EUC Report: Agriculture

Lord Carter of Coles Excerpts

Monday 6th February 2012 Grand Committee

Moved by

[Lord Carter of Coles]

That the Grand Committee do take note of the report of the European Union Committee on Innovation in EU Agriculture (19th Report, HL Paper 171).

[Lord Carter of Coles]

My Lords, I declare an interest as a farmer in receipt of payments under the common agricultural policy.

“Sometimes we talk about agriculture as something very old and traditional; it is not competitive and we can forget it. We really don’t understand how strategic agriculture will be in the future … We have left the era of surplus and come to the era of scarcity. We need to refocus what an Innovation Union is … agriculture is at the centre of an Innovation Union and the new global challenge”.

Those of your Lordships who have our Innovation in EU Agriculture report to hand will know that these are not my words but those of Mr Paolo de Castro MEP, the chair of the European Parliament’s Agriculture Committee, who gave evidence to our inquiry. We quoted Mr de Castro’s words at the start of our report because they encapsulated the key concerns of the committee, which I am sure are widely shared in the House.

The committee sees a future characterised by risk and uncertainty. The first risk is that of climate change, which threatens more extreme weather events; the second is that of demographic change, which means more mouths to feed and more complex diets to satisfy; the third is the multiple uncertainties which surround the economic health of states in Europe and elsewhere. It is imperative that policy-makers in all areas have their eyes open to these risks. Our inquiry left us in no doubt that agricultural policy is no exception; indeed, we suggest that it is of central importance in meeting the challenges ahead.

Since our report was published, the European Commission has presented its proposals for the common agricultural policy from 2014. I shall say more about that and our assessment of it later on. For us, the key test is how they measure up against the need to orientate the CAP towards the thoroughgoing support of innovation in agriculture, because, if we do not increase productivity, we face some very serious challenges.

It is almost exactly a year since the Government Office for Science published the Foresight report on global food and farming futures. I was pleased to chair a seminar here in the Palace last February at which Sir John Beddington, the Government Chief Scientific Adviser, presented his findings to us. Against the background of projections that foresee an increase to 9 billion in the world’s population by 2050, the Foresight report highlighted six important drivers of change. The first, obviously, is the global population increase; the second is the size and nature of per capita demand; the third is the governance of the food system; the fourth is climate change; the fifth is competition for key resources, as we can see in Africa now; and, the sixth, is changes in consumers’ behaviour.

The committee was able to take evidence from Professor Charles Godfray, one of the lead experts for the Foresight report, about the need to bring about what we call the “sustainable intensification” of agriculture. Your Lordships will no doubt recall that the Royal Society has supported this aim and explained it as the process of increasing agricultural yields without adverse environmental impact and without the cultivation of more land. We also supported it when we reported on adapting EU agriculture to climate change in March 2010. In his evidence to us, Professor Godfray said that, given the certainty of increasing demand for agricultural output, sustainable intensification was,

“almost a deduction rather than an argument”,

and he described innovation as critical to sustainability.

As your Lordships know, CAP represents more than 40 per cent of the EU’s budget expenditure. For the period 2007 to 2013, the agricultural policy budget is around €400 billion, which is split roughly 80:20 between direct payments under Pillar 1 and rural development measures under Pillar 2. There are, of course, powerful arguments that this level of EU expenditure is too high, but we must face the political reality that while the overall level may be reduced, the EU will continue to offer major financial support to European farmers over the next budgetary period from 2014.

Our report maps out ways in which future CAP expenditure should be directed towards promoting innovative agriculture, and, in particular, we call for money to be switched out of the CAP and into increased funding for agriculture and the EU’s research programme. We argue that when payments are made under Pillar 1 of the CAP, this should be in return for the delivery of environmental benefits by the recipients. We also call for a higher share of CAP funding to be reallocated towards innovation under the rural development fund in Pillar 2. I should like to talk about each of these changes in turn.

