Speech by Rt Hon David Miliband MP to the annual meeting of the National Farmers Union, Birmingham, 26 February 2007
I am delighted to be here at my first NFU Conference. Let me explain why.I do want to help create a farming industry that is profitable and competitive and which makes a positive contribution to the fight against global warming and environmental degradation. Peter Kendall is right to quote my letter to the Prime Minister. That is my contract with him – but the reason I am here is that it is also my contract with you.
I am in politics because I have got ideas about how to make Britain a better place to live and work. But economic and social reform is not just about government. It needs government, but while government can lead change, alone it cannot deliver it. Better schools, lower crime, cleaner environment, or profitable farms all depend in part on the decisions of government, but they also need the active engagement of people on the ground. So conferences like this are my chance to talk, but also to listen and to learn, and that is what I will do today.
For organisations like the NFU, there is a choice: shout at government from the sidelines, or take responsibility for shaping and delivering an agenda with government. The former path is easy; opposition always is. But in every job I have done in Government, I have tried to encourage the latter choice, for the simple reason it is good for the country. No one has all the answers. In the modern world we have to work at it together.
So thank you to the NFU for being blunt and clear over the last nine months, but also thank you for being constructive and engaged. You don’t have to choose between the two: when we make mistakes, say so, but far better to help us avoid mistakes in the first place. That is why I very much welcome the NFU’s initiative to create a joint task force to address the climate change challenges faced by farmers, and I applaud Peter Kendall’s ambition to “make every farm in the country a net energy exporter”. That is precisely the kind of vision and leadership the industry needs, and the kind of outcome the country needs.
Last month I used the Oxford Farming Conference to set out my vision for a confident and diverse industry, ahead of the European game, delivering food, energy and landscape for a country more concerned than ever about quality, innovation and sustainability. This is a positive vision, driven by positive pride in the contribution of agriculture to the future of Europe. Today I want to focus on what we need to do to get there.
Shared Agenda
For much of the post-war period, farm incomes were based on decisions by government. For the future, that cannot be the case. That is why further CAP reform is important, and why the agenda set out by the Commissioner so critical. Since taking over from Franz Fischler in 2004, Marianne Fischer Boel has proved a powerful leader with a commitment to listen, to understand Europe’s farmers and – where necessary – to think radically. Her “One Vision, Two Steps” approach to the next round of CAP reform is undoubtedly right.
The reforms of 2003 to 2005 were substantial, but the CAP remains unsustainable in the long term. It must evolve into a framework which gives you freedom to farm and to support yourselves from the market, while being rewarded by the taxpayer only for achieving specific environmental and landscape benefits. In other words, quality and innovation on a level playing field deliver market share; contracts to deliver public goods provide access to public subsidy.
I believe we should take some big steps forward in the healthcheck. My wish-list and the NFU wish-list present a unified position.
We should be looking to end set-aside as a production control instrument. We should prepare the way for a smooth elimination of milk quotas by 2015. We should be rigorous in finding ways to simplify the Single Payment Scheme. We should extend the principle of full decoupling to all member states.
Reforms of this nature will be good for Europe and good for agriculture. It is not ‘sink or swim’; that is the debating point from those who fear change; it is ‘adapt and prosper’, with the support to do so.
Critical to reform, and critical to my case that ours is a positive agenda not a negative one, is a much fairer system for funding rural development across the EU, with a modulation regime to which all member states contribute. We should be proud that we now have over 4 million hectares of land under Environmental Stewardship Scheme agreements, and under the entry level scheme alone, there are nearly 28,000 agreement holders, built up in less than 2 years, but we need to go further, in our country and across the EU.
I had hoped to be able to announce details of our new 7-year rural development programme for England to you today. It is a matter of deep regret that two months into the year – through no fault of the government nor of the Commissioner - I am not yet in a position to answer some of those all important questions about how much money will be available, and what the levels of modulation will be in future years. I know your concerns about the need for leadership to be reconciled with competitiveness and financial security.
My message to you is that I will be working to deliver a strong package deal for farmers and for the countryside. My message to the Commissioner is that we will be working to support serious reform in the health check and beyond: it is right for our farmers and right for Europe.
The second area is innovation and research. We need to find innovative solutions to the challenges you face, and this is where R&D has an important role to play. We need to identify, develop and apply new technologies of many different kinds across the piece, not least on climate change. I have asked our Rural Climate Change Forum, on which the NFU and other important stakeholders are represented, to advise me how best to do that in the coming months.
Your President asked whether we are spending enough in this area. The answer is simple – in an ideal world there will always be scope to spend more. But any organisation must live with its finite resources, and my Department is no exception. We are currently spending over £30M a year to strengthen our knowledge and evidence base for farming and the food chain, as well as an additional £40m a year on research related to animal health and welfare with all the benefits that brings to livestock producers.
The challenge to me at the Oxford Conference was about farming’s contribution to fighting climate change. Budgets have been set but for the future they will be reviewed with this in mind. For starters we have earmarked an extra £0.5m next year specifically for joint funded work with yourselves and other industry partners to help farming respond to the challenge of climate change. I welcome Peter’s commitment that you will engage actively with this agenda.
