“A Forward Strategy for Scottish Agriculture”
We will press on with the next item on the agenda. I am delighted to welcome to the committee Jim Walker from the National Farmers Union of Scotland and Rory Dutton from the Scottish Crofters Union. I apologise that the original schedule has had to be curtailed slightly because of important fishing matters. We are subject to a tight schedule and I shall wrap up this part of our meeting at 12.25. We have read the written submissions from Jim Walker and Rory Dutton, for which we are grateful. I ask them both to make only brief opening remarks because the meeting will benefit mainly from the question-and-answer session.
Rory Dutton (Scottish Crofters Union):
I shall keep my comments brief as the committee has a tight remit for its inquiry. Our outline view is that "A Forward Strategy for Scottish Agriculture" does not provide the necessary vision and commitment. There are many good ideas in the document that are well worth taking forward, but it is not the forward strategy document that we expected.
The document does not set out the whole picture of where it could lead agriculture, certainly not in the Highlands and Islands. While it acknowledges the broader role of agriculture in underpinning many other businesses, particularly tourism, it does not debate adequately or even acknowledge the multifunctional nature of Scottish agriculture. It does not consider the core role that is played by agriculture in sustaining fragile economies in more remote areas, nor does it fully examine and integrate its role in providing environmental services.
In effect, the document does not place public goods on a par with market goods or agricultural output. We talked earlier about agricultural output. We argue that the public goods output is as important as food products. It is not surprising therefore that the document does not discuss to any great extent the critical role played by public sector funding support—the Executive and Europe through the common agricultural policy—in keeping agriculture going in much of Scotland or the payment by the public for non-market public goods.
The document assumes, rightly, that there will be less money in the expanded European Union and discusses ways in which farmers and crofters should be able to help themselves in such a harsh environment. However, public support will remain on a slightly different basis. It will be influenced greatly by the priorities of the European Union through the CAP. So much of Scottish agriculture, especially in my area, is entirely dependent on funding for public services that the fact that such matters are not dealt with in the document is a huge omission. The minister said that the document is just a start and we hope that the debate can really get going.
Which public goods that the market is not providing should be supported by the public purse? The lack of overall strategy for public support for land management is behind much of what we have been trying to achieve in the past. We must concentrate on targeting resources. I was interested in the earlier debate on the decommissioning scheme for fishing, when emphasis was placed on targeting, targeting, targeting. A lack of targeting of resources will result in there being fewer resources in the future. There must be more targeting.
For example, six months ago, we inquired about less favoured area support. Had there been a strategic recognition of the broader role and value of public goods in that area, we would have a different LFA now. Whether it be the less favoured area scheme, the rural stewardship scheme or the agricultural business development scheme, all such infrastructure support schemes have tended to be budget limited and untargeted, possibly due to a vacuum in strategic priorities.
To conclude, we hope that today's debates and all that will follow will result in definite measures. Many of us are pinning our hopes on the land management contract idea. However, that will be no good without focused policies. Our main aim today is to get a debate going about the broader benefits of agriculture—beyond agriculture production—and how they may influence the targeting and prioritising of the public sector resources that will be available.
Jim Walker (National Farmers Union of Scotland):
I spoke to members a couple of weeks ago, so I do not intend to say much now. I should prefer to deal with questions that are based on the submissions in front of members. However, I will make a couple of observations.
As a member of the group that put the strategy together, I do not want it to be too prescriptive. We are aware of strategies that have been developed for this and other industries and that sit on shelves and gather dust. The document has some good ideas. It recognises that agriculture has a pivotal role to play in the rural economy and that is something on which we must build. The industry, as well as the Executive, the committee and the Parliament, must grab the strategy, develop its ideas and deliver the goods. We cannot expect the Government, whether based in Edinburgh or in Whitehall, endlessly to deliver all that the industry requires to get it through the next 20, 10 or even five years.
There are actions that the Executive and the Treasury must take, but we cannot guarantee that the public and taxpayers will regard the buzzwords "environmental enhancement" as good value for money in the future. I am reluctant to go headlong down that road without being clear what the taxpayers are buying and whether they can see the benefit of such action.
In 1992, when MacSharry reformed the CAP, farmers were comfortable throughout Europe with headage-based support systems. Eight years later, farmers were no longer comfortable with such systems and they have become very confused in the past three or four years about the mixed signals from Governments and the Commission. Farmers were encouraged to farm for production in headage-based subsidies. Now farmers are being told that that is a dirty phrase and that they must farm in a different way. When steering a juggernaut such as the agriculture industry, it is not easy to turn quickly. The countryside and the environment do not change annually; they change over time.
We must be careful that we know what taxpayers are buying by way of public good and that they are comfortable with that. We must be careful that we know whether we are supporting the industry for environmental benefit or for social reasons in isolated and difficult areas, or whether we want the industry to be more market driven and to receive a decent level of return from the market. It is not possible to receive a decent level of return from the food industry at the moment. That is mainly because of the stranglehold that multiple retailers have on the industry in Scotland. Let us be clear what we want to deliver.
I am also very nervous about the idea that we should suddenly modulate public support to agriculture to 20 per cent, which is the maximum that is available within the current CAP regulations. Under the LFA system, there has been a massive redistribution among small and big farmers and from one part of the country to another. Further modulation would intensify and exaggerate the redistribution of resources far more destructively than has ever been considered.
People are rightly looking for bigger budgets for the environment, but farmers should not be penalised. The committee should remember that we are told endlessly that we are working in a single market in Europe and in a global market. With the exception of France, no other country is invoking modulation. In competing with the Irish livestock industry, which is our biggest competitor in the European market, we would be put at a severe disadvantage by further modulation. Arable producers would be put at an even bigger disadvantage in the world market against French and Danish competitors. The Parliament should be acutely aware of that before single-issue groups drive us down the road of modulation and threaten the fabric of agriculture, which has been under threat from a series of other problems over the past three or four years.
I open up the discussion to the floor.
My wife bought a sirloin steak for me at the local butcher on Friday. When she did so, she was told which field the beast had come from. Interestingly, she paid less for that sirloin steak than she would have done had she walked a mere 200 yards down the road to the local supermarket.
Shortening the chain between producer and retailer clearly has an advantage. The quality of that steak was a testament to the producers in Banff and Buchan—a round of applause, thank you.
I presume that it was also a testament to your wife's cooking.
It was, but are you sure that I did not cook it, convener?
Jim Walker makes the point that funding for promotion to differentiate Scottish products should be increased. How would any such increased funding be spent? What barriers are there to increasing the differentiation of Scottish products?
I will answer your second question first. One of the biggest barriers is the premium price that Scottish beef attracts. If the premium becomes too great, which it threatens to be at the moment, the major buyers of that beef—the main multiple retailers—will very likely resist the price increase and push it back to the processors, which would threaten the fabric of the abattoir sector in Scotland.
The Executive has already agreed to address one of the other barriers: the fact that funding is raised in Scotland, moves to Milton Keynes through levies to the Meat and Livestock Commission and then back as a share of that levy to Quality Meat Scotland.
QMS was set up to further the prospects of the Scottish livestock industry—pig meat, sheep meat and beef. QMS has had a difficult start. Six months into the life of the new business, foot-and-mouth hit us and it has not had a fighting chance so far. However, from what the strategy says about what QMS and the Scottish livestock industry will look like in the future, there is no doubt that QMS will require a structure and funding that reflect the delivery requirements of the strategy. If the minister can negotiate with his colleagues south of the border and secure amicably the funding from the levies that are raised in Scotland, that will be a first and major step forward in differentiating Scotland and the Scottish livestock industry.
Do not let anyone fool you into believing that, because Scotland is small, a budget of £5 million or £6 million would not be enough to fund a sustainable body differentiating Scottish produce. In relative terms, a budget of £5 million or £6 million for the Scottish livestock industry would equal, if not better, the funding for Bord Bía in the Republic of Ireland or the funding for the livestock industry in Germany. Those countries, in particular the Republic of Ireland, have successful livestock industries. Funding is a key part of the delivery of the strategy.
I have just read the Scottish Crofters Union submission, which mentions land management contracts. It also states that it would be difficult to implement those contracts without greater debate on the
"economic, social and environmental benefits".
Does Rory Dutton think that further research in that field is required or does the information exist that will allow us to have that debate?
Further research is needed. We have worked for almost a year with, for instance, the less favoured area support scheme industry group and we have pressed for more research on the broader socioeconomic indicators throughout Scotland so that we can superimpose them on to the productive potential of the land. More research is definitely needed, but it is not impossible research or rocket science—it is bread and butter for some research establishments. The research that is needed is basic stuff that could be done relatively easily. However, before research is commissioned, the objectives—what we are trying to find out and what we want to measure against—must be clear.
Does the Executive document contain a strategy for crofting and does it consider fully the socioeconomic background of crofting?
The document leaves a strategy for crofting largely as work to be done, although there are various action points to be worked on. We are disappointed that so few crofting matters have been included in the strategy. If our members read the document, they would ask how it will work in the peripheral and harder areas. The Executive's forward strategy avoids the difficult questions about the decisions that will have to be made on public support. That support is required to ensure that agricultural activity continues and to safeguard the environment and remote communities.
If, as a result of international negotiations, globalisation and the removal of trade barriers throughout the world occur in the near future, where will that leave the Scottish industry?
We do not need to wait for the future—look at the situation now. The Scottish livestock industry and the Scottish arable sector are under threat from globalisation and the movement of food and food products around the world. In the past 10 years, the technology for moving fresh products around the world has advanced considerably. It is possible to order fresh lamb from Australia or New Zealand today and to fly it in tomorrow. Products come in chilled and fresh form. Beef from south America is imported in large quantities and poultry meat is brought in from the far east or south-east Asia for the processing industry. Therefore, there is already mass movement of food. Globalisation is a factor and trade barriers have come down. Four weeks ago, when the Prime Minister was in south America, he encouraged Brazilians to send more products to Europe and in particular to Britain because we welcome imports from other countries.
