Rural Development Committee, 10 Dec 2002

Meeting date: Tuesday, December 10, 2002

Official Report 449KB pdf

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Organic Farming Targets (Scotland) Bill: Stage 1

Item 1 is continued consideration of the Organic Farming Targets (Scotland) Bill. This is the second meeting at which we are taking evidence at stage 1. We will hear today from a panel of witnesses and then from the Deputy Minister for Environment and Rural Development. Ross Finnie would have been here, but he is in Brussels on more pressing business, if that is possible.

This is John McAllion's first visit to the committee, so I should ask him whether he has any interests to declare. I think that the answer is probably that he has not.

I do not think so. I presume that shares in Celtic do not qualify.

That is the case. You are safe enough.

I invite other members to declare any interests that are relevant to the bill. I declare my own interest as a landholder. Jamie McGrigor is not here, but has previously declared an interest as a landowner and farmer.

I thank the panel of witnesses for giving up their time to come to the meeting. They are Professor Hugh Pennington from the molecular biology department of the University of Aberdeen, David Finlay from Cream O'Galloway Dairy Company Ltd in Dumfries and Galloway—I am sorry to inform him that, since I went on a diet, his sales will have plummeted, because I was almost addicted to his product—and William Rose from This Is Organic, or Tio Ltd, in Inverness-shire.

The format is that we will ask you each to make a brief opening statement, after which we will ask questions. The briefer the statements, the more questions we can get in.

Thank you for asking me to give evidence to the committee.

I approach organic farming as a scientist and doctor who practises using allopathic medicines and as someone who was baptised Thomas, so I am a sceptic. The aims of organic farming are very laudable, but my concern is that organic farming is basically a process and we should be concerned about its outcomes.

My perception is that people buy organic foods largely because of those foods' perceived health benefits. As someone who has observed organic farming, I find it difficult to get really good concrete evidence that there are health benefits to be derived from organic food. The situation is probably quite different in relation to environmental benefits—evidence is accumulating that there are real environmental benefits. That is how I approach the bill. If one is going to argue for political and financial support for organic farming, one must take those factors into account.

My views are also coloured by my perception that generally speaking, although many people in the population buy organic food from time to time, the bulk of the purchases are still made by the wealthier middle classes. That also ought to be considered if public funds are to be used to support organic farming more than is the case at present. My view is that our most pressing health problem is the diet of people who live in housing schemes. If public money were to be used to support food by way of subsidies, I would rather that it tackled that problem.

Thank you. I commend you for the brevity of that statement.

I have a degree in agriculture, I worked for the Scottish Agricultural College for 10 years as an agricultural adviser and have been farming in Galloway for the past 15 years. We diversified in 1994 into food processing and tourism and now have one of the fastest-growing tourist attractions in the south of Scotland. Our business employs 16 full-time and 20 part-time and seasonal staff. The transition to organic farming was completed in 2001.

Our practical experience of organic farming has been a revelation. We have weaned ourselves off most agrochemical inputs, which we had been convinced were essential for good management, yet our stock has never been as healthy or content and we employ more people now and carry out environmental work on the farm. We still have many things to do.

The financial figures for the farm indicate that once the organic aid scheme is finished we will, because of our lower stocking rates, need market price premia of about 25 per cent in order to be viable. So, why are we advocating a bill that, if it is not carefully planned and implemented, might threaten that premium? It is because, if we can compete on a level playing field, I am not afraid for the future of organics. Studies have shown that organic farmers are being heavily penalised in relation to public expenditure compared to non-organic colleagues. Indeed, Scottish organic farmers are being penalised compared to other European organic farmers. If Scottish organic farmers were allowed to compete on a level playing field with our non-organic counterparts, we could produce organic food at the same price as non-organic producers. The consumer could then make a real choice.

In relation to the Scottish Executive environment and rural affairs department's strategy for agriculture, organic farming is the best-fit solution that I have come across to date; it can deliver all the requirements of the Scottish Executive vision. EU production subsidies are coming under review and a real risk exists that there will be redistribution of much of those moneys to deprived urban or to Eastern European rural areas. Therefore the public-benefit argument for organics could be vital for keeping EU funds in Scottish rural areas.

The only way in which Scottish organic farmers will ever have anything approaching a level playing field is through the Organic Farming Targets (Scotland) Bill. The only way in which public education and awareness of the benefits of organics will come about is through the bill. The only way in which industry will receive the research, advice and retraining that is needed is through the bill. Our track record demonstrates that we are not dreamers, but that we are ready to grasp opportunities and to make innovative changes to our businesses and mindsets in order to adapt to a changing world. We believe firmly that organics and the principles that underlie animal welfare, environmental protection, social issues, local food issues and accountability surrounding organics offer the Scottish rural economy the best chance of sustaining its vitality in a global future. We do not need more talk; we need action. That is why we support the bill.

I will not say much, because much of what I might have said has just been said. I will say briefly who I am and I will make a few points.

I am an organic and conventional farmer based in Inverness and I grow arable crops on a large scale. I also run a company that processes the crops that I grow and which supplies them to supermarkets throughout the UK. Every day, our entirely organic products go from Inverness to every single Tesco store in the country. We have created up to 50 jobs over the past three years as a result of that enterprise. Our business is still growing fairly quickly.

I am quite commercial in my outlook. To me, there is a clear commercial opportunity for Scotland in doing more organic farming. There has not been any real co-ordinated support for organic farming methods and I believe that it would benefit the Scottish farming community if we were able to come up with a plan that allowed marketing to take place coherently throughout the UK.

I think that there are health benefits to growing organic crops and, although the science does not say clearly that organic food is either more or less healthy than other food, common sense tells us that it probably is more healthy.

Thank you all. We have plenty of time for questions.

My first question is to Professor Pennington. I was trying to find what I was looking for in last week's oral evidence. Patrick Holden—I have forgotten which organisation he represented—

He represented the Soil Association.

Thank you. Patrick Holden discussed some health issues, on which I seek your comments. I agree with what Professor Pennington said about spreading limited budgets around and about where those budgets should go. It is a matter of public record that I supported the School Meals (Scotland) Bill, which was a case in point in respect of spending money differently. Last week, Patrick Holden said that some costs to the health service might come down if the Organic Farming Targets (Scotland) Bill were implemented, and if we were to consume more organic food. He said:

"If it could be shown that the long-term results of an inferior-quality diet are health problems—which cost the health service money—or other social problems, matters might be seen differently."

