Transport and the Environment Committee, 11 Dec 2002

Meeting date: Wednesday, December 11, 2002

Official Report 309KB pdf

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Organic Farming Targets (Scotland) Bill: Stage 1

Agenda item 5 is consideration of the Organic Farming Targets (Scotland) Bill. I welcome Lisa Schneidau of the Scottish Wildlife Trust, Peter Pitkin of Scottish Natural Heritage and Duncan Orr-Ewing of RSPB Scotland. We have received written evidence from you all and I understand that you do not wish to make opening statements to supplement your written evidence. We will move to questioning after I have explained how the committee will consider the bill. The Rural Development Committee is the lead committee on the bill, but the Transport and the Environment Committee has chosen to examine the environmental aspects of organic farming in the context of the bill. We intend to submit a report to the lead committee, which will be taken into account in the broader consideration of the bill.

The first questions are to do with research. What evidence is there that increased biodiversity on organically managed farmland is a result of the organic nature of production rather than of different management practices?

Good morning. In November 2001, the RSPB commissioned a desktop study of all the work that had been done on the benefits or otherwise of organic farming and the benefits to biodiversity in particular. We pulled out 33 studies from across Europe as well as a couple from America. Of those studies, six were on birds, one was on mammals, 16 were on invertebrates, eight were on flora and two were on soil microbes. In all cases, organic farming was found to be more or less beneficial. All the bird studies found that organic farming was generally positive for birds. For example, a study was carried out in England on skylarks—as members will be aware, the skylark is a red data book species and a United Kingdom biodiversity action plan species. The study showed that densities of skylarks increased on organic farming systems.

Did any of that research compare extensive farming, rather than simply conventional farming, with organic farming?

The skylark study made direct comparison between organic farms and conventionally managed farms. In the round, the studies showed positive benefits of organic farming.

That still does not answer my question. Could one manage a non-organic scheme in the same way as one manages an organic scheme and achieve the same biodiversity benefits?

It is possible—

It is difficult to tell.

Yes, it is difficult to tell without making an in-depth study. Conventionally managed farms can be run in an extensive way. Crofting is an example. One cannot deny that some crofting practices in the Western Isles can achieve high biodiversity interest.

To what do you attribute the increased population of skylarks? Is it down to the stocking density levels rather than the farming techniques that are used?

Techniques that are employed in organic systems are generally beneficial to biodiversity. It is possible to point immediately to the lack of herbicide and insecticide inputs, the lack of use of synthetic fertilisers—

But in an area with skylarks, surely none of those inputs would be made.

Yes, but those techniques are not employed on organic farms. A different vegetation structure results and skylarks need that more open vegetation structure. Organic farms also tend to follow the spring cropping practice, which is also beneficial to that species. One of the key reasons why the skylark population has declined in England in particular and in some parts of Scotland is the switch from spring cropping to winter cereal growing.

Could you please explain what you mean by an "open vegetation structure"?

Yes. Conventional farming with its higher synthetic fertiliser inputs results in a denser sward, or vegetation, structure, which produces more plants per square metre than is the case with organic systems. The crop structure tends to be more open in organic systems than it is in conventional farming systems, particularly arable farming. Birds depend on that crop structure as well as on the weeds and invertebrates that are part of organic systems.

It would be misleading to claim that all the evidence is in place. Although we certainly do not have complete proof, we have a substantial amount of research-based evidence that points to the fact that organic farming generally represents a better deal for the various components of the environment than most types of conventional farming do.

The question was also on whether organic farming lines up against other kinds of environmental farming. It is important to remember that not all organic farming is the same and that some kinds of organic management are more favourable to the environment than others are. I am thinking of the relationship with wildlife. There is also a range of conventional farming models, some of which pay close attention to the needs of wildlife and the general health of the environment.

In 1998-99, the Ministry of Agriculture, Fisheries and Food commissioned an interesting review, which studied the environmental benefits that arise from organic farming and lined them up against the environmental benefits that could be detected in other similar farming systems that aim to integrate environmental improvements. I cannot remember the figures—I am afraid that I do not have the review with me—but the study showed the range of environmental benefits and advantage that resulted for wildlife and the reductions in pollution and management inputs. Organic systems were shown to be at the top of the range, but significant and similar advantages were to be gained from a number of other integrated approaches.

Did the two systems overlap? Was the bottom ranking of organic systems lower than the highest ranking of integrated systems?

I do not have the details. Other integrated system initiatives incorporate practices that are used in organic systems.

The Scottish Wildlife Trust has recently put a lot of effort into developing its policy on organic agriculture. We have collated as much research evidence as we can find. The majority of research evidence on biodiversity relates to lowland agricultural systems. If one compared a conventional farm with an organic farm, neither of which were in a scheme that would add other benefits—such as the rural stewardship scheme—we are convinced that, generally speaking, there would be a higher level of biodiversity in a number of areas on the organic farm. If it would be helpful, we could point the committee in the direction of a number of wider studies that attempt to summarise some of that evidence.

