Science and TechnologyWritten evidence submitted by the National Farmers’ Union

The National Farmers’ Union (NFU) is pleased to respond to the Science & Technology Committee Inquiry: Bridging the “valley of death”: improving the commercialisation of research. The NFU has some 55,000 farmer and grower members in England and Wales and represents the great majority of full time commercial farmers.

1. Executive Summary

1.1 The NFU believes that significant and urgent changes are needed in the current political, regulatory and scientific frameworks to create the right conditions for improving the application and commercialisation of research.

1.2 Science and its commercialisation, whether that be new pieces of technology, new products or simply better adoption of best practice, is crucial to the success of the agriculture industry in facing the challenges ahead. However, the pipeline carrying science through to real products and practices which farms can use is fractured following years of under investment, particularly in the applied sciences and translation of research.

1.3 The UK has been world leader in agricultural research exporting ideas and technology over the globe, but a shift away from evidence-based regulation in Europe, particularly with regard to biotechnology, is leading to isolation. It creates a climate that deters rather than fosters commercialisation of research outputs. This in turn stifles future research investment in the UK from the private sector.

1.4 The agricultural industry increasingly specialised, which in turn required more focussed delivery of the commercial outcomes from research.

1.5 In England the privatisation of our national knowledge transfer capabilities and replacement with short-term, and often environmentally focussed projects, has further fragmented delivery channels for research and commercialisation opportunities in agriculture. Therefore, the structure of the knowledge transfer and exchange network is long-overdue a strategic overhaul to get information flowing again in both directions.

1.6 Years of low profitability have eroded confidence in investment and commercialisation of research outputs targeted towards the agricultural industry. If the agricultural industry itself is profitable, it will help to improve the necessary pull and opportunity for investment in commercialisation of the research it needs.

1.7 The NFU wish to see the optimal use of European funds such as RDPE and Horizon 2020 to address genuine industry research needs and knowledge transfer to gaps which then improve the chance of commercial uptake.

1.8 The Government must tackle contradictory national and European policy messages which constrain farm businesses from investing in the commercial outputs from research.

1.9 The agricultural industry already makes a substantial financial contribution to applied research via the AHDB levies. However, this effort alone is not enough to address market failure and there is a need for better join up with other public funding routes such as the BBSRC.

What are the difficulties of funding the commercialisation of research, and how can they be overcome?

2. Science, technology and their subsequent commercialisation are absolutely crucial to ensuring that future growing demands for food, fuel and fibre can be met from a limited land area. The UK farming industry faces the challenge of lifting agricultural productivity at the same time as reducing our environmental footprint, with diminishing, more costly, natural resources and using a finite amount of agricultural land. The renewed efforts to focus scientific research on productive agriculture seem to have struck a chord with Government both in the UK and in Europe and we’ve seen a number of high profile reports on this, notably, the Foresight report of 2011 (Future of Food and Farming).1 Whilst this is encouraging, to actually achieve tangible advances it requires investment in the sort of research that farmers can then apply to their businesses. While the “early discovery stage” of R&D in the UK remains strong, there has been a substantial cut in publicly-funded agricultural science, in the UK and worldwide, since the 1980s. This has been particularly noticeable in the applied sciences and the translation and demonstration of research which are a critical step in taking ideas through to commercialisation. This has been frequently referred to as the fracture in the “discovery pipeline”. This issue has been noted in numerous reports including the All Party Parliamentary Group on Science & Technology in Agriculture report of 2010,2 the NFU’s own Why Science Matters for Farming report of 2008. 3

3. This is further compounded by the profitability of agriculture. A more profitable industry should also provide more fertile ground for the science and research coming from government and industry. However, it is only in the last three years that profitability of agriculture has increased, and this has not been universal in all sectors. In much of the decade prior to 2008, farm businesses saw low levels of profitability. Farm businesses either lacked the funds to reinvest or the returns from the marketplace made investment unviable. Arguably, a strategy for renewal, replacement and investment was usurped by a make-do and mend philosophy. Of course, with low profitability in agriculture and what might have been perceived as a shrinking market place until recently, agriculture is a less attractive proposition for the intermediaries involved in the commercialisation of science and technology. In time, this is reflected in shrinkage of the intermediaries themselves and also their investment in science and research.