He went on to discuss processed food and drinks in schools, and I think he also mentioned public procurement, which might be one way of stimulating the organic food market. He said:

"I will cite one example of what I think is a hidden cost of intensive farming that affects society as a whole. Antibiotics have been used more or less routinely in livestock feeds—particularly for pigs and poultry—for the past few decades. It is now acknowledged that the use of those antibiotics, which form at least 50 per cent of all the antibiotics that are in use for humans and animals, has contributed substantially to antibiotic resistance, which has led to untreatable superbugs in hospitals."—[Official Report, Rural Development Committee, 3 December 2002; c 3871-72.]

He was, I presume, referring to methicillin-resistant staphylococcus aureus, or MRSA, necrotising fasciitis and so on. Could you comment on that?

I will preface my remarks by saying that I have crossed swords with Patrick Holden at meetings similar to this one. He sees me as a being a person who makes money, or rather who enhances his reputation, by boosting food poisoning. Anyway, perhaps that should colour the view that you have of my remarks.

Antibiotics have indeed been a big problem in farming. They have been used as growth promoters and they have not necessarily been used for health gain among the animals. There is still a problem in reducing unnecessary antibiotic use but I should say, however, that substantial progress has been made among all the regulatory bodies in banning the use for growth promotion in farming of antibiotics that have health benefits for people.

That issue is almost behind us. One or two technical issues still need to be resolved, but to say that antibiotic use in farms has contributed to antibiotic resistance among bacteria in hospitals is to go too far, particularly with regard to MRSA. I know of no connection between antibiotic use in farm animals and the development of MRSA, which has developed as a result of antibiotic use in hospitals and antibiotic use that has been prescribed by general practitioners. The bacteria that have been exposed to antibiotics on farms are different. The residual antibiotics in food have had nothing to do with the development of resistance leading to MRSA.

So you say categorically that residual antibiotics in food are not causing an antibiotic build-up.

The essential problem with antibiotic use on farms is that it has stimulated in farm animals the development and evolution of bacteria that have become resistant to antibiotics. Under certain circumstances, those bacteria can transfer their resistance to bacteria that live in people. The problem lies not in the antibiotics in the food, but in the antibiotics' exertion of evolutionary pressure on the bacteria in farm animals, which can then, by a process of gene transfer, transfer the resistance genes to other bacteria, some of which infect people. There is also a problem in that bacteria that contaminate food are sometimes also resistant to antibiotics as a result of inappropriate use of prophylactic antibiotics in farming, or of therapeutic antibiotics to treat illness in animals.

I think that you said that you accepted that there were possible environmental benefits from organic farming, but that you were not totally convinced about the health benefits. Does that mean that more research is required?

You also mentioned limited resources—perhaps cakes should be carved up differently. There are already farming subsidies, but what would you think about subsidies' being shifted rather than more public money being made available? Should there be no subsidies at all?

At the end of the day, farming subsidies have had many unintended effects. I am particularly concerned that subsidies have a bad effect on the developing world. We can produce subsidised food that interferes with the development of agriculture in developing countries—that is a global issue rather than a Scottish issue. In a sense, Europe and the United States are against the world. We subsidise our food substantially and we hinder the development of agriculture in other parts of the world; on that account, I have a negative view of subsidies.

Farmers must earn a living, but why should they be subsidised when many other sectors of the economy are not? I understand why they are subsidised, however. The aim is not just to produce cheap food; farmers are guardians of the countryside and a way of life should be preserved, but our task should be to work out how best to preserve that way of life, while not producing great food mountains that will not be consumed.

The assumption that has been made about organic food is that the incredible increase in market share and sales will continue and that there will be a shortage of supply, which there clearly now is. Imports are at a high level. Whether and for how long that situation will continue is another matter.

Given what you said about—

Limited time is available, so you must ask your final question.

Given what you have said about farmers being guardians of the countryside and the possible environmental benefits of organic farming, have not you argued for more organic production?

I have nothing against organic production. Organic produce attracts premium prices and if people are prepared to buy it, that is fine by me.

May I ask another question later, if there is enough time?

You may, if we have enough time.

I would like to direct my question to Professor Pennington in particular. I was interested in what the professor said about "perceived health benefits"—you spoke about "perceived" rather than real benefits. You made a somewhat politically charged comment about using Government or taxpayers' money to subsidise the middle classes.

I would like to put health issues to one side and consider environmental issues. I am sure that you would agree with me that the environmental issues are not the preserve of the middle classes but affect everybody. Rather than skate over those benefits, as a scientist will you tell us what the environmental benefits would be to us all going organic?

Clearly, the usage of land is less intense in organic farming and it also uses fewer pesticides—although the amount that is used is not zero. The way in which nitrates and fertilisers are used is quite different; I understand that organic farmers are encouraged to have hedgerows, ponds and the sorts of things that one associates with traditional farming.

The scientific evidence is a little short, because such evidence is difficult and expensive to gather and large sums of money have not been put into such research. However, there is quite good evidence that organic farms generally help wild bird populations to increase. Around organic farms, non-pest and non-cabbage white butterflies are more abundant—or, at least, there are more species of butterfly—than is the case on conventional agricultural land. There is a range of benefits from the point of view of diversity and from the point of view of getting back to the countryside that we knew as children. There is evidence to support that kind of argument.

I argue that going organic is not the only way to achieve those benefits, because they can also be achieved in other ways. That needs to be taken into account when we ask whether organic is the only way that we should go to achieve those benefits. There is not always an increase in biodiversity with organic farming; some species of wild insects and some wild birds become less common because of the nature of the crops that are grown and because of the nature of the field cover. The environmental benefits of going organic are not absolute; rather, they are relative.

Unusually, then, I will use my supplementary and ask David Finlay whether, having heard Professor Pennington's comments on the real environmental benefits of going organic, he is still as firm about the bill as he was in his opening statement. David Finlay said several times that the bill is the only way in which we can achieve such benefits. Does he genuinely feel that legislation is the only way? The evidence that we have heard previously is that if the Executive were to set aspirational targets and a real action plan—which I assume we will be provided with in January by the group that is considering the issue—we would not need legislation.