First, regarding agricultural research, we were struck by information making global comparisons in agriculture. The OECD and the FAO co-operate in analysing agricultural markets over a 10-year horizon. In our report, we quote the OECD-FAO Agricultural Outlook 2010-2019 and highlight projections for increased agricultural production over the next decade in different parts of the world. We found the numbers particularly compelling. In Brazil, the forecast increase is more than 40 per cent; in the United States, growth of between 15 and 20 per cent is forecast; yet the projected increase in Europe is a mere 4 per cent—hardly adequate to deal with the challenges that the continent faces.

A mix of factors underlies these comparisons and the starting points for farming in these different areas vary widely. However, anyone looking at these comparisons must surely share our view that the options for the future of EU agriculture would not include a steady-as-she-goes approach. It is just not good enough to carry on as we are. Again, I use a quotation from one of our witnesses—a most impressive witness— Mr Georg Häusler, Head of Cabinet of the Agriculture Commissioner. He spelt out the need for the European Union to look beyond its boundaries and respond to the fast-changing world we are in. He said:

“We in Europe are sitting here saying, ‘Agriculture is the old economy’, in what I call an innovation-hostile environment”.

We have heard this before. He continued:

“A lot of political groups are telling us to farm as we did in the 19th century, selling our tractors and doing it in the old way because it will be good for the environment”.

Yet, he continued:

“This is the strategic debate. Does Europe say that it can provide food for 500 million rich Europeans and import what we do not have, or does it play a role in feeding 9 billion people, including 1 billion people in China and India who are starting to eat meat?”.

As a committee, we are in no doubt that Europe has the intellectual resources to kick-start EU agriculture into the 21st century. Witnesses described the UK and the EU as a powerhouse of creating knowledge. In this country, the Biotechnology and Biological Sciences Research Council, the BBSRC, spends around £470 million a year on research in biotechnology and biological sciences. In France, the National Institute for Agricultural Research, INRA, has an annual budget of just over €800 million—that is, about £670 million. In the EU’s current framework agreement for the years 2007 to 2013, funding of some €2 billion is earmarked for food, agriculture and biotechnology. These are very large sums, but our report makes it clear that it is not enough.

As far as this country is concerned, we received compelling evidence that while the quality of basic research in biotechnology is high, much of the potential for its practical impact is being wasted because gaps occur in the research pipeline. We are clear that the Government urgently need to support efforts to translate scientific findings into agricultural practice much more consistently.

As regards the EU, we said in our July 2011 report that we found it unacceptable that the research budget allocated just under €2 billion to agricultural research over seven years while the agricultural policy budget was around €400 billion. The ratio is just not appropriate.

Your Lordships may know that, in the proposal which the European Commission has more recently published for the EU’s financial framework from 2014, funding of €4.5 billion has been proposed for research and innovation on food security, the bioeconomy and sustainable agriculture. That is a step in the right direction, but we remain of the view that there needs to be a much more radical shift in funding away from simple farm support payments towards the promotion of agricultural innovation.

I turn to the Commission’s proposal on what is called the European innovation partnership on productive and sustainable agriculture. Your Lordships will know that in 2010, the Commission presented its commitment to making the EU an innovation Union. European innovation partnerships are to be established under this commitment in a range of policy areas. They are intended to strengthen co-operation in innovative research, bringing together all the key stakeholders across the EU, from those conducting basic and applied research all the way through to the final users, such as farmers and businesses, and every step in between.

There will be those who understandably question the need for yet another pan-European initiative; we have a lot of those. Our inquiry shows, however, that there is still a considerable lack of co-ordination across Europe among those many excellent researchers whose efforts are key to the future success of our agricultural sector. We have seen the issue of unnecessary duplication. The problem—and the potential solution to it—was clearly described to us in evidence we received from the InCrops enterprise hub at the University of East Anglia. We support the idea of a European innovation partnership which is characterised by effective action-based co-operation. It should not be an aspiration: we need to see the action attached to it and we urge the Government to play their part in bringing this about.

