be very careful to ask people like us - I am not saying me - because we do know what we are doing, otherwise we would not have survived so long. As far as money towards the hill areas or the sort of area I am living in, personally I think there ought to be so much per labour unit per farm. A lot of farmers' wives are working these days so they only have one labour unit, not two, but farmers being farmers find out how to go around these things in a roundabout way. It is time that was stopped and it is time the money was paid to the people who work on the land. Q162 Chairman: Does anybody want to comment on David Drew's point about a ceiling on CAP? Mr Turner: Sorry, I thought you were going to say his point about the need for a more co-ordinated approach. Q163 Chairman: You can comment on that as well, but briefly. Mr Turner: Whatever strategy we evolve for the future of CAP, it should be one that involves not just 16 farmers but gives a forum for a great number of other farmers to be involved in, but not only those, the public, the retail sector and others. It would be great if we could sit down together and develop a strategy. There have been models, such as the Biotechnology Commission, which have taken quite divisive issues within farming and brought those together in quite a dynamic way. It is a shame that model is not replicated in other issues such as CAP reform. Mrs Moon: In the first presentation from Mr Blackett, he said the Scottish Parliament knew better how to work with farmers. Mr James, you work with the Welsh Assembly, would you say the Welsh Assembly is more proactive in terms of its work with farmers? If so, how? I understand also that the Assembly is withdrawing a subsidy to hill farmers which currently is in place. I had this from my local farmers this weekend and I wonder if you would comment on that too. Q164 David Taylor: I was very interested in John Turner's suggestions about areas where support can be justified for farmers. He makes the point that small and medium farms find it particularly onerous to do some things to maintain good farming practices: soil testing analysis; demonstration farms; support for fair trade; all of those, fine, and I can see how they might work. The one I was surprised at was: "Working IT systems that simplify record-keeping...". I am astonished, having come from an IT background, that within the marketplace there is not some viable worthwhile cost-effective systems that do just that. Is there really a market void of that kind? Secondly, and finally, you also talk about areas of support, "...fostering better co-operation between farmers". We have heard evidence from time to time that getting farmers to co-operate is not unlike herding cows because, of course, farmers are proud, independent and entrepreneurial. How can you break down these things and put them into a more co-operative context? Mr James: Carwyn Jones is rumoured to be taking away our monies. What do I think of the Welsh Assembly and the way things are going? I think it is another disaster. You have got another heap of politicians, excuse the phrase, and all it is doing is taking money out of our kitty. There are too many compromises and too many tiers of government. We have got the FUW, the NFU, the Scottish Unions, and whatever, and by the time our idea gets to the politicians the idea is gone, it has been watered down that much that the good idea and the good intention has disappeared. As the gentleman here said, we need more of these forums for you to get an actual idea of a working farmer. I am a working farmer, like it or lump it. I am a bit rough around the edges, a bit blunt, I cannot help that, but I am a working farmer. I get all my living from agriculture, albeit subsidies, but that is what I do. Carwyn Jones will be like the rest, he will get rid of us all if we are not careful. We are a dying industry and it is a real shame. As you like hills, we live in a beautiful area and it will disappear and all go back to bracken and that will be the end of it. Mr Turner: I too classify myself as a working farmer but, unfortunately, increasingly I spend two and a half days of the week just in front of a computer, record-keeping and keeping things up-to-date. It is bad enough for most farmers but as an organic farmer there is a further tier of forms and record-keeping that we have to do, which is purely for the sake of the audit trails. I know the Government does not have a good record in implementing centralised IT systems, but I think there is a very, very good case for doing it within agriculture and reconciling the diverse schemes there. I realise that the whole farm approach is intended to address this, but from my limited experience of it so far I think it has got a long way to go to reduce the burden. Q165 David Taylor: What about fostering co-operation, John? Mr Turner: With the best will in the world, there is a need for education for farmers, and I do not mean that in a disparaging way, but the markets have changed significantly over the last 20 years and I do not think small farmers can any longer afford the luxury of being independent isolated businesses. A lot of the problems within farming can be traced down to a lack of co-operation. Q166 Lynne Jones: Mr Turner, you have emphasised the importance of having confidence for investment, and Mrs Greed said there was a need for more investment in value-added production and