Mr Major’s Speech at the Oxford Farming Conference – 6 January 1992
Below is the text of Mr Major’s speech at the Oxford Farming Conference on Monday 6th January 1992.
PRIME MINISTER:
I cannot help thinking, standing here in this splendid pulpit, that this is more your scene, Bishop, perhaps than mine. But avoiding the temptation to say: “Dearly Beloved”, perhaps I might say what a pleasure it is to be here this evening and to have the opportunity of speaking to you about agriculture.
I have over dinner been very well prepared. I have been sitting before [Inaudible] apple juice, it is very powerful stuff, I recommend it. If Maitland Battey has not tried it I am bound to tell him that when he does try it it will change the national drink in Scotland overnight.
But despite this splendid pulpit this is not in my view an evening for sermonising. But I do have some serious things that I would like to say both about farming and about the countryside and about the future of both farming and the countryside.
I have, as a constituency Member of Parliament, a farming constituency, mainly arable, some pig farming, sheep, root crops, a bit of horticulture, in fact a bit of almost everything except hill farming, and those of you who know East Anglia will know that despite the innovative nature of the farmers in my constituency, it is pretty difficult to be a hill farmer in Huntingdon.
But apart from that I have a fairly broad spread of farming, and I make that point because I think it illustrates that I have some knowledge of how crucial farming is to the countryside. And I believe that no-one who understands that can possibly under-estimate the value of agriculture, not just to the countryside on its own, but to our whole way of life in the United Kingdom.
And I know, too, and make no secret of the fact, how difficult farming has been in the last two or three years. I understand the uncertainty that exists and I dismiss from personal knowledge as unpleasant and ill-informed the absurd caricature that some people propagate of farmers living rich in the lap of subsidy.
The reality is, we know too well in this room, that farming is short of confidence at present. And to regain that confidence it needs, in my judgment, a categoric answer to one question above all: what is to be the future of farming? Does it have one? And if it does, what is it and how soon will it come about?
I want partly to try and answer those questions this evening. But only, I fear, partly. And I say that because a full answer to those questions cannot, will not be available until two vital issues are resolved: firstly the final outcome of the Uruguay Round; and secondly the long awaited and much needed reform of the Common Agricultural Policy.
I start from the premise this evening that it is not for the government to tell you what to do with your farm businesses, they are your businesses, it is for you to decide. But for the past 5 decades the government has been intimately involved with agriculture and I think it is therefore not unreasonable for you to ask how the government sees the future of your industry. And that of course is why we recently published a paper on our farming future.
For me to say to you this evening that agriculture must change is not to say anything new. Most, I suspect everyone in this room, know that very well. But I do want to touch upon three aspects of that change. First, and briefly, why it is necessary. Second, what the most promising new directions seem to be. And third, and crucially I believe, how the government views change in the countryside more generally.
So why firstly is change necessary? Agriculture is first and foremost, always has been, an industry. But it is more than that, in the countryside it is both an industry and a way of life. It has an enormous impact on the physical environment around us. But ultimately it will stand or fall as an industry. And like other industries agriculture has its highs, its lows, its ups and downs, and a great deal of the agricultural scene has been in a low for several years now. And the prospects look at present uncertain to bleak for much of farming, even though the rest of the economy is now beginning to emerge from recession.
Bleak, of course, bleak that is if you feel that the present patterns of production and levels of agricultural price support must be sustained at all costs. But I must say to you bluntly that the reality is that that is simply not possible, not in the United Kingdom, not in Europe, and indeed not anywhere in the world. In fact in many parts of the world, not just domestically in our own industry, in many parts of the world there is now widespread dissatisfaction with many aspects of agricultural support with the direct cost of agricultural support to consumers and tax-payers and with the indirect cost in terms of trade distortions that are particularly damaging to poor countries.
And moreover those levels of support have other effects and another impact as well. They have, it seems to me, made agriculture a dependent industry – an absurd parody if I, as a non-agriculturalist can say it, an absurd parody when in my experience countryfolk generally, and farmers specifically, are among the most independent of individuals.
But that is by no means the only evil of the present system of support. The high levels of support for agriculture in most developed countries have led to over-production, increasingly desperate efforts to dispose of surpluses through export subsidies and as a consequence of that, depress world markets. And that has been harmful both to rich countries and to poor countries. In the rich countries resources are wasted on a vast scale and in the poorer countries economic development is held back by the poor returns that their own farmers can earn on world markets.
