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The UK’s role in protecting our future supply chain

Rt Hon Caroline Spelman MP, Secretary of State for Environment, Food and Rural Affairs, UK 6 December 2010 This speech was given at the conference Food Security 2010 - Making Food Security Work: Matching supply to demand.

Rt Hon Caroline Spelman MP: This year is ending as it started, with heavy snow on the ground and speculation – both in the media and the markets – about the consequent rise in food prices.

This January, cauliflowers turned to pulp in frozen ground, forcing consumers to turn to imports at £2 apiece. The price of parsnips and carrots rose by as much as 30% in some shops and, in Ireland, 6,000 acres of potatoes went un-harvested.

Fast forward to early summer and the NFU warned that the driest first six months in this country in nearly 70 years would hit grain production particularly badly. While late summer brought a Russian ban on grain exports in the face of drought and wildfires – which in turn helped drive up prices globally.

Significant as these events were, they took place within a wider context with even more serious implications for us all. The Government’s Chief Scientific Officer, Sir John Beddington, has warned us of what he calls the perfect storm – of food shortages, scarce water and insufficient energy resources which could threaten stability within the next 20 years. The food price spikes of two years ago were caused by a combination of factors colliding at the same time – poor yields due to climactic conditions, high energy prices, export restrictions, currency fluctuations and low global food stockpiles among them. Some of these factors were entirely outside the control of governments, markets and food producers, but many of them were not. Many of them were the result of longer term underlying and predictable causes – causes we have an even better understanding of today. With that understanding, I believe, comes the responsibility of government to encourage suppliers, manufacturers and producers to take the steps they needed to mitigate against these factors.

We need to start now - building into our whole supply chain the capacity, the resilience and the sustainability we will need to feed a projected world population of over 9 billion people by 2050. As we said in our Structural Reform Plan, this Government’s priority is to support and develop British farming while encouraging sustainable food production. This involves helping build capacity both in the UK and globally – because it is on the global stage that the impacts of crises are played out.

This is about the whole food chain, and about supporting this Government’s priorities on trade, green jobs and growth and development. It is not about the UK battening down the hatches and dreaming of splendid agricultural isolation – trade is a critical part of ensuring the UK’s food security. We need to meet both our own needs and those of the wider world and cooperation internationally is the only meaningful way to do this.

We saw the truth of this only recently with the achievement of an international agreement on access and benefit sharing and a new global framework for biodiversity at Nagoya. We need our trade links. They give us an incredible variety of global foods, offering the vast majority of UK households access to a diet that is both affordable and nutritious, and a market for others, including developing countries.

Our economy benefits too. We are a trading nation in a global market and a significant exporter of wheat, lamb, dairy products and cereals – our domestic food industry needs to be fit to compete on the world stage. With an economy to rebuild and food security a growing issue internationally, now more than ever we need a competitive and resilient farming industry with the business acumen and agility to respond to market opportunities.

The contribution of our food and farming industry to our economy is already significant, with the entire food chain contributing £85 billion a year and 3 million jobs. The years ahead provide us with an opportunity to grow that contribution even further – an aim underlined in our Structural Reform Plan. Globally, rising populations, growing levels of wealth and changing preferences will clearly increase demand for our exports, while in Europe we will increasingly see production split between those states with water and those with a dwindling supply.

There is significant scope for us to grow our industry in the years ahead. But to do that we will need an EU Common Agricultural Policy which looks to that future, and not to the past. A future where increased production is based upon sustainable intensification, respect for the environment and the reduction of waste, where animal welfare standards are high and animal disease outbreaks minimised. Where precision agriculture, agro-ecological processes and the increasing application of current technologies help farmers produce more food while better protecting the land, biodiversity and the ecosystems that produce it. Where, as Mike pointed out earlier, the private sector – ably supported by the third sector – can make the most of the opportunities that exist to help deliver the sustainable agri-business of the future in both developed and developing countries and where the new generation of consumers, no longer reared on a cheap food policy, are educated about the quality of their food and prepared to pay the true cost of producing it - indeed we are already seeing, in pockets, how increases in food prices are resulting in greater scrutiny of what shoppers are actually putting in their trolleys.

The UK’s demand for livestock products, for example, leads to green house gas emissions from methane and nitrous oxide estimated as damaging the climate by as much as £1.4 billion a year. As increasingly affluent developing economies start to adopt the same demand for meat and dairy products as developed countries the implications for our climate are obvious. But if cost drives consumer choice - and retail food costs are currently around 20% higher than they were in 2007 - it may also provide the trigger for households to reduce the levels of food waste they generate. UK households are currently producing over 8 million tonnes of waste annually – that’s £12 billion-worth of food thrown away every year.

Clearly, food security does not just involve increasing productive capacity – it’s also about wasting less. The UN estimates global harvests and food chain losses – before it even reaches the shop shelves – at around 1,400 calories per person, per day. Ironically, that’s broadly in line with the 70% increase in available food we’ll need by 2050.

The direction of travel we need to be taking is clear. We need a CAP that will help producers and consumers alike move towards a model where the true cost of producing food is included in its price – one where the industry no longer relies on subsidies for its commercial viability and recognise the economic imperative of environmental sustainability.