promotion. One idea in this document is about upfront payments which would allow investment, what do you think of that idea? Mr James: The biggest thing I see is time. We are working farmers and we have not got the time to do a lot of these things. From my point of view, what we really need is a directive from government, with the help of farmers or as an integrated thing, to set up something to do the marketing. My trouble is I am a down-to-earth farmer and I cannot do anything else besides farming because I have not got the time. I cannot market things because I have not got the time to market them. Mr Turner: My understanding of the role of government is to address market failure. We have the centralised distribution and retailing system which is dominated by the supermarkets which has framed a certain sort of agriculture and a certain style of farming. Where I feel there is a case for public support is to develop an alternative network which provides a greater choice for people. The seed funding at least will not be provided by the market at the moment. My feeling is if that can be brought together there is a viable alternative to the centralised food distribution system, and there is a very good case for using public money to build that network. Chairman: Thank you all very much indeed. That was excellent. We are going to move quickly to our third panel of witnesses. Witnesses: Mr Carl Atkin, Agricultural Business Consultant and Head of Land & Business Research, Bidwells, Cambridge, Mr Steve Cowley, Farmer, Mr Tony Keene, Farmer, Mr Hugo Marfleet, Farmer and Mrs Chris Thomas, Beef Farmer, gave evidence. Q167 Chairman: Ladies and Gentlemen, I am going to extend this session until ten minutes past one, so it will require discipline on behalf of all of us to recognise that, including my colleagues and myself. Can I very quickly introduce our final panel: Mr Carl Atkin, an agricultural business consultant and Head of Land and Business Research for Bidwells in Cambridge; Mr Steve Cowley, a family farmer from the Isle of Wight, with active involvement in community and environmental enhancement projects; Mr Tony Keene, who is the Chairman of two farming companies, one of 1,500 acres in Leicestershire and the other with 1,400 acres in Norfolk. He is assisted by his family in the management of that, and has been involved in being the Chairman of the Oxford Farming Conference and the Governor of the Royal Agricultural College; Mr Hugo Marfleet, who farms in Lincolnshire in arable and free-range poultry. He was formerly in pigs and is looking at diversification and has been farming for 13 years. Finally, Mrs Chris Thomas, who is a beef farmer from Powys with 700 prime beef cattle. She has recently diversified, opening a new luxury caravan park and camping park. I hope you will accept that as a free commercial for your activities. We will start very quickly with Carl Atkin, please. Mr Atkin: Thank you very much, Chairman. My name is Carl Atkin. I am a Lincolnshire farmer's son and an agriculture graduate of Newcastle University. For the last six years I have worked at Bidwells as an agricultural business consultant and also heading our research team. I am also here as Chairman of the Agricultural and Rural Policy Committee of the Institute of Agricultural Management. The Vision makes a useful contribution to the debate about the future of the CAP and agricultural and rural development policy in general, however it is naive in a number of the assumptions and sweeping statements it makes. First of all, it produces a long summary about the widely documented failings of the CAP to date. Whilst academically interesting, this is completely irrelevant and paints a distorted view of the current and indeed future policy environment. We all know, and probably all agree, the failings of the CAP of the 1960s onwards which led to the intervention, lakes and mountains of the 1980s and, indeed, probably even the CAP of the 1990s, which ended up capitalising large production linked payments in production systems, distorting both land and input markets and failing to return monies directly to the farmers, as several respondents have already mentioned. The CAP of 2006 is already very different. The decoupled Single Payment is the most radical reform for agricultural support for generations, yet the Vision makes little reference to this. It extrapolates current data about the distorting effects of the CAP and extends this to the new regime, which I believe is highly misleading. What of the central component of the Vision? Effectively, this is the elimination of Pillar 1 support. This maybe a "Vision" to some but to others it would be a nightmare. Again, I doubt many people in the room would claim that the current Pillar 1 support is good or, indeed, efficient since the Single Payment has evolved out of a complex mixture of market instruments direct to payments and is sort of being an income support, a compensation payment and a land management payment all in one. It is probably not achieving all of those things very well, yet it is what we have got at the moment. How we develop this, and how we do indeed eliminate it, if that is what we do, needs much more careful thought than is offered by the Vision document. We need to focus support far better on what we really want. If food security is a strategic issue for us, then let us have a debate and specific policy on it. If keeping