And it was that fundamental but crucial factor, the recognition of that, that led to the realisation that the misallocation of resources was so harmful that agriculture needed to be brought into the GATT Uruguay Round.
International pressures, powerful international pressures, were one of the factors that led the European Commission to propose radical reform of the Common Agricultural Policy. But the internal pressures for change were even greater, despite the very significant, and no-one should understate them, improvements made to the CAP during the 1980s, production continues to expand beyond that capacity to consume it and expenditure continues to increase beyond that capacity to pay for it.
This year, for example, spending on the Common Agricultural Policy, will be right up against the legal limit set by the agricultural guidelines. Has that helped farmers? Are they individually in the Community and in the United Kingdom better off as a result of that? The truth is it has not helped and they are not. Farming funds are under very great pressure in many parts of the Community and certainly under very great pressure here in the United Kingdom. More general expenditure has not meant more in terms of individual incomes, more has meant less.
The present system, bluntly, has not served United Kingdom agriculture well. And not only is the level of the support in the Community too high, there are other problems as well. The various support mechanisms take no account, no account whatsoever, of their potential implications for the environment or for the needs of the market.
So in its present form the Common Agricultural Policy does not operate in the interests of producers, consumers or tax-payers. And it has also led, if I may return to the point I made earlier, to the absurd prejudice that farmers are living in the lap of subsidy when in reality across Europe, and certainly in the United Kingdom, farming incomes are falling.
The conclusion from this is inescapable and should not be ducked by anyone, there is no point in putting our heads in the sand about it, further reform of the Common Agricultural Policy is essential and farming simply cannot go on as it has at present for very much longer.
So what are the reforms? What reforms are right for the future of agriculture? Let me set out some of the objectives of reform that the government are committed to.
Firstly, we believe reform should reduce the resource costs of agricultural support and the burden that the Common Agricultural Policy imposes on the economies of the member states. It should encourage an efficient agricultural industry which has a long-term future driven by the demands of the market. It expressly should not subsidise an inefficient agricultural industry that is not subjected to the demands of the market.
It should encourage agricultural policies which safeguard the environment and it should apply fairly across the whole of the European Community, regardless of the size or the location of farms.
And I can promise you this evening that it will be against those objectives that we will judge the Commission’s proposals for reform of the Common Agricultural Policy. Though I welcome very much the Commission’s perhaps belated, but let us not be miserly about it, acknowledgement that major changes in the CAP are needed, in particular their recognition that support levels must be cut.
A number of important elements in the Commission’s proposals do reflect the United Kingdom’s demands for reform, made consistently over many years. But I must add this. Our welcome does not extend to all aspects of the Commission’s proposals, many aspects of them seem to us more designed to perpetuate existing farm structures and production patterns primarily for social reasons than to bring about the innovative and competitive agricultural industry that we need and that the Community must have if it is to compete in a liberalised world market. The proposals before us at present are inward looking rather than outward looking and at present they are the wrong proposals.
So reform of the Common Agricultural Policy must take account of the changes going on around the Community and notably the development of market economies in central and Eastern Europe.
Last year Professor Vorichek, here again this evening, told this conference that Czechoslovak farmers were very unlikely to constitute a threat to the Western European market while Czechoslovakia itself could, with growing prosperity, become a good market for farm products and food. I personally look forward to the day, perhaps not in my political lifetime, when Czechoslovakia and all our other Eastern European newly democratised states become part of a European Community that stretches from one end of our continent of Europe right through to the other end.
But other countries in Eastern and Central Europe have natural advantages when it comes to supplying the Community market with food. And the sensible approach must surely be to recognise this and look for ways of working with these new democracies. It may be necessary to take a long view, it is necessary to take a long view and some people are already doing this.
This conference this evening, and over the next few days, is taking place against a background of change in the world, in politics, in the economies of the world and particularly our part of the world, and of course in agriculture itself.
There is considerable uncertainty both about the outcome of the GATT round and about CAP reform. But if the details are unclear, some points I think are becoming increasingly clear.
In future, whatever happens, United Kingdom farmers will face increased competition. They will be operating, from the end of this year, within a wider Community market and they are likely to be receiving lower levels of price support.
