Rural Development Committee, 17 Dec 2002

Meeting date: Tuesday, December 17, 2002

Official Report 171KB pdf

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Organic Farming Targets (Scotland) Bill: Stage 1

Item 1 on our agenda is the third day—and conclusion—of evidence taking on the Organic Farming Targets (Scotland) Bill at stage 1. As members will be aware, we have already heard evidence from a range of interests and from the Scottish Executive.

I welcome Robin Harper to the committee. I know that he has been with us throughout stage 1. I hope that he will excuse the low quantity of members present and that he is impressed by their quality.

How could I say otherwise?

Exactly.

Following Robin Harper's presentation on the bill to us two weeks ago, for which I thank him, we have received a further written statement from him that has been circulated with committee papers. I am grateful to him for that.

I remind members that, unusually, we must consider at stage 1 the financial memorandum to the bill. Robin Harper may want to deal with that issue; he will certainly be asked questions about it later. I invite Robin to make an introductory statement.

Thank you. I am happy to answer questions on the financial memorandum, of which all members have a copy.

Concern has been expressed that the target figure of 20 per cent that the bill will set is unrealistic and unattainable—utopian even. However, there has been much talk of targets—not all of it from the organic sector. At their annual conferences this year, both the Scottish Labour party and the Liberal Democrats voted in favour of setting targets. We can choose from a range of figures. For example, Wales has chosen a target of 10 per cent by 2005, and I understand that a Europe-wide target of 20 per cent may be under consideration. Twelve countries across the European Union have adopted targets.

The principle of setting targets is important. They offer something that is tangible, quantifiable and, above all, useful. I would like the target of 20 per cent to be achieved, but I accept that that would be possible only if infrastructure were in place to stimulate demand as well as production. That is why the bill requires the Executive to produce a plan.

I accept that a target of 20 per cent is challenging—rightly so. The purpose of setting a target is to have something to aim for. If the target were not challenging, the bill would not be necessary as the target could be achieved without the need to legislate. However, it is necessary to put the target figure into its proper perspective. If the target is not achieved, the Executive cannot be criticised if it has taken steps to help producers, conducted research, assisted with local markets and endeavoured to stimulate production. The purpose of setting a target is to ensure that resources are made available to stimulate the organic sector. By resources, I do not mean financial resources alone. It is equally important that attention is given to issues such as research and markets, and that a joined-up, strategic approach—co-ordinated by the Executive—is taken. Countries such as Denmark and Sweden provide good examples of such an approach.

If the committee considers that, in setting a challenging target, the bill has gone too far, it should specify in its stage 1 report a target figure that it considers realistic but that would require the Executive to take action to achieve it. In those circumstances, I would be happy to lodge an amendment that took account of the committee's view. Through the bill, I am trying to achieve action from the Executive. I accept that, for the bill to be effective, there must be a realistic prospect that the action taken will result in the achievement of the target.

As I indicated in my response to the evidence that has been received to date, the Executive is to be held to account by the Parliament. The bill requires the Executive to report annually on measures taken, measures proposed and progress to date. Using that report, it should be relatively easy for the Parliament to judge whether the Executive is making the best possible endeavours to achieve the target.

All that I can ask of the Executive is that it uses its best endeavours to stimulate and facilitate the market supply of organic produce, which should reduce the amount that we import. It is interesting that the action plan published by the Department for Environment, Food and Rural Affairs in July this year set an ambitious target for the percentage of the organic market in England to be met by domestic production. Setting a target and helping stakeholders meet it is a positive approach that I urge the Scottish Executive to take in Scotland.

The schedule required much deliberation about which measures it would be best to include in the legislation and which it would be best to leave out. We believe that the result is a robust framework for an action plan that will provide the basis for the delivery of the target over 10 years. Paragraph 1 of the schedule refers to the plan's interim objectives. Clearly, setting appropriate goals and milestones is crucial if we are to make meaningful progress that is transparent to all stakeholders, including the Parliament. Setting achievable goals over short periods will develop the confidence that the organic sector badly needs if it is to move forward.

Paragraph 2 of the schedule refers to the resources and financial assistance that would need to be deployed. The schedule sets out the direction that the plan will take, and the planning of resources will become easier when a series of targets is in place. The funding of the organic aid scheme in its existing or revised form would be detailed in the plan, which would offer to converting farmers the security that continuity of funding would be available for them to meet their targets. Other resources and finances would also be identified under this part of the plan, bringing together under Executive control different contributions from a mix of agencies.

Paragraph 3, which covers "Other assistance", is primarily concerned with the provision of information and advice, and paragraph 5 is concerned with "Research". A range of actions could come under those headings. The paper on the DEFRA organic action plan that I submitted to the committee last week points to actions that have been adopted in Sweden, Denmark and England. We have examples from other countries, if required. I am particularly concerned about how the issue of the lack of detailed assistance in planning conversions can be addressed. Providing a day and a half of free advice, as happens in England, would be one small action that could be adopted in the plan and which has been costed in the financial memorandum. Another important area for development is work with processors, which has been recognised in the DEFRA plan.

