Food and farming industries 'unsustainable'

The food and farming industries in England are both "unsustainable", a Government-appointed commission said in its report published today.

It described the present set up as "dysfunctional" and said that farming had become detached from the rest of the economy and the environment.

The Policy Commission on the Future of Farming and Food, chaired by Sir Donald Curry, made a number

Among the key recommendations, the commission called for early reform of the

controversial Common Agricultural Policy, which it said was serving no–one,

dividing farmers from their markets, and suppressing innovation.

In another crucial change it said there should be a re–targeting of public funds towards environmental and rural development goals instead of sustaining production.

This would mean rewarding farmers who delivered an attractive, healthy countryside, and making the environment a "selling point, not a sore point for the industry."

Other measures called for were a strengthening of the food supply chain and better co–operation between farmers to reduce inefficiencies and improve competitiveness.

The key theme of the report was to "reconnect our farming and food industry, reconnect farming with the market and the rest of the food chain, reconnect the food chain with the countryside, and to reconnect consumers with what they eat and how it is produced."

On the eve of the report's publication, Sir Donald Curry, chairman of the Policy

Commission, said: "2001 was a terrible year for farming, but the disaster of

foot–and–mouth was just the latest blow to hit the industry and the rural

economy.

"Radical measures are needed to cut through the deeper malaise. Tinkering at the edges will not turn the industry around."

Prime Minister Tony Blair, who set up the commission last August, welcomed the findings of the report and agreed changes were needed.

In a pre–prepared statement, he said: "Farming was our first industry, and food production probably our second. Their role is growing ever wider: providing safe, quality food and exports, supporting the rural economy, and managing some of the most beautiful landscape in the world. And they remain vitally important to this country.

"However, agriculture needs to change. As the commission note, the current situation benefits no–one: farmers, taxpayers, consumers, or the environment.

"Farmers struggling with the lowest incomes for decades don't need me to tell them that.

"The commission's vision for the future of sustainable food and farming industries is one that many will find attractive. But, as ever, the challenge is in getting there.

"We want to work with farmers and all other stakeholders to build a consensus for change.

"Margaret Beckett and I are fully committed to delivering on this challenge."

Secretary of State for the Environment, Ms Beckett, said in a statement: "What we want is a system that rewards farmers for producing quality, not necessarily quantity, and is a disincentive to the restructuring and modernisation that our agriculture needs.

"This report points the way towards greater co–operation across the food chain, greater attention to the needs of consumers and a proper appreciation of the importance farming has for our rural environment.

"The Government stands ready to work with the food and farming industries as they address the challenges they face."

The Scottish Executive's rural development minister Ross Finnie said Scotland,

Wales and Northern Ireland had already published their strategies for farming.

Ministers from all four parts of the UK would bring their views to the table when discussions took place to determine the UK's position on the future of CAP.

Mr Finnie said: "The nature of farming in Scotland can be different from elsewhere in the UK."

He added: "I will be pushing for the mid–term review of CAP to continue the trend towards individual countries tailoring EU subsidy to the needs of their own industries."

Mrs Beckett told the news conference: "I can support immediately and

wholeheartedly the report's broad analysis and conclusions."

She said: "We are already working hard in this area to achieve the kind of changes we all want to see."

The Government "stands ready" to work with the food and farming industry as it faced the changes.

"We will do our bit, but we can't do it alone," she said.

"The impetus must come from the industry, working within the food chain as a whole."

Mrs Beckett added that the burden on farmers must be "proportionate".

She announced talks starting in March with leaders of the food and farming industries, and with environmental and consumer groups, to decide how to take forward the ideas in the commission's report.

This would feed into Government policy proposals in the summer.

Sir Donald Curry told the news conference: "Tinkering around the edges will not

solve the problem. Our vision is of an industry that farms for profit, that is

respected by the public, and that delivers positive benefits for the

environment."

Sir Donald praised the members of his commission, drawn from many different sectors, for working together.

"Given their backgrounds, individual commissioners were sometimes faced with issues from many different standpoints.

"There has been so much common ground between us – we have shown that people from across our industry and beyond can agree on what needs to be done. We need to turn this consensus into action."

Sir Donald said: "I know this industry is capable of change. It has demonstrated that before and it will demonstrate it again.

"The resilience and commitment of people in it will see it through.

"Can we agree straight away that things cannot go on as they are. The situation today in the English farming and food industry is unsustainable, in every sense of that term. Current farming policy is not serving anyone well.

"The Common Agricultural Policy is costing taxpayers £3 billion a year, and farmers are not seeing the benefit. Consumers pay higher prices for their food than the rest of the world, yet farming incomes are on the floor.

"Farmers themselves feel they have lost their sense of purpose – this came through in our consultation very strongly. They don't feel valued."

Sir Donald said farming needed profit, which meant investment. He added: "Government has been supporting farming for 50 years, and has a duty to support farmers through the changes ahead."

He said the whole food chain needed to work together and that farmers needed to spot their own opportunities.

"Our vision is of profitable farmers that are good stewards of the countryside."

He added: "The English countryside is valued by everyone. It has been through some traumatic experiences in recent years. Foot–and–mouth disease must be a turning point – a watershed.

"Farming should be a profitable business that ensures we enjoy a healthy and flourishing countryside both now and for generations to come."

Iain Ferguson, a member of the Policy Commission, told today's press conference:

"We have to allow the food industry to restructure.

"The supply industry has restructured and it is very clear the retail industry has restructured. What has tended to stop the farm industry restructuring is that there has not been clear market signals because subsidies have obscured the message.

"A lot of our recommendations are about putting in place the mechanism to allow the industry to restructure."

He said government money would be needed to allow the farming industry to change, but added: "It should result in a better deal for the taxpayer, but there is a cost getting there."

Sir Donald told the press conference it was the responsibility of everyone within the food and farming industries to gain the trust of British consumers.

He said: "All the research would suggest British consumers have confidence in British food but their confidence has been shaken over the last five or six years.

"We cannot afford too many more health scares."

Mrs Beckett told the press conference that blame for the state of the farming industry lay with society as a whole.

She said: "In a sense all of us as a society are to blame because the farmers are responding to signals that society has given them.

"What we seem to ask farmers to do is produce more and more food, more and more cheaply."

Mrs Beckett said the industry must work together on change but warned: "It's

not the job of this department and it's not the job of this Government, or any

other, simply to deliver this vision.

"We all have roles to play and if we all do our best to play our role as best we can and work co–operatively with each other, maybe we have a good chance of transforming the prospects of businesses in the farming chain and all of the British countryside for the better."