A new study from the Agricultural Industries Confederation (AIC) shows that a lack of joined-up policy making at both the EU and UK levels is hampering the drive towards the sustainable intensification called for in Sir John Beddington’s Foresight report.
Single issue policy making by European and UK governments appears to be reducing the ability of British agriculture to achieve its objective of ‘producing more from less’, says the AIC. Its initial, but conservative, estimate is that the imbalance between the opportunities and threats facing the sector could be as much as £3 billion, equivalent to one third of the value which farmers add to the UK economy.
The AIC study - Food Supply in the Balance - officially launched at Parliament this week - is the culmination of research carried out over the past two years with the help of AHDB funding. The project started in response to AIC board level concern that the agricultural industry’s potential was being affected by single issue policy making that appeared to take no wider notice of the cumulative effects of that policy making across the whole farming sector.
An initial desk study showed that the UK has the potential to produce over 20 million tonnes of wheat (the 2014 harvest yielded 16.6m tonnes) through advances in plant breeding and using new technologies. However, in reality, the rise of resistant weeds and diseases, coupled with regulatory restrictions on the use of certain pesticide actives and fertiliser applications meant that wheat output might actually reduce by up to 50% to some 8-10m tonnes. In this example, “cumulatively the agricultural industry bears all the consequences of the threats without benefiting from any of the opportunities offered by new technology,” says the AIC.
To widen the scope of the research, the AIC commissioned independent business analysts The Andersons Centre to develop a methodology to investigate the cumulative effects of the opportunities and threats facing the industry. This study used 41 experts, drawn from leading academic, commercial and trade organisations, to identify these potential opportunities and threats, which ranged from animal disease and environmental controls to market volatility. Two further workshops – one for crops and one for livestock - then prioritised these threats by their likely impact on agriculture over the next 10 -15 years. Six of the ten threats listed arise from regulation.
The ten threats identified in the AIC study
Regulatory principles for crop protection
Cost risk of environmental targets/regulations
Limits on research affecting knowledge exchange and competitiveness
Antibiotic resistance and regulatory context
Animal health and welfare costs compared to competing producer countries
Bovine Tuberculosis in cattle
Overall disease resistance in livestock linked to climate change
Reliance on imported protein
Increased milk price fluctuations
Restrictions and limits on water use.
Lack of data was quickly identified as one of the first stumbling blocks to the process. “It is a serious cause for concern that regulations being reviewed for issues such as ammonia emissions are lacking sufficient benchmark data to understand whether proposed limits are feasible or achievable,” comments AIC chief executive David Caffall.
Credible data that does exist for the chosen scenarios has been compiled into an interactive spreadsheet – the Agmap Tool – by Andersons and the AIC and to estimate the likely direction and magnitude of these threats and quantify the ‘productivity value gap‘ between the threats and opportunities. This analysis concluded that the cumulative effect of the threats was worse in the arable sector, costing some £1.28 billion annually with up to a 30% reduction in cereals. In the livestock sector, dairying could lose 18% or £708 million, grazed stock 7.8% or £286m and intensive livestock 4.2% or £148m.
Overall, the Agmap Tool points to a £3.05bn aggregate annual cost, equivalent to a 16% decrease in production value.
Of the opportunities, the study concludes that the greatest benefit could be obtained from redirecting, and ideally increasing, public funded agricultural R&D. The stumbling block has traditionally been the inability to quantify the relationship between R&D expenditure and agricultural production levels in persuading fundholders to invest.
With frozen budgets in this time of austerity leading to declining R&D investment in real terms, the study’s authors believe that refocusing the R&D spend on production efficiency will offer a better return for the taxpayer, while at the same time improving the UK’s standing in research and attracting leading scientists to the UK.
The study estimates that an annual redirection of 2% of public R&D spending towards production research could raise UK arable output by £22 million, lifting self sufficiency by 0.5%. Similarly, horticultural and potato crop output would lift by £13m.
In the livestock sector, dairy output would rise by £20m, adding 0.5% to self- sufficiency; grazed livestock by £19m (0.9%) and intensive livestock by £18m (1.2%).
“Given that the threats far outweigh the opportunities in this study, we believe that our estimates are very conservative,” notes Mr Caffall. “These indicative numbers support the initial concern of the AIC board. They make it clear that there is a need for the whole industry to take the challenges discovered in this report seriously. Not just within the UK, but across the whole of the European Union.”
The AIC is to make the Agmap Tool interactive spreadsheet available to policy makers, and will continue to work with its European trade partners to make the findings of this initial study available to a wide range of audiences.