Good morning. I am delighted to be here speaking at the NFU Conference. The NFU is doing fantastic work for the industry under Meurig’s leadership.
The NFU’s manifesto lays out the importance of British Food and Farming to our future.
I am also pleased that Commissioner Phil Hogan is here today. Not only is he speaking this morning, but he also came out with us yesterday to hear from some farmers on the ground and to talk to stakeholders. It is so important that we work together to make sure that we have a world class industry in this country.
Food and farming is absolutely vital. It affects our health, our landscape and the security of our country; three quarters of our land is used for farming, and nothing has a bigger physical impact on our country.
This industry has huge potential to deliver jobs and growth, especially in rural England, increasing incomes and making sure our countryside thrives.
It is the foundation of an industry that is vital to the British economy. The whole food chain employs one in eight people and contributes more than £100 billion to the economy.
It is our largest manufacturing industry, worth more than cars and aerospace together.
Food businesses weathered the recession well, and have generated more than 200,000 jobs over the past four years.
This government recognises its importance and we are getting the message out loud and clear.
We are providing the number one essential foundation; a secure, pro-business economy which last year had the strongest growth in the G7.
Today, I want to lay out our Long Term Economic Plan for Food and Farming – and how we are going to ensure this industry, which is at the heart of the economy, has a bright future.
Our plan has four priorities: firstly, enabling a productive and resilient industry; secondly, opening up new markets at home and abroad; thirdly, making EU rules work for us; and finally, protecting this country from plant and animal disease.
In the UK we have world-leading farmers. In arable, we have some of the world’s highest yields. 85% of the poultry we eat here is produced in Britain and the industry is clamouring to enter new markets. And in dairy some of the latest innovations have been pioneered here in Britain.
We can find leaders across all sectors. And organisations like the NFU and the AHDB, headed by Peter Kendall, are helping spread the expertise of the best throughout farming.
We are innovators. Our food producers bring some 16,000 new products a year to the market, more than France and Germany combined.
The industry is rightly striving to be more competitive, more productive and more resilient. But the world is not standing still – new competitors are emerging and price volatility has increased.
The government is supporting food and farming by ensuring that skilled new entrants are coming into the industry, by making it easier to set up and grow food and farming businesses, by helping the industry to build resilience and cutting red tape. This is vital for our future food security.
Modern food production needs technical, scientific and management know-how. It is hungry for skilled people; farming alone will need tens of thousands of new people this decade. We are making sure that demand is met.
We are pulling up school standards across the board and increasing the number of apprentices. Last year, 7,000 young people started farming apprenticeships, with a further 3,700 in food manufacturing.
The industry is taking the lead, working across the supply chain to improve skills, setting standards for apprenticeships whether it is in food engineering, horticulture, technology or butchery.
It’s all showing results. Colleges, which a few years ago sometimes struggled to attract applicants, report teenagers flocking to courses in farming, food and horticulture. Sheffield Hallam University, in partnership with the industry, is offering the country’s first food engineering degree. Harper Adams recently announced five new food degree courses.
We also want to enable the industry to expand. Often when people talk about farm diversification, they mean moving away from food. But it should not have to mean that. We need to build on existing food production, using the qualities of the land and what it produces to add value to what the shoppers buy.
Look at the Norfolk Peer potato, produced by Heygate Farms of Swaffham. It was launched two years ago, marketed direct at the consumer for its delicious taste and clean appearance due to the free-draining Brecks soil.
That’s the kind of thinking behind many of the 11 Food Enterprise Zones we have just announced, with more on the way.
The zones will slash red tape for businesses setting up or expanding. Around Melton Mowbray in Leicestershire and on the South Downs, for example, they have inspiring plans for kick-starting the local food economy by joining up farming, manufacturing, distribution and retail.
On the Downs, it will be easier for businesses to diversify and grow. For example, disused buildings on dairy farms could be converted for cheese or yoghurt production and it would be easier to open new farm shops.
