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Farming

Gove’s Oxford speech sparks debate on farming’s future

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We must develop coherent food policy: Michael Gove

DEFRA Secretary Michael Gove used a keynote speech to the Oxford Farming Conference to say that if UK agriculture does not embrace change we will be left behind, and Brexit offers the opportunity to shape that change and how we meet the challenges ahead.

SUBSIDIES CONTINUE TO 2024

Mr Gove guaranteed farmers the same level of subsidy until 2024, but said that CAP was created for a post-war world which is no longer relevant.

He said: “Paying land owners for the amount of agricultural land they have is unjust, inefficient and drives perverse outcomes. Indeed, perversely, it rewards farmers for sticking to methods of production that are resource-inefficient.”

In his paper, Farming for the Next Generation, as well as moving away from subsidies, Mr Gove’s proposals for future agricultural policy are based on incentivising innovation and giving the farmers the tools they need to progress, maintaining the UK’s reputation for quality food and high welfare, and building on natural capital to sustain the countryside for the future. He is also aware of the Government’s responsibility to public health.

Mr Gove told his audience: “I want to ensure we develop a coherent policy on food – integrating the needs of agriculture businesses, other enterprises, consumers, public health and the environment.

“I want to develop a new method of providing financial support for farmers which moves away from subsidies for inefficiency to public money for public goods.

“I want to give farmers and land managers time and the tools to adapt to the future, so we avoid a precipitate cliff edge but also prepare properly for the changes which are coming.

“And I want to ensure that we build natural capital thinking into our approach towards land use and management so we develop a truly sustainable future for our countryside.”

Addressing both the pace of demographic change and the challenges posed by Brexit, Mr Gove said: “We can’t stop change coming, we simply leave ourselves less equipped to deal with the change. There is a tremendous opportunity for productivity in our farms. We have some of the best performing farms in the world and there is no reason why our farmers cannot lead the way in achieving better levels of productivity throughout adoption of best practice and new technologies.”

Touching on the vexed issue of migrant labour’s importance to farming, Mr Gove suggested that seasonal labour would still be easily available and looked to a future where labour-intensive farming was replaced by as yet undefined new technology.

The government now proposes to keep similar payments to the BPS available until 2024. The current EU payments may well end at the end of 2020 to tie in with the EU budget, and Mr Gove suggested that area-based support payments would be phased out over a longer period after that, but “we won’t perpetuate that forever”.

‘PERVERSE’ SUBSIDY SYSTEM BENEFITS THE WEALTHY

Responding to Michael Gove’s speech, Professor Ian Bateman, Director of the Land, Environment, Economics and Policy Institute (LEEP), at the University of Exeter, said: “Michael Gove’s reaffirmation that the public money supporting farm subsidies should be spent on delivering public goods is to be welcomed; if this is carried through then he will deserve to be congratulated on breaking more than four decades of failure in agricultural policy. But it is disappointing to see that the system of paying most subsidies on a per acre basis is going to carry on for several years.

“At present 75% of public subsidies go to just 25% of farms; the largest farms in the country. This rewards multi-millionaire estate owners while other farmers remain in poverty. I have no problem with large farms getting payments if they produce high levels of public goods; but to get these payments just because they are large is perverse. It’s good to hear that this scheme may be capped, but it needs to end.”

INCENTIVES SHOULD TARGET ANIMAL WELFARE

RSPCA head of public affairs David Bowles said: “Paying farmers to achieve high animal welfare standards is a no-brainer. Farm subsidies targeted at animal welfare will be good for new trade deals, good for consumers and good for the animals.

“If post-Brexit farm support schemes include ring-fenced incentives for farmers to improve animal welfare, the government’s laudable ambitions for the UK to produce the highest quality food will be met. This, coupled with Environment Secretary Michael Gove’s newly announced comprehensive food labelling system which includes, amongst other things, indicators on animal welfare standards, would be the icing on the cake.

“As the UK leaves the EU and nationalises the farming support system this presents us with a once-in-a-generation chance to radically transform the Common Agricultural Policy (CAP) into a British policy for humane animal and sustainable land management.

“If we get it right now, the UK’s food quality can become the world’s gold standard – and that can only happen with the highest possible animal welfare.”

The RSPCA also welcomed Environment Secretary Michael Gove’s commitment to a much more comprehensive food labelling system that measures how a farmer or food producer performs against a number of indicators, including animal welfare.

