Memorandum submitted by Tenant Farmers Association (SFS 13)

 

Introduction

 

The Tenant Farmers Association (TFA) was established in 1981 as an Association to represent the interests of tenant farmers in England and Wales. As such, the Association's focus is on those aspects of policy and practice which fall uniquely on the let sector in agriculture. However, there are, inevitably times when it is important for the TFA to have a view on wider issues as they impact upon tenant farmers and others within the industry. Securing food supplies up to 2050 is one such issue.

 

The TFA has a strong belief that there is a need for the UK Government and the EU authorities to develop specific policies in relation to food security taking into consideration both domestic and international concerns. Whilst the UK Government may feel that it has already set out a framework for dealing with food security issues in its Cabinet Office Report "Food Matters: Towards a Strategy for the 21^st Century" the TFA would disagree. In our view, the report became sidetracked into issues related more to environmental and public health concerns distracting the attention away from the central question of how we sustain food supplies into the medium and long term.

 

Scope of Evidence

 

The food system in the UK, let alone internationally, involves a large number of players. The focus of our evidence will be the perspective of primary producers and in particular those primary producers who rely upon rented land for their farm businesses.

 

The TFA is also aware that food security necessitates consideration of trade and domestic production. Without wanting to underestimate the importance of trade, our written evidence will focus on domestic production considerations as this is where our expertise lies. In any case, the lesson of the last two years is that global markets can be fickle and trade imbalances can affect developed nations.

 

How robust is the current UK food system?

 

The Select Committee has requested that those responding to the call for evidence in this Inquiry should look at the strengths and weaknesses of the UK food system. The TFA's analysis is provided below.

 

Turning first to strengths, we would firstly point to the dedicated, professional and resilient farming community. Over the past twenty years, domestic producers have faced both chronic and acute difficulties which have been faced with tenacity and resilience. However, the TFA would stress that this is not a good long term position and evidence from the dairy, suckler beef and pig sectors would point to the conclusion that pressures are beginning to impact on our supply capacity.

 

Secondly, the UK is blessed with good natural conditions in relation to soil, climate, political stability, and distribution networks. The TFA believes that the value of these aspects cannot be underestimated particularly when the UK is compared with other parts of the globe which are not so well endowed.

 

Thirdly, at least up until recently, the UK farming industry has access to leading technology and farm operators display a high level of skill.

 

Fourthly, in recent years, we have seen a resurgence in consumer demand for high quality, locally sourced food which the UK producer is well able to satisfy.

 

There are however a significant number of weaknesses which need to be addressed, as follows:

 

Firstly, the TFA believes that much will need to be done to repair the damage caused by thirty years of Government policy which has sought to undermine production agriculture due to an inability on the part of UK authorities to see past the problems of the Common Agricultural Policy. We have developed a policy framework which seems to value the environment at all costs and food production hardly at all. It is important that we urgently find a new balance between the production of environmental goods and services and food production.

 

A second major weakness in the UK's food supply system is the significant imbalance that exists between the power of retailers and the power of primary producers. We have allowed a relatively small number of very large operators to use their ongoing competition for market share to drive down the prices paid to primary producers to ensure that consumer-facing products are placed on shelves at the lowest possible price. The TFA believes that the proposed food industry ombudsman would be a significant check on this negative activity and would urge that Government should come forward with necessary legislation to bring this to fruition.

 

Thirdly, since the 1980's, we have seen the Government retreat from applied research and development which is deemed to be "near market". The TFA believes that if we are to address our future food needs then there is a legitimate place for Government involvement in funding medium to long term applied research and development which assists in improving our technical efficiency in producing food. This should include, but not be limited to, research into emerging technologies.

 

Fourthly, the TFA is concerned that the considerable increase in volatility is having a negative impact on our long term food security. Despite its many shortcomings, the Common Agricultural Policy did at least provide a degree of domestic stability to producers which we are now seeing reversed as the protection the CAP afforded is removed. Whilst the volatility that is now being experienced is leading to the development of ideas for new hedge funds and futures markets, the TFA does not believe that this is a stable framework within which primary producers and their landlords can be expected to invest. The TFA believes that policy solutions need to be developed to minimise the impact of volatility on long term decision making.

 

Fifthly, the TFA is concerned about the lack of opportunities available for new entrants to consolidate their businesses. Agricultural tenancies have traditionally been the way in which new entrants access the agricultural industry and whilst opportunities for new entrants still exist, particularly through the County Council Smallholdings system, there are now fewer opportunities for new entrants to establish themselves into the long term by moving into the private sector on longer and larger units. In all bar a few cases, the market in agricultural tenancies from landlords like the Church Commissioners, Duchy of Cornwall and Duchy of Lancaster has all but dried up. This is in part due to the need to rationalise existing units but also in part due to the lack of incentives for landlords to let longer term.