Paragraph 4 of the schedule concerns the market for organic products and their marketing. Actions that could be developed under this part of the plan range from the provision of marketing grants and the development of supply co-operatives to public procurement. Paragraph 4(b) also identifies the issue of local markets. I envisage initiatives to develop further farmers' markets and to build links between parts of a local food-supply chain.

Subparagraphs (a) and (b) of paragraph 6 specify that the plan must include details of other stakeholders and their activities and of how the Executive will co-ordinate its activities with them. A strong co-ordinating function is needed to bring all the players and activities together and to ensure proper dialogue throughout the supply chain, from producers to retailers and consumers' groups. Overall, the bill offers an appropriate balance between the forces of market pull and Government push. The bill sets out a flexible but robust framework that will not tie the Executive down to unrealistic actions but enable it to work towards a defined goal over the next 10 years in partnership with the organic sector.

Thank you. We move straight to members' questions.

Forgive me, Robin, but I want to go right back to the basics and probe a couple of matters in the policy memorandum to get them clear in my mind. Paragraph 2 of the policy memorandum states:

"The long-term aim of the Bill is that there should be more organic food produced and consumed in Scotland, contributing positively to sustainable development. It is expected that increasing production would also help to reduce the proportion of organic food that currently requires to be imported."

If I may, I would like to tease out what might underlie that policy objective. It is clear that producing more organic food in Scotland does not necessarily lead to more consumption of organic food, and that any rise in consumption would not necessarily be linked to an increase in production. It is self-evident that we could consume more organic food without producing more of it, although one can understand why it might be appropriate to link the two activities.

Let me link contributing positively to sustainable development with the question of imports. Is it beneficial to sustainable development globally for Scotland to produce organic food when the alternative might be that third-world countries could benefit from producing organic food for us to consume in Scotland? Their sustainable development might thereby be promoted. Might not that be a preferable global outcome? That is a big question, but it is fundamental to that policy objective.

I am not sure whether it is fundamental to that objective, in that the bill tries to address sustainability in Scotland.

Research shows that the bulk—70 per cent—of imported organic food consumed in Scotland comes from Europe. One of the baselines is food miles. For example, is it advantageous for a country such as Kenya, where there is a shortage of food, to grow beans that are put on jumbo jets and flown into the European market for consumption in expensive restaurants in Paris, London and Edinburgh? I argue that if the price of the air transport of those beans were calculated in terms of damage to the environment, people would realise that it is unjustifiable environmentally. Green groups in Kenya—with whose green party I am in touch—and throughout the world are developing strong green arguments for local trading systems to strengthen local trading in the third world.

When Ethiopia was suffering from starvation, it still exported peanuts to the rich world. The problem with food in Kenya was not so much that it did not have enough, but that distribution in the country was poor. Where there are genuine surpluses of food in third-world countries and where populations are not suffering from malnutrition, they should be able to export to the European market. That is a bigger question than the question of organics and must be addressed by a worldwide agreement on fair trade rather than by one on free trade.

I do not greatly disagree with anything you said. Nonetheless, the policy objective of the bill is related to sustainable development. I seek to discover whether you think it appropriate that we should subsidise farmers in Scotland to deny farmers and the economy in Kenya—to use your example—the opportunity to deliver a high-value, high-margin product that would sustain and develop the economy of Kenya and other third-world countries. Do you think we should subsidise our internal sources of production at the expense of sources of production in the third world? I agree that there are other issues and I accept that we cannot grow certain crops because of our climate, although the uplands of Kenya are not much different from our own in some ways.

That is an argument against subsidies to all farmers. The subsidy to organic farmers, who grow arable crops such as beans, is 0.1 per cent of the total agricultural subsidy given to farmers in the UK. The amount of money that is diverted into organic agriculture is not significant.

Can I just—

No, because I have not addressed your entire question.

I will come back on the finance point.

You are looking at a different set of figures.

There is no argument against importing crops that can be grown only in third-world countries. However, there is a very strong argument about worldwide sustainability in local trading for local food, in so far as such trading is possible, and about future sustainability in the world. We have a lot of unnecessary trade. Why do we export as many chickens as we import? That is done because of the way in which the market is constructed—it is not constructed on the principles of sustainability.

It must not be forgotten that organic targets have been set throughout Europe, and the bill attempts to move farming towards sustainability not just in Scotland, but throughout Europe. That also means that it should encourage, as far as possible, measures such as the development of direct local trading, farmers' markets and direct selling to supermarkets by local producers. Those measures would cut travel times and the amount of fuel used to transport goods. Do not forget that, in future, we might pay more realistic fuel prices that are related to the amount of damage that burning fossil fuels does to the environment.

