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Cornwall Food and Farming: Response to Future of Farming Consultation

The Future of Food Farming and the Environment in a Green Brexit.

Response to the Government’s Consultation Paper from Cornwall Food and Farming Group

Foreword.

The Cornwall Food and Farming Group comprises a membership of farmers, food producers, educators and health professionals who share a passion for local food and who give freely of their time to promote and support Cornish agriculture, fishing and food and drink production.

Cornwall’s economy is highly sensitive to changes in both market prices of agricultural produce and in support payments. This is not only because farming occupies such a dominant use of the land, nearly a third of which is in an Area of Outstanding Natural Beauty, but also because it provides the backdrop to our vibrant tourist industry. In addition, Cornwall’s world-class food industry depends on quality local produce to maintain its reputation.

Concerns about this proposed change in policy centre more around what it doesn’t say than was it does. It needs so much more detail, particularly with regard to food and farming, to reassure – if not convince – that English agriculture is not to be overwhelmed by foreign (and even other UK regions’) food supplies. Moreover, there seems very little detail in the likely outcomes of the proposed policy changes: economic, social or environmental.

Food Production

The first aim of agriculture is to produce food. The consultation says surprisingly little
about this and less about food security. The aim of the new policy is to reduce or eliminate support for food production. That means, all things being equal, food prices will rise. This is likely to be unacceptable to the electorate and so food imports will rise and the home industry will shrink. There is also the fear that food imports will be actively encouraged if they can help secure post-Brexit trade deals for other industries.
Is food security, and by extension food production, no longer a primary concern of government?
Can any guarantee be given that food imports into England will not be permitted from any country or region which employs lower standards of worker and animal welfare, higher government support and/or lower environmental standards?

The government has the ambition of seeing English farmers “producing high quality food that commands premium prices” – which is a fine goal: for some. But where does the food come which feeds the masses? Why not produce “high quality food” as standard – with no premium price?

Productivity

It is not the full story to say that the CAP has “decided how we farm our land”: that is still fundamentally market-driven. It has had a restraining influence on those same market forces though. It has acted in the interests of small, family farms – though not sufficiently so as to rein in the corporate farms from expanding here in the UK. It is also misleading to imply that the UK had no hand in determining what CAP should be or how it would be implemented when it had a significant voice in those decisions, not least because of its position as a major contributor to the fund.

CAP has taken on many forms through its history. The big shift in policy was to break from subsidising production following butter mountains and wine lakes to direct payments via quota systems on the way. The UK government’s approach to CAP has always been to seek favour and exemptions for Britain’s larger farms against the interest of smaller farms and the wider rural community interests. The NFU and CLA are complicit in this strategy (“What’s good for the big farmer will be good for the small farmer”). It is significant that the UK has always sought to impose CAP rules rigidly (to the disadvantage of smaller farms) whereas our EU partners have tried to interpret them as liberally as possible.

In arguing that the CAP has been “holding back productivity” is the government seeking to increase the size of farms and hasten the demise of smaller family farms which are the soul of Cornish farming?

In “supporting profitable food production” does the government intend a sea change in our approach to such issues as GMs, to hormone growth implants, to farming marginal land and, indeed, towards organic farming? Paragraph 11 of the Executive Summary says “There is a huge opportunity for UK agriculture to improve its competitiveness – developing the next generation of food and farming technology.” It is difficult not to interpret this as meaning the widespread introduction of GMs and other techniques which will have an adverse effect on organic farming in England and on consumer confidence. Even if one accepts that a licensing system can ensure all GM and other technologies are safe, such a strategy would provide international corporations with ownership of our means of production which would be far worse than being guided by CAP.

When productivity is mentioned, no definition is given. Is it output or profit? Net or gross of support payments? Measured per hectare, per labour hour, per unit of capital employed? And compared to what – other industries, other countries, sector by sector?

Productivity is also a factor of risk management. Agriculture is not only susceptible to changes in local weather, international production levels and aggressive and unfair practices further down the supply chain, but once a production decision is instigated it can take up to four years to see that decision bear fruit. Farming cannot be turned on and off like a ball bearing factory. The government’s “solutions” to risk management are considered naïve at best.

One way of increasing productivity is to encourage investment. Tax breaks for investments that protect the environment can deliver a more cost effective result than straight grants. A return of the Agricultural Buildings Allowance, which enabled a write down of 4% each year, could be another useful instrument.

