DAVID RICHARDSON
27 July 2001
DEFRAminister
Margaret Becketts
blueprint for the future
is not as contentious
as might have
been predicted, but…
DAVID RICHARDSON
Dear Mrs Beckett,
I was unable to attend the RSPB conference at which you spelled out your vision for the future. However, your press office was kind enough to send me a copy of your speech.
I was somewhat apprehensive, given the forum you chose for your first major policy statement. Please understand I am not antagonistic to the RSPB. Indeed, I enjoy excellent relations with the organisation. But I did wonder if you would devote most of your attention to birds leaving little time to discuss agriculture. In the event I was agreeably surprised. But I still seek clarification on some issues and would like to take you to task on a few others.
You clearly recognise, already, that the industry at the heart of your responsibilities is in big trouble. Moreover, you said in your speech that farmers must have a better deal. I thank you for that, although I question the starting point of average farm income for last year which you quoted. You said it was £8500. I believe it to be nearer half that figure with many farms losing money. In other words, the situation may be twice as serious as you conceded.
But I was encouraged by your declaration that "we (the government) are committed to facilitating the development of competitive and diverse farming…within the framework of sustainable rural development. This means…recognising its role as guardian of three-quarters of our land and bedrock of rural communities…also agricultures relationship with wider society, in particular the consumer."
Through LEAF I advocated for 10 years a similar approach to farming policies; to farm economically, with care for the environment; responding to consumer demand and enhancing marketability. So, we agree thus far. But I would point out that the word "sustainable" has many meanings. One of them is profitability. For if a farm is not profitable it will not be sustainable for long. Which, as the farm income figures above imply (whether you are right or I am right) and the accelerating exodus from agriculture prove, is the situation many farmers are in at present.
You also spoke of plans to divert more production aid to environmental aid. As a long-term advocate of cross compliance, I approve the trend. But you must understand that if the policy of modulation, used to help fund the change, means aid is diverted from farming and into other rural activities it will do nothing to stop the rot. The plain fact is that agriculture needs all the aid it is currently getting, and more, if a semblance of the present industry is to survive. To convert 100% of area aid to conservation based aid, via cross compliance, would help. But merely stating, as you did, that CAP cash invested in rural development will have increased from 1% in 1997 to 15% by 2005 provides little comfort to those being modulated.
The facts are that when all costs are counted there are precious few farms in this country that can even now make a sustainable margin at present commodity prices and aid. Nor will they be able to do so in the foreseeable future. Meanwhile, the Americans, chief authors of the WTO proposals on whose altar British farmers are being sacrificed, are pushing through a new Farm Bill. If successful it will give virtually open ended support to US farm commodities with no production restrictions. The estimated cost to the US Treasury is more than $30bn per year. The Freedom to Farm Act under which US agriculture is nominally run today forecast five years ago an annual payment to American farmers of only one-fifth that amount.
For US agriculture cannot survive at present world commodity prices either. And the US government is doing what is necessary to keep its farmers in business while telling the rest of the world to do what it says, not what it does.
You said in your speech that the CAP was a blunt and ineffective instrument for the control of markets. I agree, but I suggest that market forces, when they are manipulated by the US and others, are even more blunt. The WTO says it aims to help Third World economies by opening First World markets to them. In theory, that is a correct policy and many farmers would subscribe to it – provided it is not allowed to unfairly undermine our markets and profitability with goods produced through exploiting land, labour and the environment and without the ethical, health and safety assurances demanded of British producers.
Furthermore, I suggest that British agriculture today, disadvantaged as it is by the value of sterling, is the equivalent of a Third World economy trying to operate within a first world cost structure. You said price support and production controls were outdated mechanisms and that UK farmers should be "helped to adjust with transitional payments". I put it to you that UK farming is unlikely ever to be able to adjust to the combination of unfair practices, some of which I have tried to describe. Your policy options, if a significant domestic agriculture is part of your long-term plan, must include either compensation or protection from such competition.
Yours sincerely,
DR
You clearly recognise, already, that the industry at the heart of your responsibilities is
in big trouble.