We are free marketeers. The big problem is that although there is globalisation and free trade for products, the legislation and the ability to police those products from the point of view of food safety for consumers has not kept up. We have the amazing situation in which countries legally export to this country meat and meat products that may have foot-and-mouth and other infectious animal and human diseases, but there are few or no resources at ports and airports to police those imports. Last week's tragic events on the other side of the Atlantic changed security at airports, but the big problem of illegal meat imports—which we realise exists—has not been identified.
In Europe, clear labelling of country of origin and labelling legislation for consumers have not kept up with globalisation and the transfer of food around the world. Consumers walk into supermarkets and read "UK processed" on a product that could have come from any part of the world. Such products become UK products by being taken out of a bag or a box and put into another one. That is completely unacceptable.
Five years on from the BSE crisis in 1996, we are well aware that the consumer is king. The first port of call in our strategy is producing what consumers want. If, for whatever reason, various parts of Scotland are unable to produce what consumers want, the continuation of agriculture in those areas must be justified for other reasons. We are happy to work at that but, first and foremost, if consumers are not buying a product and the market does not want it, there is a fundamental problem. We would take our chance against any imported product if there were clear labelling but, unfortunately, that is not the case. We could explain why it costs more to produce beef and lamb in Scotland than it does in South America or New Zealand.
I am concerned about where globalisation leaves Scotland's ability to feed itself. When I asked the Government recently about the relationship between imports of food and the country's needs to sustain the population, it said that the information was not available. We do not seem to have a figure for how much food the country needs to survive, which would enable us to work out whether we can produce more food in Scotland, rather than importing it. Does globalisation threaten Scotland's ability to have a farming industry big enough to produce enough food for its people?
Globalisation is not a threat in that we can still produce enough food. However, the price of the products coming into the country puts the size of the farming industry under threat. Imported products are produced to standards that are not policed and are well below the Scottish and the British standard. All the legislative requirements coming out of Brussels—for environmental works, for example—have a cost. If we want agriculture and the countryside to flourish, all those things have a cost—they do not come for nothing.
Unfortunately, at the moment, consumers want cheap food, but they want it to be of the best quality and as safe as possible. There is nothing wrong with wanting safe, high-quality food, but they must be educated—they must be shown the costs of production. That is simply not possible at the moment, when people cannot differentiate between a chicken imported from Thailand and one produced in the north-east of Scotland.
I was interested to note the differences of opinion between the two producers, particularly on why we support farming. One of the written submissions indicated that a problem with the strategy was its lack of vision about why we support farming in Scotland.
First, I seek your views on why we should support farming; what is the primary reason for the subsidy? On the basis of what Jim Walker says—I accept that it is difficult to turn around a large industry such as farming in a short period—if change has to be effected, how best can the Government direct or stimulate change? How does farming need to change and how best can the Government encourage that?
The prime reason for supporting agriculture in Britain and in Scotland is that we are part of the EU, which has a common agricultural policy. We compete in the marketplace in the EU, where other farmers benefit from the CAP regime. Just as farmers in Scotland benefit, so do farmers in England, Wales, Northern Ireland and, to a larger extent, those in countries such as France and Ireland. That is why a support regime is in place for agriculture.
If the UK Government decides that it no longer wants to be part of the common agricultural policy, it must negotiate that in Europe. That is a matter reserved for it. Until that happens and while we are asked to compete in a European market with other European farmers, we should not have to justify the fact that we receive support.
In the past six months, the reason for support from a farming or a rural economy point of view has probably become more obvious to Dr Murray's part of the country than to any other. Agriculture is pivotal. It is at the centre of what happens in the rural economy, whether that is tourism or other small businesses. If foot-and-mouth has taught us anything, it has shown clearly that farming is key to the future of the rural economy. It might be that we will not have to produce as much food in some parts of the country as we have done over the past 10 years.
It may be that there will be more emphasis on environmental enhancement or managing the countryside than there currently is, but there is no doubt that if farming is vibrant and doing well, a lot of growth of economic activity is stimulated. There is a multiplier effect—£1 spent on agriculture generates £3.16. No other industry in Britain can boast such a multiplier effect. Farmers spend most of their income in the local economy in which they live and work.
The prime reason for supporting agriculture is for all the benefits that Rory Dutton explained previously as well as for producing food. I was led to believe by the Scottish Parliament and Whitehall that one of the prime objectives for both Governments is food security and safety and that it is a prerequisite for anything else that happens. Unless we can police the food that is produced in our country, there is little or no chance of achieving that objective. At the moment, because of lax import controls, there is little or no emphasis on policing, which was one of the prime reasons why agriculture was an important issue three or four years ago.
I back what Jim Walker said. We will have to justify European support as successive CAP reforms go through. Within the framework of the overall budget to support agriculture, it is necessary to justify where the money is going. The issue is no longer simply about maximising food production. We would argue that it is about maximising broader benefits. If money is being spent to support agriculture, let us try to get as many other benefits as possible from it, such as socioeconomic or environmental benefits. The broad arguments are well established and it would take many CAP reforms for those benefits to be negotiated away. When the budgets become tighter, we will have to make tighter arguments for why we put a particular amount of money into a particular area.
I return to my second question. You are both arguing that agriculture plays a crucial part in rural development and rural communities. If agriculture has to change, how should that change be effected and how is it best supported by Government policy?
First and foremost, food must command a market price that allows sustainable production. The other benefits of agriculture, such as land management, sustainability of the countryside and the social reasons for keeping people in the countryside are difficult to quantify, but unless there is an agriculture and crofting industry that is economically sustained by what it sells, the rest will not work. If we want to change agriculture, we must be clear and change it in a way that allows farming to get a decent return.
There has been a lot of talk about downsizing the industry and the pig sector is a good example of that. For the past 10 years it has been one of the leading sectors of British and Scottish agriculture. The pig industry has been responsive to market needs: it implemented all the animal welfare changes prior to European legislation; it was the first sector to adopt quality assurance standards throughout the chain; and it shortened the supply chain previously alluded to. What happened? Eighteen months ago Britain killed 320,000 pigs. Two weeks ago, we killed 200,000 pigs. The industry has downsized by more than 50 per cent.
Prices are dropping because imports are replacing the pig meat produced in this country. That is despite the industry adopting the standards and doing everything that successive Governments have asked. Retailers and consumers wanted assurances on animal welfare, quality and safety. They have been given those assurances by our pig industry. What has the industry had in return? Prices are dropping because commodities are flooding into our marketplace from all over the world, arriving on shelves and in restaurants, marked as British because they have been processed in the UK.
Rhoda Grant asked earlier about further work that could be done. Somebody, somewhere must ask consumers and taxpayers what they want from agriculture, not what one or two pressure groups tell us that they think consumers and taxpayers want. What do they expect us to do when the market we operate in does not give us a decent return? What are they prepared to pay for? Are they prepared to pay for isolated areas to allow agriculture to continue? Are they prepared to pay for environmental schemes? If they are not prepared to pay for those things, are they going to wake up in 10 years' time and wonder why the change in direction of agricultural support through environmental needs has not delivered what they wanted and we are again in a mess such as that which the industry is in at the moment?
If crofters and farmers are to change and respond, they must know where we are heading and what the options are. The forward strategy is a great idea and should help people to start thinking, but we must do a lot more work before people can see where we may be heading and therefore what changes they may have to make.
Before we continue, I ask members to agree to put item 6, which we had agreed to consider before lunch, back in its original slot. I know that the Labour group has a meeting at half-past 12 and three members still wish to speak. May I take that as read?
Members indicated agreement.
In Rory Dutton's submission, he says:
"A robust and clear Forward Strategy for Scottish Agriculture has a potentially major role in setting UK policies and the UK and Scottish negotiating positions within the European Community."
That role does not appear to be used often enough. For example, on the discussions on the sheep annual premium for next year, the Irish are calling for a premium of €30, while our negotiators, including Margaret Beckett, do not seem to support that position. What are your comments on that, Mr Dutton?
As an aside, we set up a videoconference with MEPs a couple of weeks ago, on precisely that subject.
We must not simply say that we cannot influence Europe or the WTO. Although there is a national strategy, we must start to consider in which direction we would like European policy to head. That would inform the thinking further up the chain, if you like, in the UK and in Europe. Whether we are discussing the sheep annual premium or any other measure, it is important to set out clearly in a document such as the forward strategy where we think European policy is going—or should go—and where it should not go, although that is certainly beyond the remit of the Parliament.
We probably have more in common with agriculture in southern Ireland, than in England. Unfortunately, it is not Joe Walsh, the southern Irish minister, who lobbies on our behalf in Brussels, but Margaret Beckett from Westminster. Members may have seen the comments that I made last week about our ability to influence Europe. There is a fundamental weakness in the political set-up in this country, as we seem unable to influence—we cannot influence—at the highest level the negotiations that take place in Europe, whether from the perspective of the CAP or in respect of exports, LFA support or any of the other individual problems that we face.
Until that issue is addressed, I do not believe that any rural development minister will be able to fulfil the functions that we believed they were to take on when agriculture was devolved to the Scottish Parliament. It is certain that those functions are not being fulfilled at present. I do not think that that is a personal problem for the Minister for Environment and Rural Development. Rather, it is problem for the system. I hope that the committee will take that on board and try to influence a change in the system, such that those functions can be fulfilled. Scotland's needs and the needs of members of the NFU in Scotland and of the Scottish Crofters Union in the north-west Highlands are different from the needs of those who farm in the south-east of England. However, the same minister goes to Brussels to lobby on behalf of both groups.
