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Organic Farming - 12 July 2001

Mr. David Curry (Skipton and Ripon): I am delighted that the report by the Select Committee on Agriculture is the first to be selected for debate in the new Session of Parliament. The Under-Secretary of State for Environment, Food and Rural Affairs is beginning to know the architecture of the Room quite well—no doubt he will know it even better by the end of the debate.

As there is a debate on agriculture in the House, I am sure that you will understand Madam Deputy Speaker, if hon. Members pay some attention to that as well as to this debate, particularly given recent cases of serious foot and mouth disease in our constituencies, which is clearly a major preoccupation. As Shakespeare might have put it, there are also things happening in another part of the Palace.

The Agriculture Committee report was preceded by bovine spongiform encephalopathy and followed by foot and mouth disease. In the light of two such terrible experiences, there has been a lot of reflection about the nature and the direction of modern farming, some of which has been fairly far-fetched, some more realistic. People have occasionally forgotten that European policy remains the main framework for agriculture, and have spoken as if there is enormous national discretion. Devolution will, I suspect, give more national discretion within the framework of the common agricultural policy, as consumers in different countries react differently to their priorities. BSE will probably be more of a determining factor in the long-term shaping of agricultural policy than foot and mouth disease, because it is more clearly associated with problems of food as opposed to problems of farming, and has had a wider effect in the European Union.

There has been general reflection on modern farming and on the mechanisms and direction of support. Over the past 10 years or so, there have been attempts to introduce more environmental elements into farming—the countryside stewardship scheme, for example, has been expanded by the Minister, but it originated under the previous Government. There have also been attempts to crystallise the value and the product that we want from farming. Elements remain of a policy that is driving output up while trying to get other assets out of the system. The relationship between agriculture and the environment has again been brought into focus, above all as regards the demands and aversions of the consumer. The supermarket has done more to change agricultural policy than all the politicians of Europe put together. A consumer-led policy is both likely and desirable.

The Agriculture Committee looked at organic farming not unsympathetically, but in a fairly hard-headed and unsentimental way. Most of us were sympathetic to those who were pushing towards organic farming and who will be the pace makers. We felt that we should look at organic farming increasingly as a business, rather than as a religion. It was understandable that organic farming in its early stage was evangelised. I have no objection to people who wish to cast their farming experience in that light. The Committee felt, however, that as organic farming becomes more and more a part of mainstream agriculture, evangelism should be supplanted by marketing. It felt that as organic farming became an increasingly mature part of the agricultural economy, it should be based on sustainable economics as well as being ecologically sustainable. No matter how many other claims are made, organic farming cannot be sustained if there is no marketplace.

We recognised that there is a temptation to categorise different agricultural systems in language that is too clear cut and exclusive, as if each sort of agriculture had exclusive attributes that were not shared by any other system. Practical experience on the ground suggests that the opposite is true. "Conventional" farming can be very environmentally friendly, and organic farming can be very intensive. Integrated farming—in a sense, a minimum input system—can be highly profitable. No system trails behind it exclusive attributes. We felt that a great deal was happening in so-called conventional farming that was moving it towards greater sustainability, just as organic farming has moved out of the "three acres and a cow" period of its development and is becoming a more mainstream part of production.

We recognised that some claims for organic production, including that it has health benefits, could not be scientifically proven. However, we felt that the claim that organic production was environmentally friendly was the easiest to maintain, even if the categorical scientific evidence did not support it.

Our belief in the need for sustainable systems led us to a set of assertions. There is a need to recognise the danger that farmers may convert to organic production because of financial inducement and not because a marketplace has been identified. We all know that agriculture has suffered very difficult economic conditions and that farmers have been desperate to find a way to maintain their businesses. Inevitably, some will look towards organic farming as an escape from the financial imprisonment of present economic circumstances. We wanted to ensure that those who did convert had drawn up their business plans, were confident that they could sustain them and would not abandon them if economic circumstances became more favourable in broadly conventional farming.

We expressed a distaste for setting targets for organic production, which we felt could lead to distortions and prescriptions. Nevertheless, one should be aware of erecting a counter-CAP that, in practice, depends on the same mechanisms as the CAP.

Mr. Mark Todd (South Derbyshire): The Select Committee found interesting evidence that the organic movement itself is far from united on the idea of targets for organic farming. Much of the organic movement expressed considerable doubts, as did a substantial part of the retail sector. Does the right hon. Gentleman agree?