I turn to the CAP itself. Here, I think it makes sense if I link what we said in our July 2011 report with the views that we have now expressed on the reform proposals published by the European Commission in October last year. In their totality, the proposals seem to us to fall short of the commitment to radical change which we think is needed. We consider that the Commission has missed the opportunity to introduce the new approaches to EU agriculture policy which current—and, above all, future—circumstances call for. As I have said, we favour both a reduction in the overall budget and, within a smaller budget, a redistribution of funding away from direct payments towards environmental protection and sustainable innovation.

As for the Commission’s proposals for the greening of Pillar 1 payments, we sympathise with its underlying objective, which is close to our report’s recommendations that payments under Pillar 1 of the CAP should be made in return for delivery of public goods, responding to issues such as climate change, protecting biodiversity, and encouraging agricultural innovation. However, as we see it, it is problematic that the Commission’s greening proposal is a one-size-fits-all approach because it lacks flexibility. Our view is that it would be far better if greening measures for direct payment were identified at the national or regional level and if they build on the cross-compliance requirements while recognising the substantial efforts already made by farmers.

There is understandable concern in the farming community that stepping up the environmental considerations attached to Pillar 1 could result in greater bureaucratic complexity; that is a great concern across Europe. Our answer to that rests on our conclusions about what are called agricultural knowledge transfer systems.

In drawing my remarks to an end, I want to mention those conclusions, particularly on knowledge transfer. Across the EU, there are many channels through which advice flows to farmers, and those include public sector agencies and commercial providers. Our report acknowledges the diversity of methods used to transfer knowledge—this most important thing—and recognises that no one single solution is applicable everywhere; knowledge transfers must be fine-tuned, as I have said, to national and regional practice.

Under the CAP, member states are required to operate a system for advising farmers on land and farm management—the so-called farm advisory system—for which some financing is available under Pillar 2. The FAS was set up at the time of the last CAP reform in order to offer advice, which must relate to cross-compliance but may go beyond that. However, we understand that in practice, in most member states, the FAS’s role has not developed beyond providing just minimal levels of advice. The FAS cannot become the sole source of advice to farmers, but we are clear that the time has come to extend its role beyond cross-compliance. Given the importance of effective knowledge transfer, we consider that, under the CAP, member states should be required to ensure that comprehensive farm advice is available throughout their territories, geared towards meeting the new challenges of food security, climate change and the need for sustainable intensification.

We are pleased that the Commission’s proposals from last October echo this call and foresee that the FAS should extend beyond cross-compliance, and we look to the Government to work with the grain of this proposal. However, our report was particularly critical of the position in this country. We are concerned that the provision of farm advice in England has become fragmented and overly complex. We see the urgent need for the levy boards to play a central role in broadening and deepening the range of advice currently offered in England. In this context, we very much welcome the Government’s recent announcement that, from January of this year, the new farming advice service in England will provide advice on competitiveness, nutrient management and climate change adaptation and mitigation, in addition to continuing to offer advice on cross-compliance. We also look forward to hearing in due course about the outcome of the integrated advice pilot project that the Government launched last year, which we regard as very important. The pilot shows that the Government are listening to us. We think that that is good and, if it shows that they are listening to the farmers, frankly, that is even better.

I offer your Lordships one final thought on this topic. Our report highlights that agriculture innovation is a complex business. It is complex and difficult because it requires interaction among scientists, the farming community, food processors, retailers, government and consumers. That requires systems to be put in place that promote communication among all those actors. When the EU level group on agricultural knowledge and innovation systems reports, it will be very important that member states give that group’s conclusions the highest priority.