There are similar plans for bringing together the supply chain for horticulture in West Sussex and the Vale of Evesham and Round 2 of applications is open.
As everyone in this room knows, price volatility is not a one-off storm. It’s going to be a long-term feature of food and farming and that is why building resilience is vital.
At the moment, no-one is feeling this more keenly than dairy farmers. In the longer term there is going to be increased demand for dairy products with a growing middle class in Asia in particular. British dairy is well placed internationally; it is high quality and high yield.
But I recognise this is scant comfort to those farmers who have seen prices for a litre of milk fall from 33.8 pence a litre at the start of 2014 to the low 20s in some cases now.
That is why we are doing all we can to work with the industry to support those with cash-flow issues and try to ensure that we retain capacity in this vital sector. Things like:
- Working with HMRC on Time to Pay, to delay the impact of tax bills. We’re also exploring the idea of extending the tax-averaging period for farmers from two to five years;
- We are meeting with the banks on a regular basis to ensure that they are providing whatever help they can where there are short term cash-flow issues; and
- Together with the NFU, we are exploring the feasibility of a futures market for dairy to enable farmers to have greater price predictability.
Alongside this on-farm support, the Government is doing what it can further up the supply chain. We’ve set out the powers of the Grocery Code Adjudicator in regulations now going through parliament and she will be able to levy penalties of up to 1% of UK turnover on buyers who breach the code. We’re also looking at possibilities for extending the remit of the GCA.
The dairy industry is a vital part of our food production and national life. I am determined to do what I can to help at this difficult time.
When we came into office, we said we would cut red tape and we are …. [turning] the tide:
- Since 2010, we have cut the number of farm inspections by 34,000 per year.
- We have cut the amount of Defra guidance by 80%;
- We are raising the outdated speed and weight limits in the tractor and trailer regulations, saving the industry around £57 million a year.
Of course more needs to be done. So we will keep working hard both here in the UK and in the EU to encourage better, simpler rules.
I want to see farmers farming, not form filling.
The second part of our plan is to open more markets at home and abroad.
We know consumers have a strong desire to buy British. In dairy products alone, we have a £1.3 billion trade deficit and we import two thirds of our cheese. We could be producing far, far more of it here. That’s why we are working with the food industry and retailers to remove barriers to local sourcing.
This government has taken a strong lead in buying more British food, implementing the Bonfield plan for public sector procurement. It’s opening a potential £400 million of new business by making it easier for schools, hospitals and canteens to buy high-quality local food.
I am pleased that Defra staff now go to work on British, not Danish, bacon.
We are promoting our top-quality local and regional food. So far, we have 62 products that benefit from Protected Food Name status. They range from West Country Beef and Lamb to Fenland celery and East Kent Goldings hops 62 is good, but the French have 219. I won’t be satisfied until we’ve overtaken them.
We are also putting in place better labelling for our products. From April, pork, lamb and poultry will have to show the country where it was reared and slaughtered on the label. The next thing I want to see is mandatory country of origin labelling on dairy products.
Then there is a global government campaign to promote British products and creativity; the GREAT campaign. We are using this branding to promote the best of British food and drink, here and abroad.
Selling more of our food abroad is a huge opportunity. Since 2010, exports have grown by more than a billion pounds to nearly £19 billion and this government has opened more than 600 new food and drink markets. That’s nearly three a week.
We are focusing on those markets that will give the biggest benefits to UK producers; we’re working to open the US beef market, and China is a strategic priority that will be the world’s largest importer of food by 2018.
That’s why we have just appointed our first ever food and agriculture counsellor at the embassy in Beijing. She will be there, on the ground, making sure Britain has access to this vital market.
Of course, the EU remains a very important market. I want to see the UK as part of a reformed EU, where we have the benefits of the Single Market, but reduce the burden of red tape, and enable our farmers to be more competitive by giving them access to the latest technology
I want a competitive food and farming industry that holds its own in world markets.
