Response from the Welsh Agri-food Partnership Organic Strategy Group

prepared by Organic Centre Wales= , Univer= sity of Wales, Aberystwyth, SY23 3AL

to the Welsh Assembly Government consultation on

Strategic Action Plan for the Welsh Dairy Industry

http://new.wales.gov.uk/cons= ultations/currentconsultation/envandcouncurrcons/1226862/?lang=3Den<= /a>

Background

One of the primary roles of the Organic Strategy Group, since its formation has been the implementation of the first Welsh Organic Action Plan that was published in March 1999. Many of the aims of this first action plan have be= en fully or at least partially achieved. A Second Organic Action Plan was launched in 2005.

T= he English and Welsh organic action plans focus on building UK supply and reducing imports, therefore the proportion of UK agri= cultural activity is likely to continue to increase.

OCW, with support from the Agri Food Development Assis= tance Fund, is currently producing a series of Sector Market Development Reviews&= nbsp;including an Organic dairy sector report which will be available from OCW in late April.

General comments

T= he current situation is set out well; although we have some comments which follow; but= the basis for the statements on how to achieve success is not well argued, and = it is difficult to see how the conclusions drawn have derived from the foregoi= ng statements.

T= he crux of the issue is the definition of the term ‘business performance’ = in the third aim. Our concern is= that this means a drive for more economic efficiency in production and processing. If, however, it r= efers to delivery of sustainable businesses in terms of environment and social contributions as well as economic and delivers high levels of animal welfare and quality food products, then we entirely support the aim although consid= er that the meaning should be explicit.

W= e are pleased to note the recognition of organic milk and organic companies. These are of growing significance = both in production and processing terms and it would be good to see this built on. This would entail closer collaboration between the Organic and Dairy Strategy groups in delivering t= he dairy plan, and should also entail close collaboration between the Dairy Development Centre and Organic Centre Wales, and the inclusion of OCW in several delivery points which affect organic dairy producers. It would be good to have OCW’= ;s role in organic dairy extension activities explicitly recognized.

I= t would also be good to encourage the targeting of levy resources for organic producers, for example in market intelligence, research and extension, and = for MDC to work with OCW as well as DDC in this context.

T= he action plan should recognize the OFS as an agri-environment scheme alongside Tir G= ofal and Tir Cynnal schemes.

I= n general, our major point is that demonstrating a commitment to good environme= ntal and animal health and welfare standards and commitment to corporate social responsibility are likely to be major market drivers for the foreseeable future.

There are gaps in sector information; as well as filli= ng these gaps; it would be helpful to identify indicators which the sector wis= hes to alter over the life of the plan.=

Further information<= /o:p>

Some key facts and figures are not presented and/or ne= ed augmenting, specifically:

&nbs= p; &= nbsp; &nbs= p; i. &nb= sp; How much liquid milk is produced in Wales?

&nbs= p; &= nbsp; &nbs= p; ii. &n= bsp; How much liquid milk is processed in Wales?<= /p>

&nbs= p; &= nbsp; &nbs= p; iii. &= nbsp; How much liquid milk is consumed in Wales?

&nbs= p; &= nbsp; &nbs= p; iv. &n= bsp; The exports and imports appear to nearly balance – but what is the balance of liquid milk or milk products in the expo= rts and imports?

&nbs= p; &= nbsp; &nbs= p; v. &nb= sp; Having acknowledged the importance of the niche and organic markets, there are no data later in the document providing breakdow= n of the total figures.

&nbs= p; &= nbsp; &nbs= p; vi. &n= bsp; How much land involved in dairy farming is currentl= y in an agri-environment scheme? (Including the OFS.)

&nbs= p; &= nbsp; &nbs= p; vii. &= nbsp; How much of the milk produced is organic?

&nbs= p; &= nbsp; viii. = What is the destination of that organic milk? Is it processed in Wales and= sold in Wales= , or exported?

Commentary on consultation document

What would success look l= ike?

1. There is= no disputing that success should increase the value created, but the argument = for an increased absolute volume of milk produced is not made. The document foresees a stable lev= el of production but advocates an increase.

The split i= nto two scales is suggesting the first would be competing in world markets, the sec= ond aiming for niche markets. We = do not consider the arguments for this have been well made. As the Minister Carwyn Jones said on Friday 25^th March at the Sustainable Food procurem= ent conference in Cardiff, “we know there are no products on which we can compete solely on price. Our costs are higher, = and we can never replicate the costs elsewhere, so we have to compete on quality a= nd not compete on a commodity market.”