 

Sixthly, the TFA believes that we are turning our back on traditional methods of production which have served us well in the past and should serve us well in the future. For example, our suckler beef industry has relied upon a steady stream of calves coming down from the hills where they have been bred to be fattened on lowland units before going to market. That structure is now in rapid decline due in part to the complete removal of subsidies on breeding livestock and also in part due to the regulations for livestock marketing and slaughtering.

 

Finally, the TFA is concerned about the lack of brand ownership amongst farmers which has been caused due to regulatory interference such as the splitting up of successful co-ops like Milk Marque and too strong a reliance upon assurance schemes such as the Red Tractor.

 

How well placed is the UK to make the most of its opportunities in responding to the challenge of increasing global food production?

 

The TFA believes that tackling and addressing issues of food security is at least as important as climate change. However, in comparison, issues of food security barely get a look-in whereas climate change policy seems to permeate every aspect of Government thinking. This is beginning to change but it will need to change faster if we are going to be able to contribute to the increasing global food need. Despite the resilience of the agricultural industry noted above, we have seen in recent times how quickly capacity can be lost with the dairy industry, pig sector and suckler beef industries as cases in point.

 

Even now, Government policy seems to conspire against the demands and needs of ensuring food security. When the rest of the world is focused upon how to meet the demands of a growing world population, the UK (and more specifically England) continues to be transfixed with policies to reduce production. Examples of these include Defra's desire to replace compulsory set-aside with a new set-aside regime using the cross-compliance criteria of the Single Payment Scheme, it's continued inability to deal with bovine TB which causes the needless destruction of many thousands of beef and dairy animals year on year and the Government's unwillingness to grant-aid the extra slurry storage capacity that livestock farmers will need to comply with new Nitrate Vulnerable Zone Regulations which will inevitably force many of them out of business. If such an attitude to production agriculture continues than we will not be able to be equal to the challenges for food security which are with us now and will increase in the future.

 

It is right that a balance is struck between ensuring that we are efficient agricultural producers and also managing and enhancing the environment. The Government's approach is wedded to restrictive agri-environment schemes whereas more flexible approaches should be sought in consultation with bodies like Linking Environment and Farming (LEAF) and the Farming and Wildlife Advisory Group (FWAG).

 

What assistance should the Government provide to the food industry?

 

Firstly, the UK Government needs to revisit its avowed position that food security can only be tackled through trade. In setting out its vision for the Common Agricultural Policy in 2005, Defra and the Treasury stated the clear Government position that sustaining domestic production was neither a necessary nor sufficient condition for food security. The TFA believes that that is misguided and if followed as a policy will do severe damage to our ability to contribute to the rising demand for food globally over the next thirty to forty years.

 

Secondly, the TFA believes that food security should be placed firmly in the basket of public goods that the Government has a legitimate interest in securing. To date, that basket of public goods in relation to agriculture has been too much skewed towards environmental management and the TFA believes that it is time that food security issues featured more significantly within the bundle.

 

Thirdly, the TFA believes that some direct support for agriculture will continue to be necessary particularly for hill areas and particularly for breeding livestock. This will need to be done with due care so as not to cause unhelpful distortions in domestic and global markets.

 

Fourthly, the Government must do more to help influence long term thinking within the landlord/tenant sector in agriculture. To do so, the TFA recommends that the Government should look again at the fiscal and structural recommendations made by the tenancy reform industry group in 2003 which have never properly been implemented by Government.

 

Fifthly, the Government should continue to play a leading role in securing and funding applied research and development in the food and food technology arena.

 

Sixthly, the UK should be leading the way in developing EU-wide systems which help to deal with volatility in both input and output markets which will allow farm operators a more stable framework within which to invest for the future.

 

Seventhly, the TFA believes that the UK Government needs to consider the food security impact of changes in regulation and taxation on a formal basis. Given the importance of food security as a policy goal, in preparing regulatory impact assessments for policy change the Government should be required to consider if there are any food security impacts.

Eighthly, the Government has a responsibility to ensure it is playing its full part in maintaining high animal and plant health standards through strong border controls, investing in appropriate applied research and development, implementing necessary disease eradication programmes and continuing to pay its fair share of the costs associated with animal and plant health policies.

 

Finally, in relation to our position globally, the UK Government should be doing as much as possible to encourage exports from the UK to other parts of the EU and elsewhere. In this respect, the TFA believes that it was a retrograde step for Defra to cease funding Food from Britain.

 

Annual report to parliament

 

In order to ensure that food security maintains its importance, the Government should be required to produce an annual report to parliament detailing what it is doing to ensure future food security both through trade and domestic production. Targets should be set in which the Government seeks firstly to stop the decline in UK self-sufficiency in temperate products and seeks also to encourage exports from the UK.

 

Conclusion

 

The TFA welcomes the Select Committee's Inquiry into this important area of policy and believes that it is vital that policy on food security becomes a central plank of public policy in the future.

 

January 2009