Greening the Common Agricultural Policy

Written evidence submitted by the Food and Drink Federation (FDF) (GCAP 11)

Introduction

The Food and Drink Federati o n Food and Drink Federati o n (FDF) represents the UK’s food and drink manufacturing industry, the largest manufacturing sector in the country, with a Gross Value Added of about £20 billion. The UK is also the world’s eighth largest exporter of value-added food and non-alcoholic drink products, with just under £11 billion of overseas sales in 2010.

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.

As an industry we are profoundly aware of the twin challenges of food security and climate change. We are committed to reducing our own environmental impacts and to working with others to increase resource efficiency and help protect natural capital across the whole food supply chain. We believe that sustainable food production should be the key objective of the CAP post-2013.

Summary

Although successive rounds of CAP reform are moving EU agriculture in the right direction, further reform is needed to accelerate and enhance this progress:

· EU agriculture needs to become more competitive , more innovative and more market driven , and this in turn will help farmers to become less reliant on direct payments.

· The CAP should be re-orientated to address challenges of food security and environmental pressures , including climate change.

· 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.

· More needs to be done to protect and enhance EU productive potential and to safeguard natural resources , such as soil and water, and to preserve biodiversity.


Answers to specific questions

Will the proposal to green direct payments generate significant environmental benefits

1. We believe that more needs to be done to protect and enhance the key natural resources on which future food production depends. But this needs to be achieved without damaging the competitiveness of EU agriculture or the sector’s ability to respond to market signals. The measures currently proposed risk reducing operational flexibility without delivering specific environmental benefits which take account of local conditions. A more targeted, incentive-based approach would seem more appropriate, though care would be needed to avoid undue complexity.

The impact of additional greening requirements on food production and the competitiveness of the agricultural industry

2. Requiring a default amount of land (7%) to be taken out of production irrespective of individual circumstances seems likely to depress output and add to unit costs. A preferable approach would be to concentrate on areas of particular environmental sensitivity, e.g. water courses, field margins etc.

Consistency of the greening proposals with the CAP simplification agenda

3. There is clearly a tension between the delivery of specific environmental benefits and the need for administrative simplification and the practical management and monitoring of measures at farm level. But given the wide diversity of conditions in the EU, a "one size fits all" approach is unlikely to achieve the balance required.

How greening pillar 1 can be made coherent with agri-environment schemes

4. In the context of needing to produce more from less and with less impact, the current distinction between support for production (pillar 1) and incentivising environmental protection (pillar 2) is a false antithesis. Ideally all payments need to reflect the need to increase output sustainably while preserving natural capital.

Recommendations for improving the greening proposals

5. We believe that a more targeted, incentive-based approach focussing on areas of particular environmental sensitivity and taking account of the wide diversity of conditions in the EU would help to improve the greening proposals. The payments should also reflect the need to increase output sustainably.

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 up to 400,000 people. The industry has an annual turnover of over £72.3bn accounting for 15% of the total manufacturing sector. Exports amount to almost £11bn of which 77% 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

BSNA British Specialist Nutrition 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 Group

SG Seafood Group

VEG Vegetarian (Meat-Free) Group

YOG Yoghurt and Chilled Dessert Group

November 2011

Prepared 30th November 2011