Chapter 2 Helping farmers meet the needs of the consumer

DEFRA is concerned with the needs of consumers; food industries – such as processing, distribution, trade, retail and catering; and farmers, growers and the fishing industry.

2.1 It is only by considering the needs of all of these together, through ensuring properly functioning local and international markets, that we can be sure of securing the choice, quality, safety, nutritional standards, economic efficiency and continuity of supply that a modern society requires. Together these businesses account for almost 8 per cent of our GDP and 12 per cent of employment, while farming is responsible for looking after some 70 per cent of our land. Responsibility for food safety lies with the Department of Health and the Food Standards Agency, thus providing a separation of responsibilities which is reassuring to the public. The range of DEFRA’s roles creates a new opportunity to work with the whole of the food chain.

Already we have:

• seen what we hope is the last case in the 2001 foot and mouth disease outbreak. Although there is no room for complacency, our export markets are re-opening and we have relaxed animal movements;

• worked in World Trade Organization (WTO) negotiations in Doha, with other departments and the European Commission, to secure commitments on reducing agricultural subsidies and protection and to include social and environmental concerns into agricultural negotiations;

• succeeded in reforming the EU sheepmeat regime to give us the opportunity to encourage a more sustainable sheep industry;

• launched a consultation on plans to review, modernise and simplify laws on animal welfare; set 1 January 2003 for the ban on fur farming to come into force; negotiated a Europe-wide ban on close-confinement pig sow stalls; and agreed a new Council of Europe recommendation on the welfare of farmed turkeys;

• made available new arable options nationally in the Countryside Stewardship Scheme following a successful pilot;

• provided farm business advice to 4,600 farmers since we launched the service in October 2000 and over 300 enhanced business advice visits to culled-out farmers; we also launched a planning consultancy scheme to help farmers understand the planning system; and

• launched a new stakeholder group to consider how plant breeding can contribute to the development of a more sustainable agriculture.

2.2 To promote change we will work in partnership with all our stakeholders and with the Food Standards Agency, Regional Development Agencies, devolved administrations and other government departments. We will encourage the industries we work with to make a commitment to meet consumers’ requirements and the expectations of society. Public perception of DEFRA often concentrates on the more subsidised sectors of agriculture, but we must build on the strengths of the whole of the food chain including all sectors of farming and horticulture.

Charting a sustainable future for farming and food

2.3 The Government established the Policy Commission on Food and Farming, chaired by Sir Don Curry, to advise on creating a sustainable, competitive and diverse food and farming industry in a thriving and sustainable rural economy. The Prime Minister and Margaret Beckett endorsed the Commission’s broad analysis, direction and many of its specific recommendations when it reported in January 2002. The Commission’s report set out a comprehensive range of recommendations for the food industry and farming: to reconnect farming to its markets, its customers and the environment; to restore profitability; and to further farming’s contribution to rural life.

2.4 Our task now is to carry forward those ideas in partnership with everyone who has a stake in farming and the food industries to ensure that English food and farming succeed. Together, we will define a lasting strategy for competitive and sustainable farming and food industries to be launched in the autumn, properly integrating our economic, environmental and social objectives.

Leading internationally

2.5 To help farmers connect better to their markets we need to move away from the current system of production subsidies and controls that determines so much of what they do. The European Commission is expected to make proposals in summer 2002 as part of the mid-term review of the Agenda 2000 CAP reforms. We need to open up agricultural markets and encourage competitiveness while maintaining standards of food safety, environmental sensitivity and animal welfare. We will work with our European Union partners (and with the devolved administrations, in accordance with the concordats drawn up within the devolution settlement) on further CAP reforms to achieve this goal. It will be difficult to get everything we want, but our direction is clear.

2.6 The negotiations on a new WTO Agriculture Agreement will intensify over the next 18 months following the launch of a new trade round at Doha last November. The EU must determine its own negotiating stance by 2003. These negotiations should lead to further trade liberalisation and the opening of markets, from which our own farming industry – alongside farmers in the developing world and other countries – stand to benefit. We want to grasp these opportunities to secure real and ambitious change that will benefit our farmers and food producers, the environment, consumers and the economy as a whole.