I recognise that the bill is part of a wider agenda but nonetheless we must consider it on its own merits. That is what I am trying to do—I am not confronting some of your other arguments in any way.

I want to focus on costs. Table 3 in the financial memorandum suggests that the costs up to 2014 will be £138 million. Sometimes I complain about figures, but that is quite a substantial figure that we would be investing. The policy memorandum mentions displacement of exports. How much would the £138 million that would be spent on conversion in Scotland reflect money taken out of a Kenyan farmer's pocket?

Sorry. How much—

If we were to spend £138 million in Scotland over 12 years, which is a relatively substantial period, how much would that take from third-world farmers' pockets, given that we are putting that money into the industry to compete with them?

That would be impossible to quantify. How much would the £440 million that goes to supporting conventional agriculture take from third-world farmers' pockets?

I accept that point.

You said a few moments ago that you were considering the bill on its merits, yet you consistently come back to the international aspect.

That is because you specifically state in the policy objectives that the bill aims to

"help to reduce the proportion of organic food that currently requires to be imported."

A large proportion of that organic food comes from Europe. We import crops that can be grown here from European organic farms, and the penetration of our market is largely from European competitors. The bill is not specifically designed to stop imports of bananas, cocoa and coffee beans, for instance. It is not designed to block imports of goods that can be grown only in third-world countries.

I pass the baton back to the convener.

I will ask you more about the financial aspect and how much you think your bill would cost in the existing budget. Are the current levels of payment under the organic aid scheme sufficient to attract the levels of conversion that you need to meet the 20 per cent target?

One can only express the hope that that is so. The figures are laid out on pages 6 and 7 of the explanatory notes. As I said, the sum that goes to organic farming is very small. The total agricultural subsidy that is paid to farmers is £440 million. The agri-environment budget—which, as the committee knows, incorporates the OAS—was £29 million in 2001 and only 8.4 per cent of that went to the OAS. If we count only the area of land that we hope will benefit most from the bill—the arable and horticultural area—only 0.1 per cent of the £440 million will go to that. Projections show that the figures will remain relatively small in the future.

Concerns have been expressed that the provisions in the bill would impinge on the rest of the agri-environment schemes. Because a member's bill is not allowed to be presented in a way that will cost the Executive money, we had to present the bill in a way that meant that we could see a way forward, which we can. There would not be less money for the other agri-environment schemes, but unless more money is forthcoming under the present arrangements, the organic aid scheme would eventually take up about half the funding and the other agri-environment schemes would not be able to expand.

Obviously, things are changing within the European Union and there is the mid-term review. There is increasing pressure for more modulation, which I know is not generally popular in the farming community, but it might have to come. Increased modulation would mean that the worries about the other agri-environment schemes and the concerns that have been expressed by Scottish Natural Heritage, for example, would be allayed because our scheme would be able to go ahead and more money would be available for rural stewardship.

I might come back to that later.

Before I ask my questions, I will go back to the previous couple of questions. You are talking about agri-environment schemes' almost being cut if there is no new money for the bill.

Such schemes would be restricted. I will quote a figure in paragraph 29(b) of the explanatory notes, which states:

"at no time during the 10-year period does the OAS expenditure account for more than 50% of the funds available under the agri-environment schemes."

After 2010, there would be a steady decline in OAS expenditure. That is what we worked out based on a 20 per cent target's being reached. If a lower target were set, the provisions would cost considerably less.

The matter is about striking a balance. I am not sure whether you are aware that the committee has received many representations from people who want to get into the rural stewardship scheme. An awful lot of people who want to get into the scheme are not able to get in because of the points system and the way in which funding is allocated. Concern has been expressed that the organic aid scheme top-sliced the agri-environment scheme so that the more money that went into organic aid, the less there was for the rural stewardship scheme. You are saying that in the perfect world you would want those two schemes decoupled.

Absolutely. It is a matter of considerable regret to us that, in the preparation of the bill, we were faced with having to lump everything into the same budget. That has meant that, if one heading is increased, another has to be decreased and vice versa. If, for example, rural stewardship is increased, the OAS has to decrease. In the preparation of the bill we had to work out the financial memorandum as if nothing was going to change and as if that would make it a perfectly honest and acceptable memorandum that did not depend on what might happen in the future.

I remind the committee that, if it decides to recommend that the bill progress to stage 2, the figures can be played with. It would be possible for the committee to say that 20 per cent is unrealistic. It would also be possible for the committee to say that, because it did not want the bill to exert pressure on other schemes, the bill should proceed using a reduced percentage. The committee will have to decide on that question of balance. It could do so in the hope that a future Executive might decouple organic targets from other schemes and, by so doing, make more rational decisions about its support for agriculture.

I return to Stewart Stevenson's question about imports from the developing world. Do you have figures that show how much of the organic produce that we import from the developing world we could produce at home—although the climate is obviously different here? Is there a figure in the financial memorandum that shows how much we would seek not to buy from the developing world? There might be no other source for certain produce.