It seems self-evident that, as part of the strategy for rural Scotland and for agriculture in particular, we should, following devolution, have a chance to deal directly with our competitors. Do you feel that an ability to deal directly with Governments and to lobby them behind the scenes before decisions are taken would have been an advantage in relation to lifting the export ban following the foot-and-mouth outbreak? Would it have been of help if we had had the capacity to negotiate with and lobby the French, Dutch and Irish Governments? As we know, those Governments have a different interest and standpoint from Scotland in relation to the resumption of export markets in third countries. Is that an important gap in the forward strategy document?
I do not think that that is a gap in the document, because the devolution arrangements were quite clear. That ability does not exist at present and it was not necessarily our role to get involved in the politics of that, as far as the strategy is concerned. There is no doubt that that gap exists, but I have serious reservations whether an ability to deal directly with Governments would have been enough to influence the debate on exports. What happened in Hexham, which is close to the border, and what is going on in Cumbria have a fundamental influence.
That is not to say that we cannot present a far more robust case than that which has been presented. That problem must be addressed in the next two or three weeks. We did not go through all the pain and effort that it took in March, April and May to rid Scotland of foot-and-mouth disease—against an infection level that was similar to the original level in Cumbria—to be held back because those south of the border cannot organise themselves to either cull or clean up the parts of the country that have been infected. It is a fundamental weakness of the current system that we have been unable to influence the debate on exports.
The system has failed us in other ways over the past two years. I firmly believe that the committee should scrutinise the system and do something to change it. It is simply not delivering the best for Scottish agriculture, whether through the strategy document, less-favoured areas support, exports or any other subject that you care to mention. That is particularly true at a time when Margaret Beckett, the Secretary of State for Environment, Food and Rural Affairs, and the UK Government seem intent on grinding the face of the agriculture industry south of the border into the dirt with no thought for the economic or social consequences. Look at the situation in the north of England and consider the fact that the UK Government is offering no help. The fact that Margaret Beckett is the minister who will negotiate on our behalf in Brussels fills me with terror.
Parts of the system are more devolved than others. For example, we have the Scottish rural development plan, which contains elements such as the rural stewardship scheme and the less-favoured areas support scheme. I urge the Scottish Parliament to concentrate in the first instance on issues that it has, in theory, the power to influence.
Again, I would like to draw attention to the figures in the strategy document. On page 42 is a graph that details the income of cereal farms. For the top 25 per cent of cereal farms—the very best around—the total marketplace output was around £500 per hectare while the total direct support from the taxpayer was £280. The figures are even more alarming for the top 25 per cent of mixed cattle and sheep farms. The marketplace output in that sector is £270 per livestock unit against £288 direct support from the taxpayer.
The other participants today have all said virtually the same thing in response to this question, but I will ask it again: do your organisations believe that the way forward for agriculture in Scotland is the multifunctional role that would mean that it delivers public goods as well as food, or do you believe that it should have a market-driven role as a producer of food, even though support would diminish under the threats of the WTO and the enlargement of the EU?
As our submission makes clear, we belong to the multifunctional camp. That raises issues of whether we can afford to be multifunctional throughout the whole country and sustain the current levels of support. We hope that it would be possible to maintain the levels of support for broader benefits across the country, but it may be that European expansion and the limitations of the Scottish budget will force us to question whether we can afford a multifunctional approach in all areas or whether there has to be a separation of the ways to an extent.
You know very well, George, that the figures that you quote are the worst income figures that Scottish and Irish agriculture have ever produced. The fact that even the top 25 per cent of Scottish agriculture is making money is something of a miracle. You did not mention the LFA-assisted specialist seed producers, for example. Last year, 48 per cent of them lost money and this year they face a forecast net farm income of £300.
If the idea is that the cereal industry, for example, will not require direct support because it will be entirely market-focused, I would contend that that will not be the case. The setters of world prices in cereals are the north American producers. For the past three years, they have been subsidised to a higher level than even European agriculture. Considering the funds that have recently been directed to those producers, it is ironic that people in north America—supposedly the great free traders of the world—insist that direct support payments to agriculture in Europe must be reduced in the next round of WTO negotiations.
On the issue of multifunctionality, we must be clear what we want from agriculture. We must get a bigger return from the market, but to do that we must have the right tools. We must have clear labelling. Consumers must know what they are buying and they must also be made aware that producing food in Scotland is more expensive than producing food in New Zealand and south America. At the moment, we do not have the tools to show that that is the case. If the market gives us a decent level of return, we will have a chance to add on the elements that consumers, the committee and others seem to want, such as environmental enhancement and—in the most difficult areas, such as those represented by Rory and me—a social element. However, before we insist on the inclusion of those elements, people must be clear about what they are buying.
Before direct support payments to any sector of the industry are reduced, we must ensure that the money will not simply be redistributed to various parts of the industry to the detriment of the majority. All the environment schemes that we have at the moment are competitive and the vast majority of those who want to join them in the coming year or two will be disappointed. That will not help the overall look of the countryside; it will help only one or two individuals.
I have one—
I am sorry, George. I had to stop Fergus Ewing and I must stop you too. We have run slightly over time.
I thank Jim Walker and Rory Dutton for coming to talk to us this morning.
I remind members and visitors that we will resume business at half-past 1. I apologise to our Labour members for making them late for their meeting.
Meeting adjourned.
On resuming—
I welcome Neil Kilpatrick from Quality Meat Scotland and Chris Gilbert-Wood from Marks and Spencer. The committee is very grateful to both of you for giving up your time to come and give evidence to our rather short inquiry on the forward strategy for agriculture. I should mention that we had also hoped to take evidence from Neil Stoddart of the Scottish Association for Meat Wholesalers but, unfortunately, he has been delayed in America—for obvious reasons.
We received written evidence from QMS, which we read with interest. The bulk of the session will rest on questions, answers and discussion. However, I will give you the opportunity to make short introductory statements.
Neil Kilpatrick (Quality Meat Scotland):
I apologise on behalf of Neil Stoddart. He did his very best to get here, but the flight arrangements were against him by about two or three hours.
Thank you for the opportunity to come before the committee to answer questions. Most of what we have to say is covered in our written submission. I do not think that there is a great deal that I want to add to that at the moment.
QMS welcomes the development of an agricultural strategy for Scotland. We have been part of that development process. Chris Gilbert-Wood, Neil Stoddart and I were all members of the working group that produced the report, so we are familiar with its background and detail.
QMS is supportive of "A Forward Strategy for Scottish Agriculture". We believe it to be a useful document and one that is helpful to the Scottish red meat industry. The strategy makes recommendations for action that are relevant to QMS and we are happy to help implement them. We are conscious that the implementation of the whole strategy—not just the part that applies to the red meat industry—requires resources and will. It will not happen overnight. We will require resources to tackle some of the work, which is additional to what we had intended. One of the limitations will be funding. QMS will be happy to tackle certain aspects of the strategy, but we will require the funds to do that. We will be looking to the Scottish Executive, among others, to help provide funding for specific projects that are jointly approved.
Chris Gilbert-Wood (Marks and Spencer):
Thank you for the opportunity to speak to the committee. We are discussing a very broad subject and rather than leap in, I will simply introduce myself. I am the technical manager at Marks and Spencer responsible for the technical aspects of the fresh meat, fish and poultry we sell, which includes involvement at all stages, going back to the methods of production. Coincidentally, I am a member of the QMS board. I am also a member of the Meat and Livestock Commission research steering committee, which means that I am involved in basic research on the subject.
Thank you. I will open the debate to questions from members.
This morning we heard that there appears to be disquiet among farmers about the labelling of meat products. Do you share their concerns that the country of origin is not shown properly on labelling? What steps should be taken to change the current situation?
The labelling of the product is an important issue, particularly at this time. On 1 January 2002, several changes will be made to the way that meat products must be labelled. For example, labels will have to show the country of origin—in our case that will be the UK—where the animal was born, raised and slaughtered.
Those additional points of information will place a further responsibility on the meat processors and the supermarkets that label the product. That labelling will give the consumer the opportunity to see where the product has come from. That in turn raises the question of the definitions for produce branding. A particular product branding from QMS is the "specially selected Scotch", or SSS, label. We will have to ensure that in our promotions we follow the guidelines on the definition of our own product brand and also on what goes on to the label of the products. QMS is currently considering the issue and is seeking to tighten up the definitions.
Country-of-origin labelling is important. As a company, we are transparent on the country of origin of the fresh products that we sell. Increasingly, we are also transparent on the country of origin of the ham and bacon products that we sell and we are making increasing strides to declare the country of origin of the proteins in the ready meals that we sell. We very much support—and are working towards—transparency on the source of raw materials. I add the caveat that customers find many things interesting about products; we must ensure that we do not provide so much information that we confuse people.
Is it possible, practical or desirable that products are labelled as produced in Scotland, as distinct from the UK?
The requirement from 1 January 2002 is to label a product as produced in the UK. There is not a specific requirement to state whether its origin is Scotland, Wales or England. We can decide the exact definition of the SSS brand. The committee is probably aware that there is currently a 90-day rule. Animals can be brought into Scotland from other parts of the UK and from other countries, but they have to be resident in Scotland for 90 days before we can label them as SSS. We must acknowledge that ruling.
We are currently considering whether we would wish animals to be 100 per cent Scottish—that is, born and bred in Scotland—before they are called Scottish. There are pros and cons to that. For many years Scottish farmers have imported young animals from south of the border and finished them in Scotland. They have given the animals the advantage of the feeding and environment that Scotland has. The animals have been slaughtered in Scotland and sold as Scotch. There is nothing wrong with that within the definition and it is an important part of the meat supply in Scotland. We must be careful about moving too quickly to a 100 per cent Scottish definition of Scotch.