Peter is right too that the new Levy Board UK will have an important role to play. I have today announced the Chairs of the six sector companies and three Independent members. I look forward to working with them and with John Bridge as the Board commences its work. The new structure will facilitate exchange of information across the sectors on issues of common interest such as water and waste. I know John and his team are committed to making sure that your money is stretched to deliver as much as possible for your benefit.
Third, smarter regulation. I said a few weeks after my appointment, at last year’s Royal Show, that regulation must be effective, transparent, proportionate and cost-effective, and that we need to use alternatives to regulation where possible. I remain committed to those principles.
That is why Defra has been commended as a leading department by the Better Regulation Executive for its moves to cut red tape; they are worth £30m to farming communities by 2010 and I am determined that we deliver on these savings. I also know the costs of the IPPC permits needed by large intensive livestock installations continue to exercise many of you. The EA and the NFU are now looking at ways in which IPPC inspections could be bolted on to existing farm assurance scheme inspections so as to reduce overall annual permit charges. The work is going well and we should have an outcome within the next couple of months.
Farming does have a considerable environmental footprint. That is why we have the EU Nitrates Directive and why it is essential that we implement it properly. The key it seems to me is to minimise bureaucracy and recognise where extra costs fall. It is also why once we have resolution on rural funding issues, I should be able to announce ways in which we plan to make use of resources available under axis 1 of the new Rural Development Programme in support of a package of measures designed to assist the livestock industry in tackling some of the particular environmental challenges it faces.
I have also been encouraged by the engagement and constructive dialogue between my officials and livestock industry representatives on the challenge to find a new way forward in relation to animal health responsibility and cost sharing. Responsibility sharing will provide opportunities for reducing regulatory burdens and improving the quality of legislation that is needed. Industry and Government working and taking decisions together will deliver outcomes more effectively and efficiently. The challenge to both Government and Industry in developing this new partnership and achieving a new approach to accountability should not be underestimated but the potential prize is huge.
Let me also say, because it is in part a regulatory issue, that I do want to see a level playing field for farmers at home as well as abroad. I know hardly anyone who wants to go back to the Milk Marketing Board, but people are concerned about dairy. The way I see it:
- Government has responsibilities, to ensure that we have effective competition authorities, to support innovation in the supply chain
- retailers have responsibilities not to compromise long term security of supply
- and producers need to deliver the range of goods, including those of higher value, that people want to buy.
Fourth, skills. Skills and training play a vital role in enhancing productivity and in helping you to diversify into new business opportunities, both of which are vital to your future economic success. This is particularly relevant to farming where research shows that while the industry contains many highly skilled people, there still remains a skills shortage, and the skills that are there are not always appropriately recognised.
I believe you as an industry are best placed to determine how to increase skill levels across the sector, and where there are particular skills gaps. The NFU can help facilitate and lead this debate, working collaboratively with LANTRA and other key stakeholders. I urge you to make progress on this issue, which my Department is ready to support you on. Not only will a lack of skills hinder growth, but it will reduce the attractiveness of the industry to newcomers, who are after all your future.
Fifth, I said at the Oxford Farming Conference last month that we need to prepare ourselves for a new approach to environmental damage. We are living, Britons in the 21st Century, as though we have three planet’s worth of natural resources. Farming produces 7 per cent of this country’s greenhouse gases, notably nitrous oxide and methane, and the food and drink sector as a whole is estimated to be responsible for up to 30 per cent of greenhouse gases in Europe.
The Government will publish its Climate Change Bill in the next few weeks. It will set a path for major emissions reductions between now and 2050. I believe that farming can help us do that – through what I have called ‘one planet farming’.
Let me take up Peter’s challenge about renewable energy and biofuels. My view is that any target must have strict environmental standards attached. What is the point in increasing the volume of biofuels in Europe, if the consequence is more environmental degradation elsewhere in the world? Ultimately we must be clear about the outcome we are trying to achieve – a reduction in net greenhouse gas emissions without creating other environmental problems along the way. Land use and sustainability must be integral to our future policy on biofuels, and bioenergy in general – and I will have more to say about this next week when I speak to the CPRE. I also know that your ability to diversify – in all ways – is significantly dependent on the planning system, and I want to see this addressed.
The Government’s future policy on non-food crops will be set out in three key documents which are due to be published in the Spring. The Energy White Paper will set out the Government’s strategy for energy, including bio-energy. The UK Biomass Strategy will outline the Government’s strategic aims and goals for biomass use, both as an energy source and as a renewable raw material. The Government’s response to the 2 year progress report on the Strategy for non-food crops and uses will also be published. It will look at the report’s ideas for refocusing the Strategy over the next three years, with a view to further expanding the non-food crops sector.
I am committed to making the most of the potential of anaerobic digestion. Anaerobic digestion shows that sometimes it is much easier to solve three problems together, than three separately: AD helps us to meet the need for more renewable energy; it helps us to mitigate methane emissions from agriculture; and it help divert other kinds of organic waste, especially food waste, from landfill or incineration. The UK Biomass Strategy will include the details of how we propose to work with stakeholders to drive a faster growth in the use of this technology. In parallel, the national Waste Strategy, which is also to be published shortly, will set out the important contribution which anaerobic digestion can make to achieving our waste management goals.