At no point in the preparation of the bill did we envisage that its implementation would impinge seriously on imports from third-world countries. I am particularly keen on fair trade agreements with the third world, as are many of the people who worked on the preparation of the bill. We did not think that such research would be necessary in the preparation of the bill, because the major effect of the bill—indeed, almost its entire effect—would be to substitute home-grown produce for organic imports from Europe. We would grow our own organic potatoes, kale, beef, lamb, pork and so on.

At the moment, a percentage target figure is shown on the face of the bill. Have you considered whether to insist that targets are included in the action plan, rather than to set them on the face of the bill?

We considered how much we could remove from the face of the bill. As members can see, the bill is slim and we hope that it is easy to understand and would be an effective instrument. Targets need to be included on the face of the bill for the simple reason that farmers and the market need the confidence that that gives them. I have a prepared statement that I am happy to share with the committee.

Although the Deputy Minister for Environment and Rural Development pointed to the role of the organics stakeholder group as the group that will define Government actions for organic farming, the stakeholder group was established only three days before the launch of the bill. Its single remit is to advise the Executive and it has no budget and no long-term remit. Indeed, its remit was switched midway to include the establishment of an action plan. According to the Sunday Herald, that was at the behest not of the Minister for Environment and Rural Development, but of the First Minister, although I do not know how seriously to take that suggestion.

Are we confident that the organics stakeholder group will deliver anything significant for organic farming? It certainly bears no resemblance to any organics stakeholder group in any other country within the UK or the EU. Scotland is falling well behind most other EU countries in the development of its organic sector. We have a large area of land under conversion, but there is a gross imbalance between upland and lowland areas, which has resulted from a purely market-driven approach being taken.

If we put targets into the action plan, but not in the bill, the industry will not grow. It must have a strong push of commitment from the Executive to match the pull of the market. That push-pull balance is the basis of our approach in trying to develop the sector. I have not heard yet why Scotland is such a special case that it should not establish targets and an action plan—12 other countries have done so, two through legislation. The fact that we are so far behind is one of the reasons why we need not only legislation, but targets on the face of the bill; we are almost at the bottom of the league in Europe in developing organic farming.

One of my concerns with having a blunt target on the face of the bill is that it might end up skewing organic farming towards the most easy conversion that would fulfil the aims of the bill, rather than ensuring that organic production is built up equally over all sectors. For example, we have heard about organic milk production's being greater than local demand. Maybe that could be slowed down and work done to make organic cheese locally in order to use that milk surplus. Is a target on the face of the bill a blunt instrument that will not advance the aims of the bill? Rather than put the targets on the face of the bill, the bill could state that the action plan and targets would fulfil certain aims.

You talked about skewing OAS support towards the easiest option. That is precisely the situation that we have at the moment; 85 per cent of the OAS payments go to rough grazings and only 15 per cent to other organic production. The bill would redress that imbalance. You will note that the bill is sectoral in that it refers to arable land, improved grassland and rough grassland. It addresses the present imbalance. The most obvious example is that it is difficult to finish lambs in Scotland. The bill will encourage lowland farmers to convert some of their land for finishing lambs. That would reduce animal travel distances and enable lamb to be sold properly as Scotch lamb in international and European markets, which could be of great advantage to lowland and upland farmers.

Do you know of any research that has been carried out that shows the extent to which there is a market for organically produced lamb? You rightly mention that 85 per cent of current organically farmed land in Scotland is upland ground. A huge number of organic lambs are coming on to the market, but not many of them can find a market.

One is conscious that the lamb market has over-supply problems. The market for meat in the UK grew last year by 43 per cent and lamb saw the most significant growth. Despite that, the lack of low-ground finishers resulted in many organic lambs being sold on the conventional market. The application through the bill of specific sector targets, rather than a single arbitrary target, will enable sectors that are lagging behind, such as lowland finishers, to be focused on the action plan. There is a lack of co-ordination in the marketplace, but I could not tell you—

Is not the truth of the matter that there is an enormous lack of research even into the environmental benefits of organic farming in upland farming, which is where the bulk of the conversion has taken place? You mentioned that the vast majority of organically farmed land in Scotland is upland.

Moreover, although you say that the bill will redress the problem, you have compiled table 3 in the financial memorandum under the assumption that

"the same area of each type commences conversion to organic in each year between 2002 and 2010."

I presume that that takes into account what you would refer to as the imbalance between the different amounts of land. If 85 per cent of organic land is used for upland farming and you want to skew the bill towards more necessary types of organic conversion—if I can put it like that—will not that cost considerably more, given that the conversion rates for upland farming are much less than they are for arable farming?

As I said, an action plan would address that issue. The bill's target is to convert 20 per cent of all agricultural land to organic farming. It is clear that a co-ordinated action plan would consider upland grazings and decide whether it would be sensible to offer as much extra support for conversion of such land.