4. Regulatory compliance will have driven some farm investment, but this is often reactive and can erode a farmer’s ability to make more proactive choices and investments. This means both competition for what investments farm profits might allow and perhaps more importantly, a culture where farmers have effectively been told what they should invest in rather than undertaking their own appraisals and decision making. This will all have shaped industry responsiveness to the application of research at the farm level. We are now seeing improved investment on farms, with new machinery and buildings tending to be the priority areas for spend. This will undoubtedly impact on uptake of R&D and science, but consideration needs to be given as to how this could be accelerated.

5. The timescale for agricultural research to deliver can be long and this can further deter private investment and ultimately the rate of commercialisation of research. For example the, the uptake of innovations in agriculture can take many years. The Cross-Government Food Research Strategy quoted a “long lag of perhaps 15–25 years between research expenditures and widespread implementation at farm level”.4 This emphasises the urgent need to take a long-term, strategic view now such that we are well-placed to meet the future challenges to agriculture.

Are there specific science and engineering sectors where it is particularly difficult to commercialise research? Are there common difficulties and common solutions across sectors?

6. The structure of agriculture can provide a barrier to uptake and commercialisation of the results of scientific research. Even discounting the very smallest farms, 96% of England’s agricultural output is generated by some 56,000 farm businesses. These farm businesses cover many different sectors with sometimes quite different issues and commercial opportunities. This fragmentation presents a significant challenge for intermediaries to “take” commercialisation to the farm gate considering the breadth of the industry. This is compounded by the fact that despite an instinctive drive to innovate and experiment, many small farming businesses are often time and resource poor leaving little opportunity to explore commercial application of new R&D technology. So, perhaps one of the greatest challenges for the agriculture industry is getting take up of existing knowledge and best practice. A positive step here would be to look at examples where similarly fragmented industries have seen innovation rapidly spread from the individual business level to become adopted more widely and have real commercial potential.

7. The translation of science in agriculture is arguably one of the biggest challenges for agriculture in making a functioning connection between research and the industry. There is significant opportunity to look at how public/private partnership could work better in this vital area. Who are the advisers going on to farms already? How can existing industry led initiatives be better harnessed and coordinated to provide a translation role? How equipped are they with regard to science and research, and what can they do to promote it? These are key points which have already been identified in the House of Lords European Union Committees report (“Innovation in EU Agriculture”) 2011.5 Here the NFU shares the conclusion of the Food Research Partnerships’ sub group on Translation in Agri-Food6 which states that better co-ordination of this critical part of the research pipeline can help strengthen “both science-push and market-pull for research”. Building on developing better partnership working between industry sectors, existing industry initiatives and research providers will breed greater ownership and ultimately better relevance of research. The NFU see that the AHDB has an important role here in helping address the “valley of death” as one of the key players in the provision of relevant R & D knowledge transfer directed at helping agriculture and horticulture be more competitive and profitable and at the same time environmentally sustainable.

What, if any, examples are there of UK-based research having to be transferred outside the UK for commercialisation? Why did this occur?

8. The UK has traditionally been a world leader in agricultural R&D but it is essential that this reputation is continued and furthered over the coming years. Many UK R&D centres have great traditions of being global experts on issues such as climate change and animal health. The knowledge from these institutions benefits not just UK farmers and growers, but can be transferred from these institutions globally to assist in securing food supplies globally. It is positive that UK-based research finds commercialisation in other parts of the world; we can and indeed should all learn from each other.

9. The regulatory framework must also be conducive to retaining UK research and commercialisation opportunities in the UK: In 2010 the UK Cross-Government Food Research And Innovation Strategy7 stated that:

“The Government will need to draw on the best expert advice to work with and influence the EU and the international regulatory system, to ensure an effective regime that appropriately balances benefits and risks, including for emerging scientific developments such as genetic modification, new pesticides, nanotechnologies and irradiation, to improve the efficiency with which new technologies can be managed and where appropriate adopted, with relevant and proportionate safeguards.”