So what is the key to surviving in this new environment? Surely, firstly, it must be the ability to respond rapidly to consumer demand. That is not I believe just a matter of efficiency. British farmers are already among the most efficient producers of primary food products in Europe. It is about quality, consistently producing to the standard that the market wants, and to achieve this I believe some farmers will need to change both their methods of production and their method of selling their produce once they have completed their production cycle.
During the next two days you will be discussing the theme of prosperity through excellence. It is a good thing, it is the right theme I believe for you to be discussing at present. You will be focusing on the issues which I discussed recently with a group of food producers, manufacturers and retailers, at a seminar held at Downing Street. And I am glad to learn that this conference believes, as I believe, that the key issue for farmers now is to get closer to the markets they are aiming to sell to and concentrate on adding value.
And that can be done, adding value can be done in a variety of ways. It does not necessarily mean processing a product on farm or selling direct to the final consumer. Both those options of course are included, both of them will of course suit some individuals, but there are pitfalls for the unwary.
But adding value can be achieved also by providing a product for which there is a particular demand at precisely the right moment, and there are already encouraging examples of precisely what I mean. If you take, for example, boutique apples – a new term to me, I only learned it recently – I would have called them old fashioned English apples, Laxton superbs, Norfolk Royals, that is how I would have known them, and I feared that they had been swept off the supermarket shelves by standardised products which to my taste may be French, may be golden, but perhaps are less delicious than old English apples.
But I was wrong about them being swept aside. Apple growers growing traditional varieties have been able to obtain a premium for their apples. Old fashioned apples may become as fashionable as old fashioned roses. Large retailers are now responding by offering more and more varieties and precisely the same is true for potatoes and can be true for many other products as well. And I touch now on delicate ground, but organic food can offer similar opportunities.
I am aware that the merits or otherwise, I know when to keep out of an argument, it is the first law of politics, I am aware that the merits or otherwise of organic production are the subject of very fierce debate and I do not propose to participate in it, but the point I do want to make is a simpler one. There is a demand for organic products – a big demand, a growing demand – much of which is met from abroad. Why can we not meet more of that demand from within the United Kingdom? I believe that we can and I believe that we should.
But we have many advantages, some of which I think we do not capitalise on. The higher animal welfare standard that we are determined to maintain in this country could be capitalised on by most of our farmers. The demand for free range eggs and poultry products shows that consumers are prepared to pay extra for food that meets their concerns over animal welfare issues.
And it is important that the food and farming industry as a whole makes consumers aware of the high standards of animal welfare in this country. That, for example – a crucial illustration – veal produced in this country, cannot by law come from calves reared in the crates that so many consumers find unacceptable. That is something we should make clear to the people who buy these products.
And if farmers are to take advantage of all these opportunities, better marketing of their products is going to be vital. It is not enough just to identify consumer demands. It is equally necessary to be able to meet that demand by providing the right quantities at the right quality and at the right time. And very often the individual farmer may not be able to do this because he cannot provide the volume or the continuity of supply that the modern food industry requires.
And the answer to that, and I know it is novel and I know it runs against the instincts of centuries of some parts of farming in this country, but the answer must lie in better collaboration between farmers. That will not necessarily mean classical cooperatives, a whole range of other legal structures are possible.
But it is because I am convinced of the central importance of improved marketing for the future prosperity of their farming industry that I held a seminar on this topic in Downing Street. And I learned a great deal on that occasion and I believe that the other participants in that seminar did so as well.
Let me just share with you some of the things that emerged in that discussion. I heard at first hand what is involved in producing against specification, building in quality assurance and the necessary discipline to deliver what is actually wanted. I heard at first hand about the problems of scale, a critical point in selling direct to supermarkets. Producer groups must be large enough to guarantee the volume and consistency of supply needed to interest large buyers.
And all those present at the seminar, without exception, stressed the need for relevant management skills. A farmer who can produce excellent food does not necessarily have the right skills for striking deals with supermarkets. And everyone emphasised the need to have an organisation providing a sound financial base.
Following that seminar, large retailers are now ready to engage in a dialogue with producers. One cannot expect them to be other than hard-headed, their shareholders would not allow it and doubt that you would expect it. But as one of them put it to me, their very size now means that they have a responsibility to the nation as well as to their shareholders.
So at the seminar retailers made four promises to me that I believe are relevant to the agricultural industry. Firstly, to target major opportunities for UK supply of food and food products. Secondly, to offer a more open door to producers. Thirdly, to second managers and non-executive directors to help produce a group to provide what the market wants. And fourthly, to declare country of origin on own label products where this is appropriate.
