Examination of Witnesses (Question Numbers
20-38)
MR PETER
KENDALL AND
MR ROBIN
TAPPER
14 NOVEMBER 2007
Q20 Martin Horwood: Maybe that again
argues for a best-in-class approach. Another thing is that some
of the people who have submitted evidence to us have argued that
universal labelling standards do not actually necessarily work
in marketing terms and that actually the most successful labels
we have got evidence of at the moment, like the Fairtrade mark
and organic labelling, and in fact your own Red Tractor, have
actually emerged from independent initiatives and the market has
in a sense decided which ones are successful. Is that not a fair
criticism against a universal scheme?
Mr Kendall: We are talking about
an area where we are looking at carbon and the environment. It
is very important that we do not have people making up their own
rules. That is why we opened the Red Tractor Scheme, from making
an initial initiative for the farming industry to one which was
a whole chain. It was really important that this had buy-in. I
will give you one example where I think there is a real nervousness
about the whole concept of environmental labelling, and I deliberately
gave you my preamble about why I think it is so important that
farming does differentiate itself and make sure it keeps its environmental
considerations at the forefront of what it does. How would you
label a low energy light bulb, for example, because actually when
it is manufactured it might be more intensive and it might have
a high carbon value because it takes more to manufacture and is
more expensive than a cheap light bulb? It is on its consumption
that actually it delivers its benefits. There are similar stories
about disposable nappies, that you might actually put a lower
label of carbon on a disposable nappy than on one which is washable
and re-useable. Boots have done some work on shampoos. They say
that actually of all the total life cycle only 7% of its carbon
is in the manufacturing and bottling and delivering to store and
93% is actually heating the water and using the product itself.
I think we are in a very difficult area. We think that because
it is such a difficult concept to grab hold of we do need some
really quite uniform rules.
Q21 Martin Horwood: You do not worry
that uniform rules might be quite clumsy and might actually lead
to some of the very problems you are describing?
Mr Kendall: Certainly in agriculture
I do have concerns that we could end up with some generic views
which send some perverse messages because, as I have said, we
are not steel going into a factory and nuts and bolts coming out
the other side. We do need to have some sorts of sensible rules
and not individuals trying to get a competitive advantage by having
a proliferation of different interpretations.
Q22 Martin Horwood: Can I just turn
to another issue? Obviously what we are talking about a lot is
carbon labelling and even possibly having a carbon price on products,
but some of the evidence we have received suggests that that is
actually a too simplistic approach and that there is a broader
environmental sustainability impact, for instance nitrates and
fertilizers and things like these. Would you support incorporating
all those wider environmental impacts into the labelling scheme
as well?
Mr Kendall: Again, we are actually
doing some work at the moment as an organisation with the Agricultural
industries Confederation and the CLA to actually try and understand
what these impacts are. Some people will say to you in a very
generic way that all nitrate fertilizers are bad and all the current
production and fertilizer manufacture is being done at a flamed
gas in the Middle East and it is being turned into urea. Now,
urea is much more volatile and gives off a lot more nitrous oxide.
A more expensive version which I will be using on my farm is ammonium
nitrate, which is much more stable. We actually at the moment
do not understand the science behind saying, "Fertilizer
is bad," and which fertilizer—
Q23 Martin Horwood: Is that a yes
or a no then? Would you prefer to stick to something simple like
carbon -
Mr Kendall: I think we cannot
go to methane and nitrate oxide until we understand the science
behind it. At the moment you could have more nitrous oxide damage
from the bad handling of organic manures than you could have through
using the correct inorganic fertilizers applied. That is the problem.
If you say the organic system is preferable because it is not
using bought fertilizer, actually you can get just as much damage
from flatulisation and methane and nitrous oxide from using manures.
It is a very complicated area. The science, I do not believe,
is there to allow us to make those judgments yet.
Mr Tapper: Conversely, because
more work has been done on carbon and because we all acknowledge
this great complexity, perhaps we start on the stuff that we do
know about, or know more about, which is the carbon. So certainly
as the first step I think carbon labelling is what we would support.
Q24 Martin Horwood: Okay. You have
clearly got a very deep knowledge of these issues. Do you think
it has had much impact upon your members, this whole debate? Are
they concerned about their carbon footprints?
Mr Kendall: I think in the way
the media has picked up the over-simplistic term of "food
miles" it has some resonance, but I am not sure it goes very
deep or that enough people even in the media understand that we
can over-simplify food miles. I am a farmer in my role as President
of the NFU and I do have some very sensible advisers who steer
me in the right direction. When Hilary Benn was Development Secretary
he went on the record to criticise UK rose growers on Valentine's
Day last year and said that actually you would be doing more benefit
if you bought them from Nigeria, or Kenya I think it was at the
time. My members wanted to go off on one and say how outrageous
it was that a minister could be promoting an imported product.