Mr. Curry : That is true. A few days ago, I discovered, somewhat to my alarm, that I had drawn fifth place in the private Members' ballot. I immediately demanded a recount, but that made no difference. I have since been inundated with demands that I put forward an organic targets Bill. I do not want to make a public announcement that would disappoint many people, although it would have the effect, I hope, of clearing the e-mail on my computer. I am, however, sorry to say that I am not disposed to put forward that Bill. I may, inescapably, have to espouse many other meritorious causes because of the error of listening to the Whips and signing for the blessed thing in the first place.

We question whether a buoyant market sector needs conversion grants. A Select Committee must sometimes question basic assumptions, one of which is that organic farming is increasing. Everyone told us that there was increasing demand for organic products, that supermarkets could not get enough of them and that we spent too much on organic imports. If that is the case, would the public subsidise the opposite of market failure: market success? At the end of the day, we thought that there was a case for Government support, if it were directed at clear market opportunities and given on the basis of clear measurable objectives. We certainly thought that supermarkets had a role in procuring supplies, but doubted whether the public purse was required to subsidise the commercial activities of major supermarket groups.

Mr. Todd : Does the right hon. Gentleman agree that a strand of policy that one would like to see developed is supermarkets sharing the cost of conversion for organic farmers? After all, they are recruiting people to supply their customers. Simply turning to the state for automatic support would seem inappropriate when we seek a market-led solution.

Mr. Curry : We agree, which is why we decided that we should examine that proposition. It is true that the supermarkets are important forces in determining consumer preference. They respond quickly to consumer taste; the whole experience with genetically modified crops demonstrated the speed with which they react to consumer sensitivities. We thought that, if they are anxious to procure more organic product, they should play a part in commissioning it. Such relationships between the farmer and the retailer are necessary and helpful throughout the food chain. In the agricultural sector there is too great a tendency to regard the supermarkets as ogreish enemies. Some very senior people in the Government have occasionally succumbed to the temptation to subscribe to that thesis.

Mr. Paul Tyler (North Cornwall): Why should British supermarkets become involved in that exercise, perhaps to the extent of subsidising a British farmer, if they can import organic food from other countries that has been subsidised by the Governments of those countries?

Mr. Curry : There are two reasons why. First, the supermarkets believe that there is an argument for security of supply. Secondly, the consumer demands reassurance about origin and quality. One of the things that concerned us while compiling the report was the variety of certification procedures. We were concerned about how the consumer could be assured that the stated quality was genuine in cases of procurement from a diverse range of countries.

Mr. Michael Weir (Angus): Farmers say to me that they are under extreme pressure in dealing with the supermarkets, particularly on price and quality of goods. If the supermarkets were to become too involved in organic production, would not the suppliers suffer quickly due to the disappearance of an organic premium from the supermarkets? Moreover, the supermarkets tend to demand uniform produce. Could that be supplied at reasonable costs through an organic production scheme?

Mr. Curry : We must be careful about the notion of an organic premium. Organic products have a price, as do so-called conventional products. We would all like the price for conventional products to be better. For example, the price of milk has been low for a long time and that has caused serious difficulties to milk producers. Organic milk is probably fetching about 30p or 31p a litre for farmers. That is a good 10p to 12p above the price of other milk. I would not object if dairy farmers—those who are left—were getting 24p a litre for their milk. That may influence some who would otherwise convert to organic production, but I am concerned that farmers should undertake those activities for which there is a market so that they can sustain their production at a profitable level.

The role of the supermarkets is to offer an assurance of outlet in return for an assurance of supply. We have seen that increasing significantly. It may be that, as part of the aftermath of foot and mouth disease, we will have to look at the future of the live auction marts, which will be one of the inescapable issues that emerges from the experience of the disease. Long-term contracting between supermarkets and producers may become more common, and we may see a more broadly established pattern of interdependence between those two parts of agriculture, which would be helpful.

Mr. Weir : Is that not part of the problem? Farmers tell me that long-term contracts mean that the supermarkets can put too much pressure on them. If markets change, the supermarkets press down the price as an insurance of supply. That is one of the problems of long-term financing for conventional farmers at the moment, and I am worried that if we go down that route, those problems might extend to the organic sector.

Mr. Curry : We have to decide that the organic sector will either remain a boutique sector of agriculture that has a completely separate pricing structure, or become more mainstream. Iceland Frozen Foods tried to introduce organic produce at a conventional price. That was a mistake, because the public wanted a choice. Iceland fell on its face because the public did not wish to have that choice made for them. It is inescapable that supermarkets' contracts will not specify a constant price; price will vary according to demand and economic conditions. However, an assurance of quality supplies can be much more long term, which would benefit the sector.