small, inefficient family farms in business, particularly in Southern and Eastern Europe, is a socially good thing to do, then let us have a specific policy to do so. If paying for environmental and public goods which the market will not provide for is what society wants, then let us pay for them in a proper way through a real Pillar 2 rather than relying on the current Pillar 2 as a bit of an afterthought bolt-on to Pillar 1. Let us not pretend that we can simply eliminate the current support mechanisms without having these proper debates. The structure and mentality of the current agricultural industry is entirely a result of the policy instruments we have. Farmers on the whole have become commodity producing machines, removed from their markets by intervention and such like, and encouraged to pursue a one dimensional high output, low cost business strategy. The industry needs to reconnect with its marketplace, step away from the mainstream into a growing plethora of need for specialist opportunities and focus on recapturing value through a supply chain. What is of real concern is the current shortage of Pillar 2 funds to provide support for business planning, marketing and training, and the ability of the Regional Development Agencies to deliver this support and advice to the industry going forward. That may be a discussion for another day. Let us also challenge the implementation set out in the Vision. The Vision offers no real roadmap on how to get there, except saying that gradual and carefully managed change is a good thing. I would argue is that really a good thing? All it provides the industry with is more uncertainty and a lack of ability to plan. What the industry needs now is clear signals to make it react and adjust accordingly. The gradual erosion of SPS over time, whilst appearing kind from some angles, will simply cause many to have a slow and painful exit from the industry, haemorrhaging cash over the medium term rather than reorganising their businesses now in a planned and structured way or exiting in a planned and dignified way. Where do we go from here? If the status quo rumbles on we simply have a cake that gets sliced into smaller and smaller pieces as we become an EU 27 and an EU 30. We need to look at the issues of funding the CAP. Should it be co-financed by Member States? Do we need more Member State flexibility? Do we need a Common Policy at all if we want our farmers to be entrepreneurs? Let us have a grown-up debate about how Pillar 1 should go and how we get there. It is nowhere near as straightforward and blunt as recommending its abolition as the Vision would suggest. Q168 Chairman: With the way you have delivered that with such speed, I think you could well be an auctioneer of the future! Thank you very much indeed. I am going to move straight on to Mr Cowley and ask if he would make his presentation, please. Mr Cowley: Thank you for inviting me to make a presentation to you. I was not expecting it from my little note which I wrote. Q169 Chairman: You do not have to if you do not want to! Mr Cowley: I am sure I want to. I have been a farmer all my life, and my family have farmed in and around the parish for over 200 years. My father, my grandfather and I have all be county NFU chairmen as they have been chairmen of the Local Parish Council. I have diversified from farming from time to time and as Deputy Leader of the Isle of Wight Council I have made presentations to parliamentary committees in Europe and also to ministers in the past. I had an interesting session with David Miliband yesterday, and sadly that gave me no encouragement as to how his tenure of the Ministry of Agriculture would be looked after. Since the last CAP reform, which has been mooted for some time, I have made significant changes in my business and I produce very little, if any, food anymore as a farmer. We have 350 acres, and we have put the whole farm into Countryside Stewardship which has secured my portion of the Pillar 2, I believe, for the next ten years. We have planted 40 acres to woodland under the Jigsaw Scheme which encourages red squirrels and dormice. Particularly, we planted 16,000 trees in that area and that has secured funding for 15 years at least. Our most profitable crop under Countryside Stewardship is over-wintered stubble and then summer fallow, £540 a hectare for running a cultivator through the land once. We keep a few suckler cows to keep the grass down, and we grow linseed on contract which is exported to France to make lino. We have moved our capital out of food production into holiday houses, four of which we have off the farm because that secures our capital base away from the farming industry. Most of our modern buildings house vintage buses and we have builders and a tree surgeon who operate from our site as well. We have planning approval for 34 stables which we have not implemented yet, but will. We used to produce one and a half million litres of milk, and I enjoyed milking cows. I did not mind getting up at a quarter to five every morning and doing that, but it becomes a hobby you cannot afford when you are not getting enough to cover your costs. We have made this decision to go the way that we have. We are asked the question do we think the government is committed to UK food production, I do not believe within the government of whatever perception that there is a commitment to UK food production. I think this is very foolish