When we took evidence from Robin Harper, I asked him what is the point of legislation that provides no penalty in the event of people not achieving targets. Is legislation really the best way to go?

My gut feeling—I do not know much about politics, because I am just a farmer—

That has never stopped our convener.

He is much more informed than I am about such things.

My feeling as an individual is that many farmers and producers in the organic sector in Scotland feel pretty isolated—we do not have a strong voice and our agenda is at the bottom of the list. We have no other political means with which to push forward the organic agenda unless there is real commitment from the Executive. I do not think that there will be any real commitment that will result in action unless there is legislation.

If Ross Finnie came up next month with aspirational targets and an action plan, would you be happy with that?

That would still not give any long-term commitment.

Is it commitment that you seek?

Yes.

Following Mike Rumbles's question, I have a question for David Finlay and William Rose. During last week's evidence, it became quite clear that the witness from the Scottish Organic Producers Association was, to say the least, uncomfortable with the idea of legislative targets. He was fully supportive in every other respect, including on the need for a robust action plan, but he was undoubtedly uncomfortable with the idea that legislative targets would be a meaningful way in which to achieve what he saw as the ultimate aim of his organisation. Are you members of SOPA? Do you disagree with that opinion?

I am not a member of SOPA.

I am a member of SOPA; in fact, I used to be a board member. There is no point in having a target unless it is understood why one wants the target. First, we must decide why we want organic farming. Perhaps we do not want it; if we do not, we can all go home. However, if we do want it, is that because we perceive it to be something that will make the people of our country more healthy or because we think that it will have environmental or social benefits? Perhaps it is thought that we should have organic farming for all three reasons. If we believe that any of those three possible benefits will result, a strong action plan to achieve the goal that we set would be a good idea.

I think that Alex Telfer—whom I know quite well—is probably scared that a target will be set, that X per cent of farming will be organic farming by Y time, that that will be that and that nobody will do anything else, which would be ridiculous. The actions that are taken to support the target are far more critical.

I would like to deal further with that issue. David Finlay said that when his support mechanism runs out, he will need market price premiums of about 25 per cent. Recently, a dairy farmer in the south of Scotland contacted me and gave me his production figures for April to October 2002. He sold only about 33 per cent to 34 per cent of the organic milk that he produced into the organic market. Had he been able to sell all of it into the organic market, he would have had a shortfall in income of some 35 per cent. There is huge over-supply of milk and in organic sheep production in respect of what the market will take up. How will a legislative target, which the bill proposes, overcome that?

It will cost money. What I said about a level playing field is critical. We are in a global market and there is no level playing field. America has just announced another $12 billion for agricultural support and is competing with European agriculture in a trade war. I would love subsidies to disappear tomorrow if they were to disappear around the world, but they are not disappearing and they will not disappear.

Support is being given to non-organic agriculture for cleaning up pesticides and residues of fertiliser and to deal with contamination of waterways. Intensive farming-related diseases are being cleaned up through Government funding. The public purse is funding that and other things, including action against BSE. It could be argued that the flames of foot-and-mouth disease were fanned by intensive farming, in that animals were moved around the country.

Money is being paid out of the public purse that gives non-organic competitors an unfair advantage. Professor Jules Pretty considered that matter and said that £130 to £140 per hectare of additional public money is paid indirectly to allow non-organic farmers to put their products on the shelf at a cheaper price. In addition, I have been in correspondence about the matter. If there are two farmers in the same area with the same type of stock and one is an organic farmer and the other is a non-organic farmer, the organic farmer will receive between £50 and £80 per hectare less in direct public support. Organic farmers have to start from about £200 per hectare behind. If we took away all the subsidies and made the polluter pay, we would all be on an equal footing and we could compete. In order to achieve a level playing field, we need a continuing subsidy of £200 a hectare to be able to present our product to the population. People will say, "£200 a hectare? That's going to cost a lot of money." However, it is only the tip of the iceberg. There is a huge subsidy—a mountain—that we do not see.

Billions of pounds are going into agriculture to support cheap food and £200 per organic hectare would be just a small part. We are not being allowed to compete on a fair basis. It will cost money to allow us to compete fairly, but the organic product could be on the shelves at parity and the consumer could make the choice.

Yeo Valley Organic Company Ltd is the biggest independent manufacturer of organic and non-organic yoghurt in the UK and has had both types of product on the shelves for some years at parity. The organic version accounts for one third of the company's total market.

There is a lot of potential for growth. With education, information, awareness and retraining of producers, there could be more potential.

Do you want to add anything to that, Mr Rose? The original question was on how the targets in the bill will sort out over-supply.

As I said before, it is a question of the action plan and not the target. How will one achieve a target? It is arguable that if one wants to put pressure on the marketplace to buy more of what one sells—which is too expensive—one must subsidise the product to take it to a price that will sell. As we have heard, there is an argument that we should subsidise organic food to a greater degree than we do conventional food to make it cheaper. One could be controversial and say that we should put a tax on conventional food and then use the money raised to lower the cost of organic food. However, that would be nonsense. There are only one or two ways to achieve the objectives.

It is an interesting debate—whether we have a robust action plan or set targets. With the best will in the world, we have taken evidence that suggests that some organic farmers have produced materials for which they were finding it difficult to find a market. That is quite surprising and alarming.

Whether we have a robust plan or we put in place firm targets and achieve the targeted level of production, how do you imagine organic food can be made more attractive to the customer? How do you market it? Would it find a niche market because it is organic or do you have to promote it in some other way?

We have experience of selling organic food to the public. A lot of people do not buy organic, just as they do not buy other things. They do not know anything about it: they do not know that it exists, or they do not know whether it is better or worse so why should they care? To influence perceptions, we would have to educate people and make them aware that organic food exists and that it might be a good thing. I return to my earlier point that if we do not believe organic food is a good thing, we are wasting our time. We must establish whether we believe that there are benefits. If we believe there are benefits, we will go into the business of educating the public about why the Executive believes that eating organic food is a good thing. We will back that up with the action plan and the targets that come with it to increase the amount of organic food that is available in the shops.

As Professor Pennington said, the price differential is critical. I feel that we are starting with one hand tied behind our backs. If there were equal support for all types of farming, we could compete at price parity. On that basis, and through education and awareness-raising support, I am certain that the organic market would grow from being a tiny niche market to something substantial. The benefits for our environment and rural communities would be significant.