However, as an example, the approval process for cultivation of GM traits in the EU has seen just two products approved in the European Union in the last 14 years, despite the rigorous safety process.8 This political climate has led to the recent and very public withdrawal of BASF from continued research in Europe. The ripple effect of this is much wider than purely the cultivation of GM. It sends out a message which has much wider implications for the commercialisation of all sorts of new technologies in agriculture. Businesses and researchers will see little incentive to base themselves in the UK or indeed Europe when their work is considered unlike to find a commercial outlet here. Excellent work by the John Innes Centre on blight-resistant potatoes9 and Rothamsted Research on aphid resistant wheat10 are just two examples of UK research centres currently working on innovative biotechnological solutions to reduce reliance on pesticides. However, the current regulatory framework and lack of political will means that the UK is unlikely to benefit from the commercial outputs with the net result being a loss to the UK agricultural research community. This can only be addressed with a combination of strong leadership from Government and a drive for better evidence-based and enabling regulation.

What evidence is there that Government and Technology Strategy Board initiatives to date have improved the commercialisation of research?

10. The NFU is a supportive member of the Sustainable Agriculture and Food Innovation Platform (SAFIP) Steering Group of the TSB. It is early days to assess the improvements it has made to the commercialisation of research in the agri-food sector. The SAFIP11 was launched in October 2009. Its objective has been to stimulate the development and adoption of new technologies to help improve the productivity of the UK food and farming industries, while decreasing the environmental impact. It would be premature to judge whether the research funded by this Innovation Platform will result in commercialisation given the lengthy pipeline, but the NFU is supportive of the concept.

11. Importantly, the success of the TSB in the commercialisation of research will ultimately depend on the continued provision of applied research. While the whole research chain is important, it is applied research which shapes theoretical ideas to the point that they can start to show some potential to address real practical challenges to agricultural businesses. It is this key link in the chain to commercialisation that has been eroded in recent years and we refer back to our response in section 2.

What impact will the Government’s innovation, research and growth strategies have on bridging the valley of death?

12. The new BIS Research and Innovation Strategy12 published in 2011 provides positive high level messages about the need to help businesses grow, but for the agri-food sector it lacks any clear ownership or timeline for actions. It states that it aims to increase levels of innovation including the commercialisation of R&D technology transfer and diffusion and adoption of innovation and to work with the Sector Skills Councils. All these elements are necessary to create an environment that fosters commercialisation of research in the agricultural sector. So, whilst we agree with the sentiment of the strategy, there is a lack of ownership which is also reflected within Defra in terms of their R&D and knowledge transfer activities.

13. To support the opportunities for commercialisation it is important that we have a profitable and sustainable industry delivered by a world class, competent and professional workforce whose professionalism is recognised and rewarded. The NFU works closely with Lantra, our sector skills council, and this relationship has developed and improved over the past few years through the Agri-Skills Forum and strategy “Towards a New Professionalism” which brings together all the major organisations within agriculture—NFU, Lantra AHDB, Agricultural colleges and Defra to work towards its aims and objectives. However, there is scope for improvement. For example, Lantra could develop closer communication with those undertaking training and skills development and to become more focussed on skills development rather than formal qualifications. Over the past year Defra have worked with Agri-skills partners to ensure there are discussions with BIS on the concept and requirements of professionalism within agriculture. The Agri-Skills strategy also highlights the importance of business skills, outlining that this should also cover non-financial business skills, and in particular, leadership, and entrepreneurial skills. There needs to be specific promotion of the importance of acquiring business skills in the sector. Training delivered through the RDPE programme should also reflect the importance of business skills through the training offered and available to farm businesses. Better business and entrepreneurial skills help the industry to be better placed to take advantage of research and provide more fertile ground for commercialisation. We will be engaging with Defra over the next few months to highlight the priority areas we would like to see delivered through RDPE.

