In September 2001, Board Members considered a range of forthcoming government investigations on various aspects of foot and mouth disease, farming and food (AP01/33). Members identified the Policy Commission on the Future of Farming and Food as the ...
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The Policy Commission on the Future of Farming and Food (AP01/40)

Principal Manager Responsible: Richard Lloyd Lead Board Member: Victoria Edwards

FOR DECISION

  • To approve the Agency's evidence to the Policy Commission on the Future of Food and Farming (Annex 1);
  • To agree the core message (paragraph 11).   

Relevance to Strategy and Corporate Plan:

  • Sir Don Curry's Policy Commission is addressing 'the future of food and farming', which are important concerns to the Countryside Agency and feature in our Strategy and Corporate Plan. The recent creation of the Policy Commission means that preparing the evidence is not included in the Corporate Plan but the general thrust of the work accords with its intentions.   

Staff and financial implications:

  • A member of staff has been temporarily transferred to Enterprise, Land Management and Tourism Branch. This has implications for Planning and Sustainable Development Branch as the donor unit, where additional consultancy help has been drafted in to fill some of the gaps.
  • The preparation of evidence will need about £6,000 for research contracts.   

Main issues to concern the Board:

  • Is the scope and focus of the Agency's evidence right?
  • Is the core message right and will it play?   

The Policy Commission

1. In September 2001, Board Members considered a range of forthcoming government investigations on various aspects of foot and mouth disease, farming and food (AP01/33). Members identified the Policy Commission on the Future of Farming and Food as the most important of these inquiries and agreed to concentrate Agency efforts upon it.

2. The Policy Commission - chaired by Sir Don Curry, formerly of the Meat and Livestock Commission - has recently circulated its Terms of Reference and invited comment on four questions.

3. The Terms of Reference are:

  • to advise the Government on how we can create a sustainable, competitive and diverse farming and food sector which contributes to a thriving and sustainable rural economy, and advances environmental, economic, health and animal welfare goals, and is consistent with the Government's aims for CAP reform, enlargement of the EU and increased trade liberalisation.   

4. The four specific questions are:

  1. As citizens, consumers and taxpayers, what should we expect of the countryside, farming and the food sector?
  2. Against that background, what is good about farming (as land manager and as food producer) and the food sector at present that we should try to preserve, and what are the problems?
  3. What factors are driving these good and bad aspects and how?
  4. What can be done to make things better: in the short term; and in the medium to long term?   

5. The Policy Commission Secretariat has confirmed that while it hopes for evidence that covers the ground indicated by the questions, it does not require a slavish adherence to them. The Secretariat has also intimated that it does not want evidence to become too involved with the detailed workings of the Common Agricultural Policy (CAP) or its possible reforms, which it takes largely as read.

6. The Policy Commission is required to report to the Government by the end of the year, which has meant a very tight timetable both for the Policy Commission itself, and for those who wish to submit evidence. The Policy Commission has set a deadline of 26th October 2001 for receipt of evidence.

The Agency's evidence

7. Our draft evidence is set out in Annex 1 to this paper. We have sought to address the Policy Commission's four questions but we have used them in a way that allows us to set out our ambitions for the development of rural policy. We focus our attention on a set of four principles, which seek the revival of a prosperous farming and food sector, and a seven point action plan with a series of practical measures by which the action points might be achieved.

8. The Policy Commission is expecting submissions from many quarters, which it needs to analyse within a very short time. To assist in its work, and to inform our own evidence, we have commissioned consultants to review a range of strategies which, during the last year, have looked at future directions for agriculture and the rural economy. These include our own Strategy for sustainable land management in England. The aim of the work is to identify common action points which can be taken forward.

9. The Policy Commission is unlikely to invite additional evidence from respondents and nor will it be encouraging meetings. This limits the scope of any direct approach but nevertheless we will seek to influence the outcome further by:

  • using our standing and experience to encourage further discussions with the Policy Commission;
  • joining in the wider debate through the media and contact with other players.   

Our core message

10. It will be helpful to agree a single core message around which the principles and action points which we advocate can be marshalled. The audience for this core message is not DEFRA nor the NFU. Our discourse with organisations such as this which are intimately involved in the debate is already in full swing and will continue at many levels. However, for the media and less expert audiences it will be important to have a single core message.

