Presidential address to AGM - 6 February 2020

Speech by President Andrew McCornick to NFU Scotland AGM and Conference in Glasgow, 6 February 2020.

Where are we?  Everything has changed but nothing is different

Big picture says:
• Disease in China - animal and human now in UK
• Unrest in Middle east 
• Trade tariffs - airbus and whisky
• US and china - US and Europe
• Food security 

We are in an increasingly volatile and challenging world. The threat of diseases, both human and animal.  The degree of unrest in the middle east and the continuous disruption in trade created by countries taking individual positions despite WTO rules and agreements.  

We are entering into this melee as a nation of just over 60m rather being part of a bloc of over 500m and are going to be building new trading agreements with our biggest trading partner along with the rest of the world in very short order.

We do not have the same leverage or power that we had but we may be able to be more fleet of foot and flexible to our specific needs and market/trade needs

There is an enormous responsibility to get this right

It is a bit like seeding, harvest, calving or lambing.  We must throw everything at it in a short amount of time because what happens beyond that is only possible if we get this bit right. 

The whole team must understand this and work together to do it. 

Politicians must put politics aside during this phase of Brexit and work for the greater good - the politics can re-emerge once this is done  

The UK is a net importer of food and yet there’s no reference to food security in this bold new world that we are entering. 

The 2020’s are going to be massive decade and there are going to be a lot of bumps along the road, possibly collateral damage, but there are inevitably going to be opportunities.

I believe the opportunity to refresh and renew our industry from the stagnation that CAP has created and the failure to understand the market which CAP support has perpetrated. 

The public have different expectations now of rural Scotland than pre-our entry to the common market. We are expected to deliver on all these expectations as well as the necessary provision of food. 

This comes at financial cost and we are not able to deliver on all of this with current market returns.  Legislators and policy makers need to deliver on their side of the equation, or it simply won’t work, or we risk closing down rural Scotland. 

Withdrawal Agreement Bill
• nothing changes SAF, EU rules, inspections, stress 

The withdrawal agreement bill was done at 11pm on 31st Jan and, despite the parliamentary time that has been expended on it to my mind, it was the easier step.

There are 11 months of a transition /implementation period where we are still in the EU negotiating our future relationship and fundamentally nothing is different

The bill also prohibits the extension of the transition which means that we are still potentially able to fall into a no deal Brexit blackhole. The Prime Minister announced on Monday that we are going to pursue a Canada style deal and, if that is not achieved, it would be an Australian model. The Australia model to me is little different to WTO rules.

We, as an industry of farmers and crofters, have a far bigger challenge which is the negotiation of our future trading relationships with the EU and the rest of the World as it effects significantly our markets and how we will be able to do business going forward. 

NFUS has stated from the very beginning that we do not want agriculture and food to be a bargaining chip in these trade deals or to be sacrificed in the quest for cheap food.

We have a very short window the implementation/transition period ending the 31st of December during which to lobby for what we want for our farmers and crofters.
• trade, labour, policy, support 

Agriculture Bills    
First time in 47 years, agriculture policy is coming home.
Chancellor Sajid Javid has promised that the same funding will be in place for this year and, during the election, similar funding was promised over the lifetime of parliament. 

We must have with this……………. A Multiannual financial framework?   Ring fenced to agriculture for the full quantum of funding? 

There are two agriculture bills - one in Westminster and one in Holyrood. 

The one in Westminster, which is a modified reiteration of the pre-election ag bill from DEFRA, is meant for England primarily, but there are important elements within the DEFRA bill which impacts on us in Scotland even although agriculture is wholly devolved. 

Commonly agreed frameworks need to be in place to allow the marketplace to work including traceability and movements.  