2.7 One example of where DEFRA has already made progress is agreement secured in the EU to create national ‘envelopes’ of support for sheep. These will contribute towards improving the sustainability of Member States’ sheep industries by helping address environmental problems, such as over-grazing, providing additional payments to sheep farmers and encouraging improvements in the production and marketing of sheepmeat.

What we will do:

• We will build alliances with our European partners for ambitious CAP reform that reduces the overall cost on consumers and taxpayers, removes bureaucratic burdens on farmers and improves the environment.

• We will work for a shift within the CAP away from production subsidies, such as price support and production-linked premiums, and towards programmes supporting a better environment and rural prosperity.

• We will work with our partners to reduce trade-distorting subsidies and trade barriers as part of the agriculture negotiations in the WTO while safeguarding environmental, safety and animal welfare standards.

Helping farmers help themselves

2.8 The Policy Commission on Food and Farming clearly identified the need for farmers to develop their own industry, overcome their problems and prepare for a time when EU and government subsidies are reduced. There remains a large gap between the performance of the most and least successful farms. There is a need for farmers to work together and to add value, so retaining a greater proportion of the final shelf price on farms and in rural areas. Many cereal and livestock farmers are still unduly dependent on production subsidy. In the future, the Government’s role in farming will be reduced and different.

2.9 We will administer the CAP efficiently and, as part of our overall programme of modernisation, we are improving the way we deliver our services to the agricultural industry and other rural businesses. There are now two  agencies providing our main services to farmers. The Rural Payments Agency brings responsibility for the administration of all the major CAP schemes under one roof for the first time. The Rural Development Service offers a locally based face-to-face service for farmers and other rural businesses wishing to take advantage of agri-environment and rural economy schemes. Other parts of DEFRA, such as the Environment Agency, English Nature and the Countryside Agency also offer support and advice.

What we will do:

• We will help farmers and growers increase their skills and raise their performance. This will attract people to farming and encourage them to stay.

• We will help create a business climate and skills in agriculture and horticulture which favours farmers setting up new businesses through the use of commercial and government-provided advisory services.

• We will rationalise regulation that applies to farmers by moving towards whole farm audit and classification.

• We will encourage co-operative and partnership approaches to farming which can increase returns to farmers by ensuring more of the shelf price goes to them.

• We will look at ways of transferring forms of risks associated with farm businesses to farmers and help farmers improve how they manage current forms of risk, including considering developing with banks and other bodies methods for managing currency risk and other forms of market volatility.

• We will produce an organic food and farming action plan.

• We will provide livestock farmers and their veterinary surgeons with advice on the prevention and control of animal diseases, using information on the current incidence of disease and the latest scientific research.

• We will develop policies to reduce or eradicate diseases of animals (such as the Scrapie Eradication Plan) and to reduce the risk of importing exotic diseases.

• We will safeguard the welfare of farm animals through standards set at the European level.

Improving services and rationalising regulatory bureaucracy

2.10 The Policy Commission on Food and Farming recommended a ‘whole farm’ approach to environmental regulation, integrated with the Integrated Administration and Control System (IACS) which sets the rules for linking farm subsidies to land and animals. We are developing ideas for a new system of whole farm plans that could provide farmers with the information they need to manage and develop their businesses in a sustainable way. The plans will focus on achieving environmental, economic and social outcomes rather than processes, and will help reduce bureaucracy. This could offer a more effective way of safeguarding the environment and building farm businesses. By looking at the whole business, including its impact on and contribution to rural areas, we can strengthen the long-term viability of farms.

What we will do:

• The Environment Agency will modernise and simplify its inspection procedures.

• We will develop better ways of using our data to reduce paperwork, applying a whole farm plan where possible.

• We will introduce a pilot scheme to make CAP payments to small farmers in a less bureaucratic way, and continue to work within Europe to simplify CAP bureaucracy, especially for new rural schemes.