11. The message we choose should emphasise one of the Agency's unique selling propositions - the breadth of our statutory remit covering social, economic and environmental matters, and our focus on securing win-win-win solutions. It is proposed that the core message should be along the lines of 'the English countryside is worth it'. This will aim to shift the debate from 'subsidies to farmers' to the need to invest in the infrastructure of the countryside to ensure that it is attractive, accessible and living for future generations. Without a radical new approach and continued investment of public money, we will lose much more than farm businesses and the communities on which they rely. As FMD has demonstrated so clearly, a wide range of businesses, based in towns as well as the countryside, relies on an attractive, accessible countryside. It is cared about and visited by the majority of people. It is a truly national asset.

October 2001

Annex 1

POLICY COMMISSION ON THE FUTURE OF FARMING AND FOOD

A submission by the Countryside Agency

The Countryside Agency

1. The Countryside Agency and its predecessors have been at the forefront of thinking on the future of farming and on its connections with the processing and marketing of food. The Agency's objectives are to:

  • conserve and enhance England's countryside;
  • spread social and economic opportunity for the people who live there;
  • help everyone to enjoy the countryside and share in its priceless national assets.   

2. We are pleased to submit evidence to the Policy Commission based on our broad view of rural affairs and on our experience of understanding current trends, promoting integrated activity, and exploring solutions - radical where necessary. We are presenting our evidence in two ways.

3. Firstly, we set out our four principles - the major points that we feel should be fundamental to the work of the Policy Commission. We see a need to:

  • revive confidence in the future of the food and farming sector;
  • change thinking and policies about the role of rural areas and agriculture in a post-industrial nation;
  • redefine the special position of agriculture based on the public benefits it provides;
  • strengthen the links between farming and other parts of the economy through institutional modernisation.   

4. Secondly, we recommend a seven-point action plan to help guide changes - urgently needed - to the nation's polices for farming and food. Our action plan expresses the need to:

  1. expand the range of activity that can benefit from the England Rural Development Programme (ERDP), and accelerate the transfer of agricultural funds from agricultural commodity support to activity that will enhance or restore the rural environment and encourage rural development;
  2. help farmers to capture more of the value in the food chain;
  3. seek support in expanding the market for regionally or locally sustainable products, from the food processing and catering industries, major retailers, and the public;
  4. encourage alternative uses of land for which a market does or could exist;
  5. establish markets for public benefits;
  6. require all planning authorities to prepare clear expressions of what kind of development is needed in their rural areas and to use the planning process - amended if necessary - to deliver it;
  7. Focus business advice and support in the countryside on two key audiences: land managers and incoming, self-employed entrepreneurs.
The Countryside Agency's four principles

5. Food and farming policy has been dominated for half a century by a need for increased productivity. There were good reasons for this view in the 1940s and 1950s when memories of recent conflict made a sufficiency in home grown food desirable, but from that time onwards, policy change - timidly expressed at first - became ever more a necessity. We have now reached the stage where necessity has become an urgency. The influence of the European Union (and especially the operation of CAP), more liberal world trade and easy transport links to support it, surpluses in temperate foodstuffs, a growing recognition of the need for sustainable development, and shifts in political and public attitudes have combined to demand change of a scale and intensity unprecedented since the post war period.

6. In addition, the need for change has been exacerbated by the effects of the foot and mouth disease epidemic, which have led to calls for increased traceability of food, for assurances covering animal welfare and environmental quality, and for a decrease in food-miles. Paradoxically, dealing with foot and mouth disease has created the climate in which these things are more attainable.

7. The Countryside Agency offers four principles below, which we maintain are fundamental to understanding change and essential for determining future directions.

8. Reviving confidence in the future of the food and farming sector. Confidence in the food and farming sectors has taken some severe knocks. In recent years, the public has expressed a growing concern over such disparate matters as food surpluses, environmental losses, food safety, public health, animal welfare, and (perhaps not practising what it preaches) patterns of shopping. Most recently, the farming industry and public confidence in it have suffered severely with the effects of foot and mouth disease.

9. This, and more, adds up to a loss of direction. The Rural White Paper has made a good start in providing that direction but the Policy Commission must seek to chart a more certain future for the agricultural industry and make better connections with the food we buy. Questions like what is farming for?, or what is role of the countryside?, or where should our food come from? were easy to answer thirty years ago but social, economic and environmental changes have taken away those certainties. Policy makers have yet to respond with an equally certain future.