with global warming, and other speakers have indicated that food production worldwide will decline. Oil production will decline to get it here and, therefore, our food security is going to be compromised. We have heard a little bit about the FHDS Scheme, paying us farmers to clear scrub to grow food. We have recently put that land back to trees with a grant, and I suspect my son, within his lifetime, will be paid to take the trees out so that he can grow food. I think British farmers are disadvantaged, I probably hinted at this in my initial writings to you. Defra seems to gold-plate every EU directive and implement it with a fist of iron very, very slowly. That is a matter of wrong thinking within Defra. I believe Defra should be there to help and assist, not to grind us down. Other countries' agricultural ministries manage to encourage their farmers with the support of their populations. I think in the CAP Vision there might be short-term environmental gains on the way to dereliction in the countryside. It seems to be driven purely by financial concerns, it is jointly written with the Treasury, and we can understand where that is coming from. My real fear is that there is a perception, which I think is politically unsustainable, that with the Single Farm Payment farmers are being paid to own land and to keep it a bit tidy, and I do not think that is sustainable. I do not believe that EU farmers - others can probably speak better on this than I can - want to be seen to be maintaining their lifestyles by subsidies, they would like to get a fair portion from the market. A small proportion of more affluent consumers, and I think those are the ones we get in the press, the people we see, are beginning to appreciate local foods with no air miles, but most consumers still wish to minimise their weekly spend on food. I have thought about one or two possible solutions which are probably totally impractical. Farmers are not going to maintain any profitability in food production unless there is one organisation which represents an interface with government. It is so diverse at the moment. You, as politicians, are only there until the next election, and there is no focus on farmers and food producers by you and this maybe is why we are here today. I am a firm believer, and in discussion with other farmers, that farmers are moving towards, if they can, contract pricing of food so that they know what they are going to get when they start out production. We talked about co-operation a bit. The Milk Marketing Board was the ultimate co-operative, but it was deemed not fit-for-purpose any longer and is no longer with us, and look at what has happened to the price of milk since then. I think we should keep CAP payments to enhance and maintain the environment but it needs to be specifically linked to specific outputs, which is what I am looking for. We have done specific things under Countryside Stewardship and have gained a matching payment. I think Defra is a stumbling block and I do not think a name change will make any difference. We need to change the key managers in there to something more useful so that we have managers who will understand what the job of farming is. They have been given a packet of money by the EU to support farming, not to erode it. Q170 Chairman: Mr Cowley, I am going to be very rude and cut you off. That was a very good point to end on. I am going to ask Mr Keene if he would take up the baton. Mr Keene: Chairman, since time is of the essence, I will assume that you have all read my original submission and say nothing other than the fact that I am not a farmer's son, I am not from a farming background, and I am a first generation farmer. I have to confess that I had not read A Vision for the Common Agricultural Policy before writing my submission. I have now read it and I must say it is a well presented and well written document, if at times somewhat complicated. I would like to make the following comments. The argument that the cost of food will significantly decrease to the consumer may in reality not decrease by as much as is envisaged in the document. A lot of temperate food production has been on the world market at below the cost of production for many producers. When support is removed these prices may have to increase. It is stated that 36 per cent of support given to farmers goes to a number of input suppliers, such as machinery manufacturers, fertiliser suppliers, and spray suppliers. To my knowledge, none of these suppliers is making excess profits, so unless their raw material costs go down or labour cheapens, which is very unlikely, I cannot see how they can afford to supply these commodities at a reduced cost. I can quite see that land costs would decrease as farming profitability decreases, although this has not done so to date by as much as it should have done. I would like to make one other comment under the heading of "land costs". Farmers get agricultural property relief, which means that on their death they can pass their farms onto the next generation without having to pay inheritance tax. This is absolutely essential because if inheritance tax had to be paid farms would have to be sold, further fragmenting the industry. I just pose two questions: is it a benefit to farmers that wealthy outsiders can shelter their inheritance tax by buying into land and farming it for two years? Is it reasonable that those farmers who have