We have found that a number of other European countries, including other countries within the United Kingdom, have recognised the intrinsic biodiversity and environmental benefits of organic agriculture. In the "Action plan to develop organic food and farming in England", Margaret Beckett said:

"Organic farming and food offer real benefits for the environment".

She also said that Government support for organic farming is justified by the fact that those environmental benefits are produced on behalf of the taxpayer through organic agriculture.

The Scottish Wildlife Trust feels that organic systems and conventional systems are not mutually exclusive and that further improvements in all agricultural systems, through schemes such as the rural stewardship scheme, will benefit the environment. Such benefits are over and above the environmental benefits that we think are intrinsic to organic agriculture. We support organic agriculture, as it represents an opportunity to develop farming systems that can benefit biodiversity.

We need far more research on the environmental benefits of organic agriculture in Scotland. We found it extremely difficult to collect evidence on upland systems. Eighty-five per cent of land in organic agriculture in Scotland is in the uplands. Common sense would dictate that the more extensive systems that organic farming favours and other factors such as the lack of ivermectin point to greater biodiversity in upland systems.

As Peter Pitkin said, it is difficult to compare different farming systems and the relative benefits that they could provide. We have been chasing a report that the Department for Environment, Food and Rural Affairs has on upland agriculture, which we have had great difficulty in finding. In the meantime, we tend to err on the side of common sense and to say that, even in upland systems, there could be further biodiversity benefit. We would like to see more research.

I would be interested in your definition of the difference between organic and conventional farming. Where is the border? If there is no clear border, in which areas is the border blurred? We must rely on the research in taking decisions in such areas. Where is that research founded in relation to what is an organic approach and what is a conventional approach? You mentioned that you could give us some pointers to wider studies; the committee would find that useful.

I would also like to know whether any specific pilot projects have been carried out. The bill proposes establishing a target for the percentage of land on which organic farming is to take place of 20 per cent, so it would be useful to be able to found that on a substantive piece of work that has been unequivocal in revealing benefits.

Studies on skylarks have been mentioned. Where have studies been carried out that show clear, or marginal to clear, benefits for a particular bird species? Were the consequences for other bird species or other wildlife monitored in those locations? I presume that changing the ecoculture in a location will have benefits for some species and disbenefits for others. Have such considerations formed part of the studies?

I will answer the last point first. I referred to six bird studies, but I cannot speak about all the studies specifically, because each of those pieces of work contains a lot of information. Such studies generally involve looking at weeds and insect populations, which, as the food of birds, are important for achieving higher densities of birds. In general, it has been discovered through the studies that arable weeds—including some rarer arable weeds—are more prevalent in organic systems. The insects, beetles and worms upon which birds depend for food are also more prevalent on organic farms than in conventional farming systems.

There are caveats in relation to all the evidence that I have given. It would be best for me to make some of the research available to the committee, so that members may consider it in more detail.

Thank you. Do the studies to which you have referred consider the effect of organic farming on other bird species or populations?

Yes. The studies dealt with yellowhammers—a common farmland species in Scotland that is in decline—as well as skylarks. The population of yellowhammers was shown to increase in organic farming systems.

I reiterate the point that Lisa Schneidau made: only a small number of studies have been conducted across Europe and North America and there is a need for further research. Given that Scotland has a predominantly upland landscape, it is vital that more research is done on the benefits or otherwise of organic farming systems in uplands. We have very little information on the subject. Our collation of studies has revealed that no studies have been carried out on upland situations.

The essential distinction between organic and conventional farming is that organic farming is based on the use of natural processes and systems. In so far as it is possible, it avoids artificial inputs. Organic farming takes a systems-based approach. It tries to manage systems as self-contained entities, which reduces the impact of farming on the environment. We must support that principle and ideal.

I have examined the research that has come to my notice to identify which organisms and aspects of wildlife and the countryside have been shown to gain tangible benefit from organic methods. There is reasonable evidence of benefit to birds, butterflies and plants. There is some evidence of benefit to spiders and other kinds of invertebrates, but invertebrates are a varied and mixed category. More surprisingly, there seems to be some relationship between organic farming and the visual character of the landscape. The Countryside Commission commissioned research that showed that lowland landscapes are more varied under organic management than they tend to be under conventional management.

One of the conclusions that one inevitably reaches is that benefits are difficult to quantify. Some of the work that has been done on birds has considered the quantitative benefits of organic farming—the increased rates of breeding and the increases in population that result from organic management. However, that is not the case for much of the other research that has been done.

The other thing that we ought to say about the research is that in some cases it is difficult to know how it relates to Scotland. Much of the research has been done in England or in other European countries, where some of the birds and plants are not the same as those in Scotland. Only a relatively small amount of research has been done in Scotland.

I agree with Peter Pitkin's wide definition of organic agriculture, but the policy memorandum for the bill outlines the standards set by UKROFS—the UK register of organic food standards—and gives details of the certification procedures that organic farmers have to go through and the rigorous standards that are set for them. If the committee would like more detail, we would be happy to provide it.

John Scott and Angus MacKay have supplementary questions. I ask them to be brief, and we will take them together.

