Examination of Witnesses (Question Numbers
80-99)
RT HON
HILARY BENN
MP, PROFESSOR ROBERT
WATSON AND
MS BRONWEN
JONES
13 JANUARY 2010
Q80 Chairman: No, there is a waiting
list.
Hilary Benn: How big is your waiting
list?
Q81 Chairman: Fifty?
Hilary Benn: There you are; that
makes the point.
Q82 Chairman: Yes; there we are.
I would like to move on, as we come towards the conclusion of
our inquiry, and talk a bit about your approach and the European
Union and CAP. Can I touch on one piece of information which intrigues
me, which appears on page 13 of the document, where you talk about,
"CAP results in higher prices for farmers. In the UK this
meant that consumers paid an extra 3.2 billion, or £52 each,
for food in 2007." Where can you buy the basket of food that
informed that comment for £52 less than you paid here?
Hilary Benn: A straight answer,
Chairman. I need to go back to the people who produced the figures
and send you a note.
Q83 Chairman: Is it not the case
that somebody has taken the number of average families and divided
into 3.2 billion and the answer comes out at 52? This figure is
always being put around and I am intrigued to know where it comes
from, because if you take, for example, fruit, vegetables, which
we have just discussed, poultry and pigs, none of those are part
of what one would describe as the subsidised sector of the Common
Agricultural Policy, and in recent times, when grain prices have
gone above intervention levels, there is, effectively, no degree
of subsidy being put in there. It is true that somewhere around
three billion pounds is paid for the inputs the CAP that farmers
take out, particularly now with environmental payments, but there
is a disconnect between what it costs to buy the food (i.e. what
the market place delivers) and dividing out over each person in
the United Kingdom buying the CAP what it costs us. Ms Jones,
have you got an answer?
Ms Jones: I am not an expert on
these figures, but I think they are derived from both the cost
you would pay as a consumer in the shops and the cost you would
may as a UK taxpayer through our contribution to the EU budget,
a big chunk of which—
Q84 Chairman: The point I am getting
at is that we are in a highly competitive food market and, as
somebody who occasionally shops outwith of the United Kingdom,
I have got some idea of where I think things are expensive and
where I think things are cheap and because, particularly at the
moment, of the situation with the euro, for example, UK production
is very competitive. We were talking earlier about the demand
for the UK agricultural product for mainland Europe because it
represents good value for money. So there is a European market
for food which is highly competitive and this kind of thing, giving
the impression that if you just did away with the CAP tomorrow
prices of food would magically drop by £52 per, I presume,
family, I just do not think stacks up.
Hilary Benn: I think the only
way to get to the bottom of this is to ask those who produced
the figures to do a note, which I will send to the Committee.
As you of course point out, it relates to 2007 and factors in
2008 were rather different.
Q85 Chairman: Let us move on. One
of the things I do think is very important—and, Secretary
of State, you are involved in the early discussions as we move
towards a revised CAP in 2013—is the role of your strategic
approach in influencing other European Member States: because,
as you will know from long experience on the Council, other Member
States have a rather different view of what the CAP's purpose
is from, shall we say, the rather more hardnosed and practical
point of view which the United Kingdom has, and this Committee
has solidly supported the Government's stance in terms of the
various negotiations that have taken place, but if we take the
securing of food and the appropriate sustainable production of
food as very serious issues, my first point is, is that recognised
by the Commission and, secondly, by other leading Member States,
and if Europe, recognising climate change and possibly the need
for Europe to produce more food than is necessary for its own
consumption simply because production becomes more difficult elsewhere,
how much is the 2013 renegotiation going to take into account
some of these long-term and genuinely strategic issues if Europe
is to maximise its own agricultural potential in a sustainable
way?
Hilary Benn: It is a really big
and important question. A number of factors are going to be at
play here. One will be that debate about further reform of the
CAP will, of course, be influenced by the debate about the overall
size of the EU budget given the financial circumstances that all
countries face at the moment. That is the first thing. As you
will know, Chairman, we have made progress in the process of reform,
but, let us be honest, there are some Member States that are saying
at the moment, in effect, "I told you the CAP was a good
idea because this is a way of upping production." What that
does not take account of is, first, the environmental cost of
what went on and, after all, the money that we are now spending
to repair the damage of the CAP in the seventies and eighties—damage
to hedgerows, biodiversity and lots of other things, water pollution
and so on—is great. The third issue is, of course, the impact
which the CAP has on a really important group of farmers in the
developing world, and if we do not help them to get their production
up we are all in really big trouble, which is why getting rid
of those remaining export subsidies is important and not going
back to a system where you have all this surplus stuff and when
we had decided what we wanted we would then dump it elsewhere
and completely undermine the markets of people who are trying
to get a foot on the ladder. Farmers, above all, need markets
and, as the 2008 wheat harvest in Britain showed, if you have
got a good incentive and a good market, you can produce quite
a lot. So I think it is going to be a very, very important negotiation.