That said, the convener is right: our costings are based on 20 per cent of each category. However, that is because, when we were preparing the bill, we did not want to be too prescriptive. Although we had to prepare costings of a possible future scenario, the bill does not dictate what that scenario should be. It is only sensible to address imbalances at the end of the process, when the greatest imbalance will become apparent. There would be no sense in giving a lot more money to upland grazings if a lot more money needed to be given to lowland grazings in order to redress the balance. I should repeat that the preparation of the financial memorandum dictated the way in which we presented the figures.

However, do you concede that if the bill is to be skewed—as you wish—towards ensuring that more arable ground than upland ground is converted, it will cost more than the financial memorandum suggests?

Yes.

And if a 20 per cent target has to be met?

The bill will not necessarily cost more. It might, but if we say early on simply that there are enough upland grazings, we could balance the money that would be given between the other two areas.

I am not asking the question as a criticism. I am just saying that if the bill will cost more than the current arrangements, we should say so.

I do not think that it will necessarily cost more.

Okay.

You have frequently mentioned the crying need for an action plan. Indeed, in your introduction, you said that your one desire was to get Executive action in the organic sector. However, do you concede that the presence of the stakeholder group—which, by a remarkably coincidental piece of timing, was launched two days before your bill hit the press—shows that you have succeeded partly in your task of getting some Executive action? Furthermore, why do you think that, given the make-up of the stakeholder group, it will not produce an action plan that is likely to go some way towards the target that you want to achieve?

I cannot second-guess the Executive, nor can I second-guess what the stakeholder group will say in its report, which I think will be published in February. We hope that that report will recommend the development of an action plan. However, I feel strongly that, with just a few months to go before an election, the group is a diversionary tactic. After all, the Executive has not committed itself to the development of organic farming in the past three and a half years. What has caused this volte-face, this Damascene conversion, to an apparent possible commitment to organics? As I said in my introduction, I do not see the group as being substantive; indeed, it verges on the chimerical.

I would like an action plan to be produced that is practical and achievable and that has the broad support of everyone who is involved in food production. At this stage, I want to ask a few general questions, as that is what we are here to do. I do not intend to concentrate on minutiae.

We want to encourage consumption of organic food. You may believe that it is better for people to eat organic products, but you have introduced a bill that sets a target for increasing production, rather than consumption. I presume that you thought very carefully about how to pursue the issue. Did you consider introducing a bill that would set targets—either legislative or in a programme—for consumption, rather than production?

We did so at first, but we realised that Government cannot control consumption, although it can encourage it. Government cannot by fiat make people consume organic products. The bill would not make farmers become organic producers—it would rely entirely on the will of farmers to respond to the encouragement that they are given to convert. However, the bill would require the Executive to produce an action plan that would encourage the market for organic products. The Executive would be required to encourage procurement programmes for schools and hospitals, for example, which would secure a steady market for organic produce and focus consumption of that produce on people in hospitals and schools, who need the best food that they can get. As happens in Finland and Sweden, schoolchildren should be encouraged to eat fresh fruit and vegetables. Those are measures that Government can introduce.

You are right to say that Government can influence what food is produced more readily than it can influence what food is consumed and you have chosen the former. You want more land to be used for the production of food by organic methods—20 per cent of arable land, improved grassland and unimproved grassland. How can you match consumer demand with increased production? If the production targets are met, much more food will be produced organically. That increase must be matched by an increase in consumer demand and the major retailers must be fully involved and engaged in the process. I find it difficult to see how that could be achieved, even though the market for organic produce has grown by 50 per cent or 30 per cent over the past few years. Is there not a danger that the market will be flooded with lamb or milk that has been produced organically but for which there is insufficient demand? Would not the price of organic products fall, which would cause organic farmers to lose the premium that they find essential at present?

The Department for Environment, Food and Rural Affairs is of the opinion that the premium to which Fergus Ewing refers is not a premium, but the price of the product. Some people believe that organic produce automatically deserves a much higher price than other food. One hopes that over a long period the bill would introduce economies of scale that would allow farmers to make the same kind of profit from producing organic food, while allowing it to be sold at lower prices.

To expand on that, we need balanced measures, including a target. In Sweden—as we heard from Nic Lampkin—an action plan with targets was established through a legislative route, and the views of the Swedish organic sector were represented in a pan-European research project. It is obvious that continuously increasing production helps development. More production leads to more stable availability—availability is important. That, in turn, helps new marketing initiatives because people see the product coming and realise that they can market it, and processing industries dare to invest in expansion. Increasing production also decreases the disadvantages of small volumes in the distribution chain, which is especially important for supermarkets. An increase can lead to lower costs, lower consumer prices and increased willingness to buy organic goods. More sells better: the experience of Sweden and Denmark is that increased production works.