I want just a short answer on whether the organic market would be viable if it had a robust plan. Or is a set target required, albeit that the targets that are being set are related to the landlord rather than to the food produced?

Yes, I believe that it is reasonable to set an expected outcome, which will probably be a moveable one because one always tries to move on. However, a target must be attached to a strong plan if it is to be achieved. I do not believe that the organics stakeholder group—which is outside this setting working away behind the scenes—is the entire answer for where a strategy should come from. We must back any target with actions that are part of a plan to achieve the target. Is that a clear answer?

Yes, thank you.

I raise the basic issue, which Mr Rose mentioned, of whether organic food is better and has benefits. It seems to me that it does, but there is sometimes an inference that non-organic food is consequently bad. I am a non-specialist in the area, but I think that that is where the flaw lies. Would a correct characterisation of the situation be that non-organic food, provided it is produced in accordance with the rules on BSE, foot-and-mouth disease and so on, is good for us, but organic food is arguably better for us in some ways? Is that too simplistic?

It is difficult to get evidence that organic food is better for our health. It is clearly almost impossible to do practical long-term studies that compare, over a lifetime, people who have eaten only organic food with those who have eaten only non-organic food. Therefore, one must rely more on such methods as testing organic food for levels of nutrients and using taste panels to ascertain whether they prefer the taste of organic food. When we assess such evidence the only substantial information that we obtain is that organic food tends to have less water in it and so tends to have higher concentrations of things such as vitamin C. That is partly a consequence of how organic food is grown. However, scurvy is not a disease that normal individuals suffer from in this country and there is controversy about whether we should eat vast amounts of vitamin C. There is sufficient vitamin C in ordinary foods.

Mr Ewing's point is an important one in that I think that people buy organic foods because they regard them as being free of pesticides and having health benefits, albeit perhaps rather ill-defined ones. When one tests for pesticides in non-organic food, one occasionally finds certain levels, but I would maintain that they are so low as to be no threat to human health. We can debate such matters as lifetime exposures, but certainly pesticide levels in food have been assessed by people over long periods and have not been found injurious to health. I would contend that if the food on the market today is grown appropriately, processed by people who know what they are doing and has the right safety standards applied, it is equally safe and good for you whether it is organic or conventional. The basic problem is not the food, but having a balanced diet and so on. Therefore, I would put the health benefits of organic and conventional foods on a level playing field.

The perception that organic food is safer is derived from little health evidence. People see the process of producing organic food as preferable. They like the idea of the way in which organic food is grown and they are prepared to believe that that leads to health benefits. If that is their perception, they may get a health benefit from organic food, but the benefit is not to do with nutrition; it is to do with people's assumption that they are eating food that is good for them.

Thank you for your answer, which was very helpful. Those who would like to promote organic food agree that the best way to do that is not to demonise non-organic food, which is prepared in accordance with rules and high standards. It must be made clear that non-organic food is perfectly good, but organic food can be even better. That approach is a simple way to avoid falling into a trap of them and us.

I do not disagree entirely with Professor Pennington; he made some good points. There is no scientific evidence that explicitly proves that organic food is better than non-organic food, or vice versa. There is plenty of scientific evidence, some of which I commissioned, that proves that organic vegetables contain fewer residues. As the committee heard, one can argue that, as the levels are so tiny, they are insignificant, and I cannot tell the committee anything different.

I would rather eat something that contains lower levels of poisons. However, I do not promote organic farming by saying that conventional food is terrible—I eat conventional food and, to some degree, I am still a conventional farmer. We must not be sidelined by statements such as that there is no scientific evidence to prove that organic food is better.

In your opening remarks, you said that an action plan must be formulated. I agree: the meat of the argument is an action plan, rather than arbitrary targets in legislation, which seem to miss the point. Therefore, if you were the minister responsible for agriculture, what would your action plan contain? How would we move forward in a positive way and how could we replicate the success that both you and Mr Finlay mentioned and which all members support?

That depends entirely on whether I believe that there are benefits. Do I believe that there are health benefits, environmental benefits or social benefits? If I believe that those benefits exist—

I assume that you do.

As it happens, I do. Given that you have just appointed me the minister, I guess that—

What is your action plan, minister?

It would be in Scotland's long-term economic interests to build a greater organic industry. As minister, I would therefore seek ways to fund organic farmers to retrain and receive marketing support, because farmers are terrible at marketing. In fact, they are worse than terrible. I would formulate a structure to co-ordinate marketing for all organic products. A measure that I would think about, but might not actually do, would be to redistribute through modulation some of the existing agricultural budget. Those are a few of my suggestions. The education of farmers and consumers would be my starting point.

There is scope to increase the capacity of the organic food market. If we stimulate the organic production of food, and output is vastly increased, will that not threaten and eliminate the premium that organic food currently enjoys?

Yes.

As minister, how would your plan deal with that situation?

There are a small number of ways of doing that. One is to encourage relatively large-scale producers like me to get better at what they to do and to introduce new technology. We have already done that and brought down the price of our products, much to the detriment of smaller organic farmers. That can continue, but it is perhaps not where we want to end up from a social point of view. The only other way is to make the price of conventional food less competitive, either by somehow forcing the price up or by subsidising organic food. That is difficult because organic producers do not like subsidies.

Yesterday, I came across an upsetting case of some bullocks that were raised in North Uist on an organically accredited farm. Because they are over the age of 30 months, they will be burned at the incinerator at Kilmarnock on Thursday. I know that there are rules relating to that, but that is the finest organically reared beef in the world, and it will be thrown on a fire. Is it not the case that using organic methods means that it takes a little longer to grow food and to bring cattle, especially rarer and older breeds, to the maturity at which they should be eaten for the meat to be at its best?

Does Professor Pennington agree that a target must also be set for raising as soon as possible the number of months under which those cattle can be sold into the food chain?

That is nothing to do with organic targets.

It is.

I ask Professor Pennington to keep his answer quite brief.

I ask Professor Pennington to comment on the over-30-months scheme, bearing in mind that it takes longer to grow organic food.