Mr. Todd : One way to correct the market imbalance to which the right hon. Gentleman refers is to use co-operatives to bring together farmers' interests to support a particular objective. That idea is well developed in the organic sector. The Agriculture Committee heard evidence of both successful processing co-operative activity and successful farming co-operation, particularly in the dairy sector.

Mr. Curry : That is certainly the case. A totally fragmented farming sector does not need to face that great corporate power, the supermarket. That would be possible if farmers were more organised and could more effectively deliver the quantity of supplies required. Moreover, supermarkets would probably support the idea. We should encourage the co-operative movement in agriculture, which is more developed on the continent than in the United Kingdom. Great benefits would accrue from that, not least that the co-operatives could manage some of the schemes themselves—a proper form of devolution.

We recommended that the Government devise proposals for an organic stewardship scheme as the centrepiece of their review of organic farming support, which forms part of the 2003 review of the English rural development programme. That would enable farmers to receive payments that recognise the benefits that they bring to the environment, which is relevant. However, the stewardship scheme would also mean that all the various schemes could be integrated more easily. Farmers could be monitored for stewardship, for adhering to various support schemes and for their organic qualifications in the same inspections.

The organic stewardship scheme is commendable and is becoming one of the Government's flagship programmes. I commend the recent trials to try to get more benefit out of some of the arable areas and to develop the environmental experience. That development has been extremely positive, and I am glad that the Minister plans to expand that, although I have no doubt that the Department for Environment, Food and Rural Affairs will describe it as being "rolled out". Everything appears to be "rolled out" these days. I have noticed that even seminars on the aftermath of foot and mouth disease will be "rolled out" by Lord Whitty, which makes the mind boggle. "Rolling out" is clearly part of the Government's modern jargon, about which an article will no doubt appear at some stage.

I look forward to the expansion of those programmes. It makes sense to bring the various schemes within as limited a framework as possible, provided that administrative convenience does not overtake the need to ensure that local particularities and conditions are recognised.

We were concerned about a number of certifying bodies and the different standards that they set. We recommended that the Government ensure that standard-setting procedures in the organic sector were harmonious and rigorous, and that the Government encourage a streamlining of certification and inspection processes. At first, we were tempted to say, "These schemes are barmy. Why don't we tell the Government that there should be fewer of them?" However, the sensible thing was not to question the number of schemes, but to ensure that we understood what they told us and that they served a purpose. Organic farming is essentially a process. Certification involves certifying that process, not its output. Therefore, it is a guarantee not of qualitative objectives, but of a process. There can be a number of schemes as long as people are clear about what they stand for and the differences between them. We should not be tempted by the administrative convenience of the elimination of schemes.

Clear information for the consumer is what is important. The qualities that the consumer may attribute to organic production may be different to the quality that is certified. As I said, certification relates to process. A consumer may attribute all sorts of things to a product: he or she may think that the food tastes better, is healthier or is environmentally friendly. Some of those attributes may be true, but we have no scientific basis on which to assess those claims, although we may eventually be able to do so. It is important that the information that arises from certification be made available to the consumer. The consumer may attribute other properties to organic food but that is a matter for his or her perception.

The hon. Member for North Cornwall (Mr. Tyler) mentioned heavy dependence on imports. It is important that consumers are not led to believe that organic products guarantee absolutes—of environment, husbandry or quality—wherever they may come from. We must be vigilant and ensure that products from Mexico or Paraguay are subjected to the same rigorous examination of their use of the word "organic" as those from Shropshire or Worcestershire.

The report made a common-sense contribution to the debate on organic food. It was well timed. The sector began as a small, peasant—I use the word in its continental, non-pejorative sense—industry, delivering to the same market as do the French with their designated products of local origin. Business grew rapidly, and the sector gained a larger market share, serving considerable consumer demand. It was sensible to write a report that treated organic farming as an important economic sector that would be significant in the future, rather than as a picturesque element of agriculture.

We wish to support and promote organic farming to aid diversity in agriculture, for its qualities and for the choice it provides to the consumer. Organic farming shows that innovation is important to the mechanisms of agriculture, and will increasingly be a hallmark of policy in the aftermath of the diseases that we have mentioned. We commend the report to the Government and are pleased to find that they broadly support our views.

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David Curry MP | House of Commons, London SW1A 0AA | tel: 020 7219 6202