Richard Lochhead MSP, Cabinet Secretary for Rural Affairs and the Environment
Scottish Agricultural College Outlook Conference: Food Security in a Climate of Change
November 11, 2008
Murrayfield Stadium, Edinburgh
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It is a real pleasure to be here. I am full of Scottish food - which is very nice - from an event in Comrie this morning at a project which is part of the Climate Change fund. One of their challenges is food security in the community of Comrie and I was hearing that they grow a lot of their own food in allotments locally.
May I begin by thanking you for inviting me to speak at this year's SAC Outlook Conference. While in opposition over the past years I tabled a number of motions in the Scottish Parliament about food security. It was notable that food security was absent but now it is certainly high up the food agenda. Indeed, 2008 has been the year that the world woke up to food security. While food shortages concerns had never gone away for those in less developed countries, it was something that the wealthier part of the world had been able to ignore perhaps for a very long time.
The whole issue of food security has been a constant headline in our newspapers for the past 6 months. Reports of food shortages and riots in countries in various parts of the globe were on the news. Weather-related supply problems and rising energy, fertiliser and transport costs together with strong demand from emerging markets and demand for bio-fuels all contributed to rising global commodity prices as well.
And, here in Europe as well as Scotland, adverse weather affected agricultural production. South-eastern Europe had hot, dry weather and a lack of rain impacted on the Southern hemisphere harvest. Closer to home, there was very wet weather in the north of the EU. These all impacted on the 2007 harvest. Indeed, I see Jim McLaren in the audience whose farm I visited to see first hand the impact of bad weather in 2008 on crop production.
High oil prices put pressure on input costs such as fertilisers and pesticides as well as fuels, heating and wider energy prices. They in turn have encouraged investment in the biofuels sector and increased livestock production costs. And although oil prices have receded from their high of $140 per barrel in July this year to $63 per barrel last night, this experience has brought into sharp focus our dependence on oil in our economy.
The rise in commodity prices in turn impacted on retail prices in the UK. For consumers, the proportion of household expenditure on food rose from 8.9% in 2006 to 9.2% in 2007 which of course reflected the rise in commodity prices from the middle of 2007. Scotland has seen a higher retail inflation and retailers tell me Scots are paying the highest shopping bills in Britain. There are factors which contribute to this picture and we need to understand the issues around this better. For Government, rising food prices are a particular concern because of the disproportionate effect they have on low income groups who spend a greater share of their budgets on food.
I am pleased that SAC was aware of the scale of the pressures involved, their global nature and the new climate change challenges when it planned for today's conference.
Scotland is not immune from the turbulence affecting major economies and global markets.
The global economic slowdown is clearly now being felt in Scottish homes and Scottish high streets and, with the UK expected to enter recession, this is likely to continue over the weeks and months ahead.
The Scottish Government has already demonstrated that it won't simply sit back and wait for things to get better.
As early as August we were identifying interventions to stimulate growth and help hard pressed families and businesses.
We have identified the action we can take in the months ahead, within our current responsibilities, to support small business and ordinary households, to maximise jobs and investment and ensure our economy is well positioned for recovery.
Scotland is better placed than at any time in the past to address these challenges. Our focus on sustainable economic growth and our undoubted strengths - a highly skilled workforce, huge renewable energy resources in this country and key sectors such as food and drink - give us a solid foundation on which to establish competitive advantage and position Scotland to take early and speedy advantage of any recovery.
We are well placed in Scotland for the key fundamentals of living - energy, food and water - and we are well positioned to take advantage of this in the future.
The Scottish Government is ambitious for the future of Scotland and for sustainable economic growth for all of Scotland. This is the vision for 21st century Scotland. And farming is central to that vision.
Since I took up the post of Cabinet Secretary for Rural Affairs and the Environment, everyone I have met has confirmed my belief that Scottish farmers play a special role in our nation. Special in their ability to produce, protect the countryside and above all to adapt.
Adaptation involves innovation. And it is innovative skills that will bring success in the 21st century. To respond to the challenges of increasing fuel and fertiliser costs, fluctuating commodity prices and a globalised trading environment and the broader challenges that we all face such as the need to respond to climate change.
I have seen many very fine examples the length and breadth of Scotland of such innovation, where traditional farmers have diversified both within agriculture and into new enterprises.
I have seen many fine examples of where farming and food retailing have been brought together. Or in bold decisions taken by those, for example in the livestock sector who have capitalised on their unique locations to sell guaranteed traceability and strict qualification requirements as the brand values of their product.
In every corner of Scotland, farmers are becoming more and more innovative.
Innovation is often a reaction to pressures for change. And agricultural policy has changed much in the last couple of decades as we are all aware.
We are very ambitious for Scottish agriculture as I said.
In my view, growth in agriculture should at least reach our national target to match the growth rate of other smaller EU countries. This would mean, as a minimum, increasing agriculture's "gross value added" from its present level of £800 million to at least £1 billion by 2016. it is a target that is even more of a challenge than it was six months ago. We believe it does remain achievable.