Earlier this month, the European Commission issued a communication on CAP reform and it shows a definite improvement on the original leaked document. The Commission now place greater emphasis on competitiveness, innovation and sustainability – all three an integral part of the successful and environmentally sensitive industry we need for the future.

But the communication makes insufficient recognition of the current economic situation, of the future challenges and opportunities which climate change will bring or of the priorities set out in Europe 2020. The Commission’s ideas are timid when they could - and should - be transformational. This timidity goes against the growing tide of ambition to deliver an expert sector which is more market-orientated, more relevant to today’s economy and better able to stand on its own two feet. We’ll be considering the proposals in more detail before responding to the Commission’s consultation – and I would encourage all stakeholders to respond directly as well.

Our vision for a reformed CAP is one that re-balances environmental and economic objectives, helping develop international trade. I see the role of UK agriculture as setting an example by increasing productivity in an environmentally sustainable way - using resources like nitrates, energy and water more efficiently. It’s a journey the industry has been on for some time.

The UK currently produces the equivalent of over 70% of indigenous foods and nearly 60% of our food overall. The last 20 years have seen UK farmers steadily increase yields while reducing both fertilizer use and their levels of greenhouse gas emissions. Our aim is to minimise the impact of increased food production on our environment while maximising productivity that is both economically and environmentally sustainable. This will require a more nuanced understanding of land use and technologies than currently exists among some commentators. An understanding, for example, that technology in itself is neither good nor evil, but neutral - it is how it is used that can make it a solution rather than a problem and an understanding that by using sound science we can assess the risks and benefits of modifying the genes of a plant to help it thrive in a changing climate without damaging the environment.

70% of all freshwater, for example, is used by agriculture. What happens when the clouds don’t form, when the rains don’t come, when the water dries up? Without water it becomes difficult to grow things. In Australia farmers have had to answer exactly that question. Their answer has been to produce more drought tolerant rice varieties – adapting to changing conditions by using the right crop in the right place. It is also not a straight choice between crops for food equals good, while crops for energy equals bad. All land is not created equal – and the most efficient land use will be that which uses land and water most appropriately.

In Brazil, science has been instrumental in developing 500 different sugar cultivars to suit the diverse range of soil types, fertility and temperature for economically viable ethanol production. Agro-environmental practices, appropriate use of resources and water management will be key to sustaining the capacity of emerging economies if they are to produce more and pollute less as they grow.

I have seen for myself how, in Afghanistan, ancient water management systems are preserved and reproduced to – literally – squeeze the most from every last drop of water that falls from those dry skies. While in Malawi, with an unpredictable rainy season, the population has faced crop failure, out-of-control food inflation and starvation on a regular basis for many years. There are lessons here for both developed and developing nations.

The satellite and other highly engineered technologies used in developed countries is often neither affordable nor always appropriate for emerging and developing countries. What richer governments must do is work with these nations to build the capacity, the technology and the systems that work for them. If we are ever to get close to meeting the Millennium Development Goals we set ourselves ten years ago to alleviate poverty and hunger, we must recognise the role that governments have in getting recognition of the interdependencies between our natural, social and economic worlds.

Because, as we near the end of the first ever International Year of Biodiversity, and with the success of Nagoya fresh in our minds, we will always come back to that mutual dependency and balance.

 Sustainable development is – self evidently - the only kind that will last. If we do not protect our natural environment we put at risk the abundance of goods and services it gives us for free. Take the value of pollinators – worth around £440 million to the UK economy – and for which we have never yet been presented with an invoice. It’s a system that has been going on for millennia. It’s also a system that can be destroyed if we rush headlong to food production at any price. When China stepped up its use of pesticides as it expanded its pear orchards in the 1980’s it also put into play the law of unintended consequences. The age-old system of pollination began to unravel and each Spring now sees the farmers of Sichuan province using ladders to hand pollinate their fruit trees – and bearing the new costs of this intensive labour every year.

If we do not value the goods and services our natural environment provides we are storing up trouble for the years ahead. If we do not adapt our food production and supply chains now to meet the inevitable impacts of climate change we will have to intervene in major – and significantly more expensive – ways just a few steps down the road.

Food security is a story that could have a happy ending but for that to happen we need to recognise that business as usual isn’t the answer. Defra’s first ever UK Food Security Assessment, published last year, argues that – far from a picture of unremitting gloom – there is clear evidence that, given the right tools, the world’s food producers can respond to rising demand in the future as they have in the past.

 Sustainable agriculture and food chains that drive down waste can be the key driving force of the green economy we must build in the years ahead, both domestically and internationally. With current technologies, coupled with reductions in waste and post harvest loss, we can feed the world today – but to do so will require improvements in integrated rural development and the greater empowerment of women.

We need, too, to push ahead with global trade reform - ending the iniquity of export subsidies which cripple the emerging farming industries of developing countries and stall their development. The challenges of feeding the world tomorrow lie ahead and the evolution of science and technology must play a significant part in meeting them. We are, to a large extent, the masters of our own destiny when it comes to ensuring we remain food secure in the face of rapidly evolving global trends.

It is our influence, at home, in Europe and internationally to ensure the future is shaped by sustainability – for this generation and the ones to come. Thank you.