Q25 Martin Horwood: He was quite
right, though, was he not?
Mr Kendall: He was absolutely
right. On Farming Today this morning they were talking about large
greenhouses being built down near Thanet where they are using
all renewable energy and they can actually demonstrate a better
carbon footprint by using waste energy sources and recycling CO2
into the plants. So my challenge to my members was not to chastise
Kenyan imports but to actually tell them that if they are going
to produce roses in February to do them in an environmentally-friendly
and smart way.
Q26 Martin Horwood: So would it be
unfair to characterise this whole question by the fact that your
members are concerned about environmental impacts when the market
tells them to be concerned about it, but not in their own right?
Mr Kendall: As I said, I think
we are honest enough that we have to throw the challenge to them
not to be protectionist but to make sure we demonstrate true wins.
Q27 Martin Horwood: Are you saying
that they will only really respond to these challenges when labelling
or consumer power in some form actually forces them to change
and take account?
Mr Kendall: Other than the fact
that carbon usually costs money, and I am a farmer and that is
why I am actually looking at the moment and have a system on a
tractor that steers itself because it saves 10% diesel. So when
you go down a field and you turn around it comes back exactly
parallel on itself within about two centimetres and in a reasonably
large field that saves you a lot of energy and you do not end
up with odd triangles. Now, the incentive for me to do that—okay,
the investment is about £8,000—is that over a three
year cycle that will save me that money and actually make the
job more efficient and better. I think carbon does equate to cost
to farmers. It is only just starting to bite and I think when
you have seen the inflation in the cost of energy it is making
farmers more acutely aware of it.
Q28 Martin Horwood: So do you think
that if we really did get effective environmental or carbon labelling
that would have a huge impact because that would translate into
market pressure very clearly for your members?
Mr Kendall: One of my biggest
concerns about standards—and I go back to my very early
comment that about 70% of the pork we import is illegal under
UK standards—is that we will all subject ourselves to competition
and raise the bars and standards for ourselves for domestic production
that is not applied on imports. Under WTO rules at the moment
there are initiatives which allow the banning of imports of endangered
species of animals. There are no such rules in the WTO for environmental
welfare standards.
Q29 Martin Horwood: So would you
like the labels on the supermarket shelves, not on the products,
so that they can apply to everything?
Mr Kendall: No. If we are going
to find a constant set of rules when we know the science and understand
it, I think there is a potential for that, but we must wait and
make sure that we have a single system which does not allow that
competition and people misleading our consumers with a different
and multiple amount of messages.
Q30 Martin Horwood: Okay. Can I read
you something from Defra in their memorandum to us? It says: "Defra
is also considering the possibility of developing some form of
generic standard for an integrated farm management and environmental
management scheme, which would allow consumers to know more about
the environmental provenance of food products and improve recognition
in the market place." Do you think you would welcome that?
Mr Kendall: Other than the fact
that again they elude to some of what Robin touched on as well,
the LEAF standards. Now, the LEAF mark is an enhanced environmental
scheme which currently goes on a Waitrose product—not all
Waitrose products, some Waitrose products, predominantly the fresh
vegetables mainly. The challenge for that is that Waitrose charges
about a 14% premium. If the consumers were willing to pay that
14% and have those higher environmental standards, Waitrose would
be Tesco and Tesco would be Waitrose. What I am really nervous
about is that we raise standards and costs on our productive industry
which the market actually is not willing to pay for. As I have
touched on before, we are not keeping out imports which do not
necessarily meet those standards. So Defra can say to me that
I need to raise my environmental standards and label it to those
higher levels, but if it is not going to be—
Q31 Martin Horwood: You do not think
consumers would go for the higher level labels, they would go
for the cheaper products which did not meet them?
Mr Kendall: At the moment, as
I say, Waitrose is a very small percentage of the market place
and they charge quite a significant premium and it is not where
the consumers are spending their money at this moment in time.
It is growing rapidly. It is an exciting opportunity for us as
farmers and growers to look towards achieving that goal, but I
am very nervous that if Defra—and I have this discussion
with them all the time—raise the bar too fast too quickly
we export our industry. What is the point of us actually? Let
us look at the pig sector again. We now have a surplus of grain.
We ship it to Denmark, to Holland and to Poland to produce the
pork to bring it back again, and produced in systems and standards
which we do not allow in the UK. We have to think about how we
raise the standards and it is one of my challenges with Defra.
Q32 Martin Horwood: Would you have
confidence in Defra to set those standards?
Mr Kendall: They obviously want
to go for enhanced environmental standards and I am nervous of
that without the market actually driving it.
Q33 Martin Horwood: You have made
the point very elegantly that we must not set the bar too high
in general terms, but what I am really asking is would you have
confidence in Defra developing the right standard, or would you
rather it was something done by the industry itself?