Farmers and others who are interested in anaerobic digestion have told me that the classification of the digestate as a waste is a potential barrier to the growth of this technology. I have therefore asked the Environment Agency to undertake work to develop a standard for digestate in 2007/08. This will allow modern regulatory principles to be applied to the use of this material and bring certainty to when this material is fully recovered. These are crucial steps if we are to see the level of investment in this still under-developed technology that I would like to see.
You challenged me about renewable energy, rightly. But there is also a challenge to engage the consumer. Consumers are increasingly demanding, and will create new markets – which is what makes the rise in organic production exciting and important.
I believe with the right information consumers will want to make the right choices. But without an independent way of benchmarking products, consumers can feel confused and powerless, and producers feel their environmental standards go unrecognised and unrewarded.
Our approach to carbon offsetting has been to recognise that trust and confidence in standards is absolutely essential to assure consumers that the action they are taking makes a difference. In respect of carbon labelling, I am encouraged that so many people from the supermarkets to the Carbon Trust, want to find ways to explain to consumers the different environmental impacts of their products. I am also encouraged that they want to work together in doing this. Undoubtedly there is much more to be done to turn aspirations into reality. But I can envisage the next step where, as well as quality nutritional standards, environmental standards become the norm on food packaging.
This is not an easy piece of work and will take time, particularly if this includes the whole lifecycle impact of food from production to distribution. In the shorter term, we want to develop environmental standards specifically for food production. This could cover a range of factors including energy inputs, fertiliser use, soil management, waste management and water pollution. I want DEFRA to work on an open basis with producers, retailers environmental organisations and existing assurance bodies on whether we can agree on a green standard that allows consumers to know something about the environmental provenance of what they are buying and farmers to get recognition in the marketplace.
This is a big agenda. I understand, however, that if we fail to get the basics right, the difficult things will seem irrelevant. Let me therefore finish by touching on three issues that are important: the SPS, avian flu, and bovine TB.
Government’s Licence to Operate
The Single Payment Scheme is core business. Peter recognised progress and I welcome that; but I also know that paying money on time should be basic expectation not cause for wild rejoicing.
Jeff Rooker, who has worked tirelessly on this and other issues, and I have been determined only to promise what can be delivered and then ensure that we keep those promises. I made a statement last November that where full payments under the 2006 Scheme were not possible, partial payments would be made to eligible claimants with a claim value of over 1,000 Euro from mid February. To date, over £900 million has been paid in full or partial payments. That is an improvement on this stage last year, but there is no room for complacency; an immense amount of work remains to review 2005 payments and complete the 2006 round and I am conscious of the consequential impacts on claimants in the interim.
There will therefore be no let up in efforts to both process the outstanding cases and put in place measures aimed at delivering a stable and reliable payment system in the years ahead. One other thing for the record: we are determined to fight every inch of the way to minimise disallowance penalties. I don’t accept that £300m is the right level of penalty; I am determined to try and prove those headlines of last week wrong; and I look forward to your help in doing so.
Animal health is also core business for both of us. We have been starkly reminded in recent weeks that the threat of avian influenza to the British farming industry is very real, and that a quick and effective response is the only means of controlling the spread of disease. Through you, I want to thank British farmers for their work in recent work to help contain, eradicate and prevent the disease; anyone who tells you that this is Foot and Mouth Disease all over again doesn’t know what they are talking about and should stop talking the country down.
Third, it would be wrong not to mention bovine TB. I am clear that although the disease is localised in its effects its level remains unacceptably high – with very real consequences for farming families. However despite a 15% increase in testing in 2006 the overall numbers are down.
We need to see whether this is cyclical or something more. We also need to see cattle controls, including the roll-out of pre-movement testing to younger animals on 1 March, as sensible precautions in and of themselves. And we need too to examine scientific and organisational questions about how the reservoir of the disease in the badger population can be addressed in a way which contains the disease rather than spreading it. That is what we are determined to do.
Conclusion
I never pretend that I came into this job with detailed knowledge of farming. But I am proud to have the chance to work for the good of farming.
I have a strong and growing belief that farming is fundamentally important to the economic, social and environmental wellbeing of the nation. Its influence on society is perhaps the widest of any industry, stretching from food to health, from landscape to animal welfare, from water to waste, from climate change to energy. That is the fundamental rationale for government support, whether directly through grants and subsidies, or indirectly through advice, R&D, or the tax system. It is also the rationale for regulation.
The challenges facing farming are, I think, self evident. What we need to do now is work with you to develop active programmes that will support you in delivering your potential – as a world class industry, profitable in the marketplace, making a positive contribution to the environment and being rewarded for your sensitive management of the countryside and the wildlife and natural resources that make it so valuable.
That is what I have tried to do for nine months. I have enjoyed the challenge so far. And I look forward to working with you further in the months and years ahead.
Page published: 26 February 2007