The honest answer is, yes, to some extent these questions of sustainability
and climate change will be taken into account, because it will
be advanced by some, as it already is, as an argument they would
not say for going back to where we were, but saying that Europe
putting money into encouraging food production is a good thing.
Our position remains we want to move away from Pillar 1 to Pillar
2, for the reasons we discussed earlier, supporting the things
which the market itself does not do, and I think it is going to
be a pretty lively debate, to tell you the truth.
Q86 Mr Drew: The problem with the
CAP at the moment (and you know I am a long-term critic of it)
is that actually it becomes less and less a common policy. The
pressures on different parts of Europe mean that, for all sort
of reasons, we want more independence of action because markets
are likely to become more local, they are certainly going to have
to recognise the issue, which is what this is about, of security
of supply. What we might want to do could be completely different
to Poland, for example. So how do you square that?
Hilary Benn: I think that is right,
but it reflects the different interests. You raised the question
of milk and our 13 and a bit billion litres. We have argued very
strongly for phasing out of the quota. You talk to other countries
which are very anxious about this because they look at where milk
production is currently and think, "If that happens, then
milk production in our country will be concentrated on just one
bit geographically. What is going to happen to the landscape and
the livelihoods of people who live in other parts of the country
who are currently supported by the system?" So they worry
a great deal about that and, from their point of view, understandably.
We have a pretty efficient sector which has got more efficient
because, if you go back 20 years, milk production was a little
bit higher, 14 and a bit billion, but we have got less than half
the producers now because it has become a more productive sector,
and those changes bring with us an opportunity for the UK industry—and,
of course, we export a great deal. I do not know how it is going
to work out, that potentially which you have identified, because
we have seen most recently in relation to the dairy sector a cry,
"Come in and help us." There has been, frankly, less
pressure in relation to that and less of a problem in the UK than
in other European countries, which does reflect in part the productivity
of our industry, despite the challenging times that they face.
Fundamentally, it will be about how much money is going to be
spent and what is the most effective way of spending it. That
is what will determine the outcome.
Professor Watson: Just adding
something to what Hilary has said, if we want global food security,
it is absolutely critical that we work with developing countries
to increase their production. It is not going to be solved by
exporting from Europe or the US. Therefore, in the international
assessment I directed, it is absolutely critical to get trade
reform, not just CAP at the Doha round of trade, so we do not
dump food that is produced in industrialised countries with production
subsidies. It is also critical we work on rural development. There
is no reason why an average farmer in sub-Saharan Africa should
get one tonne per acre of mixed maize and beans. Even with today's
technology, you can get it to three and four. It is a classical
issue of rural development. Our report argued you needed trade
reform globally, you needed rural development, micro-financing,
roads and infrastructure, education of women, coupled with advances
in science and technology. You need a complete package, and the
education of women plays a very critical role. So if we want global
food security, which we do because it affects the UK, a lot has
to be done by increasing production sustainably in developing
countries.
Q87 Chairman: Bearing in mind our
considerable experience with post-harvest handling in this country,
is part of the strategic approach designed to draw on our practical
experience and disseminate that where it is appropriate? In other
words, as the Secretary of State will know from his time in DFID,
he knows more about the disbursement of funds, I think, than most
people, but the technology and the understanding, if you could
get Britain's technology of 20 years ago into the countries you
have just described, what a quantum leap there would be.
Hilary Benn: I agree, if that
knowledge could be spread. The truth is that, if you go back a
few years, both donors in the international aid community had
taken their eye off the agricultural ball—that is the truth—and
some developing country governments have done so. We took at it
all for granted, and that was a mistake, and 2008 has demonstrated
that. Douglas Alexander is doubling the investment that we are
putting into investment in agriculture research in the developing
countries in which we work over the next few years. That is really
important. We put a lot of money when I was at DFID into CGIAR.