The Ag bill in Scotland called Agriculture [retained EU law and data] (Scotland) bill.  Is it to keep the lights on? From 2021-2024, it is the next step in “stability and simplicity” 

ScotGov will, via this bill be doing little that creates chaos for our industry other than tinkering with the current CAP.  It will create space to determine the future without any upheaval but is it making haste slowly?  As an industry, ScotGov have set some very demanding targets for us by 2030. There must be a real roadmap for us to see how to turn our businesses and mindsets to meet these challenges. Farmers and crofters are in this for the long haul and need to be able to adjust without crippling these businesses.  We need to see where we are going. 

Possibly by the middle of the summer we will have a report from the farming and future policy group. 

I hope to see meaningful outcomes from this.  It had better not sit on a shelf gathering dust as the Pack report does, despite having real value for the industry had it been implemented. 
We should acknowledge the importance that Brian Pack, who we have recently lost, had for our industry over his life in the many roles he held. Our thoughts are with his family and our thanks are from the industry.  

The (EU retained law and data) (Scotland) bill
This bill is to allow Scottish ministers to have powers to amend or replace EU retained laws in relation to CAP.  The space between ’21 and ’24 must deliver: -

The outcomes of the simplification taskforce
 Mapping
 Inspections
 Penalties
 Remove the crop diversification and permanent grassland requirements. They are not relevant to Scotland.
 Review the efa’s—more environmental gains with less production cost and compliance

These pilots need to 
 Encourage more woodland integration 
 Promote multiple benefits of good grassland management
 Support to evidence-based approach to crop production and selection
 Invest in mitigation measures to reduce Carbon emissions on Scottish farms.

In the long term we need to have something other than income forgone or cost incurred for uptake of environmental schemes.

The EU is our main and nearest market beyond the internal UK market, with established trade routes and partnerships. NFUS has been campaigning for free and frictionless trade with the EU to remain after Brexit. Remember our economies are very closely integrated. 

Standards on imports must match ours or we will be living with double standards one set for us and one for the rest of the world entering our market. 

Put simply we would be selling away our food safety, welfare, traceability and animal and plant health and any climate change targets we are going to be implementing in farming and crofting will be sold to the cheapest bidder if we don’t have this.  

It should be written into a trade bill in Westminster as a must - it certainly doesn’t appear in the Agri bill. 

Failing this, we need an independent standards commission with teeth to police what is going on in trade negotiations and ensure adequate checks are in place on imports. After all, we will not have Europe to do this for us now 

We will be in London on the 25th of March with the other UK unions at a rally leading on our standards of production and demanding that we are, as UK producers, not being undermined by trade deals that allow produce access, produced using methods and standards that would be illegal in the UK.  (Slow down a wee bit)

I am looking for volunteers to be with us.   

For all these reasons, but also with the potential of unintended consequences, we must have parliamentary scrutiny of trade bills before they are signed off.

Despite being out of Europe, we will have to have a close eye on what they are doing. They will be our biggest competitor as we are so closely aligned to their production methods and standards. Europe will be one of our most important markets and suppliers.  They also have most of the

World tied in with trade deals and we as UK need to match or surpass this to compete. Which also makes them our biggest competitor. 

Equally, if they are as farmers and growers getting supported more generously, we will be severely disadvantaged on the global stage.

We as UK and we as Scotland need to be more ambitious with our look at the global market. There are opportunities out there. World population is increasing and the middle class, whatever that means, is exponentially increasing within that. 

This middle class are moving to a western style diet and Scotland and the UK are globally recognised for our quality and standards of production, the PGI’s we have exemplify this. 

We can strengthen this marque with our climate change credentials, then get onto the world stage and add value to our produce and drive margin and profit to producers.

ScotGov need to stop throwing loose change at our marketing and promotional bodies like SF&D and QMS and let them loose in the land of opportunity and get marketing. This additional investment will be returned many fold if done ambitiously.  Other countries will be and are doing it. Like New Zealand and Ireland

As part of the climate change emergency, our research institutes should be getting better funded to validate our climate change credentials and guide us on how to do the same job but better going forward in crop and animal production. 

Climate Change
It's either an emergency or it’s not!