ENVIRONMENTAL INCENTIVES WELCOMED

Helen Browning, CEO of the Soil Association said: “We warmly welcome the move towards an agricultural policy that prioritises environmental protection and the new emphasis on the vital links between food, farming and public health. The clear timetable provides much-needed certainty for farmers, whilst the commitments on public procurement and better labelling are important for food producers and consumers alike. We now need to see more detail on how farmers will be enabled and encouraged to shift to higher animal welfare systems, move away from synthetic pesticides, restore degraded soils and improve water quality.

“We don’t see these proposals as leading to a reduction in UK food production – but rather about a fundamental shift in how we produce food so that farming systems are truly sustainable. In many areas, we want to see more domestic production to meet demand, especially fruit and vegetables and organic.

“The greatest test of this transition is whether the UK’s food and farming system measures up to the monumental challenges of public health, which was highlighted in the speech, and climate change, which received just two mentions. The Government must also make an ambitious and unambiguous commitment to organic and other agro-ecological approaches which are proven to deliver on animal welfare, biodiversity, soil health and climate change – both during the transition and after 2024.”

CAP BAD FOR THE COUNTRYSIDE

Countryside Alliance Chief Executive Tim Bonner said: “Michael Gove’s speech confirmed the direction of travel for British agricultural policy post-Brexit.

“The move away from area based payments to rewards for delivering environmental and public goods is far from the revolution some have hailed, but it will be significantly accelerated by a departure from the Common Agricultural Policy.”

Mr Bonner continued: “Interestingly, just about the only thing that all sides of the Brexit argument, from the Liberal Democrats to Farming minister and Brexiteer George Eustice, seem to agree on is that CAP has been bad for the countryside, consumers and farmers. Attempts to reform the CAP have been achingly slow as the EU convoy moves only at the speed of the slowest. Brexit creates an opportunity for the UK to create our own farming policy for the first time in more than 40 years and move ahead of the pack.”

However, Tim Bonner sounded a cautionary note: “That is the good news, but there are also valid reasons for concern. There remains an inherent contradiction between agricultural productivity and protecting the environment which has not yet been addressed in detail by the Government and which goes to the heart of the big long-term question: how much will the public be willing to continue to pay for the countryside that farmers maintain?

“Under the CAP the question of farm support has been decided in Brussels and the combined weight of the European farming lobby has had a significant influence. Post Brexit levels of farm support will become a direct domestic political issue for the first time for a generation. The farm support budget will have to compete with the NHS, Defence, Education and all other areas of Government expenditure in future spending rounds. In order to maintain levels of support farmers will have to persuade the public, and through them politicians of all parties, that the public goods they provide continues to justify the money they receive from the taxpayer. This will be the greatest challenge for UK farming outside the EU.”

‘A TRIUMPH OF HOPE OVER PRACTICALITY’

TFA Chief Executive George Dunn said “We are used to having our hopes dashed of hearing a meaty Oxford Farming Conference speech from incumbents as DEFRA Secretaries of State but not this time. Like or loathe what we heard, we received a fairly firm view of future Government policy, the like of which we have not seen since Hillary Benn’s speech in 2010 in which he set out his 20 year plan to boost domestic food production. That plan fell by the wayside when Labour lost the 2010 General Election later that year and we will have to wait to see if the Gove plan survives the political choppy waters of our time.

“Disappointingly, there was a triumph of hope over practicality in the extent to which Mr Gove seems to be relying upon technological change to provide the swift answers we need to address labour shortages and the urgent need to increase farm productivity. Also on the negative side, there was nothing said specifically about the tenanted sector of agriculture, and there also continues to be too much reliance on the market being the means by which we sort out our food safety and food standards issues in a free trading environment.” said Mr Dunn.

“On the plus side there was a clear understanding of the need for a sufficient period of transition to a new policy framework. A commitment for the Government to act as a strong champion of British produce at home and abroad. A pledge to deal with market failure in the food chain and a promise that no one entering into an agri-environment scheme today will be disadvantaged when new schemes are developed for the post Brexit era,” Mr Dunn concluded.

FUW WANTS ‘MEAT ON BONES’

The Farmers’ Union of Wales described the as welcome, but says Welsh farmers remain in the dark over many important issues.