got off their backsides and diversified their businesses may now have to face inheritance tax on their diversified assets? There is no mention in the Vision of renewable energy, about which we have spoken quite a lot this morning, so I will not go on, but this could have great benefit to British agriculture, the environment and the population at large. Q171 Chairman: Thank you very much indeed for the succinctness of your comment. Mr Marfleet? Mr Marfleet: Good afternoon. Does the government remain committed to UK food production? Yes, but we do have to change, and are changing, with positive approaches like rural development. The UK is a small parkland island in proportion to the world picture. It is a traditional farming estate, being of arable, livestock and tourism enterprises. Globalisation means that we are no longer a world player in terms of food production. However, with the volume of people in the UK, we do need to remain committed to food production. The UK is farmed throughout its length and breadth, encompassing every town and city. We even sing about it, "...this green and present land...", so we should not abandon it. We head through agriculture for the countryside and the seaside in our quest for the enjoyment it provides. We look to reform a market which is called "oversupplied", yet thousands of humans are starving. The world is not settled nor in harmony. There are so many different circumstances and factors for each country across the world that it is impossible to bring about total harmony. What we can do is put parameters in place so that the environment, welfare of animals and health of humans is not jeopardised. If countries fail to adhere to these basic parameters their products should be vetoed. At the same time, if poor countries need help, and are willing to be helped to help themselves, then we should assist. The UK needs to protect its own agricultural markets by standing up and fighting and not gold-plating every EU directive putting us at a disadvantage. Environmental issues and schemes are very expensive to run. We have great regional and seasonal foods of good quality which can be promoted within our country, helping with the nation's health. Our schools, hospitals and other public sectors should eat British produce. The supermarkets have used their powers to help the demise of UK farming by bully tactics and importing inferior products. The UK is well placed to go forward, but at these prices across the board the industry is falling into a state of disrepair which cannot continue. It is predominantly family-run farming practices which will do more for the countryside, employment and diversity in rural areas than large business organisations that only have money signs in their eyes. We are British, we should be proud of what we produce, and we should stand up for British produce as most of us, one way or another, enjoy the British countryside. Q172 Chairman: Thank you very much indeed. Finally, Chris Thomas? Mrs Thomas: Good afternoon, Chairman and members of the panel. I am sorry I sound like a man, since diversifying into a caravan park I spend all of my life talking, so it is rather new! My name is Chris Thomas. I am 41 years old as of last Saturday. Q173 Chairman: Congratulations, well done. Mrs Thomas: Thank you very much. I am a mother of five, ranging from 18 and a half down to one. We own and farm 300 acres in the heart of the Brecon Beacons, just literally outside the town of Brecon, and we rent another 300 acres, 200 in Hereford and 100 scattered around the other parishes. We commute on John Deere tractors. We are known as completely mad and insane. I often feel I need to take drugs just to stay alive! However, we totally love what we do and are committed greatly to what we do. I hope that you guys who are in charge of our commitment will listen to what I have to say and that I will convince you to follow this path with all of your hearts to realise that you are in charge of us, our own destiny is not ours anymore, it is in your hands. Farming is not a job, it is a way of life. I will quote you paragraphs of my original submission for the benefit of other members of the panel and of the audience. I quite liked it, so I hope you did too. As I say, farming is not a job, it is a way of life, how many times have we heard that and yet if the current policy trends continue it will be a way of life for very few in future years. I feel we will be the next rare breed. Farming is not something which can be learnt from books, it is bred into you. In as much as it can be bred in, it can be bred out too. My main concern, especially being a mother of so many, is who will be farming our countryside in 50 years' time, never mind the Common Vision for ten to 15 years, we are breeding generations of young people. Although my son, Henry, is only four years old and a hefty bloke, it is going to be some time before he can reach the tractor pedals, With all the pure agricultural courses disappearing from our agricultural colleges, and we are all encouraged to diversify, my biggest worry of all is who will be left to farm our land. Farming these days is being pummelled and moulded into an ideal formula by this Government, and this cannot be done without any future thought. For far too long we have had ministers put in charge of this most specialist of subjects, ministers who have no practical knowledge, practical experience or even