So what in practice does that amount to, what does it mean? It means that the major retailers will identify the products which could be bought from UK producers without loss of quality or price advantage. The retailers will make it easier for potential suppliers in the UK to understand their needs. And in addition to that, they will help to make consumers more aware of where the excellent products on the shelves of some of the best supermarkets in the world actually come from.
I hope that more and more of them will be British. The opportunity is there for more British producers to supply our supermarkets and they must grab this opportunity with both hands.
And in saying that I am not on some nationalistic Buy British track, but the size of the current trade gap in food which we could produce ourselves is an indicator of the size of the market which our farmers could tap. The market is there if we tap it and have the right skills to make sure that we provide what is wanted, when it is wanted, at the price it is wanted to the people in this country who are demanding food that the people in this room produce.
To underline the government’s commitment to better marketing, we announced at that seminar that we plan to offer group marketing grants to encourage the development of producer marketing groups and John Gummer has subsequently given details of this scheme.
The Ministry of Agriculture has set up also a market task force to help identify and define product areas where there may be new or expanding market opportunities. And Food for Britain is ready to assist with its role of promoting and marketing the products of our farming and food industries.
If British farmers can meet the high standards demanded by their customers in the food manufacturing and retail sectors they will greatly benefit. Not simply through recapturing their own domestic market but in penetrating substantial and rich markets elsewhere in the European Community.
I believe that the various sectors of the food industry represented at my seminar can respond to those challenges. And just to make sure that they do, I have invited the participants to come back next November to report on progress – when I must tell you I expect to be at the same address – and when they do, I am prepared to continue to push initiatives that will help British agriculture because I believe in its future and I believe in the quality of its products.
Let me say a word or two about a critical allied subject and that is change in the countryside.
You and I know that agriculture is changing and will need to change further against the background of the GATT and CAP reforms that are to come and that it will change the countryside but we ought not to be alarmed about that. The countryside is changing anyway – it always has. If it had never changed, we would still have forests from one end of the United Kingdom to the other but as country dwellers you have a very direct interest in the change, the nature of it and the speed of it and, of course, some of the changes affect the way you go about your business.
Rural depopulation is a significant problem in many continental countries but not in the United Kingdom. Outside a handful of remote areas, we have seen a shift of population out of the cities and into the rural areas over the past three decades. The economy in many rural areas has been thriving and I myself do not think that the government of a free country could or should stop people from living and working where they want to. I believe that the British are peculiarly attached to rural life so that when increasing prosperity, car ownership and the availability of jobs allows them to move to rural areas, this is precisely what many of our fellow countrymen and women choose to do either to bring up their families or to retire and the countryside which in the UK over the centuries has largely been shaped by farmers cannot be run either as a museum or as a week-end playground for people from the cities. [Applause].
As I have said, the countryside is a place where an increasing number of people want to live and to work. Agriculture remains an extremely important industry but in many rural areas it is no longer the major employer that once it was. Changing practice and increased mechanisation have dramatically cut the number of jobs directly dependent upon agriculture although indirect dependence remains considerable and as the rural population changes, with a growing number of inhabitants with no links with agriculture, so attitudes in the countryside change. It is important for the farming community to see that those new to rural life understand that the countryside is a workplace and that efficient agriculture is essential to its health.
On the other hand, we cannot write off the criticisms of the way that some farming techniques have affected the landscape. We know perfectly well that pollution from farming is no more acceptable than pollution from any other commercial activity and farming, like other industries, is cleaning up its act – another change to which farmers have had to adapt and have done so very well.
An influx of population into the countryside does raise a number of crucial issues, I believe it is a healthier and happier state of affairs than the ghost villages which haunt some other countries but we must be careful. A balance needs to be struck between meeting people’s needs for homes, job, schools, shops and other services in rural areas and preserving what is best in the countryside and the record of the Government in protecting the environment is one I am proud of.
We introduced the Wild Life and Countryside Act; we published the first comprehensive White Paper on the environment; we introduced the environmentally-sensitive areas scheme that has proved notably successful in encouraging farmers to maintain traditional less intensive farming practices but maintain the beauty of the countryside and the wealth of wild life and flora. Last year, the Government launched an experimental scheme “Countryside Stewardship” which pioneers a new approach to encourage farmers and other land managers to recreate some of our most valued landscapes and habitats and country stewardship, a traditional function through the centuries of farmers, goes beyond designated areas and includes additional incentives for the provision of new access for the public and there has, I must tell you, been an excellent initial response to this scheme with over 1200 applicants offering to provide the environmental products that are sought.