The SRDP worth £1.6 billion over the next seven years will help grow the industry providing a tremendous opportunity to invest in addressing the challenges of the 21st century. While 20% of this money comes from modulation receipts, over 70% comes direct from the Scottish Government, and the small balance is direct European funding - a balance that is pathetically small due to poor deals secured by previous UK governments. This long-term deal is something this government is keen to open up at the earliest opportunity, but realistically this is not likely to be before the negotiations on post-2013. Meanwhile, as we take stock of our nation's food security it is appropriate to take stock of the SRDP. The SRDP is delivering against many of our aspirations. But it's right to take stock, consider whether it still meets with our current priorities, and look at the bureaucracy in the system. I will be announcing more on the scope and detail of the review in the near future.
And, as we look beyond Scotland, we can see global trends moving in our favour. For example, higher incomes leading to more demand for meat, both in global markets like India and China, as well as at home. All with an increasing focus on quality.
Food and Drink is big business. The Food and Drink Industry adds value of some £7.3bn to Scotland's economy and employs over 360,000 people, including agriculture and fisheries. It is a key sector for Scottish Enterprise, for Highlands and Islands Enterprise and Scottish Development International, and we work closely with Scotland Food and Drink to ensure a coherent, industry focused approach. The further development of this sector is absolutely essential for the sustainable growth of both the sector and the economy of Scotland as a whole.
We are supporting the industry in a number of ways. This year we launched our New Food Processing Marketing & Co operation Grant Scheme. To date - some £10m assistance has been awarded as part of £75m of support until 2013. Assistance awarded will deliver investment in the industry of some £33m which will in turn create 130 new jobs.
And the Scottish Government's international promotion of Scotland will also help. We want to celebrate and enhance the reputation of Scotland's food and drink. As part of Homecoming 2009, which of course celebrates 250 years since the birth of our national bard Rabbie Burns, we want to celebrate and enhance the reputation of Scotland's food and drink. Our food and drink is up among the best in the world so we need to ensure those returning home next year get to sample it and become international ambassadors for our industry.
However, we are also faced with some serious challenges:
- Climate change - the subject of your agenda today - we are living in a world facing increasing crises of flood and drought
and of course
- Global population is predicted to grow to 9 billion by 2050 which will not just stress the world but have implications for Scotland as well
As global demand for food increases and consumers become more discerning, there is a growing realisation that we live in a world which can no longer take food production for granted.
That is why supporting food is in our national interests, and can help build not only our economy but also help develop more environmentally friendly ways of producing food at the same time.
That is why we felt it is key for our government to bring a coherent approach to food as it impacts on the economy (rural and urban), diet and health impacts, production and consumption in terms of greener agenda, and issues of public sector leadership through for example the procurement agenda.
And in my lifetime, I doubt the food agenda has ever had a higher profile in Scotland than it has just now.
Since I launched the national food discussion the interest in food and drink, particularly food and drink grown and produced here in Scotland, has become increasingly evident.
We have set out our vision for food and drink in Scotland - that it should make the nation Healthier, Wealthier and Smarter with production making communities Stronger and consumption respecting the local and global Environment. The very themes you are discussing today and which I talked about at Comrie this morning.
And so our aim is to deliver a National Food and Drink Policy which will promote Scotland's sustainable economic growth by ensuring the focus of all food and drink related activity by Government offers quality, health and wellbeing and sustainability, whilst recognising the need for access to affordable food for everyone in Scotland.
I recognise there is a need to act swiftly to maintain the momentum and capitalise on the high level of public interest in the wider food and drink agenda, and the Forum have been tasked with presenting initial findings and recommendations by March 2009.
To achieve this I have commissioned work through 5 workstreams, overseen by independent chairpersons, to deliver a National Food and Drink Policy which will promote sustainable economic growth.
So what are we doing within the workstreams?
The first work-stream, sustainable economic growth, is being led by Allan Burns from Scotland Food and Drink. He is working closely with Scottish Enterprise and other partners to deliver substantial key elements which will support the food and drink industry in terms of exports, commercialising academic expertise, and delivering training and skills for the industry.
The second work-stream is food and drink choices, and it is being led by Professor Annie Anderson from Dundee University. This group will provide recommendations for Government, Industry and consumers on how to support better choices in terms of provenance, health and environmental sustainability. One of the key areas here will be to look at country of origin labelling, and a research specification is currently in final development with partners.
The third work-stream, celebrating and enhancing Scotland's reputation as a land of food and drink, and that is being led by Martin Wishart and will include a major campaign to improve the quality and visibility of Scottish produce served in Scotland's restaurants and pubs. This will complement parallel work by Scotland Food and Drink work on reputation. I have to say if there is one addition that I will be making it is to get this debate into takeaways, restaurants and hotels, particularly multi-national chains. Lots of progress has been made but my own experience, particularly as a father of young children, has shown there is a long way to go.
Work-stream 4, walking the talk, is led by Robin Gourlay, and is about government leading the way in its work on food and drink. A significant part of this workstream is about helping public sector food procurement in Scotland become an exemplar for sustainable economic growth in terms of quality, health and wellbeing, affordability and sustainability. Robin was behind the East Ayrshire Council project that has shown how, by implementing the guidelines produced by the Scottish Government, local suppliers can compete successfully for public sector food contracts. And he will be working with group of producers, processors, the hospitality sector, who are signed up to our direction of travel, and public sector procurement specialists to inform guidance to Scotland's public sector on becoming an exemplar for sustainable growth in Scotland.