I want to return to the point that Duncan Orr-Ewing and Lisa Schneidau made. There is a huge danger in extrapolating from studies that have been carried out on low ground given that, as Lisa Schneidau pointed out, 80 per cent of Scotland comprises LFAs—or, for the benefit of the official report, less favoured areas. In the upland areas in particular—the mountainous parts of Scotland, which are severely disadvantaged areas—there will be little or no difference between conventional agriculture and organic systems. As a result, probably a great deal more than 20 per cent of Scotland is, in effect, organically farmed. Do our witnesses agree? I would also like to hear their views on the dangers of setting targets based on a complete lack of knowledge—as has readily been admitted, little or no information is available on the type of systems that cover 85 per cent of Scotland's landmass.

I have two brief points. Peter Pitkin referred to research on benefits for birds, butterflies, spiders and what not. It would be useful for the committee to see that. I would like him to say what sources have conducted the research. The lack of research in Scotland and the fact that it is unclear what the impacts or consequences might be, particularly in upland areas, sit closely alongside arguments that have been used in the Parliament against genetically modified crop testing. Is there a similar argument that the widespread application of organic farming targets in Scotland should be deferred in areas where we do not know what the consequences might be because the research does not exist? The precautionary principle seems to apply in both cases.

We will hear from Peter Pitkin first, because Angus MacKay asked him a specific question. After that, we will address the broader issues.

A helpful review of research—"The Biodiversity Benefits of Organic Farming", which was jointly funded by the Soil Association and WWF UK—was published in May 2000. It describes in some detail, but pretty succinctly, about a dozen major studies and reviews and, rather more briefly, a number of smaller studies, including a couple in Scotland. It also gives an account of a number of previous reviews of research. I have found it to be a helpful summary of the work that has been done. It is reasonably unbiased.

The review to which Peter Pitkin has referred tries to identify the benefits of organic farming in the uplands even though there has been little extensive research on that. I do not agree that the majority of upland Scotland is already organically farmed by default, because it does not come under the regulations to which organic farmers have to adhere.

On upland biodiversity, the Soil Association report says:

"Two main conservation problems in the uplands have been the intensification of livestock stocking rates and the loss of mixed farms, leading to widespread overgrazing of the natural level of grassland vegetation, and the loss of traditional small areas of arable habitats for feeding and nesting … Two-thirds of the heather moorland lost between 1947 and 1980 has been attributed to overgrazing."

The Scottish Wildlife Trust would welcome any system that contributed towards the extensification of grazing in the uplands, given the huge impact of overgrazing on biodiveristy. We would welcome organic systems on that basis.

The report carries on:

"The loss of mixed farming has been a problem in all grassland areas, the lowlands and the uplands … As organic farming is both more extensive and in nearly all cases based on some mixed farming, these problems would be automatically addressed, suggesting that organic farming is of important benefit to the biodiversity of the uplands."

I hope that that helps a little.

Do you concede that extensification can take place readily within conventional agricultural systems and lead to the regeneration of heather?

It can, but the incentives for that are inadequate at the moment.

The western southern upland extensification scheme is designed for no reason other than heather regeneration. For those who are in the scheme, there are significant inducements to allow heather to regenerate. Most of them are doing that within conventional farming systems.

I agree that those schemes can work well, but the incentive—the available funding and the extent of such schemes—is nowhere near what we need to restore biodiversity in the uplands.

One of the main reasons why targets across various sectors are needed to help organic agriculture is that 85 per cent of the uptake of the organic aid scheme in Scotland so far has been in the uplands. One reason for that is that to convert to organic is much easier in the uplands—perhaps because of simpler systems—than it is in the lowlands.

The Scottish Wildlife Trust is concerned that, once the five-year conversion payment under the current organic aid scheme is up, the farmers who have converted will go straight back to conventional agriculture. There is no further incentive; there is no recognition from the taxpayer that those farmers need to continue to deliver the environmental goods. We fully support targets for a number of reasons, but, in relation to John Scott's question, we support them on the basis that the organic sector needs to be developed across all farming types in Scotland, not just in the uplands. That needs guidance from the Government.

I will give a slightly different take on conversion in the uplands. We should not dismiss conversion in the uplands as something to do just because it is easy. We should perhaps consider organic farming in the uplands as a way of helping to provide a new opportunity for some farmers—sheep farmers in particular, but also some cattle farmers—to exploit a new market or a market that may be developing. I am not saying that I know how that could easily be done. Farming in the uplands needs to take advantage of as many opportunities as possible to restore its economic status. It needs to identify a new market that would offer the possibility of restoring prosperity to producers. Organic farming—coupled with sustainable management, which is important from a natural heritage point of view—would provide a way of doing that.

Angus MacKay has indicated that he still wants an answer to some of the points that he made.

As an addition to Lisa Schneidau's points, I will provide some context. Farm-land biodiversity has declined in the uplands as well as in the lowlands; for example, the populations of some farm-land bird species in the uplands have declined severely. In support of Lisa's points, I point out that organic farms tend to have lower stocking densities and more mixed farming and that those two factors are likely to result in increased bird populations. The educated guess is that more organic farming would improve the situation for birds in those areas.