We are told that there has always been a tremendous market for the export of light lamb. How do supermarkets currently source their primary agricultural products and what are the drivers for change? Why is it that the French, Italians and Spanish like our light lamb, when our home consumers do not, or are not encouraged to by our supermarkets?
The traditional way in which we eat lamb is as the chops and joints with which we are familiar. That is the best way to prepare heavier lamb. There is a trade in continental Europe for light lamb and heavier lamb, because continental Europeans also eat lamb the way we do. Up until now, however, the UK consumer has not been particularly keen to consider light lamb. Research into the decline in lamb consumption shows that UK consumers see light lamb as bony, fatty and inconvenient; the meat to bone ratio plays a large part in that. The meat to bone ratio in traditional cuts from a small lamb means that the consumer sees the cut as poor value. Those are things that have to be overcome if we wish to sell light lamb.
Light lamb can be sold to UK consumers at a price—everything can be sold at a price. However, Marks and Spencer is interested in selling quality-differentiated products. We are looking for lamb that can be butchered and cut to prepare the products that our customers want. The smallest lamb that we have ever sold is the Scottish hill lamb, which is the lowest specification that we take. It was a type of lamb that customers liked and bought more of when we first introduced it. I am talking about a minimum 14kg lamb, which is not a very light lamb—they are difficult to butcher.
The suggested stock welfare disposal price for light lambs is £10 per lamb. Why do you have to charge more in the supermarkets for such a product?
We have not changed our specifications to take more light lamb. We want to stick to selling the product that we have always sold, which has the right meat to bone ratio. However, the other big problem with lamb—and many livestock—is that it takes as much work to butcher and cut a small animal as it does a large animal. The cost per kilo of sellable meat is much greater for a smaller animal than for a larger animal.
I want to follow up on a couple of issues related to the point about what consumers do or do not want to buy and what might influence them. Could more be done to ensure that supermarkets and other retail outlets are able to source local produce and make a virtue of selling it? When I have travelled in Europe I have noticed that almost every supermarket has one area that is devoted to regional produce. That would not necessarily happen here.
The other issue relates to labelling and animal welfare concerns. Does more need to be done to highlight the very different animal welfare regimes that operate in the countries from which animals are imported?
In our stores in Scotland we identify the products that are produced here. Local produce is an increasing trend, which many retailers besides ourselves will be considering following. There are fewer barriers to that than people might assume. We are working with relatively small businesses, which are producing products for us.
That is an interesting market, but the small producers that we started with like the fact that we take their local produce and sell it throughout our store base. We sell Orkney salmon throughout the UK, but we do not have a store in Orkney. What is considered to be local? Do people in the south-east of England think that UK is local or do they think that local means Sussex and Kent? We have to be careful to fulfil that market for local produce without creating a barrier to the natural flow of food products, for example from Scotland to England and Wales.
If we make people interested in their local market only, we might stop some of the traditional flow of food from the rural community into the urban community. Retailers will follow that trend, but it has difficulties that we must work through. Regarding the animal welfare issue, as far as Marks and Spencer is concerned, we source all our products to our specifications. A product is produced to our specification whether we buy it from the UK or from abroad. We do not operate dual standards.
I think that the committee is asking whether product labelling should give additional information about animal welfare. The most important factor is that the consumer is reassured about the quality of the product that they buy. As a result of the foot-and-mouth outbreak, QMS has been doing a lot of consumer research into what consumers are thinking, and particularly into how their attitudes have changed as a result of foot-and-mouth. We have discovered that consumer attitudes have shifted. There is much more concern among consumers about what they are buying, where it came from, the integrity of the products in front of them, and how the animals have been treated. Those issues are very much in the consumer mind at the moment.
One of the outcomes of the forward strategy, and of the aftermath of the foot-and-mouth situation, is that we have decided that we need to move forward to what we call a generation two in relation to quality assurance. QMS is responsible for quality assurance standards from the farm gate right to the plate. We have to establish those standards in relation to all aspects of animal production and, in particular, to meat production. Animal welfare is an important part of our quality assurance assessment at the farm and we will review all aspects of that again. We will also look at animal transportation, because getting on and off loading vehicles is a key cause of animal stress. We are not satisfied that the whole haulage system is adequately quality assured. We are moving quickly to try to tighten up that particular area.
Animal welfare is important. We want to see in Scotland a specially selected Scotch brand that reflects the fact that nothing gets that label unless it has been properly quality assured right through the chain. Our responsibility is to tighten up the standards to ensure that meat has gone right through that quality assurance chain and that there are no gaps.
QMS is running an interesting parallel project to examine the eating quality of meat. The purpose of the project is to identify best practices throughout the industry, particularly those practices that produce the best eating quality for the meat on the plate. One of the areas that will be considered is the breeding of animals, but we will also consider the care and transportation of animals, to identify best practice for best eating. I would be surprised if best eating does not, in part, relate back to best practice in looking after animals.
You have done a lot of consumer research recently on the SSS label. What has that research told you about what the label means to consumers?
We have researched that issue over the past three to six months. One of the things that we wanted to challenge when QMS began was what the SSS brand meant and stood for, what consumers thought of it and whether it was robust enough for us to proceed with it as one of the main planks of our marketing campaigns.
We have done a number of studies and have held focus groups up and down the country—not just in Scotland, but in England—to get consumers together and to find out their reactions to the SSS label. We obtained positive feedback, almost unanimously, although there were some differences north and south of the border. In Scotland, there was much closer identification with the SSS brand, which people see more often. People have a better idea what the brand means—they like it and recognise it. They believe that the brand stands for quality and that an SSS label provides some guarantee that they are buying a good product. That aspect is very positive.
Down south, there is much less recognition of the brand, but there is recognition that Scottish meat products, especially beef, are of premium quality. People there believe that the product is of superior quality and that they would be disposed to buying it—depending on price, obviously.
By and large, the response to the SSS brand has been positive, both north and south of the border. We are developing promotional campaigns to build on that, to develop recognition of the brand and to help use the brand to sell more Scottish red meat, both north and south of the border.
You say that consumers recognised SSS as a quality product and felt that the brand stood for quality. Why did they think that? Was it because they believed that the animal was born in Scotland, or was it because of the systems that had produced the meat, added quality to it and given it its brand image? That question is pretty fundamental.
To be honest, very few consumers know much about the 90-day rule, for example, or about how tight the definition of Scotch is. People in the trade know, and are conscious of the definition, but the average consumer who buys a pack of meat over the counter probably does not think too hard about the definition.
On the other hand, we found that consumers are conscious of the quality assurance factors behind the meat. Consumers are much more conscious now of how animals are treated and transported, and want to know that the animals have come through what they would call a safe process. The expression, "You are what you eat" was heard in the focus groups. Foot-and-mouth disease has had a big effect, in that it has heightened consumers' interest in where products come from. They really want to know that they are safe. That is a big factor.
You said that awareness of the brand in the marketplace is reasonably strong in Scotland, but less so further south. What progress are you making to ensure that the total levy that is spent in Scotland is used to promote Scotch beef in the UK market?
Secondly, is the current collection system, whereby the levies are collected in Milton Keynes and we then have to wrestle with the Meat and Livestock Commission to try to get our own money back, a sensible way for Scotland to continue? Should we consider setting up a collection system for levies in Scotland?
Perhaps some of your questions should be directed to the Minister for Environment and Rural Development rather than to us. That is as much a political issue as it is a practical issue for QMS. However, I will say that QMS funding is limited. We never have enough money to do everything that we would like to do. We receive part of our funding through the MLC as a proportion of the Scottish levy that is raised; we do not receive the whole levy.
What is that proportion?
Slightly less than half. Although the terrible conclusion might be drawn that we are being robbed blind, the MLC provides Scotland with some extremely good services that are well worth paying for.
Are such services provided on a contractual basis that allows you to identify what is being delivered?
We can certainly identify the services, but it is slightly more difficult to identify the costs. If QMS were self-sufficient and able to retain all the Scottish levy, we could purchase services on a contractual basis if we so wished. That is a perfectly possible scenario for the future.
However, I would not want any switch of the levy to have serious effects on the quality of services that we receive from the MLC, because we value those services. A good example was last week's outlook conference in Stirling, at which we gave the industry a complete factual update on the state of the industry and on detailed research topics such as the numbers of animals, the trends and what might happen in the beef, sheep and pig industry. We could produce all that information on our own, but without the benefit of the MLC's research services, we would find it expensive to set up our own parallel research organisation in Scotland. As a result, using the MLC to support our work has some very practical advantages.
It would be very nice if Scotland received the whole Scottish levy; for example, it would allow us to make some of our own decisions on funding. However, we would still want to purchase services from the MLC south of the border. More important, we would still need funding from other bodies such as the Scottish Executive, Scottish Enterprise and Highlands and Islands Enterprise. However you like to look at the matter, neither the MLC nor the Scottish levy on its own is sufficient to allow QMS to do everything that it wants to do.
You did not answer the last part of my question: should we consider a separate collection system for Scotland? Under the current system, the decision to raise or lower levies is made at a UK level; a referendum is held among producers and more than 50 per cent of the vote is required for any decision. There have been many times when we lost the vote in favour of raising promotional levies because we were linked into the UK referendum. Would a separate system help your organisation to promote the Scottish product throughout the UK by raising more money for it?
That is a difficult question to answer. You are right to say that the present method involves asking stakeholders in England and Scotland about their reactions to increases in the levy. In fact, we went through that process last year. However, even if Scotland collected its levy independently, stakeholders would still need to approve the levy. In principle, we could raise more or less of a levy, depending on how the stakeholders felt.
What is more important is the quality of service that QMS gives its stakeholders. QMS has to promote Scottish red meat products effectively and it has to ensure that quality assurance standards are kept as high as possible. The better we are at that, the more likely it is that our stakeholders will respond and give us funding. We have to lead with a quality of service that sustains either the existing level of levy or a higher level.
