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This transcript is produced from the teletext subtitles that are generated live for Newsnight. It has been checked against the programme as broadcast, however Newsnight can accept no responsibility for any factual inaccuracies. We will be happy to correct serious errors.

Far-reaching plan to transform the way British farmers operate 29/1/02

JEREMY VINE:
To discuss this now we're joined by Sir Donald Curry, who wrote the report, Sean Rickard, an agricultural economist, Patricia Stanley joins us from Nottingham, she is a farmer, and Ian Gardiner, the Deputy Director-General of the NFU. Patricia Stanley, you are not really being asked to give up subsidies, you are being asked essentially to spend some of the money differently. What's your reaction?

PATRICIA STANLEY:
My reaction is that farming is on its knees at the moment. We are not making any money. I don't think there are hardly any farmers in this country making any money. To cap direct payments in this way, to modulate 10%, which is what it will be, from our direct payment, to go into environmental things, that's a very laudable thing to do. I applaud it. We all want to see more and more money going into the environment. But I'm afraid we need an agriculture that is buoyant and is sustaining itself. To take money away from it now, when it's in the situation it is, is total suicide.

JEREMY VINE:
On your story, are you struggling on your own farm now?

PATRICIA STANLEY:
We are indeed.

JEREMY VINE:
Sir Donald Curry, how will you help with that?

SIR DON CURRY:
(Policy Commission on Farming and Food)
I think the message is the one that we've found everywhere. Farmers, wherever we met them, through our consultation process, all said they weren't making any money. The truth is, the current system of support, and the way agriculture is structured at the moment, is not delivering returns. No-one is making an adequate return or profit to reinvest in their business and sustain that business.

JEREMY VINE:
The immediate thought is become more efficient and productive. But you say, in a sense, don't think about quantity, think about quality.

SIR DON CURRY:
I'm very interested that's the take out, because nowhere in that report do we suggest that food production should fall. We suggest that farmers need to be focused on the market, they need to produce for the market. They need to have all the tools available to help them do that as efficiently as possible, to drive out costs, and secure a reasonable return from their efforts in doing so. That is the main driver through this report. Yes, we're saying that we should modulate, we believe that's appropriate to free up resources, to be matched fund by the Treasury. This is not just, as Ben Gill was saying, creaming money off, it is securing the same amount of money from the Treasury to support that, to bring in additional funds which the industry needs to reposition itself, and be better equipped for the challenges ahead.

JEREMY VINE:
Sean Rickard, There seems to be a mismatch between what Sir Don is saying and what Patricia is hearing?

SEAN RICKARD:
(Cranfield School of Management)
They are only half right, both of them. What Don's report didn't say, and should have said, because generally it was a good report, is that we will never provide reasonable incomes in farming until we face up to one basic truth. There are too many farmers producing too much food. If you want to raise incomes in farming, we must remove significantly a number of farmers from the industry. Don's report hints at that, but we have to spell it out to farmers, and tell them the truth. This tinkering with funding will not help, as Don has said. Subsidies have not helped the industry, in fact they've pushed it into bigger problems. He advocates increasing subsidies, but the truth is, a lot of them have to be told, that in the long term, they don't have a future.

JEREMY VINE:
Congratulations for not using the word "modulate" in your answer, which has come up from both the first interviewees. So, fewer farmers, Mr Gardiner.

IAN GARDINER:
(Deputy Director, NFU)
That's the thing that we desperately want to avoid. We want a prosperous agriculture, and that's where we can first recommend the report, which puts profit at the front of a sustainable agriculture. The NFU is not against examining the support system, moving support into environmental schemes. As Pat Stanley has said, there is a real presentational problem to British farmers. They face a Government that has presided over falls and further falls in their fortunes. They are not certain that the extra matching funds will come from the Treasury. The Food and Farming Commission has not spelled out in detail how the report would operate. It's only some farmers which would have the income deduction, it's serial beef and sheep farmers who would have the income deduction. How do you deal with the problem that the environmental schemes rightly would deal with the whole surface of Britain, whoever is farming it? There is a whole raft of questions.

SEAN RICKARD:
I'd say this is missing the point. The whole thing about this report is that farmers have to get in touch with the market. This concentration on the environment is a red herring, frankly. What the report does not demonstrate is if we went down the route of reducing subsidies completely, I suspect we would deliver a great deal of the better countryside. Why? Because 20% of our farmers produce 80% of our food. Those 20% of farmers farm two-thirds of the land area. They are the people who manage the farm. It is arrogance and rudeness to tell these farmers they don't look after the countryside. They do, they produce good quality food, they could do it cheaply. We will waste millions of pounds trying to prop up inefficient farmers in environmental schemes. It has to be halted.

JEREMY VINE:
Do you think, Patricia Stanley, that thousands of pounds, at least, are being wasted on you?

PATRICIA STANLEY:
No, we are one of the most efficient farmers in the country, and this particular year, we have lost tens of thousands of pounds. I think that would run across the board of most farmers in this country.

JEREMY VINE:
And that is with your subsidies?

PATRICIA STANLEY:
Yes.