In conclusion, having spoken today on behalf of my committee, I pay particular tribute to the committee’s members, whose engagement with the subject gave our inquiry both great energy and great effect. I also thank the committee’s specialist advisers on the inquiry— Dr Julian Clark, of the University of Birmingham; and Dr Jonathan Wentworth, of the Parliamentary Office of Science and Technology—whose support was invaluable. In the months that have passed since the report was published, we have seen encouraging reflections of a number of our recommendations in proposals from the European Commission and in announcements made by the Government. However, we remain concerned that the changes now envisaged to the CAP and to the support given to agricultural innovation, in the lab and on the farm, fail to rise to the challenges that we see in the future. Of course, we support the steps being taken towards innovation in EU agriculture, but, frankly, those modest steps need to turn into determined strides if we are to reach the right destination. I beg to move.

--- Later in debate ---

[Lord Carter of Coles]

My Lords, I conclude by thanking all noble Lords for their contributions. We have been debating a very important issue this evening and all the contributions have served to underline that fact.

I noticed a number of themes emerging from noble Lords’ remarks. The first is the issue of people: the fact that the population of the world is going to rise and requires feeding imposes a moral, political and economic responsibility on everybody who can help in this. That is one of the noblest things we could focus on. The noble Lord, Lord Curry, and the noble Baronesses, Lady Parminter and Lady Byford, mentioned how we can get people to engage in agriculture, how we can motivate them, educate them and up-skill them. These are very important factors; those things together drive that along.

The second theme is the issue of science: the point made by the noble Baroness, Lady Sharp, about the renewal of science, and the fact that renewal of interest in agriculture generally is a wave to ride, something to pick up on and to drive forward. On the subject of science, the noble Earl, Lord Caithness—in his usual to-the-point way—drew our attention to GMOs. This is not to be ducked; it is an issue to be debated and it is an issue the European Union needs to get clear on. We need to address the issue of GMOs if we are to close that gap between productivity in our continent and in other parts of the world.

The noble Lord, Lord Cameron, drew our attention to the challenges we face on a global scale, as did the noble Lord, Lord Bilimoria: the challenges of moral responsibility, of feeding Africa and involving Europe beyond its boundaries by actually going out and serving and helping solve the problems of the world. The noble Lord, Lord Plumb, with his great experience, raised the most pressing question of all: how is it going to be made to happen? How will it happen? How will we influence the CAP and how will it go forward?

The noble Baroness, Lady Parminter, in her questions about research and waste, asked for specifics about how we are going to address those issues, which are really pressing. We need to maintain the pressure—both on our Government and through the Governments of the European Union—to deal with those challenges and not to duck the issues that we have to deal with out there. That is very important.

Looking beyond that, we have the sense of urgency referred to by a number of noble Lords. There is a time, and it is now, and we have to make the voice heard, most specifically around the CAP. We are not going to get another chance for another seven years if we do not do it now. It needs to be pressed on extremely hard to get this done—a point made, again, by many noble Lords. It is pretty straightforward; the policy is pretty simple, but it is the Government’s responsibility as well as ours to come up with the strategy in order to deliver those aims.

In thanking noble Lords, I would also like to echo the welcome extended to the noble Lord, Lord Curry of Kirkharle. I just read a biography of Capability Brown, so it did not come as a surprise about that. I would really like to thank him for his erudite remarks; they were very insightful and clearly, like other Members, I look forward to hearing more of his views in the Chamber as we go forward. I would also like to thank the noble Lord, Lord Taylor of Holbeach, for setting out the views of the Government. Some may refer to the noble Lord as a poacher turned gamekeeper, but I think I am not alone in hoping that his role in Government will actually be a game changer for us here—to get out there and do this and drive towards the innovation in agriculture that we have discussed.

Finally, I am going to seek your Lordships’ indulgence to quote from Ecclesiastes 1:19 in the King James Bible:

“The thing that hath been, it is that which shall be; and that which is done is that which shall be done: and there is no new thing under the sun”.

It may well be that all the changes we want to see in agriculture have all been done on a small scale. We will find these examples in one area or another in different parts of the world and things like that. However, to bring these changes together, to build on them with intellectual and financial support and apply them across the EU agriculture generally—and then out into the world—that would be a new thing under the sun, under the rain, and under the changing climate that we are going to have to live under.

Motion agreed.