I know that Robin Harper likes to cite the example of Sweden. I woke up extremely early this morning and decided to read Robin's latest written response to the committee. Somebody said that that makes me a sad person, but I do not think that that is necessarily the case. I noticed that you cited the example of Sweden in it. We have heard evidence that, in some lines of assistance, the level of support that is available to organic farmers in Sweden is seven, eight or nine times what is available in the UK. Is not that a missing element? If it is, do you think that that level of support can be justified, bearing in mind what Stewart Stevenson said about the third world and competing demands on the Scottish budget?

It is difficult for me to say what is happening in Sweden. We are not asking for seven, eight or nine times more expenditure. We are asking for an increase from £5 million this year to £15 million in four years' time. That is only three times as much. We are not asking for an increase in the support for individual farmers; we are asking for wider distribution of the support. Nonetheless, we would like to see that support continue, if possible, although we could not incorporate that in the bill. There are many calls for support for organic farmers to continue beyond the present five year cut-off point. I have heard people say that some organic farmers would be quite happy to bargain for a slightly lower starting rate if they could continue to receive the support beyond five years.

The comparative figures at the back of my written response should show that the level of support in Sweden is not nine times the level of support in this country. However, I cannot find my copy of the submission. Perhaps we can return to that in a minute, when I have that information.

It would be interesting if we could receive rather more detailed statistics about the level of financial support for various budget lines in various EU states. As you probably heard at previous meetings, I do not believe that there is a free market in food production because of the common agricultural policy. The situation is further complicated because, although the level of support for food-production support schemes is the same in most EU countries, the level of support for organic farming is not the same. There are vast differences in the amounts that are paid. That is a further complication, which will inevitably make it more difficult for some Scottish farmers to do what you would like them to do.

The bottom line is that farmers in other EU countries—including English and Welsh farmers—all get more support than Scottish farmers. If Scottish organic farmers are to compete, we must get closer to a level playing field than we are at the moment. Currently, we are way behind in that kind of support.

Alternatively, there should be only one level of support.

I believe that the Commission is considering a more level playing field for support for organic farming throughout Europe, but I cannot give details of that because the discussions are on-going.

I noticed that, but that level playing field would take even longer to construct than the ones that were to be built for 2008.

I want to tease out one issue in relation to on-going payments, which seem to be common in Europe. I notice that you are not asking for such payments. Why not?

Again, that is because of the strictures of the financial memorandum. We hope that a future Government would consider such payments, but because of the nature of back-bench bills, the financial memorandum and the bill cannot suggest extending the funding in that way. Of course, there is a strong argument for extending the funding.

I asked the question because some people would rather have on-going payments than the conversion rates. Have you given that route any thought?

That would be up to the Executive through the production of an action plan. Research at the Rodale Institute in the United States shows one encouraging development, which is that after an initial dip in productivity following conversion to organic farming on arable land, productivity continues to increase for 20 years until it is fairly close to the productivity that can be achieved on conventionally farmed land. In other words, the difference between productivity in the two sectors decreases with time. That suggests that on-going payments could be tapered towards the end of a 20-year period.

You mentioned that you want children in schools and patients in hospitals to have access to the best food and more fruit and vegetables. We all want that, although how we get children to eat food that does not comprise fast food and confectionery is a problem. Given Professor Pennington's evidence last week, do you accept that the case that organic food is necessarily better for people is, at best, unproven?

No, because I do not think that Professor Pennington's evidence suggested that. He conceded that it can be shown that some organic foods—but not all—are more nutritious by weight. For example, a pound of organic carrots has a lot more solid matter than a pound of conventional carrots because there is more water in the conventional carrots. The same goes for organic meat. People who have bought and eaten organic meat know that it is of considerably higher quality than some conventionally produced meat. Increasingly, research shows that some organic foods contain greater quantities of vitamins, although not necessarily vitamins that people would be short of if they ate a healthy diet of conventional foods.

The other side of the matter is that, particularly for people in hospital, it is an advantage to have food that is guaranteed to be pesticide free and herbicide free. Because of the way in which we control conventionally farmed foods, there should be no health worries about properly produced, marketed and stored conventional foods. However, it is not a bad thing to give young children and people in hospital as much herbicide-free and pesticide-free fresh fruit and vegetables as possible.

I do not argue with that theory, but the other proposition is more debatable. A few moments ago, you seemed to accept that if conventional food is produced according to standards and stored properly and safely, it is good. However, you seem to be implying now that, although such food is good, it should not be fed to children or patients.

I did not say that.

That was the implication.

No. That was not the implication. I stated that some organic food can be shown to be substantially more nutritious. I am confident that if we do more research, it might be possible to show that many more organic foods are substantially more nutritious, and it can be guaranteed that they are free from herbicides and pesticides, which is not a bad thing.

There is an action plan, to which you referred, to develop organic food and farming in England. In your opinion, what is missing from that plan?

I have not studied the plan to determine what might be missing from it, but it would be better, even from the English organic market's point of view, to have targets. It may be that, because so much progress has been made with the action plan, the Government in Westminster is genuinely committed to supporting organic farming to a greater extent, and its recent actions suggest that it is moving in that direction. However, the fact that the English organic sector is progressing further than the Scottish sector is not an argument against its also incorporating targets.