10. There are three key challenges in this area to which the Policy Commission must contribute:

  • regain public confidence in the way food is produced in England and in the Government's role in supporting and regulating the sector;
  • match the tax payers' money that supports agriculture with wider public aspirations for an attractive, living countryside;
  • secure a more prosperous future for farming, assuring those planning to invest in farming - especially young people considering a career in the industry - that it has it has the potential to be financially viable and rewarding.   

11. Changing thinking and policies about the role of rural areas and agriculture in a post-industrial nation. Britain was the first industrialised nation, feeding its growing population by improving the techniques of its home agriculture and establishing preferential trade links with its far-flung empire. The country has now become one of the first post-industrial nations, moving steadily away from a dependence on both primary and manufacturing sectors.

12. The agricultural industry is an important producer of many of the nation's needs but it is no longer expected to feed the nation. Global trade, rising living standards, and consumer expectations have led to different priorities, with food being drawn from world suppliers and our home acres being used for more than agricultural production alone. Public aspirations have become increasingly focused on land management rather than farming productivity, where food production remains a primary objective but others are important too:

  • heritage conservation is high on the list of priorities - the maintenance of an attractive, wildlife-rich countryside with its historic roots, cultural associations, and regionally diverse landscapes;
  • the countryside as a green backdrop to a new rural lifestyle - essentially a residential and recreational environment;
  • the countryside as an economic base for other activities - particularly rural tourism, but also other rural businesses that wish to operate in a countryside location;
  • distinctive products from the land, including locally distinctive food and drink, tourism, and recreation;
  • public enjoyment through well-managed rights of way and other forms of access;
  • public benefits of land management, such as flood control and contributions to renewable energy production.   

13. Rural policy is in danger of being pushed and pulled in response to the requirements of particular sectors within it. Social aims might conflict with economic aims and both might be at variance with those of the environment. Rural areas need an integrated policy framework - a process that has already started through the welcome publication of the Rural White Paper in 2000.

14. The Policy Commission is in a good position to help determine such a strategic framework and to establish a set of principles which commands widespread support. The Countryside Agency commends the approach which it has published in its Strategy for sustainable land management in England (June 2001), which is based on four principles:

  • multi-functionality: land should be managed to deliver a wide range of benefits beyond food and fibre production;
  • sustainability: land management should reflect the principles of sustainable development;
  • integration: land management must be integrated with rural development;
  • subsidiarity: a framework which can reflect regional and local needs and aspirations.   

We have attached the Strategy for sustainable land management in England as part of our evidence and commend in particular the strategy itself on pages 9 to 14.

15. Much of this approach can be summed up by the term 'diversification', whether on the farm, through other sources of income for farming families, or by encouraging a diverse range of rural businesses or employment opportunities in rural areas. Diversified activity has a role in helping farmers to become more consumer orientated, to respond to consumer preferences, and to make best use of their skills and assets. It is an overworked term, though, that causes particular difficulties for farmers who are already working too many hours a day, and for most tenant farmers. On the farm, the key is rural business advice linked to a whole-farm plan, which can identify all agricultural and non-agricultural opportunities, and which can be used to re-balance the enterprise within the resources available.

16. Redefining the special position of agriculture based on the public benefits it provides. For fifty years, agriculture has been treated differently from other businesses. It has had (until recently) its own government ministry, its own policies, protected markets, grant structures and price support. The public benefit from this special and expensive approach was perceived to be a sufficiency of cheap food, based on a home agricultural industry.

17. This special treatment, while giving the agricultural sector a negotiating strength, has resulted in an increasing isolation from the market, a disconnection from consumers, and a distance between farming and other businesses. Agriculture is still special, but for different reasons than in the past. Of these, the most important is that of managing the land for wider public benefits - tourism, landscape, wildlife etc. - much of which lies outside the formal market mechanisms, but which, together, far exceed the contribution of agricultural production to gross domestic product.

18. It is these wider reasons that justify continued intervention by the EU and the Government in the market (using taxpayers' money) and a special approach that ensures that broad public benefits continue to flow from a healthy and prosperous agricultural industry.