I have a couple of points to put to both witnesses. First, it was mentioned earlier that consumers are using better labelling to identify better-quality red meat products. Is that a general trend? I understood, from reading various articles and submissions on the subject, that the No 1 determining factor in the consumer's mind was price rather than provenance.
Secondly, we heard strong evidence this morning that too many margins exist in the food chain from plough to plate. Are too many cuts made from the plough-to plate profit margin?
Thirdly, quality assurance from the farm gate onwards was mentioned. How much consumer recognition exists of farm assurance schemes? Could more be done to highlight those schemes? Does QMS want to re-examine or revamp those schemes so that they achieve greater consumer recognition? At farm level, the general impression is that consumers do not know about farm assurance schemes, despite such schemes being demanded, quite rightly, in most retail contracts.
As always, when answering questions about price versus provenance, it is dangerous to talk about "a market". We are talking about many different sectors of the market. At Marks and Spencer, we set out to sell a differentiated, high-quality product to a particular sector of the market. We want, and we achieve, high volume, but we are not interested in mass marketing.
Other sectors of the market are more price conscious; they are less interested in provenance and quality. However, consumers in those sectors of the market have a right to safe food. In the more tenuous area of animal welfare, different views exist about what is good or bad welfare. People have different views about the meaning of high quality and it becomes more difficult to talk about "a market". Groups of customers, including Marks and Spencer customers, are very interested in provenance and in welfare standards. They want to buy a high-quality product and they want to know how it was produced. In other sectors of the market, that is not the case—but, clearly, I do not understand those markets so well.
Do you want me to answer all three of your questions together?
I am quite happy for you to do so.
Whether there are too many margins is debatable. I am interested in whether everybody who takes a margin is adding value to the product. In 1994-95, we started our selected farm schemes with the beef scheme. We wanted to achieve a quality animal that was produced on farms in the way that we thought it should be produced. We wanted to be able to give our customers a lot of reassurance about issues that were of concern to them. We also wanted to be able to tell farmers what we wanted them to produce for us to sell. We set up messages that go up and down the chain. Farmers in that scheme are focused on producing beef for Marks and Spencer.
Committee members could examine the chain that exists in any one of the markets that I referred to earlier. If everybody in the chain is focused on producing a product for an end use and they all add value, that does not involve too many margins. However, if committee members question what part of a chain is doing, they will probably question not whether there are too many margins but whether the person should be involved.
On recognition of farm assurance schemes, we believe that the biggest reassurance that we can give our customers is Marks and Spencer. When they come to us, they make a conscious decision that they are looking for quality and reassurance. As a result, we do not make great play of giving individual instances of how that quality assurance is given. The quality assurance is Marks and Spencer.
Part of that package—and one of the things that we set out to do as one of the most trusted retailers—is to use the necessary tools to reassure consumers. Some consumers are interested in certain aspects of how food is produced. Some are not interested, apart from the fact that they want to place their trust in somebody who will ensure that they have done the job correctly.
We are always faced with the dilemma that there are one or two consumers who want to know everything about their food. To give them that information, we would probably need a label the size of an A4 piece of paper in fine small print that covered the welfare, environmental, safety and all other aspects of production.
Other consumers want to suspend that judgment and say, "I have made my decision. I have gone to a retailer that, I believe, trades in such a way that I can be reassured that all those things are taken care of." Such consumers do not want to be constantly reminded, particularly where livestock is concerned, that they are eating animal products.
There is a fine balance between providing enough information for those who are interested, and not providing too much that other people do not want to know. That does not reduce the need to have everything in place. Every consumer wants to know what is going on when there is a scare or when somebody else says to them that they need to be worried about something. That is when everything has to be in place.
I will comment briefly on the convener's three questions. First, price is a great driver in buying meat—there is no doubt about that—but it is equally true that BSE and foot-and-mouth disease have given the consumer a real fright. That has been evident in our research.
When we did our early research, when the foot-and-mouth disease outbreak was at its worst, we got some horrifying returns from consumers. A large proportion—more than 25 per cent of people—believed that humans would catch foot-and-mouth disease from eating meat. That just is not true, but people believed it. They were getting scared about the issue. The proportion of people buying less meat was fairly high. It went up about 15 or 18 per cent at one stage.
The early reaction was pretty worrying. Price was much lower in consumers' minds than safety. The safety of the product was foremost. We took some steps through our promotion and advertising to give customers some reassurance on that.
As the situation settles down and the quality assurance factors are sorted out in peoples' minds, price will no doubt come back into their minds again. It is not possible to take away the price factor. It is good that there is recognition, particularly in Scotland, that a premium product—the specially selected Scotch scheme is in that category—can attract a premium price. Scotch beef now attracts a premium price for the farmer, which is good.
I do not have a great deal to say on margins, except that the agricultural strategy working group debated the length of the chain from the producer to the consumer and how well farmers worked together to take advantage of the fact that they could get selling power.
Scotland's agricultural industry is fragmented and has about 15,000 individual farmers, most of whom work individually. They do not naturally get together to use their selling power or to share resources. The best help for prices would be for animals to move swiftly directly from the producer to the abattoir or from the producer to the finisher to the abattoir. That does not always happen. Transfers are made to auction marts and dealers come into the chain. The primary producer is usually a long way from the customer. The exception is the recent trend in farmers markets, which, perhaps for the first time, let the farmer go eyeball to eyeball with the consumer. That is good, because it provides good feedback.
Scope exists for greater co-operation among producers and between producers and processors. We want long-term relationships that are based on trust and which provide mutual benefit to the two parties in the developing of a continuing relationship. To the producers, the situation is a little one-sided at the moment.
Do consumers understand farm quality assurance schemes? In detail, probably not. However, interest has been heightened in ensuring that proper quality assurance is conducted. We are considering that. When a farm has been inspected and quality assured, QMS is keen to make available to the farmer a sign that he can put up on his gate to show that his farm has been quality assured and is part of the specially selected Scotch scheme. We want consumers, as they drive past farm gates, to see that farmers are participating in the scheme. That is a small and slightly gimmicky step, but it is important.
I have a slightly tangential question. People's ability to cook from raw materials appears to have reduced dramatically. Has that affected your market?
The short answer is yes. Chris Gilbert-Wood will comment on that from the retail point of view. All the research that has been conducted suggests that consumers want to spend less time preparing their meals. That has had a huge impact on the meat market. The only dramatic rises in consumption have been in the market for ready meals and frozen meals, which is steadily increasing year on year.
It would be foolish for us to ignore those trends, because they show what the consumer is doing. Sometimes consumers pay quite a high price for such meals, but they will pay for the convenience. The average meal preparation time is now down to 20 minutes. I do not know how far that will fall. The situation is difficult, because people are less likely to spend time preparing a large roast, for example, as that takes time. The market for ready meals has greatly increased. The customer wants good food that is quality assured, but they want a short preparation time and food that they can eat quickly.
Does that help or hinder you in developing a market for your products?
That development may make it more difficult to respond to the market. It can affect volumes, as a ready meal may contain less meat than might be used if consumers prepared the meal themselves. That does not make the situation any easier. We must work closely with the manufacturing food companies that prepare ready meals to come up with good ideas about incorporating meat in their products. We are running a project on product development, because that is important.
The major driver is convenience so, as members are aware, ready meals form a large part of our business. We are also seeing good growth in basic areas such as meat, fish, poultry and fresh produce, because there is also a trend among people to go home and cook—perhaps at different times of the week or motivated by TV chefs. We are seeing growth in both markets and the market is segmenting: there are people who want ready meals, perhaps Monday to Thursday, and there are people who want to spend time cooking on Saturday, so who want good raw materials. Those people want those materials to be as convenient and consistent as possible so that when they cook something and present it to their friends they can be proud of what they have done. It makes things difficult, but that is what responding to customers is all about. That gives us an opportunity to sell things in different ways, which is always good news.
Members will be relieved to know that some people spend even 20 minutes preparing a meal, given that our average consumption time is about one-and-a-half minutes.
I want to press Neil Kilpatrick on the spend that QMS currently enjoys. I think he said that less than 50 per cent of the Scottish levy comes back to Scotland to be spent on promoting Scottish produce. Is he arguing with the MLC for more funds? What does he hope to achieve over the next two to three years?
The answer to the first question is that we are debating keenly and actively with the MLC about how much we should receive in promotion funds. We would probably have received a good deal more this year had the foot-and-mouth outbreak not taken place. We were negotiating for an additional £1 million of funding for a promotional campaign when the outbreak hit us. We ended up getting about half that amount, but even that will enable us to start a useful campaign.
Marketing and promotion is an area in which one could spend a huge amount of money if it were available. At the moment we are not getting as much money from the MLC as we would like. However, the MLC has been hit, just as we have been, by a severe shortfall in the levy moneys, because the animals culled in the foot-and-mouth outbreak do not attract a levy. Producers' income is dramatically reduced this year and ours will be reduced proportionately. It is a difficult year in which to get money out of the MLC, although that is mostly for reasons beyond its control.
We have had sharp debates with the MLC about promotional moneys and those will continue. Our promotional budgets will increase over the next two to three years. QMS has just produced a three-year strategy. I have written to the committee clerk suggesting that we present that strategy to the committee. If we are given that opportunity, we will be delighted to go into detail about how we would want to see promotional funding taken forward and the sort of money that should be spent.
Do you expect to be in receipt of 100 per cent of the levy over the next few years? What are you aiming for? You obviously have ambitious plans to market produce throughout the United Kingdom and you will need funding to do that. What is your internal target? Is it 100 per cent within two years?
No. In our strategy we have assumed an increase in the share of the levy funding that we get from the MLC on the basis that we would negotiate that anyway. If we were to get 100 per cent of the funding from the MLC—in other words, if we were to attract the whole Scottish levy—we might have a bit more money at our disposal.