Do the witnesses wish to reply to Angus MacKay's earlier question, which was whether now is the right time to proceed with the bill, given the lack of research?

More research is important. The steps that we take should be tentative and spread over time as our knowledge and understanding increases. Advice is also important, as is consideration of ways in which to exploit and develop markets. Any approach that we take must be based on the development of a number of strands.

I agree with Peter Pitkin.

I want to make progress because we have a number of other areas to explore. I indicate for the record that Robin Harper, who is now with us, has said that because he is the main sponsor of the bill, he does not wish to participate in the question and answer session. He will listen to the answers, but he does not wish to be both a sponsor and a questioner.

It has been mentioned that organic farms tend to be mixed. Must they be mixed or is it possible for farms to be organic and not mixed?

They are not required to be mixed, but the general feeling is that although it is difficult to run an organic arable farm with livestock, it is easier to run an organic livestock farm without arable.

So mixed farming is not a prerequisite of being organic, but it tends to happen because of the type of people who want to have organic farms and the systems that they operate.

It is easier to manage a mixed farm as an integrated organic system than it is an arable or livestock farm.

Part of the ethos of organic farming is the whole-farm approach. That approach is also being developed through land-management contracts and tends to veer towards situations such as that which Peter Pitkin described.

If we widen organic farming, people might start to use it as a subsidy opportunity. Is it possible that we will lose some of the benefits that otherwise accrue from organic farming?

That is always a risk.

That is why a targeted approach would have benefits.

Peter Pitkin said that setting organic targets would provide market opportunities for organic produce and organic farmers. How would a marked increase in organic production sustain the premiums, which are difficult to achieve at the moment?

I said that fairly tentatively. I also said that I did not know how to achieve that. However, I am interested in the possibility that Scotland could develop a market for organic sheep, given that conventional sheep production looks as though it is struggling quite severely at the moment. Much of the conventional sheep production is carried out to standards that are already fairly close to organic. If we could achieve that conversion fairly easily and get the product to the consumer as an organic product, that could have considerable benefits for sheep farming in Scotland.

Is there any research to show that the consumer is prepared to pay a significant premium for that commodity?

I am afraid that I have no information on that. I simply wanted to bring the idea to the committee's attention.

I can provide an example that might help. We were lucky enough to visit an area of the former East Germany right on the Polish border that has been targeted for organic production. Brandenburg state has individual targets for the production of a certain amount of organic produce. Those targets are linked directly to demand in Berlin. Organic production has been developed so that, throughout the chain between the producer and the market, the links are made clear and the markets that need to be serviced and the demand within Berlin are identified. Perhaps that study would be of interest to the committee.

Some of Maureen Macmillan's lines of questioning have already been touched on, but does she want to pick up on anything else?

I will pick up on one or two things. One problem for organic livestock farming is that, for example, sheep do not go directly from Shetland to the market and then on to the butcher's slab, but are finished elsewhere in Scotland. We would need a link-up between the crofter and the finisher, but I do not know how easy that would be. I think that many crofters would like to have the organic label, which they see as a good marketing tool, but they feel in some way detached from the process because their livestock must go elsewhere to be finished. That is perhaps a comment rather than a question.

I understand that that is a significant problem for organic production, certainly in the remoter parts of Scotland. That question was raised in the Executive's consultation earlier this year on the future of the agri-environment scheme and the organic aid scheme. The Executive suggested that organic conversion payments should become conditional on there being a demonstrable market for the product. Our view is that such a proposal looks at the problem rather less creatively than might be desirable. We feel that the problem could be addressed in other ways, such as the establishment of some kind of support for organic finishing.

I am glad to hear that you recognise the problem. However, what I really wanted to talk about was the possible environmental downsides of organic farming, if you can admit to such. The syndrome is similar to the way in which the amount of petrol that is used in taking bottles to the bottle bank outweighs the environmental benefit of recycling the glass. Are there issues like that in environmental farming? For example, if more machinery had to be used, more hydrocarbons might be released into the atmosphere.

When I was in Kintyre on Monday, the dairy farmers complained to me that SEPA was on their backs because of the amount of what we in the Black Isle call "sharn" that the cows produce. When I asked them why they did not choose organic farming, they said, "For goodness' sake, that would get SEPA even more on our backs." There is obviously a perception among farmers that organic farming would not necessarily cause less diffuse pollution and that it might even cause more.

A question has also been asked about whether the use of cattle dung for fertiliser could increase the incidence of E coli 0157. Will you comment on that?

We might be setting our sights a little too high if we expect organic farming to solve all these environmental problems. Some of the things that have been mentioned are pretty complex problems, which beset not only organic but conventional farming, particularly in remoter parts of Scotland.

The Scottish Wildlife Trust recognises that there can be difficulties with the issues that Maureen Macmillan raised. As Peter Pitkin said, those difficulties are as apparent in conventional agriculture as they are in organic agriculture. Organic agriculture does not claim to be perfect; rather, it claims that it can be a positive benefit.