In continually claiming there are opportunities for improving profitability and productivity, the government needs to be recognised that this needs to be balanced against other goals in life. The government has managed to bring the NHS and local government to their knees with such talk.

Environment

It is mischievously insinuated by the government that CAP has been detrimental to the environment: but the text later on in this consultation puts the lie to that (para 3 of the Executive Summary). The CAP was one of the first environmentally- linked support systems in the world and the current payment systems are subject to wide-ranging environmental cross-compliance rules and requirements. This is something which the government and the media persists in playing down and concealing from the public as much as possible.

The reasons for deterioration in the environment are not directly caused by the CAP. The question is: what on earth would our environment be like if we had been outside the EU? Environmental damage during the last 50 years or so can be put substantially at the door of “climate change”. By decoupling support payments from output the CAP has helped to mitigate climate change. We still over-use pesticides, herbicides and antibiotics in food production: this has nothing to do with CAP; but without the EU, neonicotinoids, GMs, would be with us and field margins probably not. Habitats have been eroded by the move to larger “more productive” farms (which would have grown at a faster rate without CAP supports), urbanisation, flooding and population growth which have other causes than farm payments.

In the face of all this, our farms – and particularly our Cornish family farms – provide much diversity of habitat and wildlife and recreational accessibility through miles of public rights of way.

Climate Change

The calculation is presented that 70% of the landmass produces 10% of greenhouse gas emissions. Is that really a bad return? Looked at the other way, the urban landmass produces 90% of greenhouse gases. Is that an acceptable return?

The emissions figures used appear out of date.

AHDB website gives the latest
CURRENT EMISSIONS POSITION
• Agriculture is responsible for 7% of the UK’s carbon emissions, with livestock production responsible for an estimated 5% of total emissions.
• A recent publication from the United Nations suggested global emissions from livestock made up around 14.5% of all carbon emissions. This was revised down from their earlier estimate of 18%, though that figure is still mistakenly quoted.
• A recent EU report concluded that the emissions from livestock are estimated to be responsible for around 9.1% of all emissions in the Union, higher than the UK figure due to our efficient production systems.
• Calculations show an average 100-year Global Warming Potential (GWP100*) for beef of 11.93kg CO2 e. g. per kg liveweight and for sheep of 11.95kg CO2 per kg liveweight.
THE EMISSIONS CHALLENGE
• The UK Low Carbon Transition Plan requires that by 2020 emissions from farming are at least 11% lower than the GWP100 levels currently predicted
• To meet the 11% reduction target for beef, an efficiency gain equivalent to 320g per day extra growth and 5 extra calves per 100 cows per year is needed – and is technically achievable
• To meet the target for lamb, an efficiency gain equivalent to 20% per day extra growth and 7.5 extra lambs per 100 ewes per year is needed – and again is technically achievable.
MEETING THE CHALLENGE
• The good news is that reducing GHG emissions and improving efficiency go hand in hand
• Steady improvements in production efficiency have taken place over the recent years, with 5% fewer prime cattle and lambs required to produce each tonne of meat in 2008 than in 1998
• Research indicates that the three main areas of breeding, feeding and management offer opportunities to make the required reductions
• The genetic potential for progress in beef and sheep breeds for improvements in feed efficiency is largely undeveloped, but modern breeding techniques will allow rapid progress.
DEFORESTATION AND IMPORTED SOYA
• UK beef and lamb production are not driving demand for imported soya and, therefore, not significantly contributing to deforestation in some parts of the world. The level of soya meal use in sheep and beef diets is very small.
• There are 2.1 million cattle and 14 million sheep slaughtered annually in the UK, supplying over 1.1 million tonnes of meat to the human food chain, with a farm gate value of over £3 billion (1)
• A significant proportion of UK farmland is only suitable for growing grass – without grazing ruminant animals (cattle and sheep) we could not use this land to feed our growing population
• Actively managed pastures are a good carbon sink, storing carbon which would otherwise be released into the atmosphere.

The impact of UK grazing animals on carbon emissions is therefor much lower than the consultation document asserts and there are significant environmental benefits to be gained from livestock farming.

