LORD CARTER of Coles comments exclusively for Foodservice Footprint on the subject of innovation in agriculture and food following his speech at the Footprint Forum: Thought Leaders & Innovators Conference & Partnering Event.
We have left the era of surplus and come to the era of scarcity. These are not my words, but those of the Chairman of the European Parliaments Agriculture Committee, Mr Paolo De Castro. I think there is no better phrase to sum up why we are here today and why innovation in agriculture and food is both necessary and urgent.
The underlying issues were spelled out by last years Foresight report on Global Food and Farming Futures. Against the background of projections that foresee an increase to 9 billion of the worlds population in 2050, it highlighted six important drivers of change:
global population increases;
changes in the size and nature of per capita demand;
future governance of the food system;
competition for key resources; and
changes in consumers values.
To that list of drivers, which feature a high degree of risk and uncertainty, I would add one more: the multiple uncertainties which surround the economic and financial health of states in Europe, and elsewhere.
I am in no doubt that food and agriculture are of central importance in meeting the challenges ahead. But, in the EU at least, agricultural productivity has pretty much flat-lined. Over the next decade, projections for increases in agricultural production are:
in Brazil, an increase of more than 40%;
in the US, growth of between 15 and 20%; and
in Europe, about 4%.
This, we believe, is not sustainable. The issue was set out well by one of our witnesses: Does Europe say that it can provide food for 500 million rich Europeans and import what we do not have, or does it play a role in feeding 9 billion people including 1 billion people in China and India who are start to eat meat?
I leave you to judge. But what is clear is that innovation in agriculture and food should be an easy win within the context of resource efficiency across the board.
A recent report from McKinsey highlighted that some of the cheapest resource efficiency wins are in large and small scale farm yields, yet analysis demonstrates they are also two of the aspects of resource efficiency on which there has been least focus! The development of electric cars has had much greater focus but it is also the most expensive method of delivering resource efficiency, at least for the moment.
The response from the food industry must be to boost innovation in order to improve productivity, but sustainably. This idea of getting more from less was at the heart of the Foresight Report and had previously been highlighted by the Royal Society, which explained it as the process of increasing agricultural yields without adverse environmental impact and without the cultivation of more land.
In evidence to my committee, Professor Charles Godfray, one of the lead experts for the Foresight report, said that, given the certainty of increasing demand for agricultural output, sustainable intensification was almost a deduction rather than an argument, and he described innovation as critical to sustainability.
The Committee and The Inquiry
What is my Committee and what does it do? It is the Sub-Committee on Agriculture and Environment of the House of Lords European Union Select Committee. We examine documents proposed by the European Commission but we also undertake longer term inquiries seeking to influence the EUs medium to long term agenda.
From July 2011 to July 2012, we undertook one such inquiry, into Innovation in EU Agriculture. This set out to examine how the EUs strategic aim to promote innovation throughout the economy could be delivered in the agricultural area, and particularly looking at how EU policies could assist.
What do we mean by innovation? Agricultural innovation can take many forms, and it interacts closely with innovation throughout the food chain:
First, new technologies, such as biotechnology, new crops and new machinery. Precision farming was one such example that we considered. GPS technology is now fitted to approximately 20% of new farm tractors and 50% of combine harvesters, resulting in savings on fuel and other inputs of around 10%.
Second, incremental change, such as commercial decisions to plant an alternative crop or alter a label. Simple use of labelling can add substantial value to a produce examples include Camembert from Normandy and Traditional Bramley Apple Pie Filling
Third, innovation also encompasses changes in the ways in which ideas are conceived, developed and deployed process changes. We heard about a new IT tool for the pig industry allowing the real time measurement of energy and water use, feed intake, environment and growth. This was developed through a partnership of producers, academics and suppliers.
That brings me on to a crucial point about models of innovation. Increasingly, innovation is seen as part of a system, involving cooperation between basic researchers, applied researchers, the plant breeding sector, the food processing industry, other industries with uses for agricultural products, retailers, farmers and consumers.
It is an approach that is up and running in the Netherlands in particular but has yet to gain serious traction in the UK.