Friends of the Earth Scotland submitted detailed evidence on the wider environmental benefits of organic agriculture, over and above the biodiversity benefits, to the Rural Development Committee. I do not know whether the Transport and the Environment Committee received that information, but it goes into more detail about climate change benefits, waste and water, food miles and economic and social benefits. That might give the committee answers to its questions.

I will clarify the point of the bill's construction. Organising the payments from the organic aid scheme on a sectoral basis would address the problem of finishing lambs, to which Maureen Macmillan referred.

I am not sure that the committee has a clear picture of the possible financial consequences of the bill, but I presume that it would require a given amount of money. In the opinion of your organisations, what is the biggest threat to Scotland's environment and species? What is the biggest threat to the work of the RSPB Scotland, Scottish Natural Heritage and the Scottish Wildlife Trust? Is it excessive road use, excessive pollution caused by heavy industry or the depletion of the ozone layer? In other words, if we are to spend money, why spend it on the promotion of organic farming?

For the sake of argument, if organic farming is to cost £50 million a year, would not that money be better spent on subsidising bus and train transport so that less cars are used and less pollution is pumped into the atmosphere. I am trying to get a broader idea of the benefits of organic farming as opposed to allocating the same amount of money to another policy area.

That is a very broad question, and the answer depends on the desired benefits. For many years, one of the RSPB's arguments has been that the rural stewardship scheme, which is one of the key schemes that is available to all farmers in Scotland, is chronically underfunded. If you were looking for biodiversity benefits and had £50 million to spend, a significant increase in funding for the rural stewardship scheme would benefit a wide variety of wildlife species and would be open to all farmers. That cannot be denied.

In England, DEFRA recently increased funding for its equivalent of the rural stewardship scheme by £150 million, which obviously delivered a significant benefit to wildlife. However, to deliver some of the wider benefits, for the reasons that we outlined, it might make more sense to target the organic sector.

I will give a slightly different reply. At the moment, we in Scotland are supporting agriculture to the tune of £500 million a year. In terms of the benefits to the public or the outcomes that we get from that investment at the moment, that expenditure is not best value for money.

I would give another different answer.

I was pausing to see whether that was the end of that answer.

That is my answer. We are concerned that only a small proportion of that £500 million is allocated to environmental measures. As arrangements stand, that small allocation has to fund the natural heritage management of the countryside through agri-environmental schemes. It has also to fund any programmes for conversion to organic farming.

A situation in which two kinds of initiative compete presents us with a choice that we should not have to make. The choice should be about whether we are prepared to increase our support for environmental objectives within the overall agricultural support programme of £0.5 billion.

I will give a slightly different answer. Seventy-five per cent of Scotland's land is farmed and the farming policies that have just been described have led to a large-scale loss of farm-land biodiversity on that land. Reform of agricultural policy and taxpayers' support for that policy towards more sustainable farming systems that recognise the delivery of environmental, social and economic benefits would be one of the major things that could improve wildlife biodiversity in Scotland and achieve more sustainable management of Scotland's land.

I want to leap on my hobby-horse for a few moments. The policy intention of the enormous sums that go to support agriculture is to subsidise food for the consumer. Subsidies are often seen in a negative light and the beneficiaries are seen to be farmers rather than consumers. Obviously the eventual beneficiary will be the consumer.

Maureen, are your questions finished?

Yes. All the questions that I was going to ask have been dealt with.

John Scott was going to ask about the economics of organics.

I might go over some of the same ground again. I declare belatedly my interest as an upland sheep farmer who finishes lambs, among other activities.

We will send you the Shetland lambs.

I would be perfectly happy to receive them, provided they are at the right price.

In its evidence, SNH said that the cost of environmentally sustainable production should be reflected fully in the price of the product. I would be interested to know how that could be achieved in the first place and then guaranteed. How does that equate with the view that organic farming needs financial support in order to develop—as we have just discussed—given the acknowledged underfunding of agri-environment schemes?

Lisa Schneidau spoke about the money that is currently used to subsidise Scottish agriculture being better used for social and environmental benefits. If that money was used to fund organics, would not it reduce significantly the £500 million support if much of it was reallocated towards organic farming? Obviously there is not going to be enough money in the existing agri-environment schemes. Would doing that not result in a reduction in the number of people who are actively engaged in farming and thereby defeat the social objectives?

There are several policy objectives at play, and one is certainly to do with the number of people who are employed in agriculture. It is an objective of the less favoured areas payments to maintain agricultural systems that are inherently less productive because of environmental and climate considerations. The payments go to areas where those systems would not otherwise be viable in order to maintain local communities and sustain population levels.

Incorporating environmental costs into the price of food is obviously a gradual process and is not something that can be done at the flick of a switch. We envisage its being achieved by meqasures such as those that form part of the European Commissioners' proposals for the mid-term review of the common agricultural policy and, in particular, the proposals for further decoupling support from production and making decouple payments subject to statutory environmental conditions. We see that as a significant step forward in ensuring that more account is taken of the environmental cost of production in the market price of food.

We would very much like to see a larger proportion of the total agricultural support budget in Scotland being used to support organic farming. There is no question about that. We need to examine more closely exactly how those payments are made. We currently make payments over five years for organic conversion, but there might well be a case for extending the scope of those payments beyond five years if we can show that there are positive social and environmental gains and, in particular, if active management is required to maintain and improve the natural heritage.