When it comes to considering imports, will the same environmental standards and practices be required of the countries from whom we import? Greenhouse gas emissions are a universal concern that knows no geo-political boundaries. Protecting migratory birds in UK does not guarantee their future if other countries are slaughtering them for sport.

Animal Welfare

The public has an expectation of high animal welfare standards: but are they willing to pay for ever demanding standards, many of which they do not understand. At the same time, as the consultation states, we have an existing reputation for world leading standards. Once the “five freedoms” have been achieved, is there merit in having the public purse pay for practices which, at best, might be only marginal in their effect on welfare and non-existent in terms of public health.

Is it not better to leave it to the consumer to pay higher prices for higher welfare above a universal baseline? As long as imports of product produced to standards below the UK minimum are prohibited then the price mechanism must be the best way of securing meaningful high standards.

Let’s not forget that animal welfare is not something to be driven by issues of food quality but because animals are sentient beings and deserve to be treated with appropriate respect.

What plans do the government have in safeguarding animal welfare beyond the farm gate?

Land Prices

Farm payments have been made to land subject to environmental cross compliance: they are made, not according to the size of holdings, but at standardised rates varied by the level of environment gains delivered up. Land prices have been bolstered because land is a finite resource and (as always) offers a very safe investment to individuals and corporations of wealth. Farmers are also very active in the market as they expand to maintain their level of profitability: standing still has proved to be no option. Land prices have possibly been more affected in recent years by subsidies for renewable energy, the National Planning Policy Framework (the “Developers’ Charter”), and the housing shortage.

Public Health

How can the government claim that the CAP is somehow responsible for problems with public health? Yes, there has been support in the past to such evils as tobacco production, wine and sugar but these have been in place to favour EU production which would otherwise fall to competition from non-EU imports. UK governments would not have changed, or have been prevented from carrying out, their policies towards such products by CAP. In fact, some of the great public health issues faced within the food industry have been caused by complacency or incompetence by UK governments rather than EU/CAP regimes: think CJD; Foot & Mouth; bird flu; bTB and so on.

Support Payments

All subsidies, supports and incentives distort the market and need to be reviewed and revised according to changing circumstances and policies. There is little evidence to show that any support policies are flexible and, especially in agriculture, flexibility is feared over certainty because of long production cycles.

It is a priority that the purpose of support payments be clearly identified and outcomes accurately ascertained. Production subsidies, for example, are clear in intent and their effect easily measured. Their removal requires confidence in the market to produce sufficient profit as to sustain viability for the industry and at the same time restrain food-price inflation. Their removal signals that confidence or the abandonment of the home industry to the world market. The whole purpose of land-based or decoupled “subsidies” has, of course, been to fund environmental maintenance and improvement: their whole raison d’etre is the antithesis of “widespread productivity improvement”. There seems a fundamental confusion here about what outcomes are being sought by the government from support payments.

Support payments must be seen to be fair. It is difficult to justify the given example of providing agriculture with public funding to improve water quality when other industries do not receive such payments and this also flies in the face of the proclaimed “let the polluter pay” diktat. Similarly, if soil health has been reduced by the activities or neglect of farmers, why should they receive public funds to correct their mistakes?

The benefit of subsidising grazing livestock is questioned by the government. Grazing livestock are the most extensively reared livestock, often in the most economically disadvantageous areas, and they maintain the most environmentally sensitive landscapes. Subsidising the production and management of these animals is not bad – it is essential.

It is said that the pork and poultry sectors have outperformed beef and lamb despite having much lower support. These sectors have indeed done well despite unilaterally imposed higher costs of production. In part, this has also been due to a misconception in the relative health merits of “red” meat versus “white” meat. It is also the case that pig and poultry production is more akin to factory production than the farming of beef, lamb and dairy. There is a strong case that direct payments should support enterprises which are economically weak (but deliver high environment and welfare “public goods”) rather than the economically strong sectors. This inevitable relationship between the most extensive/least profitable forms of farming and the most attractive and diverse landscapes is actually acknowledged in the paper.

Effect on Consumers

A “more self-reliant agriculture” means one with less support from public funds. If we assume that this “Brexit Dividend” will go into the public purse, can we assume that there will be freedom to increase food prices without government constraint? Will farmers be able to work co-operatively to an extent that is meaningful when dealing with the supermarkets or have competition legislation used against them? Post-war agricultural policy has been based on the supply of cheap food: the removal of production subsidies reverses that policy: will this be politically acceptable or will the doors be opened to cheap imports at the cost of subverting the home industry?