I’m very pleased that Commissioner Hogan has made simplifying the Common Agricultural Policy his number one priority in office. Only yesterday, Commissioner Hogan was at a local farm listening to farmers’ concerns around the impact that the three crop rule and greening bureaucracy will have on the competitiveness of their businesses.
If we want our farmers to be able to compete, we have to enable them to grow what the market demands, not what the rules dictate.
It is vital that decisions are made on best available science. First, on pesticides. Our arable farmers have built up their competitiveness over many years using the most modern science to raise yields and quality, but we cannot be complacent.
It’s been estimated that between one in three and one in six of the pesticides currently approved for use in the UK are under threat of bans or severe restrictions from Brussels.
I have made the case to Commissioner Andriukaitis that decisions on pesticide use must be proportionate and based on the science. We must make sure our farmers have access to the latest science and technology.
Here in Britain we understand this. Our £160 million Agri-Tech strategy is aimed at ensuring that more of the world-class science taking place in this country leads directly to improvements in the field and on the supermarket shelves.
On GM, one wide-ranging review found recently that in countries where these crops are used, they have increased output by more than a fifth, grown farmers’ incomes by two thirds and slashed pesticide use.
Europe needs to embrace scientific advances, many of them achieved here in Britain, and I am pleased that the need for greater national discretion on GM is now accepted.
I am keen that we see less red tape and more local decision making that will help the industry thrive. We have achieved that with the Common Fisheries Policy and I would like to achieve the same with CAP.
I am determined that the new Basic Payment Scheme and Countryside Stewardship schemes should be implemented in a smooth a way as possible. We are doing this by enabling farmers to register early, build up their application and review their information over a period of weeks before submitting their claim; this gives the RPA the chance to check maps in advance to make sure they are right.
Since 2010,96% of payments made in the first week of December 2014.
We are determined to build the system block by block, identifying and resolving problems in the system as we go.
So far, nearly 50,000 farming businesses, 58% of those eligible, have registered and I would encourage anybody who hasn’t registered yet to do so as soon as possible.
I know some farmers need to transfer entitlements. The new system will be ready to confirm applicants are active farmers and for entitlements to be added in early March.
Today, we are releasing our comprehensive handbook on the Basic Payment Scheme. That will help ensure applicants have everything they need to meet the May 15th deadline for finalising claims.
Businesses will also soon be able to start applying for our £141 million Countryside Productivity Scheme, which is opening in phases. It will offer capital grants for projects that boost innovation and productivity and put new technology to use.
We are also now taking applications for the first elements of our Countryside Stewardship Scheme, which includes £900 million of new funding for environmental programmes. Woodland grants opened last week, with water following next week.
The fourth part of our Long-term Economic Plan for Food and Farming is safeguarding our animal plant health. We know what a devastating effect disease has on food and farming, both domestically and overseas.
And that’s why, despite necessary reductions in Defra’s budget, we have maintained the number of frontline vets in our organisation, while extending our surveillance and investigation capacity. As we know from past experience, early action is vital…
We have the highest levels of the disease in Europe.
…Bovine TB is the greatest threat to our beef and dairy industry, endangering our food security. That’s why this Government…will take the difficult decisions to deal with this disease.
Our twenty five year strategy includes cattle movement controls, vaccination in the edge area and culling where the disease is rife. This strategy has worked in Australia and it’s working in New Zealand and Ireland. And I am grateful to the NFU for their help on the strategy and on our TB Expert Advisory Group.
We will not let up, whatever complaints we get from protest groups.
We’re in it for the long haul. We will not walk away.
This government believes in food and farming as a core part of our economy and our national life. We are prepared to do what it takes to make sure it has a great future in Britain.
Our long term economic plan for the country and its regions has food and farming and the rural economy at its core.
It is vital for food security.
It is vital for our landscape.
It is vital for jobs and growth.
We can lead the world in food and farming and I want to work with you to achieve that.