Correct me if I am wrong, but I have a couple of points of detail. I think that there is some research that shows that more people are on average employed in organic agriculture than in conventional farming systems, but I cannot point to the actual research.

Is that the case in upland areas?

I do not know, but there is some research that shows that difference, which might be worth considering. I also think that that is a possible research area for the Scottish Executive environment and rural affairs department. SEERAD should be looking at how much the consumer will pay for the environmental benefits and other public benefits of organic and biodiverse farming. To date, I do not think that SEERAD has examined that as it should. However, it is clear that consumers are voting with their feet. My notes refer to a 33 per cent growth in organic produce purchasing in 2000-01. We also know that 70 per cent of our organic produce is still imported.

I want to add a few extra points on to the market versus government-payment led development of organic agriculture, which was the point that John Scott was making. The Scottish Wildlife Trust supports the Organic Farming Targets (Scotland) Bill because it recognises that an action plan is needed for all sectors, and that that includes commitment from the Government. We argue that that commitment must not be just financial; positive leadership is needed from the Government in Scotland to help develop the organic sector and to bring the various strands of the organic sector together. We certainly would not accept that the matter should just be left to market forces, which has been the Executive's line until now, because that is clearly not working. It has not resulted in a balanced approach and it is not helping to develop the sector in response to consumer demand.

Would you guarantee the income of those who had gone into organic production but who came to realise that they were in an over-supplied world market? How could those people be given a sustainable income? Their production volumes will be significantly less than in conventional agriculture but the market return might be no greater.

As I said, we think that on-going payments should be made to organic farmers after the five-year conversion period, which would recognise the environmental good that they do.

Because markets change for a number of reasons, targets must be flexible enough to respond. Targets—which are, essentially, a way of measuring against output—are important because without them an action plan could easily become a wish list and the needs of various sectors might not be provided for. It is interesting that the target in DEFRA's action plan that was published in July is for 70 per cent of consumer demand to be met by English production. It proposes that there be a yearly review of that figure according to what the market demands. Setting a target and helping the stakeholders to meet it is a more positive approach than the approach that the Scottish Executive is taking, which seems to be a "the glass is half empty" approach to organic agriculture—and I am certain that it is not organic milk in the glass.

Like Lisa Schneidau, I do not believe that progress will be made simply by leaving the matter to market forces.

That is what is happening at the moment.

There is a point to be made about what is happening at the moment. Duncan Orr-Ewing said that there had been a 33 per cent increase in demand in 2000 or 2001 and anyone who shops in supermarkets will have seen, over the past few years, the organic section going from a small shelf to many shelves that contain a broad range of goods. I agree that market forces have driven that percentage increase, but I do not think that we can rely on market forces alone to ensure that the increased demand will be serviced or that the mechanisms will be in place to ensure that the organic industry is capable of growing. That will need Government support and direction. The DEFRA approach is interesting because it has a mixed-economy approach that involves market forces and command.

I would like to know more about that 33 per cent increase. What is it 33 per cent of? If the base figure were low, that increase could be small.

I do not have all the figures, but I know that the market is growing every year. I do not know whether that growth is sustainable, however. I am not an economist.

If you could let us have a reference for that figure, that would be helpful.

I believe that the figure is in the bill's explanatory notes, but I am not sure.

There is also a relevant figure in the Scottish Executive's evidence to the Rural Development Committee.

I have found it. Paragraph 11 of the bill's policy memorandum says:

"Sales of organic food in the UK are increasing faster than in any other European country. During the year 2000-2001 sales of organic foods reached £802m, a rise of 33%."

What does that represent as a total of UK agricultural food sales?

I do not know.

Would there be any way in which one could find that out?

I presume so.

The source is the Soil Association's organic food and farming report 2001. I presume that if we can dig out that report, we could find out.

It would be worth finding that.

Whatever way you look at it, 33 per cent of £802 million is a fairly substantial amount.

For products that are impossible to grow in Scotland, do the environmental costs of importing organic produce outweigh the benefits of growing the products organically elsewhere in the world in the first place?

I will come back with a supplementary to that if I may.

Again, that is a large question, but significant research has been done in examining, for example, the costs of importing by air a bottle of organic wine from Australia or South Africa. That shows that we would be far better sourcing organic wine from France or any country that is growing vines organically nearer home. That information is available and it could be provided if it is required.

If we stick by the principle that the full environmental costs of production should be part of the price for both home-produced and imported food, the current balance of imports and exports would change quite considerably.

Before I ask my supplementary question, I declare an interest as the chairman of the Scottish Association of Farmers Markets.

I cannot accept Angus MacKay's point about something that is worth while and acceptable, such as the farmers market movement in Scotland. From the point of view of seeing the glass half full, that movement has been driven entirely by market forces. It has received absolutely no Government support and has become one of Scotland's fastest growing small businesses, turning over between £10 and £15 million a year from a standing start three years ago.