Mr Tapper: I think we have said
in our submission that we support Defra's approach in terms of
labelling to come up with these universal measurement criteria,
and we do. Just to answer one of your previous questions, I do
not think also we should remotely see this environmental labelling
as a marketing opportunity, and I think that is what it is being
viewed as at the moment. People are coming from the point of view
of, "Let's see this. We can sell one product more advantageously
than another." I do not think that should come into it at
all. We are trying here to inform consumers about the environmental
impact which that product they buy has, and I think we have got
to set that one up. So that is why we need the original -
Q34 Martin Horwood: Can I come back
to you on that? I find that a rather surprising statement actually.
Maybe it is because I am from a marketing background that I do
not think that is necessarily a bad thing, but surely if your
members are confident of their environmental standards and their
ability to respond and the fact that they might get better environmental
labels than the competition that was being imported, surely they
should see it as a marketing opportunity?
Mr Tapper: Provided we are using
the same criteria.
Q35 Martin Horwood: Should you not
be singing it from the rooftops?
Mr Tapper: If we are using the
same criteria, yes.
Mr Kendall: Yes.
Q36 Jo Swinson: I just wanted to
clarify that you are open-minded to the idea of labelling which
provides information but not necessarily to a generic standard
which requires to be -
Mr Tapper: No, sorry, I did not
finish. What I was going to say is that we are very supportive
of what Defra are trying to do in terms of creating a universal
standard. They must also have first of all a really large scale
consultation with industry and it also must have full scale testing
with consumers. Again, I go back to the debacle we have got between
traffic lights and GDAs. The reason why we have got the two systems
is because there was not the full consultation, or in fact there
was the consultation but it was not taken on board, so we ended
up with the big food manufacturers saying, "We know better,"
basically, "We'll go our own route." So that is why
we have a situation where we have got half the production side
of the world using GDAs and most of the retailers using spots
of various sorts.
Q37 Jo Swinson: With the best will
in the world, I suspect that actually we come back to the marketing
reason for why we ended up with two different schemes, because
various producers did not like the idea that their cereals, or
whatever, actually were red and not very healthy after all. I
think there is still just a slight confusion here about a standard
or labelling because you have got some of the labels which give
a standard like, "This is certified Fairtrade", "This
is certified organic", but then there is also labelling which
is more informational. Are you saying that you are supporting
some kind of generic environmental standard across industry but
that that would be requiring some carbon reduction, because I
was understanding that you were more coming from the point of
view that if we could create a universal scheme for measurement
then the labelling would be what you would support rather than
necessarily what Defra seems to be talking about here as almost
a mandatory LEAF scheme or something?
Mr Tapper: What I am saying is
that we need first of all a standard set of rules which everybody
adheres to and then if you wanted to use your marketing to develop
those then fine, but it must be based on the same information.
I think, as we discussed earlier, that must apply, so that the
starting point is the same set of rules across each sector and
then you have got to be able to demonstrate how yours is different,
better, environmentally more friendly, or whatever.
Q38 Jo Swinson: Just to probe slightly
on how you might envisage such a scheme, because you have ruled
out the idea of traffic lights and you also suggested, I think
understandably, that the whole 75 grams of carbon is a little
bit in the air and not really relevant to people. You mentioned
possibly using the GDA as a measurement, but at least with the
calorific intake there is a certain amount that you should have
between this and that and you can at least do a percentage, but
obviously with carbon and environmental labelling that is not
the case. You are not saying we ought to have certain carbon emissions
of X because less is pretty much always going to be better, so
how would you actually envisage it working?
Mr Tapper: If you go back to my
Macanus & Witherson type experience, first of all that would
provide the measurement and then you would be able to then work
from that basis in the same way as you do in food. If you have
a low fat version you can actually market the fact that it is
a low fat version because it is 30% less fat than the standard
and the measurement criteria are there. So I do not see a big
issue with that. The big issue is actually coming up with the
measurement in the first place.
Mr Kendall: I think we are concerned
because this is a complex issue and we have seen the way there
has been rationalisation in the abattoirs. I could be producing
beef in Bedfordshire which then goes down to St Merrion in Wales
to be slaughtered and produced and then goes on sale in Scotland.
Where do we pick up the story? Where do we pick up the carbon
measurement on the product as beef, for example? I think there
are so many grey areas with different products going to different
places and how it is produced, whether it is has been a wet season,
whether I have irrigated or whether I have not irrigated. This
is the point about whether I believe in British agriculture being
responsible, getting ahead of the game, trying to use its inputs
very responsibly. I do see it as a marketing edge for us in the
long run. I just do not think we understand all the complexities
of what we are doing on carbon usage and how we might demonstrate
it at this moment in time.
Chairman: I think we are going to get
the answers to those questions later on this afternoon. Thank
you both very much for your evidence to us. It is much appreciated.
| 