I was involved in some of the discussions during the preparation of the Organic Food and Farming Targets Bill that was introduced at Westminster and, if a team sought to reintroduce such a bill, I would give it my support. I would like to see the inclusion of such a bill in the next Labour manifesto.

Perhaps I should warn Robin Harper that Stewart Stevenson has spent the last 20 minutes using his calculator. Please reveal all, Mr Stevenson.

Section 1(1)(a), which contains a typo of "that" instead of "than", refers to

"a target for the percentage (being not less that 20 per cent) by area of each category of land".

Do you want 20 per cent or more of arable land, 20 per cent or more of improved grassland, and 20 per cent or more of rough grassland?

Yes.

What is the relationship between land usage? Sheep and cattle, depending on what stage of finishing they are at, can move between improved grassland and rough grassland. Is an arbitrary 20 per cent for each category appropriate?

I am very happy for the committee to debate those figures and to suggest amendments to them at stage 2. I am also happy to propose amendments. In preparing the bill, we did not feel that we could suggest that it would be better to have separate figures for each category of land. Of course, the Executive would be in a position to do that during the preparation of an action plan, as would the committee if it decided to take further evidence.

I would have thought that an action plan would drive towards the 20 per cent target for each of the categories of land. We do not expect that the amount of land in conversion for each category would be exactly the same at any one point, as some areas would need to play catch-up. The implication is far from being that each category would or should reach 20 per cent, because an action plan would rationalise organic development for each of them.

As I said clearly in my opening statement, the bill would compel the Executive to produce an action plan to do everything possible to achieve the 20 per cent targets. The words that I used were that the Executive could not be criticised if it did not reach either the overall 20 per cent target or the individual targets within each of the three categories of land.

I take it that, if the Executive were to achieve the overall target of 20 per cent through the conversion of 808,793 acres of rough grassland to organic farming, Robin Harper would not necessarily find that attractive. However, it would be attractive to the Executive because it would reduce the cost of organic conversion from £138.168 million to £29.9 million. Would that not be rather tempting for the Executive? That is not what Robin Harper is after, is it?

No, it is not. However, the terms of the bill would enable the Parliament to hold the Executive to account if the Executive produced results that ran counter to the bill's intent, which is to produce a balanced development of organic agriculture in Scotland.

As I said at the beginning, we could prepare the financial memorandum only on the basis of a blunt set of figures that give a rough idea of what the bill would cost. If I can put it this way, our preparation of the bill required that we produce a financial memorandum that did not get too complicated or go into perhaps 15 or 16 different what-if scenarios for each category of land and for each set of costs.

I understand that point perfectly. My question is not about the bill's intention; the bill states specifically:

"The Scottish Ministers shall … publish … a target for the percentage (being not less that 20 per cent) by area of each category of land".

If Robin Harper is now saying that the target is just a sort of sighting shot, I would like to hear what the balance would be between the three categories of land.

Indeed, I draw Robin Harper's attention to the fact that the bill's definition of arable land includes set-aside land. Therefore, although the bill sets a target of 20 per cent of arable land being converted to organic farming, that definition means that the amount of land that would be delivered as usable arable land would probably be in the order of 16 per cent rather than 20 per cent.

I am trying to see what kind of numbers would create a system that could deliver land that could be exploited for organic farming. There is no point in converting to organic a huge amount of rough grassland—the eventual target could be just under 800,000 hectares—if that land cannot be put to a sensible use. If the increase in organic rough grassland were not related to an increase in organic improved grassland, animals would not be able to move from the rough grassland to the improved grassland and retain their status. I do not see the relationship between those. That goes to the core of my concern—

But that relationship—

Just a tiny second, Robin.

That goes to the core of my concern about the nature of the target that has been chosen. I am not against using targets—that is not my problem. However, the choice of a percentage of land area causes me difficulties. If, for example, you had wanted to introduce a bill that set a target for the consumption of organic food or for the consumption of locally produced organic food, I might not be having this difficulty. I do not know whether the practical details of the bill would deliver a set of resources on farms that was consistent in achieving the right balance between arable land, improved grassland and rough grassland. Arguably, the balance that we have at the moment, with rough grassland making up 85.7 per cent of the overall organic area, to use your figures, might be right. I do not know.

People who are trying to finish their lambs in Scotland will tell you that the current balance is not right. The organics sector is quite happy with the idea of split targets. By identifying those three categories, we are getting into a loop that I would like to break out of. The action plan should address all the concerns that you have expressed; that is why it is in the bill. The action plan, as produced by the Executive, which will relate to the three categories, should ensure that there is a balance and that the amount of money that goes to arable land, improved grassland and rough grassland is controlled to produce the best result. The bill would not compel the Executive to do anything other than set an overall target of 20 per cent. That does not mean that, in the progress towards meeting the target for Scottish land that is converted to organic status, there will not be considerable differences between the amount of converted land in each of those three categories at the end of 10 years. However, the action plan should produce the best balance.