Would a solution need to be absolutely Government led to produce something that you claim the market wants? If the market wants it that much, I cannot see that there is a need for targets and huge amounts of Government support.

In developing organic targets and the organic sector, the Government needs to work with the industry. Again, I point you to the action plan in England, in which Margaret Beckett puts great importance on the fact that the major retailers have committed themselves to working with the organic action plan group and the follow-up to that, in helping to develop the organic sector. An integrated approach can be taken. We would say that both targets and Government support are needed.

I wish you luck.

Small-scale marketing, local labelling and the marketing of quality produce of the sort that farmers' markets supply are important parts of a more sustainable approach to agricultural production.

I have a final point on that. Six or seven other European countries, aside from England, have taken the decision to go down the targets route. As part of that process, I think that they have weighed up the fact that Government intervention is important in helping to design the market so that it suits the needs of producers and consumers.

Lisa Schneidau's point about DEFRA was interesting. Focusing on the relationship between targets and demand is perhaps the way forward to ensure that our policy, if we go down the organic targets path, is not only financially supportable, but has a clear, output-related benefit.

In our discussion on figures, I was struck by the figure that showed that there had been an increase of 33 per cent in the consumption of organic food, which means, according to my rudimentary calculation, that in 2001 there was an increase from £600 million to £800 million. If we accept that £800 million figure, the Barnett-style share of it for Scotland is £80 million. Therefore, consumers in Scotland spend about £80 million annually on organic products.

That figure is small compared with overall retail spending, particularly on food products. Nonetheless, spending on organic products is growing. Poor health is a serious problem in Scotland, but we have great difficulty in persuading people to eat any fruit and vegetables at all. We are discussing how we can encourage people to eat better produced, healthier food, but we have difficulty in the first place getting people to eat any kind of healthy food. That makes me uncomfortable, in terms of expenditure. Can Lisa Schneidau help us to square that circle?

We should not spend too long on this matter, because we are drifting into other areas of policy. Lisa, you can respond briefly to Mr MacKay's question.

I cannot comment on health issues, I am afraid. However, in terms of justifying more expenditure, we certainly feel that more agri-environment funding is required, as Duncan Orr-Ewing said, not only for organic production, but for rural stewardship schemes and wider agri-environment measures. We should ask why most European countries felt it necessary and desirable to develop their organic sectors through a targets approach. I sit on the organic stakeholders group on behalf of Scottish Environment LINK, which the Executive asked to produce an action plan by January. We must ask why Scotland is not setting organic targets and why it has trouble with the idea of them. If Scotland does not have organic targets and does not give as much support as possible to organic farmers—such as the continuing payments after year 5 to which England has agreed—would that not put Scottish organic producers at a competitive disadvantage?

Those are important points, but they do not answer my question. We propose to go down a particular policy line that will have a clear cost in terms of either additional, new investment of Executive moneys or the displacement of existing budgets in the agricultural budget or elsewhere. We propose to do that in a context in which one of our biggest challenges is to get people in Scotland to eat more healthily by eating fruit and vegetables. I am not unsympathetic to the broad policy on organics, but the need to reconcile that with the healthy eating challenge makes it harder, not easier, to support the bill.

We must be clear about the policy priorities and expenditure to which we will commit ourselves through the bill. How do we relate the value of organic production to the core social justice challenges that we face? All those policy areas are interlinked, however weakly or distantly. None of our policy decisions is free of costs or consequences. How do we prioritise the bill as opposed to something else? Or, how do we prioritise the bill and reconcile that with broader objectives? I realise that those are broad questions, but I think that they must be addressed.

I want to move us on. We, as politicians, must make a judgment on those questions; it is not fair to ask our panel of witnesses to answer them.

You did not say that we had to be fair.

Duncan Orr-Ewing wants to make a point.

I fear to tread on this matter, but I have just one point to make. I heard Jack McConnell give a speech about environmental justice, so perhaps organic production connects with that policy, which I understood was partly about sustainable agricultural development. Perhaps that policy connects to the environmental justice policy. That is the only extent to which I would be prepared to answer Angus MacKay's questions.

I would like us to draw to a close on this matter. I will give Angus MacKay a final opportunity to examine the proposed target of 20 per cent and how it has come about.

Why should we go for a target of 20 per cent of land, rather than 20 per cent of food production? In either case, why 20 per cent? Why not 30 per cent or 15 per cent or 10 per cent?

Do we have a volunteer to answer that question?

If I am forced to, I will go first. I do not think that there is an environmental case to be made for 20 per cent. I do not think that we have the information and research to be able to say that conversion of 20 per cent—whether it is 20 per cent of the market, 20 per cent of the area or whatever—will deliver specified environmental benefits. That is as much as I can say from our perspective.

There are a lot of different types of targets in the UK and other European countries. For example, Wales has gone for 10 per cent by 2005. The principle of targets, which I have said is important, should be explored. The Executive is questioning that principle. There has been a lot of talk of targets. I note that the Scottish Labour party conference and the Scottish Liberal Democrat conference this year voted in favour of targets, sometimes with figures attached and sometimes without.