FUW President Glyn Roberts said: “We very much welcome Mr Gove’s apparent commitment to agricultural funding until 2024, and the general thrust of his speech, which described a prosperous and forward looking post-Brexit industry which is rewarded for delivering the very best in terms of food, the environment and social contributions to society.

“However, the nuts and bolts of turning such a vision into reality are where the obstacles will lie, and we look forward to seeing more meat on the bones in the long-awaited DEFRA white paper, due in the spring.”

Mr Roberts said many Welsh farmers would also be concerned that nothing was said about progress on talks between devolved regions on how devolved powers and funding might operate once we leave the legal framework of the Common Agricultural Policy (CAP).

“Wales currently has devolved powers over agricultural and rural development spending and policy, but this is within the limits laid down in the CAP framework.

“The FUW fully supports such devolved powers continuing. But, we now need to ensure that devolved powers are fully respected by all 4 nations and that we don’t see the creation of support mechanisms that benefit one nation over another. Therefore we need to develop a UK framework which ensures equivalence between producers in the four nations, which respects devolved powers and allows a degree of flexibility.”

While acknowledging that this was a difficult balance to strike, especially given political differences between devolved regions, Mr Roberts said progress was necessary.

“We currently have such a system, so it is not difficult to see how a framework could be developed which strikes a sensible balance between respecting devolved powers and avoiding the dangers of a free-for-all.”

Mr Roberts said reaching sensible agreement on spending frameworks should be a priority, in order to avoid inappropriate and unfair divergence between spending areas in devolved nations.

He also emphasised the need for Mr Gove’s vision for the future of UK agriculture to be underpinned by an acceptable post-Brexit trade deal with the EU.

“I therefore welcome his fellow speaker’s, Professor De Castro’s, confirmation of the EU’s desire to ensure tariff-free trade between the UK and EU post-Brexit,” he added.

Mr Roberts also welcomed USA Under-Secretary McKinney’s comments regarding the desire to increase agricultural trade between the UK and US, but warned that care needed to be taken to ensure any new arrangements did not compromise existing markets.

“Standards in the US are very different to those in established UK and EU markets, and we need to ensure new arrangements do not compromise or undermine established markets.”

Farming

Welcome for Young People into Agriculture Scheme

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Geraint Davies, FUW: Scheme is an exciting oppprtunity

A SIX MILLION pounds scheme to develop the next generation of farmers is open for applications, Cabinet Secretary for Energy, Planning and Rural Affairs Lesley Griffiths announced on May 10.

The Young People into Agriculture scheme will offer start-up aid to high achieving individuals looking to establish a new business or develop an existing business. Successful applicants will need to demonstrate they have the attributes to lead dynamic businesses and drive change in the wider industry.

The scheme, agreed as part of the Budget agreement with Plaid Cymru, will support 150 farmers and will develop participants’ leadership skills.

Eligible applicants must be aged under 40 on 1 April 2018. Expressions of interest must be submitted by 12 June and there will be only one application window.

Cabinet Secretary said: “Supporting the next generation of farmers is a key priority for me and this is even more important as we prepare to leave the European Union.

“This scheme will provide young people with the support they need to enter the industry and gain the skills needed to develop resilient and sustainable businesses. I urge young people to take the opportunity to put themselves forward and apply for the scheme.

“To complement this important scheme, I established a Young People in Agriculture Forum and met with the members last week to hear their views and talk to them about the development opportunities the Forum would provide for them. The Forum will help us further develop a long term relationship with young people who aspire to be the future senior leaders of the agriculture industry in Wales.

“Now is the time to prepare for the challenges Brexit brings. As a Government, we are working hard to support the industry to prepare and build resilience. This scheme and Young Persons Forum will help the next generation of farmers put their businesses and the wider industry in the strongest position to thrive in a post-Brexit world.”

Welcoming the scheme, NFU Cymru President, John Davies said: “We very much support this investment by Welsh Government as part of the budget agreement with Plaid Cymru last year. The NFU Cymru Next Generation Group were pleased to meet with the Cabinet Secretary, Lesley Griffiths and Simon Thomas AM last autumn when this new scheme was being developed, therefore we’re very pleased to see a scheme launched by the Welsh Government.

“It is vitally important that we support the next generation in every way possible and this scheme will provide vital investment to allow young farmers to further progress or kick-start their business.

“The future of agriculture is dependent on good young farmers, driving forward innovation and improving competitiveness in each sector, that is why we have a dedicated Next Generation Policy Group, which has been in place since 2015.