I will share a thought with you so that you can comment. During today's meeting, the possibility of more local retailing of the product was mentioned. The logic of that would entail more local slaughtering and shorter journey times, which you mentioned. It is easy to say that, but the outcome would be a smaller, locally based operation and the economies of scale that the current system provides would be lost, which goes in the opposite direction from the cheap food policy that we have pursued for many decades.
There has been a lot of argument in the press about going back to small local abattoirs and about how that would solve all our problems. Sadly, that is not true. Small abattoirs are extremely difficult to run profitably in today's world. The amount of inspection that is required, the number of vets that must be around and the oncosts of running an abattoir sadly mean that a high volume must go through it before it is economical. There is a huge economic argument for larger, centrally placed abattoirs. Under present legislation—and I can only see legislation getting tighter—it would be difficult, economically, to move back to small abattoirs.
Another factor is the process of getting animals to abattoirs, which is difficult for remote farmers because they are further away. Research suggests that the principal stress on the animals—which has an impact on the eating quality—occurs when the animals get on and off the transportation and is not dependent on the duration of the journey. There are limits—obviously, we are talking about journey times of hours, not days. Animals are not necessarily much more stressed when they travel long distances, but it does take longer and cost more to transfer them.
We operate a regional abattoir base and some quite large abattoirs because, as Neil Kilpatrick said, we get economies of scale. There were many small abattoirs back in the days when a lot of animals were sold in balance. That is no longer the case. We do not sell whole beef, lamb or pig carcases. Those are sold by the people with whom we deal, but they do not come to us, because we are not the best marketplace. It is difficult to differentiate breasts of lamb. They are not something that our customers are particularly interested in, so we would have to discount them heavily. It is better to send them to someone else to get the full return. There is an economy of scale, which is a good thing for an abattoir.
I wish to repeat my earlier comments. Buying local produce is a trend that will continue, but we have to be careful, particularly if we are talking about the economic prosperity of rural areas, because it depends what people think of as local. We sell Orkney salmon and Orkney beef throughout the UK, which is good news for the people who produce those products in the Orkney Islands. If consumers in the UK became so focused that they wanted only to buy the produce of their local county, the rural parts of the country would struggle. We must be careful where the trend goes.
Members have asked the questions that they wish to ask, so I thank the witnesses for their time. It has been a useful and constructive hour and the points that you have raised, and the others that were made this morning, will be useful in relation to the questions that we are about to put to the Minister for Environment and Rural Development.
Without further ado I will move on. I welcome the Minister for Environment and Rural Development and Jan Polley to the committee. I am aware that the minister is short of time—he must leave at 3.15 for another meeting—so my introductory remarks will be brief.
As the minister will be aware, we have been taking evidence on the forward strategy for agriculture. It would be useful to repeat the terms of reference for the inquiry:
"To identify whether the Scottish Executive's Forward Strategy on Agriculture, published on 26 June 2001, sets out the vision and level of commitment that is necessary to develop a prosperous farming industry, sustainable rural communities, and environmental protection and enhancement."
As I said, witnesses have given oral evidence and there is already a considerable amount of written evidence. I understand that the minister has seen the written evidence, but I am not sure how much of today's oral evidence he has been made aware of. Perhaps the minister would give a statement that is based on what he has gleaned so far.
I thank the convener for the opportunity to speak about the strategy.
As the committee appears to be taking evidence from the same people whom I consulted, we should perhaps run down on one side what they say in response to the committee and on the other side what they said in response to me. We could then have a sort of Christmas parlour game and spot the difference. There seems to be an enormous read-across.
I want to put into context where I am and where the strategy is. Farming and agriculture have been in difficulty for some time—with Alex Fergusson as convener, I do not need to elaborate on that. From my perspective, there has been a growing sense that the traditional approach of providing emergency packets from time to time is not a long-term answer to farming and agriculture problems. Governments' reactions have to be slightly broader than that. The foot-and-mouth outbreak exacerbated problems and brought into sharp relief the extent to which all industries in rural Scotland are hugely interdependent. People in rural Scotland knew that, but many people in urban Scotland had forgotten it.
We tackled the issue by involving as many people as possible. We consulted widely, had five or six main public meetings and issued a consultative document. In trying to make the process more inclusive, I took the unusual step of setting up a steering group to develop the strategy. As the committee will be aware, the group was made up of people from crofting, food, consumer, enterprise and agricultural backgrounds—indeed, the very people from whom the committee is now taking evidence.
When I set up the steering group, I expected it to act in an advisory capacity. I was pleased when we achieved the end-product. Each person on the group was prepared to put their name to the strategy and therefore give it a degree of credibility that it might not otherwise have had.
Broadly speaking, the strategy has been fairly well received. Three thousand copies have been distributed on request and 20,000 farmers received a summary of the document directly. I think the committee is familiar with the strategy's broad thrust of creating a more prosperous sector and developing farming's role as an integral part of wider rural development. Farming has a crucial role in protecting and enhancing the environment.
I do not see the document as the endgame. The intention was to draw together huge strands of opinion and set out broad areas and some specific action points. The objective was to make the document live. Shortly, I intend to establish a different body, which might include some of the same people—I have to decide on that—to try to turn the written word into something that takes shape and uses the overarching framework. The body should engage with the diverse range of people in the industry, in broader rural development and in the environmental field and use the document as an overarching strategy rather than as a finalised policy document. The strategy is the beginning of the work rather than the end.
I am under some pressure, as I must attend a Cabinet meeting—I would need a death certificate to avoid it. I must leave fairly promptly, but I am happy to answer members' questions.
We do not want to issue a death certificate. I will try to get you away on time.
I thank the minister for coming along. I would like to pursue a few lines of questioning.
The forward strategy is to be welcomed, in particular what it says about sustainable rural development, environmental features and assisting rural communities. I believe that the minister has said—he will keep me right on this—that he is considering setting up a different body to take the place of the agricultural strategy steering group. How was it decided how the agricultural strategy steering group would be made up in the first place? For instance, was there any consideration of equality of opportunity and gender balance on the group?
The group was established by taking the temperature somewhat. We tried to find people who would be suitable. They were judged entirely on their ability and on the contribution that they would make. It is right that Elaine Smith should pursue the questions of equality and gender balance, but because of the history of the agriculture industry, the agricultural community is sadly wanting in that regard. I do not for a moment suggest that that may be anything other than entirely wrong.
The people who served on the steering group were chosen for their ability. There were one or two obvious choices. For example, it would be almost impossible to have such a group without including the director of the Scottish Crofters Union or the president of the National Farmers Union of Scotland. Broadly speaking, the members of the steering group had experience of the supermarket trade, the food industry, land management, co-ordinated land development or—so that we could get a financial perspective—the joint-stock banks. The membership was chosen based on a range of issues, in particular people's ability to contribute to the make-up of agriculture and rural development.
When you set up the other body, will you consider the mainstreaming of equalities across the Executive?
I take slight issue with your remark at the beginning that the committee is consulting the same people whom you consulted. At a previous committee meeting, I asked that the committee take evidence from the Food Standards Agency, the Convention of Scottish Local Authorities and the Scottish Trades Union Congress. I know that COSLA had an input to the Executive's document. It is obvious that the committee's time is limited, so when it was decided during the summer who would be called to give evidence, the STUC—for whatever reason—was not among them.
The STUC has submitted written evidence in which it makes the point that there was a major debate on agriculture, which the STUC feels strongly about, at its annual congress in April. Although the STUC welcomes the fact that the steering group that informed the Scottish Executive reflected a wide range of interests, it was extremely disappointed that no trade union representatives were invited to participate. Will the minister comment on that?
Sorry, I did not mean to be flippant when I mentioned that I thought that we had consulted the same people. I merely read the papers that were handed to me. I apologise to the convener and to you. The first eight names I read were the same people. I apologise if I gave the wrong impression.
I am always happy to consider equality and it will be considered when the group is set up. There will be some difficulties, not least of which is that we need continuity and we have people with genuine expertise who have made huge contributions to taking the industry forward. If we can find alternative people, we will do so, but that is not simple. It is the Executive's policy to mainstream equality, so I am bound to take that into consideration.
Good afternoon. I want to pursue two issues that arose from this morning's evidence.
Donald MacRae suggested that there were two significant omissions from the strategy document. The first omission was an assessment of the strengths, weaknesses, opportunities and threats in relation to the Scottish agriculture industry—a SWOT analysis. Secondly, he pointed to a dearth of international comparisons. I know that for the minister there will never be a shortage of criticism; that comes with the job. In this case, does the minister accept the criticism as constructive? If so, will he address those points with the new body that is to be formed, by giving a specific instruction that the gaps—a SWOT analysis and international comparisons, which could be extremely useful pointers for the future—should be filled?
I am sorry that I do not have the benefit of having heard what Donald MacRae said. I do not want to get into a dispute with Donald, for whom I have a high regard.
The strategy document is not intended to cover everything. A SWOT analysis was included in the preceding document that went out for consultation. We listed some of the strengths and weaknesses of Scottish agriculture as we saw them and used that as the basis for inviting comment, so that persons who came to the consultation meetings or who made written submissions could base their responses on an analysis of the strengths and weaknesses in Scottish agriculture rather than fashion them from a standing start. I agree that that analysis is not repeated in the strategy document. The strategy document is a distillation of all that work.
On international comparisons, as part of the process we took soundings in three specific areas. We took soundings in New Zealand, where a lot of work has been done, not only in the sheep sector. We also considered work that we have heard of through our contacts with the machinery rings in France. Among other things, we came across the fact that they were pursuing, in a slightly different form, the kind of land management contracts in which the committee and others have been extremely interested. I am reminded that the third country that we considered was Austria. We were keen to know more about Austria, because it is without doubt the leader in the European Union on agri-environment development and, somewhat perversely, continues to get the largest share of EU support in that sector.