Q88 Chairman: Can you remind everybody
what that is?
Hilary Benn: Consultative Group
on International Agricultural Research.
Professor Watson: Correct. Well
done.
Hilary Benn: Precisely for the
reasons that Bob himself has set out, and it is also about governance.
Do farmers feel secure on the land? Because if you do not feel
secure, you are not going to invest. Good roads, bring down the
price of fertilizer, help you to get the goods to market—it
is all of those very practical steps, and having a market, in
the end, is what is going to drive that change, and since we know
that in 1940 a hectare of land in the world was able to feed two
and a half people, by 2020 it is going to have to feed six and
a half people, boy have we got a job on our hands.
Chairman: The mention of science takes
us neatly into Lynne Jones' area of questioning.
Q89 Lynne Jones: Before I go on to
my main questions, can I raise the issue of soil. In the report
it does mention the soil quality but not total resource. Of course
some of the best agricultural land is in the East Anglia area,
which is potentially going to be affected by rises in sea level.
Has any thought been given to that issue?
Hilary Benn: Yes, but East Anglia,
of course, faces the biggest problem of coastal erosion. We have
a system for prioritising flood defences, as the Committee will
be very well aware. You can organise the formula in any way that
you like, but the way the formula works at the moment, not surprisingly,
is it protects particularly residential homes and businesses,
the economic impact if areas were to flood. The Environment Agency
is talking to farmers because in some cases if the EA says, "We
cannot maintain this wall any more", then farmers may pick
it up, and I know from the past of East Anglia that that conversation
is itself taking place. In some part it is going to be very difficult,
even if you had unlimited amounts of money and concrete, depending
on the level of sea level rise, to say the coastline, which has
changed over the centuries, is going to change no more because
we are going to be able to stop it happening, because the truth
is that we are not going to be able to stop it happening.
Q90 Lynne Jones: But it is disappointing
that it was not touched on in this strategy and whether the priorities
ought to be changed in the light of the pressures in relation
to food security?
Hilary Benn: That would be a very
interesting debate, to say we are going to provide less protection
to houses and more protection to agricultural land.
Q91 Lynne Jones: Would it not need
to be raised as an issue in a report like this?
Hilary Benn: It has been raised
already, as I have indicated, in the discussions that are taking
place down the east coast as the EA and others are looking at
the plans for combating flooding.
Q92 Lynne Jones: This is your report
on your food strategy and it is not even mentioned. I am not saying
that it should be protected, I just think it ought to be flagged
up as an issue.
Hilary Benn: It will also be looked
at as part of the Foresight process, which does plug into this
in the way that Bob indicated earlier.
Q93 Lynne Jones: I think for the
rest of my questions I would be getting myself rather less muddled
if I had that chart that I was requesting earlier, because it
is very complex, all these different organisations and strategies,
and so on, but I will do my best. In our own report on food security
we did highlight the reduction over a number of years in agricultural
research and we did make recommendations, and I think the response
to our recommendations on the need for an increase in the budget
was that the UK Strategy for Food Research and Innovation was
going to be published later on in the year. I think it was actually
published this month and, I apologise, I have not actually read
it, but could I ask what part Defra played in drawing up that
strategy and how does it relate to your strategy?
Hilary Benn: Bob will respond,
if that is all right. Can I just say on the financing, in 2008-09
Defra and BBSRC together spent £253 million on food sustainability,
food and farming related research. In 2003-04 it was £204
million. So, just to put on the record, the balance has altered
between Defra and BBSRC—in Defra it has gone down; in BBSRC
it has gone up—but it does not really matter which envelope
the funding comes in, the question is what is the Government overall
putting in?
Q94 Lynne Jones: We did mention that
in our report, but we said, although it had gone up again, that
reflected the overall increase in the science budget. I do not
know what is going to happen in the future; I certainly hope that
budget pressures will not reduce our spending on research and
development, because I think it is crucial for our future. So
we did acknowledge that, but we still felt that there was a need
for more investment in research.
Hilary Benn: That is exactly why
we responded with the 50 million over five years from the Technology
Strategy Board—you are looking quizzically at me—which
is subsequent to the committee producing its report.
Q95 Lynne Jones: Yes, that is one
of the questions. The 90 million over five years. Of that, which
is the Sustainable Agriculture and Food Innovation programme,
50 million is new money.
Hilary Benn: Yes.