Connecting farms with society, the environment and the rural economy

2.11 Society expects farming to deliver a wide range of environmental benefits, not least an attractive and living countryside. Not all of these benefits are rewarded through the market and there is a clear role for the Government in making sure these benefits are provided. So we provide payments for work done to achieve this. We help farmers farm for wildlife and landscapes, develop organic or other ‘integrated’ farming systems and help rural communities affected by changes in farming. We also want farming to contribute to the development of rural economies and so we encourage new businesses on farms and processing and marketing of farm products, so increasing the proportion of their final value kept in rural areas.

2.12 Further CAP reform, taking forward the Agenda 2000 reforms, will ensure that money, land use and labour are directed more to where there is a market for products than where there is a subsidy. This will benefit the economy in rural areas. We also want to develop further the schemes that we already offer to farmers, especially so that we help them adapt to a more market-driven farm economy and manage land sustainably. The England Rural Development Programme (ERDP) is already proving its value, although inevitably the foot and mouth disease outbreak affected what could be achieved in 2001. We need to simplify it where we can, and to improve its integration with other funding to help to accelerate the pace of change and deliver maximum benefits. We will also work hard with our partners in Europe and with the European Commission to make the case for more flexible rules in the future.

The England Rural Development Programme (ERDP)

The ERDP helps us meet our objectives for sustainable farming and forestry and a thriving rural economy and communities. DEFRA offers payments to farmers, foresters, landowners and managers, growers, businesses and communities through ten ERDP schemes that encourage environmental protection and enhancement and assist rural businesses and communities to adapt to change. Over the programme’s seven years we aim to:

• increase farm revenues from diversified sources by 25 per cent on full-time farms;

• bring an additional 0.5 million hectares of land into the Countryside Stewardship Scheme;

• convert 430,000 hectares of land into organic farming;

• assist thousands of rural businesses to start up, expand or diversify; and

• provide nearly 50,000 days of training for farmers and foresters.

In the future, we will develop the ERDP by:

• improving advice on access to the schemes so that we support high quality and innovative proposals for sustainable development; and

• reviewing the agri-environment schemes, and reflecting the Policy Commission on Food and Farming’s conclusions, culminating in significant programme changes after the mid-term evaluation in 2003.

Helping markets work

2.13 To achieve sustainability all food businesses have to meet the requirements of their consumers. Consumer choice is greater now than ever before. As well as cheaper food, there is strong demand for value-added products and processed convenience food. Any business must offer strong brands, new products and real choice to the consumer. International goods have their place alongside local products. Ethnic minority, welfare, environmentally friendly, fair trade and organic values are reflected by ever more sophisticated demand and diversity of products on sale.

2.14 Safety and health are a growing concern to many consumers. There is increasing concern about nutritional standards. Another critical factor influencing what people buy is the price of quality food. To those with lower incomes it is particularly important, but value for money is relevant throughout the range of food.

2.15 A strong and competitive food industry is a vital part of a strong economy. It is also the most effective way of meeting the needs of consumers. The British food industry is also by far the largest market for our farmers, and the future of the farming and food industries are inextricably linked.

• To promote a sustainable, competitive and safe food supply chain which meets consumers’ requirements.

• To promote sustainable, diverse, modern and adaptable farming through domestic and international actions and further ambitious CAP reform.

• We will work with the Food Standards Agency and Department of Health on effective food safety measures and to encourage healthy eating.

• We will work to ensure ready access to competitively-priced food through reform of CAP, by removing barriers to trade and by promoting a consumer-focused industry.

• We will promote competitiveness by bringing together the different parts of the food chain to achieve greater efficiency and effectiveness; by increasing agriculture’s responsiveness to market demands; and by working to remove barriers to trade.

• We will support the Food Chain Centre that the Policy Commission on Food and Farming recommended be established.

• We will develop a sustainability strategy with the food industry to help it achieve better use of resources and growth and contribute to prosperity, social progress and protection of the environment.

• We will provide direct support in areas where funding is needed such as promoting exports, technology transfer and innovative initiatives.

• We will fund world-class research to help industry take advantage of new technology and higher safety, environment and other standards of production.

• We will make sure the interests and needs of the food and farming industries are fully taken into account across the range of government policy by working with DTI, the Department for Education and Skills, the Regional Development Agencies (RDAs) and other key players.

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