The OTMS is in place to protect public health as much as anything else, given what is known about the biology of BSE, although it is under active review. The Food Standards Agency would like to get rid of the scheme, as would everyone, as soon as we can be absolutely confident that public health will not be put at risk. It may draw in people who would say that the chance of an animal having BSE is minimal, but that is where the precautionary principle comes in. It is unfortunate that no exceptions can be made. The scheme is under active review, and people want to move away from it as soon as possible. My perception is that Mr McGrigor's points are being considered in other quarters. It is not being put to one side.

That makes it 15-love to Mr McGrigor so far.

I want to return to the question of scientific evidence about the health benefits of organic food—or lack of them. I do not usually sit on this committee. I sit on the Health and Community Care committee, which has been considering genetically modified crops. People are concerned that there is no evidence that GM crops are bad for their health, but that is because nobody is looking for the evidence, and no research has been carried out. Is it not also the case for organic food that the absence of scientific evidence that it is good for health does not mean that such evidence does not exist? It just means that no one has funded sufficient research into the connections between health and organic food.

Yes. However, there is a basic problem with getting that evidence, as there is with GM. Studies must be carried out over a very long period of time to find whether there are particular health benefits. For example, eating vegetables protects against large bowel cancer, which is a major Scottish health problem. Getting evidence about how many vegetables one should eat and interventions and so on is incredibly difficult. It is a very difficult area, which is why I said that one is often reduced to testing the food to examine its nutritional content, rather than directly examining its effect on the people who eat it. There is a real difficulty as regards the time that it takes to do those experiments. Finding controls—people who have not eaten organic and comparing them over a 40-year period with people who have—is clearly virtually impossible to do.

I fear that we will end up having vigorous debates that will generate more heat than light. One difficulty with discussing organic food and its health benefits is that the data are difficult to obtain. Analyses can be done, but where those have been done, it has been over long periods in different countries that have different organic production regimes. A big study has not been conducted that allows scientists from any camp to be confident that a consensus is emerging.

It remains an open question.

It remains an open question, but whether the major nutrients in organic and conventional foods are different is not an open question, because there is not much difference. The overall benefits of the package of nutrients in food are more difficult to examine. The organic philosophy—the holistic philosophy—is difficult to test by a reductionist method of studying one component in a food. That generates a fair amount of argument, because the holistic person says that a reductionist approach cannot be taken and that picking out little bits and saying, "That is the same, that is the same and that is the same," will not show that there is no difference. We will debate that for a long time.

Carrots can be grown hydroponically with 16 nutrients. Scientists have told me that someone who lived on such vegetables—I will broaden the discussion from carrots—would eventually develop God knows what deficiencies because their diet did not contain enough nutrients. If the uptake of a broader range of trace elements and various minor nutrients from soil is greater organically than conventionally—I am satisfied that evidence suggests that it is—it is strange that we cannot agree that organic food is often likely to be more nutritious.

The Soil Association published a review of the evidence called "Organic Farming, Food Quality and Human Health". I am not sure of its date, but it is fairly recent. Hundreds of experiments throughout the world in the past 30 years were brought together in that comprehensive review, which Professor Pennington has probably read. I tend to fall on the side of believing it.

The report lists pesticides' effects on neurotoxicity, endocrine disruption, carcinogenicity and immunotoxicity—that is a good word to say after a pint. As Professor Pennington said, many of those residues are at very low levels on food, but we do not know their long-term effects or how they interreact. On any day and in any week we can absorb several of those chemicals.

I was a Scottish Agricultural College adviser back in the 1970s, when we were still advocating the use of dichlorodiphenyltrichloroethane—DDT. We said that chemicals such as dieldrin, aldrin, organophosphates and organochlorines were safe to use but, 20 to 30 years later, they are off the market and unsafe. It takes that length of time to find out about that. I would be wary about rushing into the debate about safety.

We know nothing about new chemicals that are being manufactured and are entering the market. On antibiotic resistance, the World Health Organisation concluded in 1997 that four antibiotic-resistant strains of bacteria—salmonella, campylobacter, enterococci and E coli—had been transferred from livestock to humans, with serious consequences for human health. Evidence also exists for tetracycline resistance.

I am afraid that I must rush to the next agenda item. Professor Pennington may say a brief word.

I underline that the Soil Association is an organic farming advocate. That must be taken into account when considering the review that it produced. It presents an optimistic view of health gains.

I assure you that we have taken evidence from you and others in as open-minded a way as we can. The situation is always unsatisfactory, because we never have enough time to take evidence. Other members had questions to ask and I am sorry that we have no more time—we are considerably over time.

I thank the witnesses for giving us their time and their answers. We will hear from Robin Harper again next week and everything that we have heard will feed into that. The witnesses are welcome to stay with us for as much or as little of the afternoon as they wish.

Agenda item 2 is also consideration of the Organic Farming Targets (Scotland) Bill. I welcome Allan Wilson, Deputy Minister for Environment and Rural Development, and his officials Alasdair Sim and Simon Cooper. Ross Finnie was scheduled to be the witness for this item, but he has had to go to Brussels at short notice, so I thank Allan Wilson for stepping in at equally short notice.

As always, I invite the minister to make a brief statement, which will be followed by questions. There is a memorandum from the Executive in members' papers.

Thank you, convener. It is always good to renew my acquaintance with the Rural Development Committee, even if it is at short notice.

I hope that you are still feeling that at the end of the day.

So do I.

I hope that all members have had the opportunity to read the memorandum that the Executive submitted last week. Members will agree that the memorandum sets out a strong message about the Executive's support for the Scottish organic sector. We clearly want the organic sector to increase its contribution to environmentally friendly and, obviously, market-orientated agriculture in Scotland. In that sense, the Executive's aspirations are not so far removed from the bill's intentions.

I suspect that many of the bill's supporters, including those who have given evidence, have chosen to support the bill because they want to raise the profile of the organic sector and the priority that is attached to it, not necessarily because they support its target-driven approach. I applaud that initiative and aspiration because I too believe in putting organic issues higher up the public and political agenda. However, I must agree with those witnesses who have indicated that setting arbitrary Scottish Executive targets for the amount of organic production is not the right way to stimulate growth in the sector. Others have made that point to the committee, including Peter Stewart of the National Farmers Union of Scotland and Professor Hugh Pennington.