19. Strengthening the links between farming and other parts of the economy through institutional modernisation. As the nation moves towards a post-industrial economy, it will need to adjust its institutional arrangements, too. The foot and mouth disease epidemic has shown the interdependence of businesses, not only within the countryside but within the nation at large. It is no longer valid (and possibly never was) to make distinctions between 'urban', 'rural', or 'agricultural' economies: there is now one, single economy of which towns, countryside and farm businesses are all an intrinsic and integral part. Each depends on the other.

20. This interdependence is increasingly recognised. Less obvious is change to the institutions that underpin particular sectors of the economy. Unless change is introduced quickly, an increasing mismatch will appear between narrow, sectoral advice and an ever-widening, integrated economy. Agriculture and farmers need to connect more effectively into the mainstream of business thinking but they will be impeded by institutions that fail to take on a new, wider role.

21. All public bodies should move quickly to follow the lead set by the Government in creating the Department for Environment, Farming and Rural Affairs. In the private sphere, the change from the Country Landowners' Association to the Country Land and Business Association is an earlier example of this approach. Others will need to follow suit.

The Countryside Agency's seven-point action plan

22. The Countryside Agency's four principles, set out in the paragraphs above, outline what is needed to match an essentially 1940s food and farming policy to the requirements of the twenty-first century. There is a broad consensus on this sort of approach but, as ever, the devil is in the detail. In our seven-point action plan below, we seek to identify:

  • the nature of each action point - briefly expressed;
  • practical measures associated with it. The debate on the future of farming and food has brought forward scores of practical ideas, many of which we support. The measures we identify below represent the approaches for which we have a particular experience.   

23. Action Point one. Expand the range of activity that can benefit from the ERDP, and accelerate the transfer of public funds from agricultural commodity support to activity that will enhance or restore the rural environment and encourage rural development.

24. The Countryside Agency has published views on the future of the CAP (particularly through a Strategy for sustainable land management in England) and it has been instrumental in taking forward a number of practical proposals.

25. One point deserves the particular attention of the Policy Commission. The Rural Development Regulation - translated nationally into the ERDP - allows member states to use CAP funds to help bring about change in rural areas. This is a welcome move but the proportion of total funds allocated to the ERDP is small. We see the need for greater investment in the Rural Enterprise Scheme and an expansion in the resources available for agri-environment schemes so that they are accessible to all farmers and land managers across England.

26. Practical measures for action point one.

  • In the short term, the Government should make greater use of its powers to apply modulation to increase the budget for the ERDP beyond that planned by 2006. Under current plans, modulation rises to 4.5 percent by 2004: this proportion should be progressively increased towards the 20 percent allowed under EU rules.
  • In the mid-term Review of the Rural Development Regulation, the Government should press for: (a). changes in that Regulation to allow for more integrated delivery of the full range of measures (for example funding publicly employed facilitators); (b). changes to the (so called) Horizontal Regulation to allow Member States flexibility in deciding how money generated from modulation can be spent (ie across the full range of RDR measures not just the 'accompanying measures'). (c) a better deal for the UK in the allocation of RDR funds from the EU. Our current allocation of 3.5% is based on historically low spending on agri-environment schemes.
  • In the longer term, the Government should negotiate in Europe to transfer two-thirds of production related support to ERDP type measures by 2010.   

27. Action Point two. Help farmers to capture more of the value in the food chain.

28. Understanding the operation of the food chain is a complicated area. Not all farmers will be in a position to add value to their produce and many will continue to produce and sell basic commodities. However for many there is scope to capture greater value.

29. The CAP has supported farmers for many years but its subsidies, price supports and guaranteed markets have also led to a generation of farmers who have few tangible links with their ultimate customers. In consequence, a lengthy food chain has established itself between the farm gate and the shopping trolley, and the farmer has to share the profits available with food manufactures, transport fleets and retailers.

30. Farming needs to be profitable but farm businesses will continue to struggle unless they are able to obtain a better price for the goods they produce, funded from a greater proportion of the profits of the final product. We make two suggestions, although we accept that even with considerable expansion, they will be small players in a tough market.

