Defra’s Ministers have been in office for a year now.
It has certainly been a challenging time. Aim is to support and develop British farming and horticulture and encourage sustainable food production. Agri-food sector plays a key part in our economy with the whole food chain contributing £88 billion per annum (7% of GDP) and 3.7 million jobs. Farmers and growers play a crucial role in managing the land.
It’s important that the supply chain, work together to increase the competitiveness of the whole UK food chain. In Defra we have put a sustainable food and farming industry at the forefront of what we are doing. It is the first key priority in Defra’s business plan. It underpins everything we do and we are looking at the food chain in its entirety, which is important. This will help secure an environmentally sustainable and healthy supply of food and create the conditions for the agri-food sector to succeed.
We are currently experiencing dry weather conditions, which will affect different crops in different ways at different points in their growth. Whilst we are not in a drought, the situation is one which demands attention and support for the capacity of farmers and growers to negotiate it successfully.
The Secretary of State convened a water meeting earlier this week with water companies and farming and environment groups to make sure we are properly prepared for prolonged dry conditions. We are working closely with the Environment Agency and the Met Office to ensure we have an up to date understanding of the situation on the ground. We are also in close contact with the NFU.
I am not going to try to predict what the effect on farmers’ profitability will be.
Many factors will continue to combine to affect production and we will continue to work closely with the industry so that farmers are better placed to manage and adapt to changing circumstances. Other crops are benefiting, developing more quickly and gaining a timely advantage of this period of sunny dry weather. Strawberries, for example. Overall looking good for fruit and potatoes; for vegetables , the picture is more mixed. We may be looking to a bumper year for ornamental and garden centre sales.
We have supported the work of the industry led Fruit and Vegetables Task Force. The Task Force reported last summer with a number of recommendations for increasing the consumption and production of fruit and vegetables. Their action plan covered production, supply chain and consumption. No one organisation was tasked with doing everything and industry agreed to take responsibility too.
The opportunity afforded by wholesale markets was one area highlighted by the Task Force. They discovered that although we all think that the big retailers have cornered the market in fruit and veg - there are other outlets. Up to 30% of all fruit and veg pass through wholesale markets. When they discovered how few English growers were supplying into the wholesale markets, they could see an opportunity. Of course, they weren’t the first to see this opportunity.
The London Fruit and Veg wholesale markets have Business Development Managers to help UK growers supply into these markets. These managers also help wholesalers make contact with farmers and help both work together to increase profitability.
Since the Business Development Manager Programme started in 2008 it has been estimated that 370 businesses have been supported with an estimated annual increase in turnover of as a result of this support in excess of £107,000. This equates to a return of approximately £40 million of additional business. And the NFU now plays an active role in bringing together growers and wholesalers for a win-win outcome.
We have decided to take forward the Task Force recommendation on expanding the role across the country. We have provided some funding for the GLA to investigate the feasibility of a nationwide scheme.
Another Task Force recommendation was that growers would benefit from a guide to wholesale markets. The FPC stepped up to the plate and decided that their annual Re:fresh guide provided a unique opportunity to achieve this goal. I am pleased to launch the new improved Re:fresh guide here today. Has a very useful section aimed to help growers get their foot in the door with wholesalers - I hope that this will encourage growers to utilise this market.
Reducing regulatory burdens is another way in which we are looking to support the industry. We want to reduce the unnecessary red tape for farmers and growers.
In June last year I set up the Task Force on Farming Regulation, chaired by Richard Macdonald, to advise Government on ways to improve approaches to regulation affecting farmers, growers and food processors. Tasked with identifying ways to reduce regulatory burdens and suggesting ways to move to a risk-based system of regulation, the Task Force presented its findings on Tuesday. The Task Force looked at various issues affecting growers. Included recommendations on:
- EU Producer Organisation scheme and its operation
- pesticides legislation,
- import controls on high risk products and a range of other issues.
I welcomed the Task Force Report and I will take due consideration of its recommendations.
You may be aware of the Red Tape Challenge launched by Prime Minister on 7 April, giving the public and industry a chance to have their say on more than 21,000 regulations that affect their everyday lives. Some regulations, such as those on food safety, make sense and are welcomed by consumers. The Government is committed to removing unnecessary barriers to growth and finding alternatives to regulation e.g. deregulating fruit and vegetable import procedures for approved traders in July last year.
Defra and the Horticultural Marketing Inspectorate (HMI) set up an approved trader scheme to reduce the bureaucracy and allow quick importation of high quality perishable fruit and veg. Reduced the level of checks required in the UK under the EU marketing standards based on risk analysis. The IT systems were updated to make all of this faster and more efficient. FPC estimated that these changes could save the UK fresh produce industry £3 million per annum.
Our domestic food industry also needs to be able to compete on the world stage. Last year, exports of food and soft drinks were a record £11bn and alcoholic drinks a record £5bn - there is further potential. UKTI Investment and Trade Strategy - announced last week - identifies food as a key sector.
The Defra Business Plan published last Friday includes an action for us to work with the industry to maximise the potential for growth through overseas trade.
Finish up by saying a few words on sustainability. Living within our environmental means whilst also increasing production, has to be a priority for the whole food chain. As set out in the Foresight report, the food production sector faces a significant long-term challenge to meet the demands of feeding an increasing global population, at less cost to the environment.
“Sustainable intensification” must be the way forward. Government is preparing a Natural Environment White Paper which will address exactly this challenge - the balance of increasing natural capital alongside increasing food production.
Climate change poses significant challenges for this sector -in terms of adapting to environmental change to deliver a sustainable increase in production - and in playing part in reducing greenhouse gas emissions to mitigate climate change. UK has committed itself to an 80% reduction in GHG emissions by 2050, - does not mean that the agriculture sector has to deliver an 80% reduction itself. The technical challenges are significant, but this sector must play its part. Farming industry has taken a good first step towards achieving this aim, through the recent publication of the Greenhouse Gas Action Plan and the sector-body product roadmaps.
Key emphasis is to encourage greater efficiencies in production, - makes good business sense. Could make a significant contribution to achieving their interim commitment of a 3 million tonne reduction per year by 2020. Look forward to seeing real action on the ground to implement this action plan- we will be reviewing progress in 2012.
Industry must plan to take advantage of the opportunities associated with climate change and to manage the threats- ensuring that businesses across the food chain are more resilient.
Defra is producing the UK’s first Climate Change Risk Assessment, - examining the risks that climate change poses to the food sector, - will be published in January 2012. Will be followed by a National Adaptation Programme to address the risks identified. Clear that Government cannot do this alone - on all these issues we need to work in partnership Industry and government working together to solve problems and exploit opportunities as they come along.