To what extent are the phrases “supplying products of the highest standards to the domestic market” and “increasing exports” incompatible? What will be the effect on output by competing imports? We need to see economic models to show this is a reasonable and responsible ambition in its effect on the whole supply chain including the end consumer. The outcomes of the government’s proposals seem anything but clear and lack of clarity is dangerous.

Rural Communities

It is not just agricultural sectors or geographic/environmental areas that need supporting but also the populations that work in and maintain those rural landscapes. There are strong social reasons for direct payments into rural areas and removal of these will accelerate claims on social benefits, poverty and eventually depopulation. Direct payments are a small balancing agent in a political environment which refuses to countenance wealth distribution from the richer areas into the poorer areas. Regions such as Cornwall, already one of the most disadvantaged in Europe, will become more marginalised.

The commitment to support rural businesses other than agriculture needs to go further to have credibility. Rural communities receive less support from the public purse per head than urban communities. This imbalance needs immediate correction and government is well aware of this. Tinkering around the edges by playing up broadband and mobile phone connectivity while ignoring rural education, health, transport and general income levels does us a disservice.

Policy Implementation

It is difficult to credit or comprehend a support regime which is so narrow in its aims as to ignore such key objectives as food security, maintaining rural populations and addressing rural poverty. Any agricultural policy cannot be put forward with no regard to the effect it has on agricultural production and sustainability: the standards which imports have to achieve is a necessary factor to be taken into account in the equation. In addition, will quotas or import levies be considered as means of protecting home production from unfair competition or where barriers are imposed on potential exports?

It will need to be seen how this new policy could be achieved without micromanagement and/or intricate and intrusive inspections: the antithesis of an innovative and productive industry. How much will such scrutiny cost as a proportion of the total support budget?

We would applaud a more integrated, appropriate and targeted enforcement system. It is no secret that “random” inspections work to a quota. This means that smaller farms, particularly those where there is a track record of compliance, receive a greater than average number of random visits so that the number of farms visited can be kept as high as possible with an administration cost as low as possible

We are to see different production standards, different environment standards and different support structures in different parts of the UK. This will prove divisive and see standards employed as political weapons rather than have value for their own sake. We are the United Kingdom and there needs to be unity in the way we support agriculture. If there is to be regional differentiation then the cost of applying additional support or different standards in any one region should be funded from income raised within that region and not from the UK government’s purse. It would be quite perverse for English farmers to be subsidising, say, Scottish farmers who are their competitors within the home market and potentially export markets.

Surprisingly, our farmer members have found this year the easiest for claiming BPS but the most laborious for renewing Countryside Stewardship.

International Trade

“The government is fully committed to maintaining high standards of consumer, worker and environmental protection in trade agreements. We will adopt a trade approach which promotes industry innovation and lower prices for consumers.”
It is difficult to see how higher standards can lead to lower prices: unless the “higher standards” of imports (including “imports” from Scotland, Wales and N Ireland) reveal themselves to be lower than those in England or subsidised.
This statement/ambition needs to be explained in detail.

The Workforce and Career Opportunity

The ambition to make agriculture more attractive to the home workforce is applauded. To do this requires an industry with the capacity to offer good salaries, working conditions and career structures. It does not have that capability in most sectors. Until that financial soundness and desire within the culture exists, agriculture needs to continue to employ foreign labour without undue hinderance.

There remains, because of the very nature of agriculture, a need for unskilled and semi-skilled labour. It is wrong for the government to simply close its eyes and ears to this. Agriculture, like most primary industry, produces low-value units. With a volatile market, labour is the cost of production that can be most easily altered. This is particularly the case in many potential competitors abroad who do not have the capacity for strong capital investment, where labour is plentiful and cheap and relatively free from employment and welfare regulation. We need to be aware of this in trade negotiations.

The structure of farming is changing. Farms are becoming larger and mono-culture is widespread, primarily as a response to globalisation of the market place and the pressures of a rapidly increasing urban community. Agriculture has a tradition as a business for the self-employed or as a family enterprise. Start-up costs together with low returns make it very difficult for new entrants on anything other than an employee basis unless this is done on the back of an inheritance or success in fields other than agriculture. It is difficult to see how this situation can be reversed.

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