  • A growth in marketing co-operatives and producer groups . This will help provide a scale of activity that will command strength in negotiating prices and a more effective promotion of farm products locally or regionally. They should focus on improving product quality through sustainable land management.
  • Direct selling to consumers. Many farmers have always sold produce directly to customers but the proportion of these direct sales can increase dramatically through farm gate sales, farm shops, food boxes sold in nearby towns, and internet selling - and through farmers' markets, which the Countryside Agency has backed in recent years. The number, geographic spread and frequency of farmers' markets still needs attention but their growth from small beginnings to 300 markets in 2001 is an example of what is possible. The goal should be a major change in shopping opportunities so that, for example, a visit to the market or to a farm shop moves from being just a pleasant event to part of the shopping week.   

31. Practical measures for action point two.

  • Farmers' organisations should champion market co-operatives and provide practical advice to help individuals to find marketing partners and to .... sustainable land management.
  • Local authorities should aim to establish 400 new farmers' markets by the end of 2002 and, in the longer term, should aim for a weekly market in most towns and shopping centres.
  • The Government should buy out sheep quota in areas where there is over-production, in order both to improve markets for sheep meat and help achieve sustainable grazing levels.   

32. Action Point three. Seek support in expanding the market for regionally or locally distinctive products, from the food processing and catering industries, major retailers, and the public.

33. The food and farming industries would benefit from a greater public understanding of the link between the food they buy and the countryside they value. The growth in farmers' markets, rural tourism, and other forms of direct contact will improve matters but the real challenge is to link the choices made in bulk supermarket shopping or in hurried purchases in a sandwich bar with the future of the English countryside.

34. The food processing, hospitality, tourism and catering industries can help address this challenge through their wholesale food orders. Currently, factors like the price, quality, freshness or appearance of the food are specified but rarely its provenance. The Policy Commission should seek the support of those industries in making links with a range of different suppliers so that orders specifying, say, a locality or organic source would become the norm. This would enable access to a more segmented market for producers. There would also be promotional advantages for those hotels, restaurants and other businesses which make such local links.

35. The same principles apply to public procurement practices, although current regulations can cause problems. Public authorities which buy food and rural products - hospitals, schools, and military establishments, for instance - could support their surrounding countryside if local purchases were given preference. But procurement policy, with its requirement to seek the lowest price, and EU regulations which prevent preferential treatment for a particular locality, will need to be reviewed before help can be given in this way.

36. Major retailers also have a part to play. The trend towards a few very large food retailers - supported by the public through their buying habits - has led to benefits for shoppers, including choice, convenience and lower prices. These benefits have their effects elsewhere, though. Until recently, the national and international purchasing policies of the major retailers have had little regard for the importance of local markets to local farming businesses and the countryside that supports them. The Policy Commission is in a good position to welcome recent moves to widen the choice of sustainably produced food and drink in supermarkets - but also to press them to do far more.

37. Practical measures for action point three. 

  • The Government should review the regulations and practice of public procurement policy and allow public authorities to build best value into purchase specifications.
  • The Food Standards Agency, in association with farming organisations, should explore consumer attitudes to food safety and risk, and determine the best ways of addressing them.
  • The farming and food industries should explore how to enhance consumer confidence by increasing awareness of the nature and origin of the food they eat through, for example, full traceability and branding initiatives.
  • Major retailers should support the well-being of their local countryside by sourcing more local produce, supporting more village shops by providing them with supermarket goods at wholesale prices and providing free retail advice, and providing expert training and business support advice for potential new suppliers.   

38. Action Point four. Encourage alternative uses of land for which a market does or could exist.

39. The increased production by farmers of non-food crops grown for industry and renewable energy has the advantages of tapping new markets, expanding commodities not dependant on subsidies, and in the development of non-fossil fuels. At present, though, there is no national framework to give some certainty to those proposing to invest in non-food crops.

40. A national framework for non-food crops to guide what is otherwise a host of individual decisions is essentially one for Government. National guidance on matters such as non-fossil fuel obligations and sustainable development targets are helpful but come without context. The industry needs broad marketing advice, perhaps backed by incentives, in which it can determine what should be grown and where without creating environmental damage, in what quantity, to what timescale, and within what level of economic certainty or risk

41. Practical measures for action point four.

  • The Government should prepare and promote a national framework for the development of non-food crops.   

