The long-awaited report from the UK Policy Commission on the Future of Food and Farming was launched this morning. It calls for a large-scale redirecting of agricultural subsidies from the European Union.

The Commission is headed up by Sir Don Curry, past chairman of the Meat and Livestock Commission. Curry and his team were asked to “advise the Government on how we can create a sustainable, competitive and diverse farming and food sector which contributes to a thriving and sustainable rural economy and advances environmental, economic, health and animal welfare goals”. It was timed to offer guidance to farmers hit by foot and mouth who are wondering whether to sell up and exit farming.

Every year, farmers in the UK receive £2bn (US$2.8bn) in direct payments under the Common Agricultural Policy (CAP) system. The report calls for subsidies to be redirected away from direct payments for crops and livestock and into rewards for protecting the countryside. It states that CAP has been sponsoring overproduction and urges reform of CAP to “remove incentives to damage precious resources” by reducing production subsidies. It also calls for the Community’s budget for environmental programmes to be increased.

Organics drive

This is partly interpreted as a drive to increase organic production. More than 70% of organic food sold in the UK is currently imported, which policy-makers are increasingly seeing as a missed opportunity for UK farming.

Margaret Beckett, Secretary of State for Environment, Food and Rural Affairs, commented to The Observer newspaper: “There is a lot of discussion about whether we have the right kind of incentives for people who may have been interested in moving into organic farming […] There are others who argue that the structure of the incentives we pay is inadequate.”

Given that some countries in the EU offer more assistance to farmers seeking to convert their crops to organic, there is a feeling in certain quarters that the UK is placing its organic farms at a competitive disadvantage. The report backs financial incentives for farmers seeking to grow food in an environmentally friendly manner.

Local sourcing incentives

It also urges that supermarkets be encouraged to buy and sell on more local food. Retailers that free up dedicated areas in their stores to market local food should benefit from business rate relief on that part of their premises, the report recommends.

The Commission went on to recommend a new publicly funded Food Chain Centre to be facilitated by the Institute of Grocery Distribution (IGD) to assist in the challenge of “reconnecting the food chain”. The Centre would promote sharing of information along the chain, provide unbiased analysis, champion positive trading relationships, collect performance data and develop and test improvement techniques. High priority would be given to the areas of red meat and fresh produce.

The Commission also proposed a role for IGD in facilitating the mediation of any disputes arising from the OFT Buyers’ Code of Practice. IGD would establish a register of qualified arbiters and help train them in the workings of the food chain. IGD CEO Joanne Denney welcomed “the opportunity to play our part in creating a stronger, consumer-focused food chain”.

More scope to Food From Britain

The report goes on to recommend that management of regional food schemes be shifted from the Countryside Agency into the remit of Food From Britain and its Regional Food Groups. Additional funding, if necessary, should be made available to FFB for this purpose.

FFB broadly welcomed the recommendation for a more coordinated approach to regional speciality food promotion, but chief executive David McNair issued a statement expressing disappointment at the lack of “ clear recommendations in the report to increase export competitiveness”.

The UK Food and Drink Federation moved swiftly to voice its support for the proposals, notably welcoming its recommendation to “make the whole food chain more competitive and equitably profitable including reviewing direct production and other subsidies”.

Other parties were less enthusiastic, predictably. Ben Gill of the National Farmers Union said he feared the proposals, if put into practice, would effectively “rob Peter to pay Paul,” cost a lot to implement and be of no benefit to the environment.

To see a copy of the full report, click here.