Should the UK seek to encourage more private equity investment (including venture capital and angel investment) into science and engineering sectors and if so, how can this be achieved?

14. No, the goal of agricultural research is not quick profit. The government needs to recognise that it must also take responsibility to foster closer working with private sector and encourage or financially support certain areas of research which may never happen as a result of purely commercial drivers. The Taylor review, “Science for a New Age of Agriculture”13 was published in 2010 and called for greater private sector investment in research. While the NFU agrees with this ambition in part, there are notable examples where there is market failure and public investment and support is needed. An example here is the development of plant protection products for minor crops. Following the EU review of active ingredients there are notable gaps in the armoury of products available for use in certain minor crops in the UK. The high costs, and long run-in times for the development of new products, combined with their relatively small acreage, reduces the commercial attractiveness for private sector investment. To put this in context, a briefing from the Fruit and Vegetables Task Force14 on the approvals process for plant protection products stated that:

“Research by the Horticulture Development Company (HDC) suggests that the registration process of both active substances and products takes about five years on average and costs between €200,000 and €2 million for biological products and estimates from agri-chemical companies suggest that registration can take 10–15 years for chemical pesticides with an even greater cost”.

There is no Government funding for research into minor uses of herbicides and the UK spends less than any other European country in this respect.15 This means that in the UK the cost of finding solutions is already largely borne by growers through industry levy bodies.

What other types of investment or support should the Government develop?

15. For agriculture, the Rural Development Programme for England currently provides a resource to support the commercialisation of science and research and capital investment. The current RDPE will end in 2013, with its future scope dependent on the outcome of the CAP reform process. Inevitably, there will be some form of successor to RDPE and some may suggest that Government utilise this to offer some support in future. However, this needs to be approached vigilantly.

16. Firstly, the RDPE has been somewhat disjointed in practice and needs better integration with training and capital grants to maximise its potential. The initial approach to delivery was through regions, which prevented industry wide or sector specific approaches. Although delivery has recently been centralised, the programme has yet to gather momentum. It would seem unlikely that RDPE funds would not be fully utilised, but there remains a question over whether the effectiveness of this budget has been maximised. For example, the potential to link training with capital grants has not been exploited eg before receiving funding for reservoirs, farmers receive training for water/resource management issues. The use of lots of individual providers has not been conducive to directing farmers to the next piece of relevant training or building up a sector increasingly receptive and hungry for the latest research. Such integration would be an obvious benefit, demonstrating that applicants will make best use of that investment or technology. Evaluating the success of RDPE in facilitating R&D uptake is essential before committing future resources.

17. Secondly, the size of the future RDPE resource can be questioned. Currently, 80% of RDPE funding is skewed towards agri-environment measures rather than targeted at knowledge transfer or capital investment. More importantly, the UK’s allocation of rural development funds through the CAP is inadequate. Of all EU member states, the UK currently receives the lowest share of funds on a per hectare basis. To compensate for this shortfall, farmers’ direct payments are currently transferred to rural development budgets. This disadvantages UK farmers versus EU competitors. It is akin to taxing a business solely to fund an incentive-based scheme back to that same business. This makes rural development funding through the CAP a contentious issue for farmers and we believe CAP reform should not again allow such transfers. If RDPE is to be considered a resource to support R&D related ambitions, it is essential that the UK achieves this through a better allocation of P2 funds and not through raiding the direct payments budget which disadvantages all farmers.

18. Providing the right signposting and support to help businesses to get involved in the new future of European-level research and innovation funding, Horizon 2020, will be critical if innovation and commercialisation is to result. Key areas of improvement in Horizon 2020 that we believe will increase the likelihood of the uptake of research by farm businesses is the inclusion of knowledge exchange from the earliest stages of project development. For this to happen, the research must firstly be relevant to commercial activity of some kind and must contribute to innovation in farm businesses that will increase their productivity and competitiveness. Making this early connection will be essential if the research from Horizon 2020 is to remain relevant and taken through into innovative products and practices by the private sector. If there is no early adoption nationally of the outputs of UK research, the return on investment for the UK is severely compromised.

