Agribusiness 2020, the annual AIC member conference, drew over 220 agribusiness executives to Peterborough last week. The keynote speaker, Defra food and farming minister George Eustice, had been forced to pull out shortly before the event once the general election had been called.
Opening speaker AIC chief executive Robert Sheasby commented that the last year had been one of stasis – the UK remained in the EU for the time being, while the Agriculture and Environment Bills had started their Parliamentary journeys but were now dependent on the general election result. Nor was there firm progress on trade talks.
Brexit continues to dominate the AIC workload, and the Confederation analysed the realities for members – particularly in the event of a no-deal withdrawal from the EU. Any rapid adjustment to a new agricultural policy post-Brexit will cause supply disruption and business casualties.
Of course, there will be opportunities from the changes, he continued. The AIC is engaged with the new Agriculture and Environment Bills to influence these important frameworks for future legislation, and it has responded to various Defra and wider agency consultations concerning the food supply chain on behalf of members. Earned recognition through the AIC assurance schemes will be particularly important once the UK is outside the EU.
At the same time, climate change and environmental issues are rising up the political agenda, with government responding by committing to reduce carbon outputs to net zero by 2050. This movement has been accompanied by a tide of misinformation, with agriculture often inaccurately blamed for environmental degradation.
Net zero will affect agriculture – the AIC is working with its five sectors to create roadmaps to help plan a way forward and, importantly, seek to pre-empt regulatory measures with voluntary actions that are more under the industry’s control.
AIC member expertise can be harnessed to identify solutions – for example in the new Environmental Land Management pilot schemes – to help set policy and bring about a more sustainable future.
Meanwhile, technology continues to develop. Data-based applications offer the promise to increase farm and member business efficiency, as do genetic advances, but these must be regulated to scientific principles with engagement between government and industry.
Government can’t make decisions that affect the agribusiness sector without full industry consultation, if industry is to be productive and profitable, concluded Mr Sheasby. He cited the recent example of an EU ban on potatoes treated with maleic hydrazide being fed to livestock, but with unintended consequences for former foodstuffs processors handling potato co-products. An earlier engagement would have allowed this policy decision to have been highlighted, rather than unpicked later.
Head of agriculture at HSBC Bank Allan Wilkinson warned that the global economy is softening as China’s economic growth slows – a function of that country becoming more developed. This could lead to a broader world downturn and even recession. The US is the only major economy with room to cut interest rates to mitigate recession – the EU and UK already have very low rates.
The UK economy is still growing, but at “crawling speed”. Brexit uncertainty is eroding consumer confidence: although there is real wage growth after a long period without it, consumers are investing in small purchases rather than “big ticket” items. Brexit has also led to fewer migrants coming to work in the UK – labour is becoming an economic constraint.
The “elephant in the room” is UK agricultural productivity, which lags other EU and international countries, Mr Wilkinson noted. There is a widening gulf between the best and worst UK farm performers – while the very best farm businesses are globally competitive, the average and below-average ones are falling behind.
Brexit will highlight this difference, he continued. Much of UK agriculture still relies on direct CAP support – but this is very unlikely to sustain at current levels after Brexit. Any support available will be more conditional on environmental and public goods.
Reduced support will lead to fewer farm businesses, with implications for rural communities and infrastructure, and of course, for the agricultural supply trade. “How well prepared is the supply industry? he asked. “Clear leadership will be needed.”
Society and consumers are changing too, Mr Wilkinson stated – the new generation thinks differently to the older one on a range of issues such as climate and natural resource usage, soil and bee health and sustainability. This is reflected in the rise of convenience foods, less tolerance to plastic packaging and food wastes, and a move away from meat in the diet. There is a growing focus on plant-based proteins as part of the food and health relationship debate – changing consumer tastes will affect the future industry.
Increasingly, the hidden costs of food production – wastage, health costs and greenhouse gas emissions – will be calculated into the overall budget, which will affect businesses all along the food chain.