The memorandum sets out the Executive's reasons, which I will briefly summarise, for opposing the bill's target-driven approach. We do not believe that the bill is workable as it would create a duty for the Scottish Executive to attain targets for organic production without giving it the power to actually make that happen. The continued growth of organic production must be in line with the growth of the market for organic produce, rather than with statutory targets. Organic farming is only part of the wider policy of building an environmentally sustainable agriculture industry. Therefore, although opposing the bill because of the target-driven approach to which I referred, I stress the Executive's active support for the further development of the organic sector.

At this juncture, it is worth while stating that the Executive has done a great deal to stimulate market growth. More than 7 per cent of Scotland's agricultural land area is in organic production or conversion, which represents 57 per cent of the UK's organically farmed area. The Executive's organic aid scheme, which provided for only 19,000 hectares of land in 1997, now provides for more than 300,000 hectares, and spending on that scheme has risen from £88,000 in 1996-97 to almost £5 million in 2001-02. The technical support that the Executive has made available, through the Scottish Agricultural College, to organic farmers and those interested in conversion has also been a big success.

Since last year, on the food chain side, the Executive has awarded approximately £1.45 million to organic processing plants and marketing projects, and it funded the development and publication of the Scottish Agricultural College's acclaimed report, "A Guide to the Marketing of Organic Food".

Clearly, there are real opportunities for the Scottish organic sector to increase the value of its contribution to the production of good food, which Scottish consumers and others want, and the Executive wants to help the Scottish organic sector to realise its full potential.

Members have said that, so far, the Executive's work has been good but it could be better. The bill requires the Scottish Executive to produce an action plan for the organic sector. The Executive accepted that challenge voluntarily, and the organics stakeholder group, which was appointed in September to undertake the task, is making good progress with the development of the action plan.

The group has highlighted several areas in which things could be done differently for the benefit of the organic sector. For example, it has identified a strong case for reviewing the incentive rates for organic conversion. The group suggests increasing the incentive for conversion by offering better quality arable and improved grassland where there may be greater environmental gains and market opportunities. The group has identified a good case for better support for the advice that farmers need when considering conversion. The organic aid scheme does not provide a similar level of support to farmers who are considering conversion to the support that is enjoyed by applicants to the rural stewardship scheme.

In addition, the group is seriously considering options to maintain support for organic farmers after the conversion period and is examining further processing, marketing and research issues. The group, therefore, is undertaking a range of work to advise the Executive before the publication of the action plan.

The Executive is building on the strong foundations of its existing support for the organic sector, and it is hoped that the action plan, outlining the Executive's future support for the organic sector, will be published as early as possible in the new year. To that end, I look forward to the organics stakeholder group's advice. The bill proposes that the Executive should publish an annual report on the implementation of its action plan. Again, we voluntarily accepted that challenge.

I hope that the committee will have gathered from our memorandum and this short presentation that the Executive actively supports the development of the organic sector as a significant part of the development of environmentally sustainable, market-orientated agriculture in Scotland. The target-driven approach is not correct, but we are committed to working with all stakeholders to help to create a successful and, importantly, prosperous Scottish organic sector.

We are told that other European Union countries support organic farming past the conversion stage. Will the Scottish Executive do that? Can an organics plan work without such support? Does the Executive plan to publish an organic action plan and targets? How will the Executive support the development of a sustainable organic market and supply chain in Scotland?

I referred to all those questions in my preamble. The advice from the organics stakeholder group, which will inform the production of the action plan, will consider production targets. We will also be informed by development elsewhere, as we are currently.

In researching for this meeting, I looked at levels of organic production in other European countries. We are very well placed, certainly on the basis of the most recent available information. The percentage of organic production as a proportion of total production in Scotland places us at or near the top of the European league. Obviously, we want to maintain that position.

Part of the process will involve the stakeholder group looking at processes in other parts of Europe and advising us on whether we should extend our existing support beyond the five-year conversion period. We will take that advice and incorporate it in the action plan that will subsequently be produced.

My concerns are due partly to the fact that, as you know, I represent the Highlands and Islands where a great number of the livestock are sold as stores through auction markets. I went to an auction market last Saturday and spoke to several farmers about the bill. They are more than happy to be part of it, but the feeling was that they would have to go to Carlisle to find a market where they could sell their produce. None of the auction markets in the Highlands is capable of following through the organic chain. Therefore, after the five-year conversion period, all those farmers would simply be forced into going back to conventional farming.

From my involvement in Ayrshire, I am familiar with the requirement to develop markets for the finished product nearer to home than Carlisle. We hope that the advice from the organics stakeholder group will address some of those market-related problems and come up with solutions that might be incorporated in the action plan to better stimulate both the demand and supply sides where store lambs require to be finished outside the Highlands.

The difficulty is that every store farmer would have to find an organic finisher to buy his products. While that will not make the entire exercise pointless, it will make it extremely difficult to run in any cohesive way.

The issue is about seeing the supply chain through to meet market demand. With lamb and other organically produced produce, remedial action requires to be taken to address breaks in the supply chain. Whether that is market action, Executive action or market action that can be stimulated by Executive action, we would hope that it is incorporated in the action plan.

I have two questions, the first of which relates to your opposition to a target-driven approach, which is mentioned in your submission. I can see where the Executive is coming from with its opposition to targets that the Executive will have to meet being set in legislation. Will the action plan contain specific targets? If so, what will they be? If you are to produce an action plan, I presume that you want to get somewhere with it. Where do we want to get to?

The Executive memorandum makes it clear that we oppose taking a target-driven approach to developing any sector in which the ability to attain targets is outwith our power. That is because, as much as anything else, we want to avoid bad legislation. In general, we would not encourage such an approach in legislation. It is obvious that an action plan should be a means of getting from where we are to where we want to be and it should include a step change in methodology for so doing. In that context, I hope that the organics stakeholder group can advise us on the best methodologies to get us from where we are to where we want to go, and on the ultimate destination.

Do you envisage there being targets in the action plan? Will there be percentages?

I envisage advice from the organics stakeholder group. The group is considering many things, such as the percentage of land that might be devoted to organic production as a proportion of total land and the means and methodology by which we might reach that objective. I will have to wait and see what the organics stakeholder group says.

My second question relates to paragraph 12 of your submission, which states:

"The Executive works closely with DEFRA on the UK's overall research effort on organic farming, and contributes around £500,000 a year to this effort."