In one Dutch example, an egg packing firm, poultry husbandry manufacturer and scientists teamed up to take forward a new design for a hen house that combines the advantages of closed systems producing barn eggs and animal welfare standards comparable to free range and organic eggs. As the project progressed, different partners were involved at different stages: the local municipality, the Dutch Animal Welfare Protection Society, local farmers and the Ministry, which provided the financial guarantee in case of failure.
In our report we supported the systems approach and concluded that, to be successful, sustainable intensification of agriculture will require better cooperation among farm businesses, advisory bodies and scientists; greater responsiveness in European agriculture to markets; improved interdisciplinary research among scientists and social scientists; and farmers becoming actively involved in setting agricultural research agendas.
An often neglected component of the systems approach is the consumer. The consumer determines what is on the shelf, but on the basis of what information? Consumers as a group were described to us as wary, uneasy and uncertain about new technologies in relation to food. Clearly then, effective and reassuring communication goes to the heart of the challenge listening to consumers as well as directing information at them.
Who should be responsible for that communication? Interestingly, there was no consensus among this among our witnesses everyone was willing to pass the buck.
Clearly, trust can be a concern, but we think that government, retailers and processors must all accept responsibility for communication about innovation and sustainable agricultural products and practices, and about the wider implications of their dietary choices.
Let me turn to some of the detail of the systems approach. It has three elements: research; knowledge transfer; and regulation. I shall take each in turn.
In terms of research, we are in no doubt that Europe has the intellectual resources to kick-start EU agriculture into the 21st century. Witnesses described the UK and the EU to us, as a powerhouse of creating knowledge.
In this country, the Biotechnology and Biological Research Council (BBSRC) spends around £470 million a year on research in biotechnology and biological sciences. In France, the National Institute for Agricultural Research (INRA) has an annual budget of just over 800 million euros (some £670 million). In the EUs current Framework Programme, from 2007 to 2013, funding of some 2 billion euros is earmarked for the area of food, agriculture and biotechnology.
These are big sums - but our report made it clear that they are not enough.
As far as this country is concerned, we received compelling evidence that, while the quality of basic research in biotechnology is very high, much of the potential for its practical impact is being wasted, because of gaps in the research pipeline. We are clear that the Government urgently need to support efforts to translate scientific findings into agricultural practice much more consistently.
As regards the EU, as we say in our July 2011 report, it is unacceptable that the research budget allocates just under 2 billion euros to agricultural research over seven years, while the agricultural policy budget is around 400 billion euros.
In the December 2011 proposals which the European Commission published for the EUs financial framework from 2014, funding of 4.5 billion euros has been proposed for research and innovation on food security, the bio-economy and sustainable agriculture. This is a step in the right direction - but we remain of the view that there needs to be a more radical shift in EU funding, away from simple farm support payments, and towards the promotion of agricultural innovation.
I should say a few words about the Commissions proposal for what is called a European Innovation Partnership on productive and sustainable agriculture. Such Innovation Partnerships are to be established in a range of policy areas. They are intended to strengthen co-operation in innovative research, bringing together all the key stakeholders across the EU, from those conducting basic and applied research, all the way to the final user like farmers and businesses, including every step in between.
This takes me back to my earlier comments about the systems approach. Our inquiry showed that there is still a considerable lack of co-ordination across Europe among the many excellent researchers, whose efforts are key to the future success of our agricultural sector. That problem, and a potential solution to it, was clearly described to us in evidence we received from the InCrops Enterprise Hub at the University of East Anglia. So we support the idea of a European Innovation Partnership (EIP) which is characterised by effective, action-based co-operation.
I have spoken about research, but, as we heard in our inquiry, knowledge is no good unless it can be used by those who benefit from it. Knowledge transfer to farmers is therefore very important.
Across the EU, there are many channels through which advice flows to the farmer, and these include both public sector agencies and commercial providers. Our report acknowledges the diversity of methods used to transfer knowledge, and recognises that that there is no one single solution that is applicable everywhere. Knowledge transfer must be fine-tuned to national and regional practice.