Targets attached to land are important, because they give a concrete result with respect to the way that land is managed. From our point of view and from a biodiversity point of view, such a result is tangible and useful, and all the different organic sectors can relate to that. It also addresses the concerns about the balance of organic conversion between sectors, and the fact that there is an imbalance at the moment. I understand that a Europe-wide organic plan is being produced, and that the target of 20 per cent across Europe is being discussed as a potential figure.

In relation to the amount of land that is converted, the figure of 20 per cent would need a lot of discussion. It has been discussed a lot by the various groups and parties that have brought together the bill. If further discussion is needed, we would be happy to help. A target figure has to be put on the amount of land that you would like to convert by a certain date. That figure might need reviewing as we go along, as long as there is a target.

More explicit links should be made between the target of 20 per cent and the delivery of other targets to which the Government is committed; I am thinking of some of the sustainability-type targets. For example, DEFRA has a target to reverse farmland bird declines by 2020. Given the research that we have indicated, there are some benefits to farmland birds. Perhaps those linkages could be made and it could be shown how the 20 per cent figure stacks up in relation to some of the other targets to which the Government is committed.

You have spoken, as we would expect you to, about the benefits to skylarks, to environmental justice, to redressing bird decline and so on. We all agree that the rural stewardship scheme is significantly underfunded, but would it not be taking a more direct and honest approach—I do not say that in an unkind way—to say, "Look, the targets that we all want to achieve would and should be met through the agri-environment scheme?"

In a way, a Trojan horse is being used to deliver the environmental benefits that we all want to see. I submit that organic food is very much a niche market and a luxury product, which should be driven purely by the market—given that there is a premium for it over all other types of food—rather than by Government subsidy.

Our argument agrees broadly with Peter Pitkin's. Currently, there is a £500 million spend on agriculture. There is room for both those schemes, if that is how it is decided to reallocate existing spend. As we said, we would not want a squeeze on the already over-stretched rural stewardship scheme fund. In fact, we would like that fund to be increased. If you are asking me a direct question, we would probably like both the schemes to be funded from the £500 million budget to the detriment of some of the other existing agriculture spend.

You mentioned the market case. My data, and I am not an expert, suggest that demand exists and is increasing. We should surely take a future look in that regard.

If the market is demand led, why does organic production need to be subsidised?

We have tried to demonstrate that the market-led approach is not without its faults. The approach to date has been market led, to a certain extent, and that has resulted in discrepancies in the number of lowland farms that are able to finish lambs, for example. As a result, some lambs have been put into the conventional market, which has resulted in problems for the organic producers.

That is because the premium is not sufficient for lowland farms to be converted to organic so that lambs can be finished. If the market premium were sufficient, such farms would finish lambs.

I want to draw that point to a close. Much of the agriculture sector receives subsidy, so the suggestion that organics should receive subsidy is not necessarily untoward.

I am trying to get my head round what the bill is for. I was going to ask whether the land target was the one to go for. Are we talking about land management or food production? If we are talking about land management, would we get more bang for the bucks by using the rural stewardship scheme than by focusing more narrowly on organic farming? Or is the overall objective of the bill to increase organic food production? Will you comment on that balancing act and on what the bill will deliver?

Different markets are involved where food production is concerned, and different approaches are required where the environment is concerned. To summarise that, we need different approaches to sustainability. We need to be able to encourage people who are inclined to take different approaches to sustainability to make those leaps, where we are convinced that those leaps will benefit society.

We must see organic production and support for organic production as complementary to the funding that we provide for the management of the environment and the natural heritage. In many ways, those are complementary. Somebody who is being supported in converting to organic production will make changes to their business that will mean that the business will be able to accommodate the kind of management that is supported under agri-environmental schemes. That is quite important.

From the public investment aspect, someone is paid to manage the landscape components, wildlife habitats and other similar matters. That investment is quite likely to be more secure and durable on organically managed land than on land that is entered into schemes under conventional systems. I emphasise the complementarity.

In effect, the bill is trying to achieve a positive approach from Government to develop a sector that involves all players. That has several different outputs. It is quite difficult to balance more organic food production against the environmental benefits and to quantify and measure those elements against each other. To my mind, and to the Scottish Wildlife Trust's mind, the bill would deliver good things all the way along. It would increase the amount of local organic food that is produced in Scotland and deliver environmental benefits. To use a horrible expression, it is win-win all the way through.

I will add something to what Peter Pitkin said. The forward strategy for Scottish agriculture sets out the map route for the sector. There is a fairly clear steer that there must be room for all approaches—the conventional approach, which John Scott described; the organic approach; and an approach for those farmers who want to follow an environmental route on a conventional farm. It is about choice, and there is room for all approaches. It is about ensuring that some sectors, such as organics, are given room in the existing agricultural budget, which is possibly not available to them at the moment.

On behalf of the committee, I thank Duncan Orr-Ewing, Peter Pitkin and Lisa Schneidau for giving evidence. The committee will move into private session to consider initial responses to today's evidence.

We have a copy of the Soil Association's work on the biodiversity benefits of organic farming, which we can leave with you.

That would be very kind of you.

Meeting continued in private until 13:18.