Previous witnesses—Professor Hugh Pennington in particular—referred to the lack of research on the health qualities of organic food. How much does DEFRA spend as a whole on research? The submission states that the Executive contributes around £500,000. What research is that money earmarked for?

Off the top of my head, I could not say what the statistics are. However, I refer you to paragraph 15 of the submission, which deals with research in general. The organics stakeholder group is considering what the Executive can do to support research to help the development of the organic food chain. I will let Alasdair Sim respond to your query about health, if that is okay.

The Food Standards Agency has been particularly interested in the health qualities of organic food and is planning a programme of research to evaluate assertions of health benefits or otherwise from organic food. Last month, the FSA held a conference on the subject. The programme of research is the main instrument through which work will be progressed.

On how we stack up in relation to the rest of the UK, I cannot give an exact figure for DEFRA's research budget off the top of my head, but we at least slightly more than proportionately pull our weight in contributing to research effort. I cannot tell the committee the exact research catalogue, but we are looking at technical and evaluative matters and can give you information later, if the committee would like it.

That would be helpful. When I last looked at the statistics, Scotland was not necessarily the healthiest country on the planet. We are a food-producing nation and it might be sensible to link the two issues together and find out whether there are major health benefits and where we should direct our research funding.

Generally speaking, we would support any research that contributes in any way to making us a healthier nation, whether indirectly, in relation to organic food or in other areas.

I want to question the minister further about targets, which seem to be the Executive's main objection to the bill.

In your preamble, as you called it, and in response to Richard Lochhead, you mentioned the Executive memorandum, in which you talk about not supporting the bill because it is target driven. Paragraph 18 of the memorandum says that the bill

"creates a duty for the Scottish Executive to attain targets for organic production even though the attainment of these targets is outwith the Executive's power."

In the light of some the evidence that we have heard, will you comment on whether attaining the targets would be entirely outwith your power? For example, there are subsidies that you can move around. Will you also comment on why setting targets for renewable energy is different? What are the differences between targets for organic farming and targets for renewable energy?

That is a good question. Part of the answer is that we have a mechanism in the Scottish renewables obligation to stimulate market demand, which compels consumers to source a percentage of their supply from a particular form of renewable production. The same mechanism does not exist to change the method of production to compel producers to produce organically as opposed to non-organically.

Many of the levers and mechanisms that might be used to stimulate growth in demand for an organically produced agricultural product would not be readily available to us, if we wished to exercise them. As the memorandum makes clear, we could therefore have a mismatch between supply and demand. Supply could outstrip demand, with adverse consequences for the producer.

Adopting a target-driven approach could bring about an excess of supply of organic produce in relation to what the consumer demands. That would have an adverse effect on the premium and on the producer's prospective profit. We must tie up supply and demand. There would, therefore, be little sense in us adopting a target-driven approach that addressed supply without adequately addressing demand.

Some of the suppliers think that the playing fields could be more level. There are, as we mentioned last week, different ways of influencing demand. One of the main issues on organic food is probably price and there could be ways to influence that.

Further down the Executive memorandum, in paragraph 19, you say:

"Whatever incentives the Executive may offer, high targets for organic conversion will not be achieved unless farmers believe that their best economic choice is to convert their land to organic status, and the targets will therefore be unattainable if market conditions do not support increased organic production."

That is what you have just said to me. Will you comment further on the words:

"unless farmers believe that their best economic choice is to convert their land to organic status"?

Does it all come down to economic choice? Are there no social—if that is the right word—reasons for turning to organic farming? Are there no ethical or environmental reasons? Is it purely a matter of economics?

If one believes in the market economy and the market-orientated approach to agricultural or any other form of industrial production, consumer choice is an important feature. A Soviet-style planned system—with five-year plans that set out the proportion of production that had to be organic—could be adopted, but that is not an option that is readily supported by many.

If we take the market-orientated approach and eschew compelling people to produce organically, the demand factor becomes critical to having a financially viable product. If the supply side were over-stimulated, that would force down prices and the premium will not be available. Organic farmers would find it difficult to make a living solely from organically sourced products.

We debated this subject in part last week, when I referred to different economic systems, although we did not quite manage to get into the debate. It is not just about the market and whether subsidy is involved.

Let me draw the minister a little further on the supply and demand argument.

You mention your pride in the fact that more than 7 per cent of Scotland's land is now organic. The fact is that an awful lot of that land has not been targeted and is producing an end product for which there is no market. I refer specifically to the hill land that has come under the organic aid scheme, which was driven principally by the economic low in those areas and by the fact that attempts were being made to source any available income stream.

The same applies to the dairy sector: there is now a large amount of organic milk that cannot find a market. Surely if the original organic aid scheme had been targeted in the way that some producers suggest it should have been, that would have overcome the problem.

I am making the argument for a market-orientated approach. Any form of subsidy that distorts that market runs the risk of creating an excess of supply over demand. That point is well made in the Executive memorandum.

Subsidies can be moved around, and we would expect the organics stakeholder group to advise us on that in relation to the action plan. That could be done to fill gaps in the supply chain, and it is a legitimate exercise where market opportunity can be created or exploited by more judicious use of subsidy. However, it is not a risk-free exercise, as it would be difficult—some might argue impossible—to second-guess the market.

I might have to come back to you on that, once I have worked out your answer.

When we received evidence from the National Farmers Union of Scotland last week, we were told that there was no committee that dealt with organics. It strikes me that there is nowhere in Scotland where people who farm organically or who have an interest in becoming involved in organic farming can meet to set up networks. There is no way for farmers in the Highlands, who might want contacts with lowland farmers for finishing animals, to set up such networks.

That point follows from the difficulty with the supply chain, to which Jamie McGrigor and others have referred. As I understand it, the Scottish Organic Producers Association is trying to achieve precisely what Rhoda Grant has described, and I suspect that the stakeholder group might wish to advise us so that the action plan can address those problems.

One of the problems that is faced by the same group of potential organic farmers from the Highlands and Islands is finishing off animals. We heard last week that, if stocking levels were cut dramatically, it might be possible to consider finishing off animals in the Highlands and Islands.

Unfortunately, most of the subsidies that are available to farmers and crofters tend either to be on a headage basis or to contain a stocking density element. That cuts the income for several years while the transfer to organic farming is made and is a disincentive. Considering the support that is available in other countries, even England, how can we address those issues?