The final work-stream is security, access and affordability and it is focusing on these three themes. Under the leadership of Reverend Professor David Atkinson this workstream is developing with the aim of ensuring that Scotland as a national maintains the capacity for food and drink production in Scotland; that we better understand the global issues affecting supplies in order to plan efficiently and in order to maintain our longer term food security as a nation; and of course, at the same time, that we have continued access to affordable food. The Group he chairs are scoping the issues around access and affordability with the intention of commissioning further research into this. We are also looking at self-sufficiency figures for Scotland.
The issues of food security and the current economic climate show why it is vitally important that we have a robust and healthy debate about this nation's attitude to food. That is why I was determined to have a national food and drink policy, and the events of the past few months have proven that we were right to highlight food and drink as crucial to the future of Scotland.
The debate we are having is now even more vital as we come up against the hard questions the current climate puts in front of us. How best do we, as a nation, balance the interests of quality products, affordability for consumers, better health and wellbeing for our people and a sustainable environment for our children?
The current climate highlights the tensions between a long-term and a short-term view, and any food and drink policy needs to be flexible in order to respond to different economic conditions in the future. The choices that we all have to take are by no means easy. But I am determined that we will not shy away from the challenges that we have to face, and that together we can work through the challenges that lie ahead.
Our work on food security and responses to our food policy discussion highlight the importance of self-sufficiency in the form of growing your own. We also want to capture the enthusiasm that people have and that's why I have recently announced more efforts to free up Government land for people interested in allotments. I mentioned the situation in Comrie - 50 families have already applied for an allotment. There is huge public demand and it is important not just for growing (hopefully) nutritious food but also for food education.
We have also been taking work forward on a number of fronts which contribute to the food security debate and I have commissioned work to understand better the issues of self-sufficiency and what the Scottish figures look like.
We do have to recognise that self-sufficiency can be a difficult area for strong policy because it does not necessarily support the value the food and drink industry gains from exporting. And we have to be careful that secure food is a combination of domestic production and import. Diversifying supply options implies greater security against disruptions. Plus exports are an important part of the Scottish economy and increases in self-sufficiency through reduction in exports can have a damaging effect and we have to be conscious of that.
However that does not mean we should not better understand the issues and that is why food security is firmly on my agenda as a future challenge that Scotland must explore.
Looking to the future, we need to grow the rural economy sustainably. We are all now very aware of the threat posed by climate change to our future prosperity. The Scottish Government is determined that Scotland should give leadership on this topic and we will be introducing a Scottish Climate Change Bill into the Scottish Parliament shortly to meet our commitment to reduce emissions by 80% by 2050 and to set annual targets to achieve this objective. Indeed, our target has been matched now by the UK government in recent weeks.
Farming is very much at the sharp end as far as climate change is concerned given its dependence on the weather. We are told to expect longer growing seasons which may be good for some, but there is the real threat of more extreme weather events such as floods and the possibility of new diseases. We will have to learn to adapt to those changes which are now unavoidable.
Farming will also need to play its part in helping to reduce emissions. In the first instance, the aim must be to focus on those actions which farmers can take to reduce to reduce their use of energy on the farm. and make better use of materials such as fertilisers. Farmers should be looking to SAC and others for advice on reducing energy use and other ways of reducing their carbon footprint.
The good news is that agriculture can also provide land for carbon sinks such as woodland planting and land which can be used for opportunities to develop new forms of renewable energy such as wind and hydro power, anaerobic digestion and energy from biomass. We have, of course, initiated a land use study through the Macauley Institute and government scientists, to look at what Scotland's land resource can deliver and how we can best use it to meet some of these challenges.
Tackling climate change is a key challenge for Scottish agriculture as it is for us all. The Scottish Government will seek to support and encourage farmers to make their contribution.
Already, help is available through the SRDP to help farmers respond to the challenge of climate change and achieving environmental objectives can be tough and challenging, but we hope to provide support to the industry to adapt.
In conclusion, I want Scottish agriculture to continue to contribute to a sustainable rural economy, to the quality of our environment and to the vitality of our rural communities. Food security is now at the top of the agenda and this means there is a massive opportunity for Scotland to make full use of our natural resources. Food security and sustainable production have to come together but of course there are many ways to ensure we grasp the big opportunities for Scotland.
Next week I will be attending the Agriculture and Fisheries Council meeting which will conclude the CAP Health Check negotiations. It will also be the penultimate step in the annual fisheries negotiations - let's not forget fishermen are food producers too. The Health Check is not a major reform, but it's important and I'll be aiming to get the right outcomes for Scotland. Food security doesn't feature much in the Health Check. But once it's done, Europe needs to sit down and look at how supporting food production contributes to food security, to set the tone for the negotiations about policy after 2013.
Food is sexy in Scotland at the moment. Fascinating developments are going on and I very much want to see it going from strength to strength.