But all these changes are also business opportunities, he concluded. The UK is ahead on many sustainability measures, and British brands are trusted globally. The UK needs to capitalise on this – particularly in the healthy food sector.
Baroness Lucy Neville-Rolfe, who chairs Assured Food Standards and its Red Tractor assurance scheme, observed that the new Environment and Agriculture Bills showed the direction of travel towards higher standards of environmental protection and animal welfare, whichever government is elected in December. The NFU had anticipated this green shift in consumer thinking through target to achieve net zero industry carbon emissions by 2040.
But the major question is the level of public support funding for UK agriculture post-Brexit, and whether the Treasury will sanction farm support when faced with a host of competing priorities.
The Red Tractor food standards have been in place for almost 20 years, and now cover around 75% or £14 billion worth of UK food, she said. The scheme is important in accrediting safe, traceable food products produced to high standards. It aids retailer due diligence and earned recognition at government level to reduce farm inspections. Red Tractor branding promotes the high-quality provenance of UK food and drink exports, particularly in South East Asian markets.
Lady Neville-Rolfe called for a level playing field post-Brexit – the market must respect the additional cost and care taken in producing UK food to higher standards, or the system becomes unsustainable. She called for public procurement policies to respect the higher standards and cost.
Red Tractor is now rolling out risk-based inspections to ensure it is not let down by poor practices – as has been shown, one bad media headline can affect the whole brand. Therefore, the scheme will focus on improving the weaker performing farm businesses within its 46,000 membership. Starting with the pig sector, there will be more unannounced spot checks to weed out the minority with non-compliance issues, who will face suspension. The tougher approach will then be rolled out into the dairy and poultry sectors.
There will also be investment in raising cereal farm efficiency, through dealing with rejections online and providing more digital portals for consumer and supplier reporting.
The Red Tractor vision is for a complete farm assurance scheme that enhances the environment and animal welfare, rather than merely protecting it, concluded Lady Neville Rolfe. But she called on all farmers to join Red Tractor; the whole industry to work together in raising agricultural productivity; and to recognise that the consumer is central – the sector must adapt to changing tastes such as more plant protein consumption and animal welfare concerns, rather than fighting them.
Dr Laurence Smith of the Royal Agricultural University reported on his doctoral research, carried out in conjunction with Cranfield University, on the impact of switching England and Wales to a totally organic farming system.
An earlier Cranfield report had warned that conventional agriculture is causing £1.2 billion in soil erosion losses each year, with climate change lifting average temperatures. Could an all organic UK reduce agricultural GHG emissions?
The modelling showed a potential 40% drop in farm output if the UK was fully organic – fewer intensive cereals, oilseeds and beet production would lose yield, but the change would promote the growing of a wider range of vegetable crops. There would be less pig, poultry and dairy production, but an increase in grazing livestock.
Under the all organic scenario, the UK would produce more protein – primarily meat and pulse crops – than at present. There would be less starchy cereals and dairy products, but more vegetables.
Assessing crop and animal production by emissions over a life cycle, converting methane, nitrous oxide and carbon dioxide to kg co2 equivalent, showed that organic milling wheat and rapeseed produced less emissions that their conventional equivalents, but root crops were worse – more energy was needed to cultivate and protect them organically.
While organic livestock systems had lower emissions – fertiliser and energy use is lower than with intensive conventional livestock – this is partially offset by worse organic food conversion ratios.
Surprisingly, in most scenarios, organic performed worse than conventional when net system emissions were calculated – for example smaller organic grain and oilseed crops would leave less processing co-products feedstuffs for livestock.
In summary, an all-organic UK agriculture would see GHG emissions fall through less fertiliser and imported feed material usage. But, replacing UK food imports with 100% domestic food production would see GHG emissions rise, even under a fully organic system. This could be mitigated over time by breeding specific plant varieties for organic systems and developing alternative feed proteins – perhaps based on insects or algae.