JEREMY VINE:
How do you see your role as a farm developing, because at the heart of the report is the idea that farmers shouldn't be thinking solely of the market, but of their role as custodians of the countryside.

PATRICIA STANLEY:
We have always been custodians of the countryside. I get very annoyed when people tell me that I should start thinking about being a custodian of the countryside. We've always been doing this for many, many years. Our particular farm has been farmed by the family for 70 years. My father-in-law, who lived through the great depression, said this is the first year that the farm has ever lost money, which goes to show what sort of a situation we're in. Basically, what we are looking for, when Mr Rickard says that we should stop having subsidies. What about the rest of the world? I can tell you that most of the rest of agriculture, in some form or another, is subsidised around the world.

JEREMY VINE:
The point about this plan today is that it will re-route money that you would otherwise be getting for the main part of your farming activities towards any kind of environmental activity. So wouldn't that encourage you to do more for the environment?

PATRICIA STANLEY:
How can we possibly do that, when what we are doing at the moment is unsustainable? How can we possibly afford to be doing these environmental things, when what we are doing at the moment really doesn't make sense.

JEREMY VINE:
That is the problem, Sir Don, isn't it?

SIR DON CURRY:
I understand the challenge, but it is important to recognise that in the report we see the delivery of environmental goods as a commercial activity, which farmers get paid for. The re-routing of these subsidies through environmental schemes is an opportunity for farmers to participate in that, and to see that as part of their business.

JEREMY VINE:
But surely, if Patricia could find a better way of making money out of her farm, particularly a more environmental way, she would have found it by now.

SIR DON CURRY:
Sorry, but I'm not hearing solutions. We're presenting a solution to this. No-one else is presenting one. The current situation is not sustainable.

PATRICIA STANLEY:
But if we have profitable farming, you will find that the environmental issues follow on behind them. That is what we have done over the generations.

SIR DON CURRY:
Can I remind everyone, the main thrust of this report is to deliver profitable farming, and gaining profit for farmers out of the activities they are involved in. Producing food more efficiently, using benchmarks, using support through collaboration, the best knowledge from RND. All of those tools are the keys to success in delivering profitable farming.

JEREMY VINE:
Do you believe your report will make Patricia's farm profitable, or are there some that can't be saved, and will always make a loss?

SIR DON CURRY:
If her farm is as good as she says it is, and I have no reason to doubt that, there is no reason why, looking forward, adopting the recommendations in this report, her farm should not be profitable.

JEREMY VINE:
So this is a turning point, Sean Rickard?

SEAN RICKARD:
No, unfortunately. It's another drip-feed. Another 100 million, 200 million, and we'll move on. We've got to start telling farmers the truth. Until they change, and adopt the sort of business practises which requires them getting in touch with the market, they are turning to Government. Help us, Government.

SIR DON CURRY:
It says that, Sean.

SEAN RICKARD:
Yes, but you muddle your message by then saying, "But give us a little more money first".

SIR DON CURRY:
Because now, we believe, is not the time to remove support. Right across the board, we wanted to re-route it for other purposes which the taxpayers, we believe, would be willing to support.

SEAN RICKARD:
Do you not believe, Sean, the logic of your report is fewer farmers?

SIR DON CURRY:
It may well result. The trend is downward now. I'm not suggesting it will change.

JEREMY VINE:
Patricia, do you think that you are moving towards a situation where you will only be viable if other farms around you close?

PATRICIA STANLEY:
I think what is happening is the Government are exporting our industry abroad. Unless we have a sustainable industry, the way we used to have, indeed when our farm was viable, we could re-route money into doing things like buying rare breed cattle, which we have done, and we're very, very proud of. We felt that we were putting something back into our industry. We now have a wonderful herd of Longhorn cattle, which we wouldn't have been able to do, unless the rest of our business had been profitable. That is what paid for these animals. We helped to save this particular breed. These sort of things aren't going to be able to happen unless we have a viable industry. All that is happening is our industry is being exported abroad to places that don't have the same standards that we have to adhere to here. Things are grown in areas where it is unsustainable. They are using cheap labour and land, and it is being grown not to the standards that we have to adhere to rigorously here.

JEREMY VINE:
Ian Gardiner, just a point that was raised with Margaret Beckett, to do with supermarkets, and the pressure that could be placed on them to give farmers a less rough ride. Do you think this food chain forum will have any bite?

IAN GARDINER:
Yes, I do. We are already working solidly with the food chain. Many of the proposals in this report are already being operated on by the industry as a whole. Farmers will have to fight for their own futures. The harder they fight, the more successful they are in that fight, the more of them will be there to preserve Britain, to provide the nation with the its food, and to look after the countryside.

JEREMY VINE:
Do you buy the report?

IAN GARDINER:
It's a hell of a target which is set in front of us. I buy most of the report. Our serious reservation is at this low ebb of the fortune of British farming, to ask our farmers to buy such a major shift in their support without proper understanding of it, is a step too far. But, there is a lot more in this report we've got to get on with now, with the Government and the Secretary of State, now.

JEREMY VINE:
Thank you all very much.


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