The figure of 20 per cent is aspirational. If the committee decided that there should be different targets for each category of land and the Executive could do the research that would enable it to set those different targets, I would be happy to accept that.

I put it to you that, while this committee and the Executive could do that, you are the member whose bill this is and I will do you the justice of believing that you have done far more research on the subject than anyone in this committee. It is beholden on you to suggest what amendments might be necessary to the bill, rather than simply producing a figure of 20 per cent. I think that we agree that having 20 per cent in each category gives us a blunt instrument. I have genuine difficulty with this point and I wish that you would say something that would help me to support you.

I have a slight worry about the lack of research that has been done into whether it might be necessary to increase or decrease the levels in various categories in order to address the market as it stands.

Research is covered by the action plans. The Executive's first action plan would require it to conduct that research to allow it to produce sound figures. I am a member of the smallest party in the Scottish Parliament. It is true that I am backed by all the organic groups in Scotland, of which there are 80 or so, but we have little money for research. We rely on research that other people have done. The first action plan that the Executive would follow would contain many elements that would address all sorts of inconsistencies that exist at the moment. The idea of having three action plans is to ensure that the situation develops in a logical, consistent and well-researched way over the 10-year period.

The target of 20 per cent is an ambition. Only if the committee believes that that is unreasonable and completely unattainable in any category of land should we reduce it. However, we must have an aspirational target that sets out the most that we can achieve in any category.

We must place farmers in a secure position, ensuring that for the foreseeable future they have a market for the food that they produce. The organic sector is happy with the target of 20 per cent across the categories. The figure is in line with the targets that other countries have set. Other European countries are already producing 9 or 10 per cent of their food organically and are now looking forward to the next 10 years. Do we want to reduce the target to 10 per cent, in order to reach in 10 years' time the point that the rest of Europe has reached now, or do we want to set a target that is more aspirational and to work hard to achieve it?

You say that the organic sector is very happy with a target of 20 per cent. One witness who gave evidence to us on behalf of the Scottish Organic Producers Association said that he was not happy with targets at all. SOPA represents a considerable proportion of organic food producers in Scotland.

SOPA is slightly divided on this issue. Some members of SOPA are worried about targets, but others would like them to be introduced. That is all that I need to say on that point.

I want to touch on the environmental benefits of sustainable farming, if I may use that wide-ranging term. You regard the bill as a considerable step towards sustainable farming. Would it be fair to describe that as one of the key drivers of the bill?

Yes. The environmental benefits are a key element of the bill.

Is it fair to say that there are already measures that enable such benefits to be delivered to the same extent in differently managed conventional farming systems as in organic farming systems? I am thinking in particular of the organisation LEAF. I cannot remember what the acronym stands for, which is most embarrassing, but I am sure that you will be able to enlighten me. Do you agree that there are ways—free to the taxpayer and leaving more money in the agri-environmental pot for the rural stewardship and organic aid schemes—of delivering environmental benefits without subjecting an agri-environmental budget that is already stretched to further stress?

LEAF stands for Linking Environment and Farming.

Thank you.

Only a tiny percentage of the agriculture budget is allocated to organic farming. Giving more money to organic farming would not involve taking much out of that budget.

Some agri-environment schemes have specific and proven benefits. I am informed that LEAF has yet to prove through research the impact that it has had on the environment. The organisation does not yet have market recognition. Organic production offers a more comprehensive ecological approach to farming. LEAF is about making conventional farming more efficient with less impact. That is a good option for the 80 per cent of Scottish farming that would not be organic, and we encourage it strenuously. However, only organic farming provides all the environmental benefits of sustainable farming.

I am thinking not just of wildlife, insect life and microbial life, but of soil quality. There is a substantial amount of research on soil quality, which demonstrates that soil quality in organic farming is much higher. There is a higher carbon content and better water retention—not that that is a concern in Scotland, except in some dry areas. As a general principle, organic farming delivers identifiable and well-researched benefits for soil quality as well as for general wildlife quality.

I thank Robin Harper very much for his efforts this afternoon and for answering all the questions so ably. One of the joys of not having too many committee members present is that members get to ask all the questions that they want to. I hope that Robin Harper agrees that we have covered a wide range of aspects of his bill. As I said when I introduced him, I congratulate him on the work that he has done on bringing the bill to this stage. I do not have experience of producing a member's bill, but it must take an enormous amount of effort.

We will consider our draft report on the bill at our next meeting, which will be on 7 January 2003. A draft report will be circulated with the agenda papers, which should be issued on Friday. I seek the committee's agreement to the proposal that, as is now traditional, we consider the draft report in private. Do members agree?

Members indicated agreement.

I propose a short break.

Meeting suspended.

On resuming—