The work that we did was not devoid of international comparison, but we were keen to produce a document that was fairly readable without having too many appendices. We have not published all the submissions that we received—perhaps that was a mistake. We tried to concentrate on the conclusions and what we were trying to drive forward. We may be able to pick up on international comparisons as we drive the strategy forward. It will be important to consult other countries to see whether we can do things better or in a different way. We have dealt with looking backwards at strengths and weaknesses.
I thank the minister for that answer. I hope that further work will include close consideration of what happens in countries such as Austria and France, which various witnesses referred to this morning.
Jim Walker raised another matter in his evidence this morning. He expressed in characteristically trenchant terms the necessity of having a direct voice in Europe to implement any strategy. He made strong remarks to the effect that he would prefer the minister to deal directly with Europe rather than having Margaret Beckett seek to represent Scotland. Would the minister prefer that he undertook that role?
Just as I have to abide within the law, I must stick to the constitutional settlement. One does not have to be Einstein to see where you are coming from, but we are one member state, which means that there is one representative. The present arrangements appear to give us every opportunity to prosecute Scotland's case. We have meetings at official level prior to every meeting of the council and we have meetings of agriculture ministers at which we have the opportunity to rehearse the particular matters that we, from our different perspective, wish to raise. That is at the council level. At the Commission level, things are rather different. I can think of a number of occasions on which—providing that we have agreed at ministerial level which matters are to be pursued—Scottish officials have been free to make common cause with members of the Commission to prosecute a Scottish case.
I understand that there are frustrations with the process, because it makes it slightly more long-winded and occasionally it would be helpful to deal directly. However, we have only one representative to cast the votes.
I understand the position that you set out, but I am bound to reflect that your counterpart in Northern Ireland, Brid Rodgers, sought and obtained dispensation to argue Northern Ireland's case directly in Europe and so secure a lifting of the export ban for Northern Ireland. Was there anything to prevent you from seeking a similar dispensation to argue the case directly for Scotland?
The fact that I have conversations directly with the commissioner without having my telephone listened in to by the Department for Environment, Food and Rural Affairs might indicate that I have an equal opportunity to speak directly to the commissioner. We must not get the issue with Northern Ireland out of perspective. It was hugely important for Northern Ireland, in the context of its being part and parcel of a range of matters that get wrapped up in the peace process. That was one representation in relation to three cases of foot-and-mouth. We are prosecuting the Scottish case. I do not speak to David Byrne about anything but Scotland.
With a bit of luck, we might return to the subject of the forward strategy.
I have three sections to my question and will be as brief as possible.
First, the evidence we heard this morning raised questions about how this strategy links in with other strategies of the Scottish Executive, particularly the tourism, forestry, rural development and cultural strategies, although you do mention rural development in the document. Could you say a bit about how those strategies, which are all important in rural areas, come together?
Secondly, representations were made that our application of the rural development regulation—in particular the fact that we do not apply article 33—should perhaps be reviewed after a year. I wondered whether you would be prepared to consider that.
Thirdly, we heard representations that the organic aid scheme should be separated from other agri-environment schemes because it tends to use up a fair amount of the money, and there is often insufficient funding for other agri-environment schemes.
Before I answer that, can I clarify whether, in your second point, you were saying that we do not apply the diversification?
The impression is that some parts of the rural development regulation that are used south of the border are not applied in Scotland.
There are many things south of the border that are not applied north of the border, but I do not think that you are asking me that question.
One question that causes me—and, I am sure, members of the committee—great anxiety is that, although we are hamstrung in the way in which the instruments of the CAP are delivered, our overriding problem is that here is an industry that, whether or not it deserves it, nevertheless receives well in excess of £500 million of public support. Two things were not at all clear to me: first, exactly how farmers were benefiting directly in terms of developing their businesses; and secondly, exactly what the Government and the public understood the strategy to be. I did wonder whether it was sensible to have a number of separate strategies. However, at the end of the day, a single strategy was justified.
Having set that in train, I recognise—wearing my rural development hat—that there are huge overlapping and interlocking mechanisms between forestry, tourism and agriculture. One of my jobs is to ensure that those overlapping parts interlock, and it is a job that both of us have to do, convener, because that is what those industries need.
I shall ask Jan Polley to deal with the more technical question about the rural development regulation. As for whether the organic aid scheme should be separated out, I have some difficulties with that question. Although I wish that there were a greater preponderance of organic aid, if the whole thrust of the document is that we must become less dependent on subsidy and more attuned to receiving our income through the market, it would be rather silly of me to argue that there should be an increased direction from Government in the organic sector. I am not aware of us having had to turn down organic aid scheme applications in the past few years or at present.
The suggestion was that the other agri-environment schemes suffered from being thrown in the same pot as the organic aid scheme.
I would be happy to look into that, but I am not aware that that is a general problem. I shall ask Jan Polley to answer the question on the rural development regulation.
Jan Polley (Scottish Executive Environment and Rural Affairs Department):
Between 20 and 30 different measures are available within the rural development regulation, and each country has picked up on its own menu. Article 33 includes two measures that we are using in Scotland. The main one that we are using is diversification, to help farm businesses diversify into other activities. We are planning to spend around £70 million on that over the next six years. That may be a slightly different mix from the approach taken in England, but it is certainly a key part of article 33.
Do you have plans for a review of the way in which the rural development regulation has been applied?
There is provision for relatively small changes to be made on an annual basis under the European regulations. There is also the mid-term review, which is due for 2003. The Commission has made arrangements with each member state to evaluate how the plans are going and whether the measures that are being used represent the best use of the money. We would make that kind of assessment at that review.
I would like to focus on the strategy document. I shall preface my question by saying that I think that having 54 action points is a first-class way to proceed. I would like to focus on two action points in particular. Action point 29 says:
"Local Enterprise Companies, local authorities, the Executive and other local agencies must identify and develop the economic potential from better links between farming businesses and other rural businesses in their area."
Action point 2 says:
"The Executive, in partnership with the industry, will review over the next six months the business advice currently available to farmers".
How is that review proceeding? The document was published in June, so we are almost halfway through that process.
Yes, we are almost halfway through that review period. I am bound to say that my department is still slightly struggling with a thing called foot-and-mouth disease—whisper it gently. We have had consultation with all the network agencies and a joint forum is to be held. We are concerned that, until now, there has been great unevenness across the Scottish Enterprise networks in the delivery of genuine business advice, with farmers being set apart as if they did not quite qualify under the general heading. I know that Mike Rumbles has been pursuing that fairly vigorously.
We were fortunate to have Jim McFarlane in our group. Having looked at the evidence and at the presentation, and having considered the discussion that took place, he did not take too long to realise that that was a fact, and that we should therefore be seeking a commitment from the enterprise networks to a different, more even-handed approach to agricultural businesses across those networks. We will be holding what I think is called a seminar, at which representatives from the enterprise networks will be present. We want to ensure that they all sign up to even delivery of service to the agricultural community.
In the light of the pressures from the WTO on the CAP, specifically against production-based subsidies, an opportunity to consider social, economic and environmental factors appears to present itself. What research has been carried out on the benefits of agriculture in terms of those factors, and what research would the Scottish Executive environment and rural affairs department hope to carry out on that?
Rhoda Grant is right about that opportunity to consider those factors, although I would sound a note of caution. Although we can broaden the scope of the inquiry, and despite the great importance of the economic and social factors, we should recognise that we will almost certainly be dealing with, at best, a fixed cake and, at worst, a much reduced cake. We have to balance the formation of the new policies against the persons who are currently in receipt of support.
One of the main reasons that we saw huge potential in the land management contract in Scotland was not just because it could deal with the huge diversity of farming enterprise, but because it could do the very thing that Rhoda Grant has referred to in her question: it could embrace elements of socioeconomic and environmental policy.
The Executive's work on the incidence of deprivation in rural Scotland will link in with and be informed by socioeconomic trends. We can also tap into other resources but, in our environmental and other policies, the main missing element consists of serious, evidence-based studies on the impact of deprivation in rural areas.
When do you hope that the study to which you refer will be complete?
In the next few weeks. It has been in final form for some time, and the group producing it do not seem to have been able to come to a conclusion, but I understand that it is imminent.
When you speak to smaller farmers, do you find as I do, minister, that they believe that the future of farming in Scotland should comprise lots of thriving farms, whereas bigger farmers tend to think that Scotland should comprise lots of larger farms that are able to compete in a global market? There is a perception that the Executive perhaps favours the latter over the former. The strategy does not delve into the issue to any great degree. If we want a thriving rural economy, that means jobs, which, in agricultural terms, means many farms rather than a few. In your vision for the future of agriculture in Scotland, minister, do you favour having a few large-scale farms or many family farms? That is not really addressed in the document.
The problem with trying to keep a document fairly crisp is that things are not gone into in great detail. I would refer Richard Lochhead to the clear—I think—statement of our belief in the place of co-operative and other collaborative structures.
The Scottish Executive provides substantial financial support to the work of the Scottish Agricultural Organisation Society. We have promoted a huge range of innovative structures, the whole intention of which is to ensure that smaller owners can remain in place while obtaining the benefits of collaboration or working in a co-operative, thereby reducing their input costs, improving their output and increasing, through machinery rings and other means, the efficient management of their fixed capital. Doing that has made a huge contribution to Scottish agriculture and I hope that that will continue.
Given the long-term and medium-term trends in agricultural prices—which Donald MacRae doubtless talked about—the only way in which larger numbers of people can be sustained is for those people to act in a collaborative and co-operative way. That has been clearly spelled out in the strategy.