Q96 Lynne Jones: It is over five
years. So that is 10 million a year, which does not really, make
up for the concerns that we were expressing. Is that new money,
or where has it come from?
Hilary Benn: It has come from
the money that has been allocated to the Technology Strategy Board,
which is looking across a whole range of things but has identified
that food and farming research is one important strategic priority
and has put that in, which I warmly welcome having argued for
it, and it will be supported by money principally from Defra and
a bit from BBSRC to go with what they are doing to fund the range
of research programmes, but Bob was going to respond.
Professor Watson: There is new
money through the Technology Strategy Board, indeed. Defra worked
very, very hard with Ian Gray to get this money, and so did John
Beddington and BBSRC. It was a concerted effort to try and get
an innovation strategy in the agri-food business. This is a very
different type of innovation platform from what TSB is normally
used to. They are doing low carbon vehicles, they are doing low
carbon houses, they are much more used to what I call very hard
infrastructure. In addition, however, DFID is literally going
to be doubling, as Hilary has said already, its budget related
to agriculture R&D for the goals of development. This year
2008-09 the spend is 50; within about three years from now it
will be up to 80 million. So there is an upward trajectory both
in DFID R&D and in the consortia now with the Technology Strategy
Board. The document, effectively, that did come out the day after
Food 2030 is, indeed, this document, UK Cross Government
Food Research and Innovation Strategy, and, as you can almost
see from all the logos on the bottom, it was a truly integrated
effort across government and the research councils, and so on.
The lead from the research councils was BBSRC. The lead government
department was Defra but with strong support from DFID. It shows
the money from the Scottish Governments as well. If you look at
all of the programmes that we currently have, including that of
the Scottish Government, there is actually about £415 million
spent in 2008-09, the big number being that by BBSRC, followed
by ourselves, then the Scottish Government, and then DFID and
then a significant amount of money also, or not insignificant,
in the Medical Research Council, the Food Standards Agency, et
cetera. So when this document was put together it truly was, in
my opinion, an excellent example of government working together,
and we are going beyond this now because this was government spend.
So, again under John Beddington and GO-Science, we are now looking
effectively at what is happening in the private sector, so we
have a consortia, including a wide range of actors in the private
sector, asking themselves also about research, but there are two
subcommittees, one just finished as well, What is the skill
mix needed in agriculture and the Food Sector, and that piece
of work was headed up by Celia from BBSRC. They have concluded
their work on the skill gaps. The other one that is currently
working is with Chris Gaskell, who is from Cirencester—he
heads up the Royal Agricultural College—and he is looking
at whether there are there gaps in translational research. So
all of the players that effectively helped John to put this together
are now working on an additional thing of asking effectively,
with the private sector, are there skills gaps and are there gaps
in translational research.
Q97 Lynne Jones: I asked where the
10 million a year came from?
Professor Watson: The TSB has
its own budget. It comes out of BIS. There is a Technology Strategy
Board budget out of BIS.
Q98 Lynne Jones: So there was a reserve
which had not been allocated for anything else.
Professor Watson: There was a
budget given to the TSB and they have a strategy board, and the
question was how to spend that money that could help the private
sector be economically viable. As I said, much of the money has
gone into low carbon vehicles, low carbon buildings, there is
some into stem cell research, there is some in the indigenous
economy, and one of the newest of the platforms is, indeed, this
one on the agri-food industry.
Q99 Lynne Jones: If you recall, the
Chief Executive of the BBSRC was quoted as calling for the need
for an extra 100 million a year in agricultural research. Are
there any plans to increase public spending in this area?
Professor Watson: That request
for more money did not actually come direct from Douglas Kell
of BBSRC, it was an outgrowth of the Royal Society report Reaping
the Benefits, and that was the whole issue of science assisting
agriculture. Reaping the Benefits was the one that did
call for a significant increase in funding. Obviously, as we look
forward to the next Comprehensive Spending Review, there is going
to be a lot of pressure on all budgets. So what we are collectively
doing, with BBSRC taking the lead, is asking ourselves what would
a true integrated agricultural R&D programme look like, all
the way from looking at agricultural productivity but looking
at the social and behavioural issues, looking at the trade issues,
et cetera. So we are all working together at what would a really
integrated cross-government programme look like but, obviously,
the issue of where funding would come from will have to be a political
decision and we realise budgets are going to become very tight
in the future.
|