“Our 2018-2020 intake of 21 strong members met on Friday, May 11, to discuss the group’s priorities for the future.

“As I travel around Wales I am always encouraged by the number of young enthusiastic individuals wanting to make a career in agriculture, I would encourage anyone with an interest in applying to do so. Whilst there are many uncertainties post-Brexit, there are also great opportunities as we look to meet the challenge of producing great food to the highest health, welfare and environmental standards for a growing global population.”

FUW Younger Voice for Farming Committee chairman Geraint Davies welcomed the news: “The announcement brings exciting opportunities for younger farmers to set up as a head of holding for the first time, to develop their innovation and business resilience or indeed to establish a new business.

“To qualify for the money – which can be used as working capital and will be paid in three instalments up until 31 March 2020 – you will need to meet agreed key performance indicators.

“Applications will initially be scored and ranked according to how they meet the selection criteria and includes the type and structure of the business. Different points will be awarded according to the type of business, business structure, academic qualifications, level of continuing professional development and the strength of the business plan.

“Even though there are some hoops to jump through, it is worth applying if you think you fit the criteria.”

Expressions of interest will be made through RPW Online only and all supporting information must be uploaded when you submit your expression of interest. Failure to do so will mean that your application will not be considered.

Eligible applicants must be under the age of 40 on 1 April 2018 and expressions of interest must be submitted by 12 June.

There will only be one application window.

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Farming

Farmers and SMEs concerned by supermarket merger

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Merging?: Mike Coupe (L) with Judith McKenna (Walmart) and Roger Burney (Asda)

THE TENANT F​ARMERS ASSOCIATION (TFA) is calling for the Government to rethink its refusal to extend the remit of the Groceries Code Adjudicator (GCA) in light of the proposed merger between Asda and Sainsbury’s.

The planned merger, which will probably be referred to the Competition and Mergers Authority, would create the UK’s largest supermarket chain. However, a merged company would still not be as big as Tesco was only a couple of years ago, when that company had over 30% of the UK’s supermarket retail share.

The combined strength of the merged business poses a threat to suppliers, who could find their margins squeezed as the company would be able to depress prices paid to primary producers by manufacturers. That prospect was well flagged up during a BBC News interview with Sainsbury’s CEO Mike Coupe.

Mr Coupe told the BBC that there will be no store closures and no in-store staff redundancies, the inference that can be drawn is that jobs will go both in administration and back office operations, as well as logistics. The most likely way to deliver savings would be to increase the company’s margin or arrangements with producers and suppliers. Mr Coupe told the BBC that the merged company would have the potential to reduce prices through supply chain efficiencies.

Unfair practices within the retail supply chain led the Government to establish the GCA in 2013 to oversee direct supply contracts between retailers and suppliers. However it recently refused to extend the remit to include oversight of relationships further upstream between farmers and processors which could be impacted by the dominance of retailers.

TFA Chief Executive, George Dunn said “The merger between Asda and Sainsbury’s announced this week should cause the Government to rethink its strategy here. When Sainsbury’s boss Mike Coupe pledged to cut prices on everyday products by 10%, alarm bells rang out across the industry. It is suppliers who will be expected to shoulder the cost of these savings.

“There is a growing recognition that the food supply chain in the UK is dysfunctional and all too often it is the farming community which bears the brunt of the problems that this produces. Poor returns, last-minute changes in orders and specifications, unfair competition from abroad and poor labelling are all contributing to the pressures at farm level,” said Mr Dunn.

“Given that the vast majority of farm produce passes through at least one processor, if not more, before it hits supermarket shelves, the Adjudicator is therefore unable to consider the impact of retailer activity on many farmers,” said Mr Dunn.

Speaking in the House of Commons on Monday (Apr 30), Business Minister, Andrew Griffiths MP, referred to the work of the Groceries Code Adjudicator, but failed to address why the Government had decided to do nothing to protect primary suppliers. This was despite being challenged by Labour’s Shadow Agriculture Minister, David Drew MP on how the Government planned to tackle further potential supply chain abuse between farmers, processors and retailers.

“The TFA agrees that the GCA has had a positive impact on the groceries market by ensuring that there is a greater focus on the principles of fair trading. Retailers are now more aware of the need to ensure that they are not using their dominant position within the supply chain to engage in inappropriate practices. However the extent of the influence of the GCA is limited by its current legislative powers both in terms of the scope of its remit and its ways of working. The Government needs to act now to ensure that appropriate mechanisms are in place to guard against future abuse in the light of further concentration in the retail sector,” said Mr Dunn.

