Rural Affairs Secretary Richard Lochhead
Speech at QMS Breakfast, Royal Highland Show
Support For Livestock Sector
June 25, 2009
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On behalf of everyone I'd like to thank QMS for hosting this breakfast. As usual, you're getting the Show off to a fantastic start.
I'd like to congratulate Donald, the QMS Board and all the staff, on the hard work you've put into making the transition into a non-departmental public body a success.
QMS has delivered many successes for the red meat industry since last year's Show: like the recent pig promotion campaign, or the "5th quarter project", which is creating market opportunities and reducing processors' costs. QMS has also ensured the Scotch brand retains its place as the premium red meat product. No mean achievement during a credit crunch.
I know the QMS Board is looking hard at how to match your activities to your levy receipts at a time when the sector has been contracting. As I've said many times, the Government shares the concerns about the trend in livestock numbers in the pig, beef and sheep sectors.
That's why we're taking action across the board.
Ranging from the £1 million package we put together for the pig industry last year to my announcement in Parliament two weeks ago set out a substantial package of new and re-targeted support for the sheep beef sectors.
That package will deliver extra support to our most vulnerable farmers and crofters as rapidly as possible. We had dozens of suggestions from stakeholders, but none of them would have delivered help as quickly as the increased LFASS rates that I announced, for the fragile and very fragile regions.
There's potential for the entire livestock sector to benefit from the further steps I announced in relation to SRDP.
Another important part of the package is tightening the links between payments and farming activity. This is the one area on which there's been complete consensus among stakeholders. We can tighten the rules, and we will.
Public payments are one side of the equation; the other side is, of course, farmers producing for the market. And the market is looking good at the moment.
Cattle prices are strong, at around £3.00 per kilo deadweight. Pig prices are up 25% on this time last year, and input costs are down. Sheep prices may have eased slightly in recent weeks, but at around £3.50 per kilo they are still high, and the future prospects look promising as outlined in the Rural Affairs Committee report on the pig sector.
The future looks promising for the arable sector too. According to OECD forecasts, medium term prices will be at or above the previous trend.
So I was delighted to read in the press last week, that the National Farmers' Unions from all parts of the UK, plus Ireland, had concluded that: "producers should take much-needed comfort from the current beef and lamb market situation, and the positive outlook for the rest of the year."
I welcome that positive and confident attitude. Because, as stakeholders tell me, confidence can influence the business decisions you take. Confidence matters for the future of this industry.
And if all we focus on is the challenges and the difficulties, then we risk talking down our level of confidence, unnecessarily. Of course there are serious issues to address, but food production is a good business to be in. The world's population is growing, and every one of them needs to eat, every day.
So let's send that message out, in particular to our young people who are the future producers.
So there's good reason for the sector to be confident, and this Show is the ideal place to start saying so.
I'll be setting the example myself, tomorrow, when I launch the next steps in Scotland's first National Food and Drink Policy. There's some tremendous progress to report. I won't pre-empt that announcement today, but I would highlight a couple of points.
Our Food Policy recognises that successful relationships along the supply chain are vitally important - from primary producers to processors and retailers. The government has been very active in this area. QMS also plays a vital role, and the fact that businesses from the whole supply chain are here for this breakfast demonstrates that.
Our Food Policy also recognises the importance of educating the public about food, especially young people. For instance, we're funding the Royal Highland Educational Trust to expand their work on food and farming with Scottish pupils and teachers. And in our schools curriculum, children will learn about healthy eating, and issues around food sourcing, production and advertising. Today's pupils are tomorrow's adult customers, so this work is an important investment for the future of the food production.
Producing food is the principal role of our farmers and crofters, but it's not the only one. Earlier this year I set out the government's vision for farming in Scotland. That vision is about using the rich natural resources at our disposal - our land and soils of course, but also water, wind energy, our landscape, our unique biodiversity and so on. And using them, in a sustainable way, to produce both products for the market, and a full range of public benefits, including protecting biodiversity and maintaining communities in remote areas. In other words, it's a vision based on optimising our "natural resource productivity".
This is a positive vision, for a new contract between society and our rural communities. It's as important for the public as it is for the farming sector, and I'll be saying more about that vision in the coming months.
Perhaps the biggest challenge that our vision will have to face is climate change. Yesterday was a momentous day for the Scottish Parliament and I was in the Chamber yesterday when the Climate Change Bill, the most ambitious and comprehensive climate legislation anywhere in the world, was passed.