Under the Common Agricultural Policy, Member States are required to operate a system for advising farmers on land and farm management, the Farm Advisory System (FAS), and some financing is available. The FAS was set up at the time of the last CAP reform to offer advice which must relate to farmers regulatory obligations (that is cross compliance), and may go beyond that. In practice, we understand that, in most Member States, the FASs role has not developed beyond a minimal level of advice.
The FAS cannot become the sole source of advice to farmers. But we are clear that the time has now come to extend the scope of the FAS. Given the importance of effective knowledge transfer, we consider that under the CAP Member States should be required to ensure that comprehensive farm advice is available throughout their territories, geared towards meeting the new challenges of food security, climate change and the need for sustainable intensification.
We were pleased that the Commission took on board this recommendation in their proposals for CAP reform last October.
Domestically, Scotland and Wales have good systems in place but, as we observed in our report, the provision of farm advice in England has become fragmented and overly complex. We look to see the fruits of the new Farming Advice Service, set up in January 2012, to provide advice on competitiveness, nutrient management, climate change adaptation and mitigation, in addition to advice on meeting regulatory requirements. We are also keen to see what decisions the Government take in England at the end of the current 12-month trial of an integrated advice pilot scheme.
I turn now to regulation itself. The head of the office of the EUs Agriculture Commissioner described the microcosm of Brussels as an innovation-hostile environment.
When speaking of EU agriculture and regulation, the Common Agricultural Policy springs immediately to mind. On that, we made a series of recommendations and we were disappointed that the October 2011 proposals for reform fell short of the commitment to radical change which we think is needed. We consider that the Commission has missed the opportunity to introduce the new approaches to EU agricultural policy which current and future circumstances call for.
It is not just about the Common Agricultural Policy, though. A snapshot of other pertinent EU regulation includes:
novel foods those not consumed in the EU to a significant degree before 1997 for which regulation exists but it is out of date and proving difficult to revise
animal cloning again, an impasse exists with particular debate over the marketing of products derived from the offspring of clones
pesticides, to which new rules apply which it is feared may reduce the pesticides available on the market, with a negative impact on crop yield; and
genetically modified organisms a regulatory approach allowing for the cultivation of GMOs has ruled out significant cultivation in the EU.
We have no problem with regulation in itself but the EU decision-making procedure should seek to help, not hinder, the adoption of new technologies. It places too much emphasis on the precautionary principle, which underpins food regulation. The precautionary principle has value but it must be applied with due consideration of available scientific evidence of potential risks and benefits.
Undoubtedly, the level of acceptable risk has become too low. Only two GMOs have been accepted for cultivation in the EU: a GM maize product in 1998 and a starch potato, for industrial use, more recently. In 2009, EU GM production covered 0.1 million hectares, while US production covered 64 million hectares, including produce that is subsequently imported into the EU.
Yes, our food must be safe, and we cannot overlook public concern, but the reality is that politics trumps a sensible, evidence-based debate.
Let us be honest. Reluctance to take a risk can be a risk itself, particularly where global food security, productivity, sustainability and competitiveness are threatened.
That reluctance is also self-indulgent. A more open approach to new innovations is all part of sustainable intensification. And it is why your presence here today, exploring new innovations in the food chain, is excellent to see.
In conclusion, innovation is not a new phenomenon. Arguably, it is as old as mankind itself, and agriculture is one of the most fundamental of all innovations.
Often, it takes a crisis for large strides forward to be made. A great example of that was the development of the cherry tomato. The Dutch Government explained to us that the cherry tomato was a result of the Wasserbomben affair in the early 1990s. For too long, the Dutch had been breeding tomatoes for the German market that were bred for everything but taste. That led to a big crisis in the German market and the need to innovate. The result was the cherry tomato, involving knowledge about breeding, logistics, disease management, product development and marketing.
A new crisis is upon us we are working within a new paradigm that requires a step change. And the modest steps already taken need to turn into determined strides, if we are to reach the right destination. We have debated our 2011 report with the Government, and discussed it with representatives of the European Commission. We know that they are listening; what matters is that they will act. And I have no doubt that their willingness to act can only be strengthened if you and others in the agri-food sector bring forward successful and sustainable examples of innovation.