“Well-meaning initiatives aimed at improving supply chain relationships on a voluntary basis have failed to have the necessary traction across the board. We must deepen and broaden the GCA’s powers to allow it to look at the whole of the supply chain and not just direct supply contracts to ensure fairness in supply chains.​”​

Federation of Small Businesses (FSB) National Chairman Mike Cherry, said: “A merger of this size will concentrate a lot of power in the hands of one giant company, and it’s important that power isn’t misused to coerce small suppliers into accepting unfair contracts and poor payment terms.

“Those at the top of Sainsbury’s and Asda should explain how they plan to merge these two supply chains fairly, and give reassurance that cost savings won’t be achieved simply by milking their small suppliers for all they’re worth.

“When investigating this proposed merger, the Competition and Markets Authority should be looking for cast-iron commitments that a positive standard will be set for working with smaller suppliers.”

FUW President Glyn Roberts said: “The proposed merger will raise many concerns for farmers given the huge power a new mega company could exert over the supply chain.

“If the government were to allow such a merger, we would need to see a step change in regulation of the supply chain and the powers of the Groceries Code Adjudicator, otherwise there is a risk of severe abuses taking place which further undermine farmers and suppliers.”

NFU Cymru President John Davies said: “NFU Cymru and the NFU will be examining the details of this proposed merger between Sainsbury’s and Asda carefully and the further concentration of retail power it creates within the food supply chain. We will also seek clarity on what the structure of any merger will be.

“We will be requesting a meeting with Sainsbury’s and Asda to ensure that the commitment of the new business to British sourcing will not be affected. First and foremost the NFU Cymru and the NFU will be seeking to understand what potential impact a merger would have on our members – both those farmers who are directly part of these supply chains and those who could be affected by wider connotations.

“With just over 31% of the market potentially being held by one company the Competition and Markets Authority (CMA) is likely to consider the impact on shoppers – but that must also take account of changes to supply arrangements that could give rise to a reduction in choice and availability over the long term. The impact of the whole supply chain, all the way down to farm level, needs to be carefully assessed.

“NFU Cymru and NFU support any investigation by the CMA and we would aim to feed into this if approached.”

Welsh Liberal Democrat Spokesperson for Agriculture Cllr William Powell said: “Welsh farmers will be justifiably concerned this merger will produce a supermarket that is simply too powerful, leaving suppliers at its mercy.

“Farmers already work with tight profit margins and face the multiple challenges of Brexit, including diminishing farm support and obstacles to accessing the vital EU Single Market. This merger must not be allowed to threaten them further.”

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Farming

New quarantine measures for show season

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Quarantine units: Protect low TB areas

AHEAD of the summer show season, new Quarantine Unit measures have been introduced to protect the Low TB Area and give cattle keepers greater freedom to show their animals.

From October last year, Low, Intermediate and High TB Areas were established in Wales, based on bovine TB incidence. This approach has been designed to protect cattle herds in the Low TB Area whilst driving down the disease in the Intermediate and High TB Areas.

Cattle returning to the Low TB Area from a non-exempt show in the Intermediate or High TB Areas of Wales, or Edge and High Risk Areas of England are required to be Post-Movement Tested between 60-120 days after their return or movement. Until these cattle receive a clear Post-Movement Test during this period, they are unable to move off the premises to other shows.

Keepers in the Low TB Area wishing to show their cattle at multiple shows will now have flexibility to move their show cattle into a Certified Quarantine Unit, and remain in that Unit (when not at a show) through the show season, until a final Post-Movement test has been completed with clear results. This will allow multiple moves to be made over the course of the show season.

Show cattle will require a Post-Movement test between 60-120 days after the initial movement back from their first non-exempt show and again between 60-120 days after the final movement back from a non-exempt show.

Chief Veterinary Officer for Wales Christianne Glossop said: “Our priority is to eradicate TB. The measures announced today will give greater protection for cattle and herds in the Low TB Area.

“Quarantine Units, developed in collaboration with the industry, provide a high level of biosecurity and are inspected to ensure standards are maintained. Cattle keepers in the Low TB Area will now have the flexibility to use these Units to make multiple moves and show their animals over the course of the season whilst enabling us to continue to protect the Area from TB.”

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