The latest climate predictions, published last week, show exactly why we need such ambitious targets. Our children's future depends on the decisions we take now. The world needs leadership, and this Government is determined to show it.
Farming will have to make its contribution to emission reductions, as every sector will. But although we need to save the planet, we need to feed it as well.
And 21st century consumers will be more and more discerning about the provenance of their food. Brazil's top public prosecutor said recently that "the single biggest driver of deforestation in the Amazon is cattle." That situation can't be allowed to continue.
So balancing climate and food security will be a massive task, for governments and businesses together, in the coming years.
Here in Scotland, the government's strategy is to start with the "win-wins": those actions which are good for climate change and good for business too. Like using inputs as efficiently as possible, or exploiting Scotland's massive renewable energy potential. To promote these "win-wins" we will use both financial support and free advice, including on-farm demonstration projects. We are working with SAC on a programme to roll out later in the year.
One way to reduce emissions and still produce food is to have healthy livestock. Animal health is an area where government and industry in Scotland have worked together with great success. The President of the British Veterinary Association recently said "compulsory vaccination for bluetongue has been an incredible success story".
We developed a powerful partnership during that process, and I take this opportunity to thank all the stakeholders involved for their positive contributions.
We've been working together too on electronic identification for sheep. I myself was in Luxembourg on Monday when the Council of Ministers discussed the subject.
As I'm sure this audience is aware, the fight continues to get a scheme which is affordable, practical and workable for Scotland. The Commission continues to refuse to re-examine the EID Regulation, on the basis that it was agreed by Member States following the foot and mouth outbreak in 2001. However Scotland's proposal gives equally good traceability, and would significantly ease the burden on our farmers.
Working together we've secured some valuable concessions from the EU already, but there's more to do and I will leave no stone unturned in pursuing this very important issue.
Both government and industry have ambitious goals for animal health in Scotland. But to achieve them, we need to have more control over our own destiny. An important part of that is to secure our own share of the GB animal health budget, currently held by Defra. I'm glad the UK government has acknowledged that the current situation is unacceptable, and begun to engage with us to solve it.
And I want to reassure you that although Defra's proposals for responsibility and cost sharing apply only to England, we are well aware of the potential impact on Scotland. I am particularly concerned at the proposal that the UK Chief Veterinary Officer, who has to represent Scotland's interests in Europe and internationally, would be located, under the current proposals, within a body established for the English industry. I have made it clear to Hilary Benn that this is totally and fully unacceptable to us.
Of course, this isn't the only area where we have differences with the UK government. On Monday a Defra minister, with the Treasury looking over his shoulder, vetoed a set of Council conclusions, because of the UK government view that the Single Farm Payment should be abolished. That so-called UK policy was put together without any consultation with Devolved Administrations whatsoever.
Given that a Treasury official was in Luxembourg, it's very clear to see who is driving DEFRA policy at this time.
This example shows how much Scotland's constitutional arrangements matter for farming. It can't be right that when the EU discusses important agricultural business, Scotland can't make its voice heard. Sometimes we're not even allowed in the room, like at the Informal Councils when Ministers map out the future of the CAP post-2013. Or the Council lunch this week, when they discussed the situation in the dairy sector. We can't even get a subject put on a Council agenda without going through London.
So as Parliament prepares to debate the Calman Report, the government's National Conversation is highly relevant for the sector, and I urge all of you to contribute to it.
In the meantime, we have to make the best possible use of the current arrangements. That's why I am delighted Brian Pack, who's here this morning, has agreed to chair our inquiry on the future of farm support. I know he can count on the full support of all parts of the sector for this crucial work. Since I announced Brian's appointment last week, I have agreed his terms of reference with him and they are being published on the government's website today.
Before I finish, I have one final announcement, which I know Brian will be pleased by.
As part of our £1 million livestock sector resilience package, the Scottish Government and QMS are today launching a major research project on meat eating quality.
Quality is at the core of Scotland's strategic positioning in the red meat sector, and it's therefore vital that we maintain our quality advantage. In time, this research could lead to an integrated, automatic system for assessing both carcase characteristics and eating quality. This would be a world first for Scotland. QMS deserve huge credit for developing this project, and on behalf of the whole sector I congratulate them today.
So there's yet another reason to have confidence for the future. In the meantime, we can all enjoy the fabulous products of today. This Show is one of the best events of the year. A showcase of all that's best about rural Scotland, and our food and drink. A reminder of how lucky we are to be here in Scotland.