In an emergency, you see blue flashing lights and things happening at pace. We are getting ambitious targets set for us in legislation above and beyond the Paris agreement targets. 

There is no fault in this at all. 

My problem is, I have had the call to say there is a fire and I have the team ready to do their part to deal with it but I have no fire engine, I am getting told that it is just getting built and it is the best ever. 

We need the tools and we need them sooner rather than later and we need to know that they work or the call - hoax or not - was pointless.  

What have we got in Scotland? 
 Global situation prescribed at local level
 Tactical 
 Aspirational
 Smarter farming and crofting outcomes & production improved
 Pressure is on “pace of change is increasing”
 Every sector will have different ways of doing this
 Future regs will need to incentivise rather than closing farms down
 Income forgone or cost can no longer be used to deliver environmental change

We need a holistic circular economy with sustainable resource use. This ambition must not be masked by exporting our climate change commitment by allowing imports that are not doing at least the same for the planet. 

Farmers have a contract with nature.  We are the original environmentalists.  Environmentalists need farmers to deliver their aspirations as custodians of the countryside and farmers need environmentalists as they are the key to the money.

There is no single solution to this.

Some people believe that they can eat the way to a better planet. 
We are being told that trees are the solution, yet Ben Fogle goes out to Siberia and discovers that the tree canopy is protecting the land surface, heating the permafrost and creating warming.  Climate change is about temperature, but everyone is looking at carbon.  It is much, much more complicated than just one element ……this is nature…. A living vibrant ecosystem.

An article in “trends in ecology and evolution” reports that the Royal Botanical Garden in Edinburgh and University of Cape Town amongst others have been reviewing the ambitious afr100 plan to plant 100m ha of trees by 2030 - 4x the size of Britain with the potential to absorb 3% CO2/year in the long term possibly (is this absorption).  The establishment phase will be running a negative carbon footprint. 
There is no scientific agreement on whether trees will warm or cool the planet. Trees have darker canopies than grassy vegetation absorbing more sunlight and heating the land surface – a problem not yet included in the calculations of afforestation by advocates ( source shauna hay )

Trees have a part to play but they are getting used as a distraction for the real issue of reduction of fossil fuel usage and transforming energy systems.

The tree model will displace the potential to grow food crops, livestock farming and the rich flora and fauna that grazing systems deliver with the associated employment and communities benefiting the national GDP. 

In Scotland’s case, it means probably importing food from somewhere that is de-foresting. The consequences of political decisions and policy must be thought right through holistically. 

The right tree in the right place and not blanket afforestation will play a part in climate change and carbon storage.

The pilots I mentioned earlier need to be ambitious on woodland integration and they need to be honest on all the biodiversity and climate change costs and benefits.     

Currently Europe imports 70% of its feed needs – the majority from Brazil, which is deforesting therefore exporting our footprint.
Ursula van der Lleyn, the EU president has, in her green deal, a proposal for a “climate border tax” to avoid carbon leakage.
his needs to be accounted for in future trade deals as part of the standards we expect on imported food. We would be accepting double standards if we were to do anything else
COP 26 - The UN conference on climate change 
This is climate change on a global scale coming to Glasgow.  It will be the biggest conference event ever held in the UK and we as NFUS want to get involved. Already our Climate Change manager Ruth Taylor has been at the 2019 version in Madrid COP 25. 

We are currently working with WWF on a promotion in Holyrood later this year of what we, as an industry, are working together on to help deliver for the environment, climate change and food. 

We need to develop this and showcase Scotland’s environmental and climate change credentials to the World when they are here and promote our high-quality high provenance food and tourism and make it clear we are open for business to trade with the World. 

We will also follow what world leaders are looking on as the next steps and how it will affect Scotland.   

Food - food security is a global issue. 
We can see this with the devastation that African swine fever is wreaking in China. This catastrophe is benefiting protein markets like lamb, beef and pork.