The incentive side of the equation is one aspect that the stakeholder group and, subsequently, the action plan will address.

I want to ask about the imports of organic food. I think that I am right in saying that we import about two thirds of all the organic food that we consume. I see nodding heads from the minister and his team. He said earlier that we have a good record in the proportion of organic food that we import. Which EU states have a worse record?

I said that we have a good record in organic production and the percentage of land used for organic production. Scotland is up there among its EU competitors in that regard.

In that case, do you agree that we have the worst record in Europe on the proportion of imported organic food?

We have made it clear that there is a demand for products that cannot always be satisfied domestically, for climatic as well as other reasons. However, I am not saying that there are no market opportunities that could be exploited domestically or that an action plan prepared by us could not help in that regard.

The organic food and farming targets bill campaign told us that France imports 10 per cent of its organic food, Denmark 25 per cent, Sweden 30 per cent, Austria 30 per cent and Italy 40 per cent. Germany, Spain, Belgium and the Netherlands—not noted for tropical fruit production—all have better records than we do. Why are we falling behind?

Would your solution be import controls? I have already said that we have a market-oriented approach to supplying the organically produced products that the consumer demands. In certain sectors, we can compete equitably with other countries in the EU, but in others—including fruit production, for example—it would be difficult for us so to do. There will inevitably be an exchange of goods, whether they are organically produced or not, between EU countries. Short of having some sort of control economy, we have to adopt a market-driven approach to any trade imbalances that may arise as a consequence.

You mention the market-driven approach, but is not one reason why the imports of organic foods are higher in the UK than the other states that I mentioned that other EU states give a far better deal to producers of organic food? For example, horticulture payments for organic producers in the UK are about £70 per hectare per year for five years. In Sweden, the comparable figure is £534, according to the authority that I just mentioned. The deal for Swedish producers is seven or eight times better than the deal for producers in the UK. How do you explain the poor deal that organic farmers get? Do you accept that it is not entirely a matter of the market, but one of different subsidies and the lack of a level playing field across the EU?

There were a few questions in that, but I do not accept your basic premise that organic farmers in Scotland or the UK get a poor deal. Different approaches will be adopted in different member states. Part of what we expect the organics stakeholder group to do in advising us on the action plan is to consider how subsidies affect production, supply and demand and whether they might be better targeted to exploit market opportunities.

We are talking about a market-oriented approach. Around 7 per cent of our farming land is used for organic production, which is in excess of the proportion for most of our European competitors. That has been achieved voluntarily by the organic producers. Those facts do not suggest to me that the general incentives for organic production are any less favourable here than they are in the rest of the European Union. If they were, we would not have such a high percentage of land used for organic production.

It is a little extravagant for the Government to claim credit for that. Given what we heard from Mr Rose and Mr Finlay, the credit for producing organic food should go to the producers, despite the unlevel playing field.

It was you who suggested that the percentage of organic production in any member state is a direct consequence of the subsidy that might be available.

Plainly, organic production in other EU states receives differential and higher rates of subsidy. With other support, such as that for beef suckler cow and direct support for production, the figure per unit is the same throughout Europe. That is not the case for organic, so there is an unlevel playing field. You said that Scottish farmers are not at a disadvantage. However, the fact that other EU states make post-conversion payments but we do not is a simple and clear example of Scottish organic producers being at a patent disadvantage to their competitors in Europe, who receive post-conversion payments.

I understand that not every member state makes those payments, although that is the case generally. As I said in response to Mr McGrigor and others, we expect the stakeholder group to advise us on that issue and, potentially, we will include it in the action plan that we will produce next year.

We await that.

I will endeavour to put the discussion back on a positive footing. I welcome what the minister outlined, particularly the action plan, as I welcome anything that is proposed to support the organic sector. I urge the minister to appreciate, in what he is doing, that there are different types and sizes of producer. I represent crofters, not the great farming communities that exist in other parts of Scotland. For many crofters in places such as South Uist, North Uist and Benbecula, the conversion to organic production would be simple and straightforward. They would merely have to revert to the practices of 20 or 25 years ago, when few—if not none—of the crofters used artificial fertilisers or sprayed crops with weird and wonderful chemicals.

As other members have mentioned, the important point is that the health of the nation and the food that we produce are linked inextricably. Incentive rates for conversion are important for big-time farmers, but it is also important that the incentive rate is applicable to and can easily be accessed by small-time crofters and communities or villages that work collectively.

I want the minister and the Executive to appreciate that organic farming presents us with a wonderful opportunity to revitalise an industry. I know that there have been links between my constituency and the minister's as a result of seaweed. Traditionally, until a few years ago, seaweed was cut in the islands and transported undried—wet seaweed was taken across the sea—to Irvine. We have a wonderful opportunity to increase the amount of organic produce and to allow those outwith the Hebrides to access a ready-made, renewable source of fertiliser.

I accept and welcome that statement. You have identified opportunities that a judicious approach to organic production offers farmers and other producers, not only in your constituency, but throughout Scotland. Direct use of the subsidies that are available is one method by which some of the breaks in the supply chain that have been referred to can be addressed. The other side of the issue is demand management, which we can discuss. That would also influence the ultimate supply side.

Given the other payments and subsidies in the sector, it is important to bear in mind the fact that, when demands are made to extend the period of assistance for organics, to increase payments or to make other concessions to the supply side, that money must come from elsewhere in the agri-environment budget. We must make the best and most judicious use of the available resource. We will be seeking advice from the stakeholder group on that. In that context, we will bear in mind what you have said.

I have a brief question on the Executive's memorandum. Paragraph 3 mentions EC regulations, which define minimum standards for organic production. Those include

"prohibition on the use of genetically modified organisms in any way."

Does promoting organic farming have any impact on genetically modified crop trials? Is there a link?

As the paper makes clear, there is only a link in so far as there are minimum standards of what constitutes organic production, one of which is the prohibition of the use of genetically modified organisms.

I thank the minister and his officials for coming. I am aware that he stood in at very short notice, for which I am grateful. We will have a short break before moving on to the next item on the agenda.

Just before we suspend, I want to clarify whom Professor Pennington was representing.

He was here as an individual.

Meeting suspended.

On resuming—