Campaigning for farming and food in the general election

The general election is an opportunity for farming and food issues to be debated and the National Farmers' Union is fully entitled to brief its members with questions to be asked of candidates. Indeed, the NFU has posed very interesting questions about any referendum on membership of the EU and what the implications of 'Brexit' might be for British agriculture, an issue that requires more systematic attention and exploration.

What I think is less helpful is any suggestion that we need self-sufficiency targets which can all too easily smack of Soviet central planning. The NFU has warned that by 2080 less than half the nation's food needs will be met by UK farming. This date is a long way away and it is not clear whether this is a figure for temperate foodstuffs or whether it includes tropical products like the ever popular banana.

The NFU's report entitled Backing British Farming in a Volatile World said that 85 per cent of consumers wanted to see supermarkets selling food from British farms. This is a bit like asking people whether they are in favour of motherhood and apple pie.

There are food security issues to be discussed, but as Tim Benton of Leeds University, the UK's global food security champion, commented: 'It remains an "open question" as to what the optimal level of self-sufficiency should be.' I would argue that there is no methodology that can tell us, given all the uncertainties. That may, of course, represent a case for being cautious, but I don't think that target figures are the right way forward.

The NFU claims that more than half the income of an 'average' farm comes from single farm payments (soon to be the basic payment). This suggests an over dependence on subsidy, but the NFU says they are needed to protect against price volatility. What would perhaps help more is a supermarkets ombudsman with more powers and a staff of more than three to ensure more of a level playing field. But then governments like low food prices.

You can read the NFU report here: Backing British Farming

Have milk prices turned the corner?

Problems in the EU dairy sector have led the Commission to resort to the tired old policy instruments of intervention buying of skimmed milk powder and export subsidies. To be fair to the Commission, they have had to resist a lot of political pressure for even more intervention, including backing off the planned phasing out of quotas which have ossified the EU dairy sector and made it less internationally competitive.

However, there are a few signs of an improvement in prices. In the UK the NFU believes the corner has been turned for dairy farmers supplying the liquid market after Robert Wiseman Dairies announced that it was raising its price by 0.3p a litre. This increase follows a period of better returns from the cream market and will take the standard litre price for about 900 direct suppliers to 24.3p before seasonality deductions.

Prospects for milk used in manufacturing are less good. Skimmed milk powder continues to flow into intervention stores throughout Europe. While President Obama enjoyed one of the best publicised beers in history, the USA continues to distort the world market with subsidised exports.

Prices on global commodity markets are still under pressure. Butter is quoted at about £1160/t, while skimmed milk powder has slipped back recently to £1227-£1288/t. EU prices are somewhat better and the butter price has climbed above the intervention level. But significant volumes of skimmed milk powder are still being sold into intervention at about £1450/t. These stocks will eventually have to be sold into the market with an inevitable depressing effect.

What is evident is that supermarkets have been creaming off profits. According to a new market situation report from the Commission, 'the pronounced fall in the prices of milk and dairy commodities since the end of 2007 has only triggered a slight decline in consumer prices for dairy products.'

Since the end of 2007, Commission figures show that the wholesale butter price has dropped by 39 per cent, skimmed milk powder by 49 per cent, cheese by 18 per cent and milk by 31 per cent. Yet the price consumers pay in the shops for dairy products has dropped by just 2 per cent.

The Commission's conclusion is that 'the EU dairy supply chain does not function efficiently.' The market power of supermarkets, particularly in Britain, but increasingly in other member states, is considerable.

Competition policy authorities seem reluctant to act. Admittedly, it is sometimes difficult to get hard evidence of exploitation of market power as suppliers feel they are vulnerable, even with guarantees of confidentiality.

However, there is also a broader political context as supermarkets help the less well off by holding down food prices. Given the importance to New Labour of working people and their families, it is not surprising that they are unwilling to back strong action, but I would not expect Dave Cameron to take a very different line when he is in charge.

Meanwhile, the Commission has proposed extending intervention purchasing for 13 months. Even more worrying, it has suggested allowing state aids of up to €15,000 per dairy farmers. This will do nothing to solve the industry's structural challenges.

Overdoing the gloom

I regard climate change as a major challenge. As it is a global public bad, it requires action by governments, individually, at EU level and globally. However, these actions will be insufficient if there is not an adequate response by business and by citizens.

In my view excessively gloomy predictions about climate change actually have a disempowering effect on citizens. They start to think it is all hopeless and they might as well continue with their existing environmentally unfriendly lifestyles.

Some of those putting forward these views have a broader agenda which is well served by taking an excessively pessimistic view of the prospects for climate change mitigation. (Adaptation is only now really starting to get on the EU agenda in a serious way).

This was the case with one of the speakers at the recent meeting of the Franco-British Council that I attended. I have so much material from this meeting that it is going to take some time for me to blog it all.

I thought that this particular speaker made some good points, but he undermined them through overstatement. He started by stating that we were just nine meals from anarchy because of our over reliance on retailers for buffer stocks. We do sometimes rely too much on leading supermarkets as a private governance mechanism, a subject which I am personally interested in. Indeed, I believe that Cobra, the civil contingencies unit in the Cabinet Office, has taken an interest in the subject of potential threats to food stocks.

The speaker argued that national food self-sufficiency was in long-term decline. The UK was increasingly reliant on imports when the ability of the rest of the world to provide for us was weakening. The fabric of biodiversity, nature's insurance plan against disaster, was wearing thin.

The speaker went on to argue that intensive farming defied ecological gravity. I think that this depends on how it is done. In arable farming, one needs the use of methods of Integrated Crop Management and Integrated Pest Management, subjects I have written on with my biological science colleagues. Livestock farming needs to observe animal welfare standards. All these objectives can, and are, being pursued through appropriate EU policies and it this dimension of the CAP that needs to be developed and strengthened.

The speaker argued that obesity is a climate change issue and that we need to consume less. The food crisis had been coopted to promote asymmetric market liberalisation and particular commercial agencies.

Where I did agree with the speaker was his emphasis on the importance of the planet's hydrological cycle. The proportion of the earth's surface subject to extreme drought had already increased from one to three per cent and could increase to one third by the end of the century [this is a worst case scenario in my view].

A person associated with DG Agri asked whether there was really a problem about generating a sufficient food supply. Yields had improved in the past. This commentator also defended biofuels, arguing that higher energy prices in the longer run would mean that they would be used without public policy.

The speaker asserted that biology must become before economics and politics. Scientists, however, were prone to pander to politicians. This is not my experience of working with natural scientists. It is not a question of biology coming before politics, but the insights of economics, political science, law, biological science and many other disciplines being brought together as in the RELU programme: RELU

A person from a farmers' organisation argued that the model of a richer country outbidding everyone else on the world market was not sustainable in the future.

The speaker concluded by celebrating the return of dirigiste politics and said that we could fundamentally re-engineer the economy as we did in the run up to the Second World War. The state rules ok!

For some of my work on ICM and IPM go to: Biologicals

On animal welfare: Livestock