Retail sector is going through an enormous change the number of retail outlets are diminishing at a fast pace. Consumer preferences are changing.
In the US, over 50% of the food eaten is out of the home and we are not far behind if you look at the number of fast food outlets that there are springing up.   

Commodity or added value
Scotland is ideally suited to produce protein. Meat and dairy from rain and inedible grass off the LFA which is 85% of Scotland not able to grow crop. 
Our crops, horticulture, fruit, alongside the pigs and poultry sector can produce the balance of a nutritious, healthy locally sourced sustainable seasonal diet for Scotland.    

Can you afford to be, or do you want to be, a commodity producer and accept being a price taker? Or if not, how do you deliver something different and identify it? 

Herein lies a paradox for our food production; sustainable food has a monetary cost.  Whether it is eggs, dairy, fruit, vegetables, meat and crop, few consumers are willing to pay this cost although we are told they want it. 

Farmers and crofters cannot act alone as the social and environmental conscience of the nation while receiving such a small part of the food value chain.  Labelling has got to be in place to allow us to differentiate and market to the consumer, be it local or export, to draw on this value/cost as well as the appropriate support for the “public good,” that the public say they want.   

Retailers need to get a clear signal that we need to make money. 

We must be in a place to be able to say no. 

Additional markets must be opened to give processors choice and options and encourage development in their businesses.  It is currently possible to get a better price abroad in relation to what we get from retailers here and now by selling the back story of how we produce and the standards we produce to. 

Marketing must be moved up the agenda along with climate change. 

As I said earlier the solid foundations are in place…. With SF&D and QMS and our PGI’s ….but these need to be turbo charged with a wedge more public finance if government wants to deliver on their 2030 targets and secure the vibrant, sustainable farming and crofting industry that supplies the raw materials in a sustainable way going forward, along with the entire food chain.  

Public procurement is another open door that Brexit should be delivering on. Governments should be delivering contracts of locally sourced, highly nutritious, healthy, unprocessed, low road miles, low climate impact meat, dairy, vegetables and fruit in every contract that they are paying for through schools, NHS, military or anywhere that the money comes from the public purse. 

It’s a real own goal to do anything else.  Imagine a marketing campaign where I am telling you to buy my excellent single malt whisky while I am sitting drinking American bourbon. 

We should be ensuring the consumption of our own home produce before going elsewhere. It’s only common sense and healthier than providing cost-driven cheap, highly processed product for our growing children, and the ill and infirm.

Supply chain
 Status quo is not acceptable
 Processors need to seek out alternative/new markets
 Producers need new markets, and this can be done with outward looking governments being ambitious for a committed industry using SDI, SF&D and QMS 
 Need added value/strengthen brand, climate change is an opportunity to exploit Scottish provenance and quality.
 Something will need to shift in structure of processors/retailers/government.

We are not doing enough to exploit what’s on our doorstep. 

How many of you are talking to consumers?  You may be the most efficient farmer or crofter in Scotland, working with the highest welfare and environmental credentials, but once it goes down the farm lane you lose control of your produce and margin.  This has got to stop  
National Telecoms company says, “it’s good to talk”.  Why not “speak to a farmer”

Agritourism, food tourism are other doors lying wide open, ripe for exploiting. Look at your business and see if there may be something you can boost your farm or croft with?   How many have thought 5 years ahead?

There are positives
• Lamb makes up just 3% of China’s meat consumption yet they eat one third of all global lamb production
• 40% + of goods go to EU, down from 60% in 1999
• 90% of growth in World will be outside the EU 
• The sheer scale of the Far East is an opportunity 
• 10 yrs. ago 10% of the population was middle class.  Today it is 66%  
• Other markets recognise the UK as quality. 
• Processors and retailers have taken the farmers margin, we need to tackle this.

In conclusion
 Scottish government can simplify the model we are farming under. That should not stop the development of an ambitious post 2024 roadmap. 
 We need the tools to deliver climate change, but they must be proven
 Let’s see real commitment to marketing.  

 Thank you

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