19. Another key element of improving the commercial success of Horizon 2020 will be in providing research scientists and their consortiums with the best support and co-ordination possible from Government. We have already highlighted the significant levels of bureaucracy associated with accessing such European funds. Even the best project concepts fall by the wayside as a result of the time-consuming and complex application process itself, which is not a natural skill for many research scientists. We are partially reassured that the intention is for the rules for applying for Horizon 2020 to be simplified, harmonized and the reporting and auditing will also be streamlined. We are also pleased to learn that there will be increased focus on innovation and commercialisation. However it will need the UK Government to push at the European level for these promised to turn into reality. There is also a role for Government to provide guidance and support in helping co-ordinate the most effective proposals which genuinely help meet the strategic challenges for the agricultural sector.

20. The relationship between Horizon 2020 and other Community policies, such as the CAP, is vitally important. The objectives that the Commission has recently identified for CAP reform may fail to recognise what should be the over-riding objective for reform, which is to help agriculture achieve a position where it can be less reliant on public support, even more market-focused and thus contribute to Europe’s growth agenda. The link that must be achieved is orientating agriculture and the CAP towards meeting the EU2020 goals (smart, sustainable and inclusive growth). Therefore the overarching role of the Horizon 2020 should be an enabling one ie allowing agriculture to achieve its potential in terms of growth by becoming more competitive and productive through the application of R&D.

21. There must also be complementarity between Horizon 2020 and the new European Innovation Partnership to maximise the likelihood of commercial success. The new European Innovation Partnership (EIP) “Agricultural productivity and sustainability” will be funded through the EU Research and Innovation Policy. We believe that these EIP operational groups should utilise and strengthen existing partnerships and networks and not duplicate. It will also be vital that there is complementarity between the activities of the EIP and Horizon 2020.

February 2012

1 “Future of Food and Farming”, Foresight report of 2011
www.bis.gov.uk/foresight/our-work/projects/published-projects/global-food-and-farming-futures/reports-and-publications

2 “Support for agricultural R&D is essential to deliver sustainable increases in UK food production”, APPGSTA Report 2010. www.appg-agscience.org.uk/linkedfiles/APPGSTA%20-%20David%20Leaver%20report%20Nov%202010.pdf

3 ??????

4 The Cross-Government Food Research Strategy
www.bis.gov.uk/assets/bispartners/goscience/docs/c/cross-government-food-research-strategy.pdf

5 House of Lords European Union Committees report (“Innovation in EU Agriculture”) 2011
www.publications.parliament.uk/pa/ld201012/ldselect/ldeucom/171/17102.htm

6 Government’s Food Research Partnership sub-group report on the “Translation of Research in Agriculture”.

7 UK Cross-Government Food Research and Innovation Strategy 2010.
www.bis.gov.uk/assets/bispartners/goscience/docs/c/cross-government-food-research-strategy

8 Approvals of GMOs in the European Union, EuropaBio, October 2011,
www.europabio.org/sites/default/files/position/approval_of_gmos_in_the_european_union.pdf

9 http://www.tsl.ac.uk/lateblightqa.html

10 http://www.rothamsted.ac.uk/ProjectDetails.php?ID=5010

11 www.innovateuk.org/_assets/0511/agriculture&foodinnovationplatform2011.pdf

12 www.bis.gov.uk/assets/biscore/innovation/docs/i/11-1387-innovation-and-research-strategy-for-growth.pdf

13 archive.defra.gov.uk/food-farm/farm-manage/documents/taylor-review-response-110131.pdf

14 Briefing from the Fruit and Vegetables Task Force
archive.defra.gov.uk/foodfarm/food/policy/partnership/fvtf/documents/briefing-fv-approvals.pdf

15 Meeting on the Future of Weed Research organised by the HGCA (2008),
www.aab.org.uk/images/Future%20of%20Weed%20Res_p5_7.pdf

Prepared 11th March 2013