Environment, Food and Rural Affairs CommitteeWritten evidence from the Food and Drink Federation

Introduction

1. This submission is made by the Food and Drink Federation (FDF), the trade association for food and drink manufacturing. Food and drink is the largest manufacturing sector in the UK (accounting for 16% of the total manufacturing sector) turning over £76 billion per annum; creating Gross Value Added (GVA) of £20.6 billion and employing up to 400,000 people.

2. The UK food and drink manufacturing industry is a committed customer of UK farmers, purchasing around two-thirds of the country’s agricultural production. FDF member companies operate in an increasingly open and competitive international market place. To continue to grow sustainably, the industry must be able to access a secure supply of raw materials that are safe, of high quality and competitively priced.

3. This submission broadly focuses on the goals of fairness and greening. These areas are of greatest importance to food and drink manufacturers given the need for sustainable increases in food production to help meet the challenges of food security and climate change.

Fairness

4. The Food and Drink Federation (FDF) is concerned that the agreement on CAP reform reached in July will not deliver a sufficiently level playing field with other Member States. The reforms also fail to adequately address the need for sustainable increases in food production that are required to meet the challenges of food security and climate change.

5. The reformed CAP must ensure access to agricultural raw materials at competitive prices, while ensuring a level playing field within the EU. However, where other regions or Member States adopt significantly different approaches to implementation, it could result in market distortions, with harmful consequences for the competitiveness of farmers and food and drink manufacturers alike in England.

6. A particular area of concern is the possibility other regions and Member States may adopt differing policies to England with regard to recognition of Producer Organisations (POs) and Interbranch Organisations (IBOs). Where recognised, these groups would have the power to use temporary measures including market withdrawals. This could have a detrimental impact on England’s agri-food and drink chain and as such will require careful monitoring by Defra and the European Commission.

7. The same can be said about other new features of the reformed CAP that are subject to national or regional discretion. The increased scope for coupling payments with production could cause similar competitive disadvantage as could the critical decision of whether to transfer money between the two CAP pillars.

8. It is vital that Government and devolved administrations work together to coordinate their implementation to minimise the potential for introducing further distortions that could undermine competition, innovation and market orientation in the UK.

Greening

9. FDF believes 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.

10. The greening measures agreed in June risk reducing operational flexibility without delivering specific environmental benefits which take account of local conditions. A more targeted, incentive-based approach would be preferable to the measures agreed in June. The payments should also reflect the need to increase output sustainably.

11. 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.

12. Of potentially greatest concern are Ecological Focus Areas (EFAs) requiring a default amount of land (5% rising to 7% by 2017) to be taken out of production. This has the potential to depress output and add to unit costs if not concentrated on areas of particular environmental sensitivity, eg water courses, field margins etc.

8 October 2013

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 400,000 people. The industry has an annual turnover of over £76 billion accounting for 15% of the total manufacturing sector. Exports amount to over £12 billion of which 77% goes to EU members. The industry buys two-thirds of all UK’s agricultural produce.

The following Associations actively work with 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
FCPPA	Frozen and Chilled Potato Processors Association
FOB	Federation of Bakers
PPA	Potato Processors Association
SMA	Salt Manufacturers’ Association
SN	Sugar Nutrition UK
SNACMA	Snack, Nut and Crisp Manufacturers’ Association
SSA	Seasoning and Spice Association
UKAMBY	UK Association of Manufacturers of Bakers’ Yeast
UKHIA	UK Herbal Infusions Association
UKTC	UK Tea Council

FDF also runs specialist sector groups for members:

Biscuit, Cake, Chocolate and Confectionery Group (BCCC)

Frozen Food Group

Ice Cream Committee

Meat Group

Organic Group

Seafood Group

Vegetarian (Meat-free) Group

Yoghurt and Chilled Dessert Group