Written evidence submitted by the Food
and Drink Federation (FDF)
The Food and Drink Federation (FDF) represents the
UK's food and drink manufacturing industry, the largest manufacturing
sector in the country, with a Gross Value Added of about £21.6
billion. The UK is also the world's eighth largest exporter of
value-added food and non-alcoholic drink products, with nearly
£10 billion of overseas sales.
At both a UK and EU level the sector operates in
increasingly open and competitive international markets. To succeed,
our industries must have access to adequate supplies of raw materials
that are safe, of high quality and competitively priced. We are
committed customers of UK farmers, purchasing around two-thirds
of the country's agricultural output. But to supplement this supply
base, we also import ingredients for further processing.
Although successive rounds of CAP reform are moving
EU agriculture towards greater market orientation, further reform
is needed to consolidate this progress. We also believe that more
needs to be done to protect and enhance UK and EU productive potential
to help meet the coming challenges of food security and climate
change. This means doing more to safeguard natural resources,
such as soil and water and to preserve biodiversity. In short,
we need a sustainable food and farming policy, looking at the
supply chain as a whole and based on resource efficiency and comparative
advantage rather than historical patterns of production.
How will the Commission's proposals affect the
ability of UK agriculture to be competitive in a global market?
1. The Commission has suggested three broad options
to launch further debate on reform of the CAP, stopping short
of offering significant detail as to how these options might be
achieved. Given the lack of detail, it is difficult to accurately
evaluate the potential impacts of this document.
2. FDF is pleased that the Commission has included
the competitiveness of the food supply chain as a key objective
for reform of the CAP. Ensuring viable food production, encouraging
increased productivity and improving the functioning of the food
supply chain will help improve the competitiveness of UK farming
and food. But much will depend on the choice of options proposed.
3. In this context, it is disappointing that
the Communication sees increased trade liberalisation as a potential
threat rather than an opportunity. A more market-oriented CAP,
more open to world trade would stimulate export performance and
help boost competiveness. This is essential for us to maintain
investment and production within the UK, as companies make new
regional or global investment decisions and as the EU enlarges.
Do the proposals ensure fair competition for British
agricultural products within the European Union?
4. The EU is a very diverse area of agriculture
production. The more that CAP tools and mechanisms are adapted
to local circumstances, the greater the risks of market distortion
and unfair competition. The principle of comparative advantage
needs to be reflected in a system which also encourages resource
efficiency. Supporting inefficient or unproductive sectors will
not help the EU to remain competitive or meet future food security
needs. It may also harm UK interests.
5. FDF would therefore like to see less emphasis
on potentially market distorting national flexibilities such as
those introduced under Article 68 of the CAP Health Check of 2008.
Any such aid needs to be directed primarily towards environmental
priorities.
Will the proposals achieve the correct balance
between productivity and sustainability?
6. FDF is pleased to see that the proposals include
an emphasis on productivity and sustainability, with two of their
three main objectives for the future CAP being "viable food
production" and "sustainable management of natural resources
and climate action". However, there is again a real lack
of detail regarding measures to achieve this, particularly in
the case of productivity.
7. More needs to be done to improve ecological
resource efficiency. But this needs to be done in ways which avoid
unintended consequences or hamper productivity. Any new measures
also need to be simple to administer and monitor.
Do the proposals place the UK in a good position
to help meet future food supply challenges?
8. Depending on the options chosen and the detailed
mechanisms involved, the proposals have the potential to help
the UK in meeting future food security challenges. But it would
be preferable to have sustainable food production as a more explicit
policy aim to mark a step change in the reform process and to
ensure that market distorting measures continue to be phased out
and that available resources are used to develop productive potential
and preserve natural capital.
9. As an example of this, FDF welcomes the Commission's
continued commitment to the removal of dairy production quotas
in 2015. The end of quotas and the forthcoming proposals from
the High Level Expert Group on Milk should help to ensure improved
market orientation in the dairy sector, enabling long term planning
by dairy farmers and increased stability. UK food and drink manufacturers
have faced significant shortages in supplies of dairy raw materials
in recent years and improvements in the functioning of the dairy
market would be welcomed.
Will the proposals redress the imbalance in support
to different sectors created by the historic basis of payments?
10. The Commission favours greater equity in
the distribution of direct payments between Member States rather
than redressing imbalance in support to different sectors of production.
FDF welcomes the abolition of historical CAP payments to move
towards a fairer and more equitable system that rewards active
farmers, however it is unclear which "objective" criteria
the Commission will base payments on and exactly how this will
impact different sectors and UK agriculture in general.
What aspects of the proposals should be made a
common policy, and which are best left to Member States?
11. A strong EU common policy for farming and
food is essential for guaranteeing equitable competition conditions
within the EU. Maintaining a single market for agricultural products
must remain the guiding principle for the future. It is important
to ensure that national flexibilities and exemptions do not create
distortion which would harm the single market or the supply of
raw materials to the food industry.
Can the proposals be implemented simply and cost-effectively,
within a short time-scale?
12. The options presented by the Commission are
lacking in sufficient detail to adequately evaluate potential
costs and difficulties of implementation. The proposed greening
of pillar 1 is potentially burdensome and a complicated measure
to enforce.
December 2010
THE UK FOOD AND DRINK MANUFACTURING INDUSTRY
The Food and Drink Federation (FDF) represents the
food and drink manufacturing industry, the largest manufacturing
sector in the UK, employing around 440,000 people. The industry
has an annual turnover of over £72.8 billion accounting for
15% of the total manufacturing sector. Exports amount to almost
£10 billion of which 79% goes to EU members. The Industry
buys two-thirds of all UK's agricultural produce.
The following Associations are members of the Food
and Drink Federation:
| ABIM | Association of Bakery Ingredient Manufacturers
|
| ACFM | Association of Cereal Food Manufacturers
|
| BCA | British Coffee Association
|
| BOBMA | British Oats and Barley Millers Association
|
| BSIA | British Starch Industry Association
|
| CIMA | Cereal Ingredient Manufacturers' Association
|
| EMMA | European Malt Product Manufacturers' Association
|
| FA | Food Association |
| FOB | Federation of Bakers |
| FPA | Food Processors' Association
|
| GPA | General Products Association
|
| MSA | Margarine and Spreads Association
|
| SB | Sugar Bureau |
| SMA | Salt Manufacturers' Association
|
| SNACMA | Snack, Nut and Crisp Manufacturers' Association
|
| SPA | Soya Protein Association
|
| SSA | Seasoning and Spice Association
|
| UKAMBY | UK Association of Manufacturers of Bakers' Yeast
|
| UKHIA | UK Herbal Infusions Association
|
| UKTC | UK Tea Council |
Within FDF there are the following sectoral organisations:
| BCCC | Biscuit, Cake, Chocolate and Confectionery Group
|
| FF | Frozen Food Group |
| MG | Meat Group |
| ORG | Organic Food and Drink Manufacturers' Group
|
| SG | Seafood Group |
| VEG | Vegetarian and Meat Free Industry Group
|
| YOG | Yoghurt and Chilled Dessert Group
|
| 