But there is a point to be borne in mind in all this. We must not start conserving for conserving’s sake. Change can be frightening and when you are pleased with things the way they are, it can often be distasteful; sometimes it is unnecessary. But sometimes it is necessary to give more people an opportunity to enjoy what most of us want: reasonable living standards, job opportunities, good access to public services. Proposals which would affect the countryside have to be measured against this yardstick as well as against purely environmental yardsticks.
This Government’s commitment to the countryside is based upon an appreciation of what people living in the countryside both want and need. Of course, priorities are different in different areas but many things are similar. In virtually all rural areas, you will find people looking for low-cost housing, people looking for jobs, people looking for accessible services. Government cannot wave a magic wand and resolve those overnight but we can and have taken action through carefully targeted programmes operated by the Rural Development Commission, and we have been successful in creating jobs in many rural areas.
There are now only 3 rural development areas out of 27 with an unemployment level above the England average and the Government has also put in place two measures designed to increase the supply of affordable housing to rent and buy which are directed specifically at rural areas.
People who live in the countryside should not feel disadvantaged by the mere fact that they are living in rural areas. That must be a fundamental of policy. Newcomers to rural areas often bring the prosperity which enables the children of local people to stay there if they wish. That is one of the side benefits of population movements. But we do not want to see a population exchange with the less well-off in rural areas being driven into cities by the absence of affordable housing and jobs in the countryside and the levers to ensure this does not happen are not all in the Government’s hands.
Local attitudes to development expressed through the planning system have a crucial role to play. Elected politicians at all levels must give a lead. Proposals for development must not be turned down simply because that is the safer course. Those taking planning decisions locally must ask themselves what the proposed development is going to do for local job and local housing prospects. Do we really need these days to offer as much protection to farm land now that we have surpluses? What will be the consequences for jobs and housing if a particular application is turned down? If there is a problem, does it lie in the design or would the development fit better in a neighbouring site? Can constructive suggestions be made on all those points?
Those are the questions when considering planning and other matters that must increasingly be asked if we are to ensure the greatest level of prosperity in all its aspects in our countryside in the future.
We have rightly emphasised that the detailed siting of development is essentially something to be decided locally and this requires local communities to think responsibly about their needs as a community and the needs of their children. It means agreeing to the changes needed to provide opportunities for the young and the not-so-well-off in rural areas.
These are all vital policy issues that we need to consider side by side for they are intrinsically linked with the future of agriculture and the future of our countryside in the decade ahead.
Mr. Chairman, I took as my text tonight the need for change, change in agriculture and change in the countryside more generally. My Party has never set its face against change since it knows that it would be futile to do so. What we stand for is conserving what is best while accommodating new thinking and new aspirations.
I believe that British agriculture has the resilience to adapt and to flourish in new circumstances. Does it have a future? Of course it has a future – of that I am wholly confident. That future is a future that will belong to those who study their market carefully just as it does in any other business and our rural areas have a future as well. I believe that most of you who live in the countryside hope for a future in which your children can if they want to live and work in that countryside as well and not be driven to leave that countryside and go off into the towns. Of course the jobs may change, the prospects may change, the nature of life and the rhythm of life may change just as they have done all the way through history but the key thing is surely this: to channel the enterprise which is undoubtedly attracted to rural areas and will be even more so in the years ahead in such a way that we have balanced communities offering something to people of all ages and ensuring we have a balanced population in each and every part of the rural communities of the United Kingdom.
That, Mr. Chairman, is what I want to see. That is, I believe, what we should seek: a prosperous countryside, a thriving countryside; a countryside whose beauty will be maintained; a countryside that will cherish an agricultural industry which after the reforms to GATT and CAP will know what its future is, will have the confidence to pursue that future and will be able to look forward to a secure and a prosperous future for many years to come. That is the policy for which I will be working; that is the policy that I believe is in the interests of this country and in the interests of the whole of Europe and it is with that policy and that aspiration in mind that I ask you to rise and join me in a toast to agriculture.
Mr. Chairman, the toast is agriculture! Agriculture! [Applause]