qualifications to understand the physical, emotional and mental needs of agriculture and its workforce. One of my all-time favourite lecturers in agricultural college, himself a keen Yorkshireman farmer, used to say to me, "Chris, common sense is a sense not common to everyone", and I genuinely feel this is quite right regarding the people who implement these policies and write the damn things. We now are at a stage where the Single Farm Payment has taken over our lives. I feel this whole fiasco has turned into nothing more than an enormous white elephant. Its purpose was two-fold. Originally it was to remove production payments and encourage the older generation to retire, paving the way for a new and younger workforce but, unfortunately, the reality could be no more different. The older farmer now has the best government-funded pension policy of his entire life, for he can now sell his entire stock, rent out his land, and in the majority of cases still pick up quite a hefty cheque. There are others who have been unsuccessful in their bid for entitlements from the National Reserve who are farming with no financial help whatsoever, whilst still, at the same time, producing a commodity. This ridiculous situation does two very detrimental things to farmers and farming alike. First of all, the older boy's desire to keep the entitlement payments have shot the price of rental land and grass this year by £50 an acre alone from what we were paying last year. Secondly, the new system does nothing to help the public's perception of us guys. Since going into this diversification project ourselves several articles went into our Welsh national newspaper, The Western Mail. I genuinely do feel that whereas perhaps before our lives ended at our farm gate our life begins because we have to be nice to people and that is something farmers are generally not very good at. They are quite rude, arrogant and anti-social as a breed and it is bred into us. Now we have to try and woo these people. We have to be nice to these campers and they are fantastic. We have never met so many people and we have only been open four weeks. We are full every weekend with over 400 people and, as you can imagine, it causes a bit of a hoo-ha. It is a wonderful way to learn how to be nice to people by getting them on your farm. How sad it was to see that the uptake for the farm walk was so minimum. We could not have them on our place because we still had diggers digging out things. It was a very, very sad thing that more participants could not go into this. However, agriculture is Britain's last industry, boys and girls, we are now a consumer nation and not a producing nation anymore. God forbid, if there was a world war we would be in trouble for sure. Do not forget, government men, Britain is an island, and with the threat of terrorism they would not have to bomb our stations and our buildings, they would only have to put bombs in the Bristol Channel and they could starve us to death. It is an incredible thought that we only produce enough food in this country to survive from January to April and the rest is all imported. It is a frightening thought and, without scaremongering, if our country and the EU were all settled why on earth would Mr Brown make a note that he wanted to spend an extra £25 billion on the Trident Missile. They cannot feel that there is a great deal of world peace for him to go down that road. For our nation I feel food security is a very, very important issue. Should our agricultural industry be sold down the swannie as has our manufacturing, coal, steel, construction and shipping industries? They have all vanished now and all been taken over by imports. Agricultural policy should be completely separate from government policy as they can change the goalposts in one afternoon. It is a continuity of good, sound and reasoned policy that is required for the future. This policy should be worked over a 20 or 30 year period, not even a ten or 15, it is a much longer period we need. I could honestly go on and on. Let the farmers who are getting their hands dirty be the ones who are going to receive the payments and not pay people to sit in the house. If the government wants to remove the link between payment and overproduction, although that myth has long since been dispelled or why would they import meat from foot and mouth endemic countries and why would you guys be voting on whether we should have American hormone beef in this country when it has been banned here for years, however, why can we now not look at arable payments. If you want to reduce greenhouse emissions, why do you not put arable payments into creating biofuel plants to do the cultivations. There is a huge amount of diesel used. When I plough 250 acres with my John Deere tractor every spring we go through a full tank of 80 gallons in a day with a four furrow plough on it and we have no stones, so God help the ones who have got stones. Not every farm can afford this. Our farm could not afford to have £26,000 plant but what we could do is put one in Brecon farm and we could all buy our fuel to do all the rotational cultivations in this country using biofuel and that would keep everybody happy. Stock payments: the Single Farm Payment does not want poaching, and that is a very interesting thing because they are telling us to keep our stock in, but that is the worst thing unless you have got really good sheds, so bring