42. Action Point five. Establish markets for public benefits.

43. The opportunities for farmers to produce non-market public benefits as part of their land management are widely understood and considerable progress has been made on providing such benefits as enhancing the landscape and wildlife habitats, conserving soils and water, protecting historic features, and managing the land for public enjoyment.

44. Marketing public benefits is complex, with support from the public coming primarily through taxes rather than direct payment. Nevertheless, a well-founded market system would support the benefits the public want from a farm but which (unlike crops or stock) do not generate a profit in the traditional sense. Subsidies and grants will still play a big part but we need alternative approaches, too.

45. Practical measures for action point five.

  • The Government should back examples where public activity might lead to multiple benefits from land management. An early candidate might be flood prevention plans for towns which include the creation of flood plain water storage upstream. A similar process could be used for other benefits - for instance, the creation of new wildlife habitats, or new access for recreation.   

46. Action Point six. Introduce a new style of development plan which requires planning authorities to express clearly the kind of development needed in their rural areas; and use the planning process - amended if necessary - to deliver it.

47. The planning system has guided and delivered rural development of many kinds for half a century. The majority of proposals are granted planning permission but nevertheless development planning and - to a greater extent - development control tend to be perceived as hurdles to cross rather than a positive force for rural well-being. There are three reasons for this:

  • development plans are slow in preparation and not sufficiently responsive to changing local needs;
  • rural planning is often about reacting to the proposals of others rather than setting directions;
  • the long-held exemption from full planning permission of many farm buildings has been the norm for many farmers, and regulations that have brought such development partly or fully into the planning system have caused resentment.   

48. If, as Planning Policy Guidance Note 7 maintains, the planning system is to provide guidance and leadership for rural areas, these points must be addressed so that those seeking to diversify their enterprises have a greater certainty about what would be well received by the planners. As an integral part of a changing rural economy, delivering a wide range of public as well as private benefits, it is no longer appropriate that agriculture should be exempt from the planning controls that apply to other businesses.

49. Practical measures for action point six.

  • The Government is about to publish a Green Paper on the planning system, with the possibility of legislation in 2002/3. The result should be a new style of development plan which expresses clearly what kind of development is needed in each authority's rural area. Proposals that meet those needs would be welcomed and granted planning approval.
  • The Government should amend the General Development Order so that, once the new style plan is adopted, all development in that area will be brought into planning control.   

50. Action Point seven. Focus business advice and support in the countryside on two key audiences: land managers and incoming, self-employed entrepreneurs.

51. The countryside is changing quickly and the traditional role of farmers in growing crops and raising stock might not always match the scope and requirements of wider, more integrated rural enterprises, and nor will it necessarily deliver the ERDP. Efficient farming demands many skills but many farmers, while adaptable to a point, would benefit from the advice and training needed to run a variety of farm based enterprises. This might include:

  • how to make connections with the wider local economy;
  • how to diversify on-farm businesses, taking on new roles and adding value to existing products;
  • how to manage a farm as a part time enterprise;
  • how to respond to the demand for wider public benefits from farmland;
  • how to tune business and marketing skills.   

This process would not have to start from scratch. Much is already under way and experience can also be drawn from the Countryside Agency's Land Management Initiatives, which are piloting a range of approaches for the better provision of integrated, whole-farm advice.

52. In an industry with an ageing workforce and a crisis of succession, such high quality advice and training is urgent and demands public investment:

  • farming advice should be based on an extended capacity of farm business advisers, providing assistance on development and diversification in the context of whole farm plans;
  • formal training in new skills is often logistically difficult for farmers but a variety of approaches is possible, including flexible programmes, distance learning, on-farm training and best-practice visits.
53. Research shows that new businesses started up by incoming self employed entrepreneurs are the most effective in raising economic activity and employment in rural areas. Yet they are generally not targeted by publicly funded advisory and support services.

54. Action Point seven: practical measures:

  • The Small business Service and DEFRA should offer all farmers and land managers time limited, comprehensive, and free or low-cost advisory service to help draw up integrated development plans and programmes for their land and assets.
  • Training providers should institute a comprehensive training programme for farmers and land managers to provide the range of skills that a modern, diversified farm business requires.
  • The recently announced cross cutting review of the delivery of Government services to small businesses should pay particular attention to the needs of self employed start ups in rural areas.   

Countryside Agency

October 2001