In his submission to the committee, Donald MacRae says that consideration of the implications of reduced numbers of farm businesses and farmers, and of less farm employment, is absent from the strategy. When considering the strategy, does the minister keep such issues to the front of his mind? Is the Government trying proactively to sustain the number of farms in Scotland?
Yes, we are. As I have said, we are the largest single contributor to the Scottish Agricultural Organisation Society. The society's most recent annual report is most interesting. It is unusual in that it contains a list of all the organisations to which the society has given assistance to ensure that smaller units can remain in the ownership of individuals and can survive in this increasingly competitive world by engaging in a whole raft of co-operative and collaborative work.
We support that approach because we firmly believe that it represents the way forward for Scottish agriculture. That is especially true in Scotland because of our dependence on the livestock industry, which needs people. Without such an approach, we could drift towards ranch farming such as that found in New Zealand. That would have serious ramifications for the numbers of people in Scottish agriculture and for the nature of Scottish agriculture.
This morning we heard evidence from a large number of individuals and organisations. Almost to a man, with one notable exception, their long-term view of agriculture in Scotland was of an industry that was multifunctional and not just about food production. The future industry would deliver broader public goods. What is the Scottish Executive's view of the future of agriculture? The strategy document is silent on that.
I find that surprising. I did not hear the witnesses this morning, but if they were saying that every farm in Scotland will have a multifunctional role, I would find that rather an odd view. The multifunctional role will appear across the whole of Scotland, so one of the purposes of the strategy was to point out what the options might be for individual farmers in particular places. In certain sectors, some farmers will not be able to produce a volume and range of goods that the consumer wants. That will result in a huge change in outlook among certain people. However, that is not to deny that, across Scotland, agriculture contributes to more than just the primary function of food production. The document says that agriculture also has roles in socioeconomic and environmental issues. Those roles must be acknowledged. We also have to acknowledge that, if people are to move away from production, support mechanisms will have to move swiftly and will have to support multifunctional farms.
Is that how you view the future then?
That is what we have set out in the document.
Will the Scottish Executive develop those kinds of support systems through the land management contracts? Will that be the vehicle used?
Yes. I would like Scottish agriculture, people in Scottish rural development and the Scottish Parliament to be in the van of making constructive suggestions at the next round of CAP reform talks. I despair when I think that, in recent years, we may have sat on the edges, waited on others to make suggestions and then been somewhat critical about the final output. In launching the forward strategy and the further work that is to be done on land management contracts, I am serious about selling those ideas not only in Scotland but down south and about trying to make that work a major contribution to the discussions on CAP reform at the UK level.
The great difficulties that we have with ad hoc changes to the LFA scheme serve only to illustrate the fact that one cannot move from a designed production support system that was well worked up simply by changing the rules in the middle. One cannot say, "Now it is a land-based system" and still hope to achieve a satisfactory result. One must change the delivery mechanism and I believe that land management contracts will offer us the opportunity to make such a change. For land management contracts to be fully effective, one would have to funnel through them almost all the CAP resources. Having that degree of flexibility and amount of resource at our disposal would allow us to construct a system that would meet some of the earlier concerns that were raised by addressing the diversity of Scottish farming and the social, economic, environmental and other contributions that it makes.
We took evidence from Quality Meat Scotland earlier, when I asked Mr Kilpatrick, the chairman, whether he thought more spending on the promotion of specially selected Scotch meat products was needed. His view was that more money was needed to help that process. When he was asked whether more moneys should be retained in Scotland than is the case at present, he indicated that that was his wish. However, he also said that that was a political question. Minister, are you actively assisting QMS by ensuring that the maximum amount of money raised through the levy system in Scotland is retained in Scotland and is spent by QMS to promote Scotch meat products?
I am encouraged by the work that Neil Kilpatrick and his managing director are doing. They have established in the industry a high degree of credibility, which did not exist across the sector for the previous organisations. It is clear, both from the strategy that QMS produced and from the role that is envisaged for the organisation in the forward strategy document, that the work load of QMS is far greater than when it was launched. To that extent, I believe that it will require more funding from the MLC. Given the fact that I published the forward strategy document, I will pursue that matter with the MLC.
I have a supplementary question on the land management contracts. I understand your comments on the difficulty of changing the way in which we fund agriculture and the difficulties that we have had in respect of LFAs. However, surely this is an opportunity to develop an overarching policy on what we want from agriculture. It seems to me that land management contracts would differ from farm to farm and that they would cover long, rather than short, periods of time, given the length of time that it will take to change practice and the like. Surely that offers the Executive an opportunity to change farming practice in a way that provides social, economic and environmental benefits. That change could be carried out in a way that would encourage people to move in the right direction: funding could follow them if they moved in that direction.
I agree. That is why—I repeat my opening remarks—the forward strategy is not intended to be the end point. I made it clear in the document that the public has to be much clearer in its own mind what it is prepared to fund in respect of agriculture, as funding causes great confusion. If we are clearer about the broad range of funding, we will have that opportunity when we develop the strategy. We have set broadly based ground rules, which are in a strategic form. There is an opportunity to develop the range of issues that is set out in the document into firmer and more concrete policies.
I did not want to start with being prescriptive to industry and saying that not only are we going to have a strategy but we are going to spell out what the industry is to do for the next five, 10 or 15 years. That is a clearly accepted flavour of how we are driving the issue forward in harness and partnership with the industry. It is right to say that it is for the various parts of the industry in their various locations to change practice and to accept that. There are those who still believe that unless 100 per cent of their income is coming from selling produce, they have somehow failed. We have a big job to explain to those people that they make a huge socioeconomic and environmental contribution. The public values that.
On occasion, I have heard you talking about getting value back up the chain from the market to the producer. It is an accepted fact among hill farmers and crofters that there is an enormous problem with marketing. Those people are not marketing experts nor, with increased paperwork, do they have the time to do it.
What information is available about local, national and global markets that would help Scottish farmers to compete? Is expertise and advice on those matters available throughout Scotland? Whose responsibility is it to develop those services? Could agencies such as HIE and Argyll and the Islands Enterprise have a hand in those services?
We made a modest start on that issue last year. You are right, Jamie. Either farmers are frustrated because they find the food chain somewhat complex or they have no exposure or expertise in that field. Last year, the department ran a series of seminars in different locations throughout Scotland. Those seminars aimed to give people a better understanding of how the food chain works.
That is part of a developing programme that is trying to make the farming community more market-oriented and to enable it to understand better what the producer wants. There are opportunities to get business support from those agencies. If one is not in farming, I suspect that HIE and the Scottish Enterprise network would be happy to offer appropriate marketing support. However, when it comes to dealing with marketing support for the food chain, it goes into a "too difficult" box. I hope that the undertakings that were extracted from HIE and the Scottish Enterprise network when we were putting together the strategy will allow those agencies to embrace the appropriate form of training and dissemination.
As a supplementary question, minister, how do you see the future role of the SAC playing alongside the increasing activity of HIE and Scottish Enterprise in the agricultural field?
All those organisations have a potentially huge role to play. Historically, the SAC underpinned the broadening out of developments and practices. My view is that the SAC and, to a lesser extent, the SAOS and Scottish Enterprise are part of the range of available agencies and support. On both sides of the chain, not only do the farmers have to adjust to the change in consumer demand but bodies such as the SAC have to refine their product to ensure that it is relevant to farmers' needs. We have had discussions with the SAC and they are cognisant that they need to bring some of their programmes up to date.
When you pay a farmer to look after the environment, how do you measure the outcome?
That is a good question. You will be invited on to the steering group if you are going to ask good questions like that. It is a fair point. I am not ducking the issue, but since I took on the job as Minister for Environment and Rural Development six months ago, one of the matters that has bedevilled me is finding out what serious work has been done to measure the improvements to the rural environment. Matters that deal with pollution can be measured, but that is different from measuring improvements to habitat and other ecological trends.
If Stewart Stevenson's question is whether we need to have a series of measurements for such purposes, the answer is yes. Do we have them? No, we do not. It has not escaped my attention that there is a distinction to be drawn between matters of pollution and the improvement and enhancement of our habitat.
How do you intend to develop such a distinction?
We do not have to draw such a distinction strictly and purely with agriculture people. I have people in an environment department who should not be sitting on their own. They can engage with those on the agriculture side to examine what is necessary. I do not want such policies to be too prescriptive, but public money is being used and we must have some view about what outputs would warrant such payments.
I was just beginning to wonder whether I am invisible, convener. After a couple of weeks of not being in the committee, everyone has forgotten me.
I refer to a point made by Elaine Smith at the beginning of our proceedings. I welcome the work that has been done on the strategy—as do most of the people who have responded to it—but the STUC has identified a couple of areas where it considers that an opportunity has been missed, particularly examining the experiences of agriculture workers and some of the issues that they have raised, such as health and safety at work.
It has been suggested that it would be useful if someone with an agriculture background were on the group that will continue to monitor the progress of the strategy. Can the minister assure me that that door is open and that consideration will be given to such a suggestion so that, in the spirit of true partnership with everyone who has an interest in ensuring that we have a sustainable future for agriculture in Scotland, no significant interest groups are excluded from the process?
I certainly hope that I can give such an undertaking. As the minister who managed to retain the Agricultural Wages Board against pressures from several interesting and diverse groups, I hope that my record on such matters is not entirely a blank. I certainly want to examine with care the criticisms, particularly those lodged by the STUC, of the composition of the group when it is reconstituted.
Unfortunately, my questions will have to wait because we have passed our deadline. I do not want to be a contributory factor to your death certificate, minister. While I may disagree with you from time to time, I would not want such an ending for you. I wish to wind up this part of the meeting by thanking you very much for the way in which you answered questions. The whole committee agrees that the strategy is a useful first step and that it must be built on. Thank you for your attendance this afternoon.
Thank you, convener.