But achieving UK GHG reductions will require significant dietary change – the whole food system will have to adapt, not just the way it is produced, to achieve reduction targets, advised Dr Smith.
NFU vice president Stuart Roberts said that while Brexit is dominating the UK news agenda at the moment, the real story is the need to produce more food in next three decades than has been produced in the last 10,000 years – from finite resources in a changing climate.
These factors are behind the NFU’s aspiration of achieving net zero UK agricultural emissions by 2040, as the British agriculture industry makes itself part of the solution to climate change rather than part of the problem. For example, the role of ruminant agriculture is essential in converting low quality forage to protein for human consumption.
These changes are a massive opportunity for UK agriculture, he stated. The sector is one of the world’s most sustainable and efficient primary production industries, with a world leading record on welfare, water stewardship and antibiotic use – but it needs to communicate that message and its high standards more effectively.
Dr Elaine Fitches of FERA discussed the role of insect proteins as an alternative feed ingredient to imported vegetable sources.
Research and investment trends point to the Black Soldier Fly being the best species – the larvae grow fast on range of organic waste materials, and with no human or animal disease implications, but their production requires high temperatures.
The larvae can be processed into protein, fat and oil components, with the bioresidues making a useful soil conditioner and/or biostimulant. The protein is highly digestible – between 37% – 47% -and is comparable to soya and fishmeals with a useful amino acid composition. While the protein content is relatively constant, the lipid content will vary with the substrate. A high lauric acid content in the lipids has been shown to have an antimicrobial effect in the diet.
Insect proteins are safe to feed – primarily in aquaculture and monogastric species – but care should be taken with the substrate the insects feed on – while there is no evidence that they accumulate contaminants or mycotoxins, cadmium levels can be a problem with some substrates.
Dr Fitches observed that the UK lags many other countries in developing an alternative protein strategy, in a global sector that the IPIF estimates could be worth $20bn annually. But there is an UK insect biomass task and finish group – with AIC representation – watching developments. The EU allows insect proteins to be used in fish feeds and pet foods at the moment, with a decision on pig and poultry feeds expected next year.
Certainly, insect protein will need less land than vegetable sources – perhaps 120 times less than soya. It is far from price competitive yet but is still at the pilot stage. Estimates of up to 500,000 tonnes of insect protein output by 2025 will allow the cost to come down. Also, there is great potential to improve the genetics of the BSF to make it more efficient, Dr Fitches concluded, pointing to advances in broiler chicken production over recent decades.
Final speaker Professor Huw Jones of Aberystwyth University explored the potential of gene editing technologies in a more productive and sustainable agriculture. These advances could help reduce the need for conventional agricultural inputs and mitigate the impact of the industry on the environment.
Changing single functional genes, transcription factors or moving natural mutations from poorer genetic backgrounds all have commercial potential. For example, Pioneer is seeking to move waxy corn traits into high yielding varieties through gene-editing rather than conventional breeding and Calyxt is working on a gene-edited soybean oil. The addition of flavour, heat and drought stress traits to crop plants is being explored.
The interest in vertical farming systems and robotic crop management and harvesting means that new plant architectures may be needed to get best efficiency from these methods – gene editing could play a part here. For example, partial harvesting of the ripe parts of a plant, rather than the whole plant, may become more common, with a just-in-time approach matching supply to demand and avoiding surpluses.
While public perception of genetic technologies appears to have softened over the years, regulation is still a barrier – particularly the recent EU ruling that gene-editing counts as a genetic modification, without the exemption allowed for conventional mutation breeding. Prof Jones termed this decision “illogical, unworkable and disproportionate”.
The EU knows that gene-editing is coming, but doesn’t know how to regulate it, Prof Jones advised – outgoing Health and Food Safety Commissioner Vytenis Andriukaitis had expressed his support, and UK ministers Gove and Eustice had both spoken in favour – the industry needs to keep lobbying for access to these technologies.
The full confernce presentations are available via: www.agribusiness.org.uk/agenda/