back the 50 per cent shed grants. Do not just dish out these payments to people who are not worth it. Listen boys, stop Britain becoming the national park of Europe. Let us do what our prime land was intended to do and produce the finest quality foods to feed our fine nation of people. We went to ball a fortnight ago at the officers' mess in Brecon and we had Argentinean beef and New Zealand lamb. There were only four of us on the table with our own teeth and I wanted to offer to chew it for them, it was appalling. Chairman: Fantastic. Thank you very much indeed. Judging by the splendid photograph of your family that you sent I can see the next labour force there being bred very, very well. Two of my colleagues have caught my eye, so David Taylor and Lynne Jones in the remaining four minutes that we have. Q174 David Taylor: You are not going to ask how many MPs here have their own teeth, are you! This one is to Mr Atkin, Chairman. He was concerned about the separation of farmers from their markets and the distance it has gone down the path of high output and low cost, and he referred to there being an unmet plethora of specialist opportunities I wonder whether he can highlight that briefly. Mr Cowley, on dairy, with one and half million litres he might have been losing about £30,000 a year with his tuppence a litre loss, which was typical. Does he think - a question I put to an earlier contributor - that farming could have done a lot more to move away from milk as a commodity to a rather more specialist and segmented market? Mr Cowley: On that specific question, by government regulation the MMB and its daughter organisations were not permitted by the DTI to go into the downmarket production of food. Look at yourselves in the past in the round as to why you stopped farmers doing that. Q175 Chairman: That is a succinct answer to a good question. Mr Atkin: The key point is because the old support system penalised people who effectively stepped away from the mainstream, whether they be mainstream crop or mainstream livestock, we have built up uneasiness within the industry of stepping away from the known because the environment has been very certain. We have had instruments in place that have guaranteed certainty for output. As soon as you step into whether it be an alternative enterprise or a non-agricultural enterprise, what we see are issues of risk coming into play, issues of marketing, issues of negotiating supply relationships and contracts. Some of these enterprises are new and tested and by default will not work. When we advise farmers on these enterprises you cannot say, "We will guarantee this will work", that is not the way of the business world. Because the industry has not had to address medium-term business planning issues, market research and the like, it has not been historically used to operating in that kind of environment, it has operated in a very safe, protected environment. Q176 Lynne Jones: My question is also for Carl Atkin. You said that there was a need for clear signals, not a gradual erosion, and a real Pillar 2. Can you expand on that? What clear signals would you like to see being given? Mr Atkin: There are obviously lots of options and I probably have not got time to talk about them all. One of the things in the agricultural economics literature is about whether you have capitalisation payments to allow people to leave the industry rather than the slow annuity which other people referred to as the "pension haemorrhage". That is one option. The other thing I think about the Pillar 2 is a lot of the Pillar 2 schemes, particularly the agri-environment schemes, only work because they are a bolt-on to Pillar 1 and they also have their Single Farm Payment, they could not survive on the agri-environment income alone. If we want a real Pillar 2, that is fine, let us do that, but we have got to pay people for the real environmental outputs they are going to deliver and not just have this half-measured income foregone measure we have now, which is a little bit of a fudge, in my view. Q177 Lynne Jones: Mr Cowley, were you disagreeing? Mr Cowley: No. Chairman: Ladies and gentlemen, I think that brings our series of panel presentations to a conclusion. May I thank not just the panel who are in front of us but the two who went before for some of the most committed and genuinely passionate presentations about farming and its future that I, and I think my colleagues, have heard for some very considerable time. It is a genuine benefit for us to hear from people who are not, if you like, in the traditional role of representatives of any of the bodies who have come before us to date but are, as I think everyone of you has said, farmers who are there doing it from five o'clock in the morning until goodness knows what hour late at night, whether it be growing crops, growing people in caravans or growing energy fuels to keep us all going, it has been a truly superb contribution to our inquiry. On behalf of our Committee and my colleagues, I would like to thank you all very, very much indeed. Thanks again to our stenographer for taking it all down, to the gentleman who has done the sound system, to those who organised this and made it possible, and to those in the audience who stuck there resolutely listening to what was being said. It has been one of the best attended sessions we have had for some considerable time. Thank you all very much indeed. |