The current situation

2. See comm= ent on data gaps.

3. Welsh As= sembly government policy has been to support family farms.&n= bsp; We are concerned at the assumption that increasing size of farm is necessarily a positive aspect. It is important to consider aspects other than economic efficiency, especially= social and environmental impacts. La= rge dairy farms with outlying fields will encourage the need for transportation= of either livestock or feeds and the intensive use of close-lying land, with attendant pollution risks. Th= ere may also be animal welfare implications to increasing farm size and reducing labour numbers, which need to be addressed.

4. Many wou= ld argue that the reduction in number of producers is a response to price rather than market, and it is the low prices received that are forcing the small farmers out of production. It is wide= ly recognised that price is affected by many things, and its use by the multip= les clearly impacts heavily on producers. The final sentence noting average Welsh milk output per farm is lower than the UK average would be more helpful with the information given in yield per hecta= re.

5. It is st= ated that Wales cannot consume all the milk it produces, yet later (paragraph 14) it states= we import £30m per annum of dairy products. There is no mention of the proport= ion of liquid milk imported, which would be helpful

7. It is disappointing that the tone of this paragraph presents issues as problematic when the improvement of environmental care provides opportunities for the sector to sell the high standards and clean green image of Wales.<= span style=3D'mso-spacerun:yes'> There is clearly a need to support adaptation and this should be identified in the Action points.

8. There are dif= ferent perspectives on the benefits of aspects unique to Wales. The climate is stated as being sui= ted to dairy farming, but it is probably more accurate to say that the climate is suited to grass farming. Farmers in Wales s= hould be looking to utilise this cheap source of feed and adopt a potential strategy= to shift to more extensive pasture based systems. Intensive dairy farms often require considerable quantities of concentrate feeds to be brou= ght- in and large quantities of slurry then need treatment and safe spreading. Transport and concentrate feed cos= ts are not likely to come down in the future.

9. We are pleased to see three organic companies: Trioni,= Caws Cenarth and Rachel’s dairy identified. It may help readers to know that t= hey are organic in the context of the discussions of the focus of successful developing businesses.

11. The increased interest in local sourcing is one to= build on. It is particularly import= ant to focus public procurement policies and encourage local purchasing of dairy products.

14. The point has been made above, that the balance of exports and imports and the need for more information on the balance of liq= uid and milk products.

15. The growth of quality, traceability, differentiati= on and increasing interest in food miles and carbon and climate change impacts all build to make a positive picture for those entering that ‘niche’ market.

16. It needs emphasizing that demonstrating a commitme= nt to good environmental and animal health and welfare standards and commitment to corporate social responsibility are likely to be major market drivers for t= he foreseeable future.

Challenges and opportunit= ies

17 a. Access to Markets and Locati= on. The transport situation dependant = on motorway networks may change with changes in awareness of fossil fuel reser= ves and rising fuel prices. Sensi= ble planning for the future would work on shortening supply miles, and building local networks.

The transport and distribution difficulties are real, = and it is difficult to see how producers may overcome them by developing close sup= ply chain relationships and becoming more efficient. The issue of supply and distributi= on networks is one that must be tackled by all, globally and locally, and need= s a direct approach to investigate new methods and systems.

b. Consistent and High Quality Products. This paragraph again focuses on technical ‘performance’ and efficiency and does not mention the= aim of focussing on inherently high quality nutritious food products, or other aspects of quality that can make up the ‘story’ in which increa= sing numbers of consumers are interested. Quality aspects of food include the methods of production, the origi= n of the produce, the animal welfare and health aspects: all these build the pic= ture of quality in the consumers’ minds.&= nbsp; These aspects must be focused on to build a brand of Welsh high qual= ity milk, which fits well with recent publicity on the enhanced health benefits= of forage fed milk.

c. Quality of Management and Labour. It is not clear why the seventh po= int covers personal development and livestock technical skills. This may be a layout error, but it= is clear that these are two separate aspects that need different competences.<= /p>

c. Sustainable Development. Despite mentioning the need for so= cial sustainability, this is dismissed in the text as being an inevitable result= of economic and environmental sustainability.= Social sustainability is a prerequisite for sustainability, and will need direct engagement in social issues to develop this aspect, such as maintaining a trained agricultural labour force, community involvement etc.=

It has previously proved difficult to engage the dairy sector in agri-environmental schemes – paragraph four states that dai= ry farmers are reluctant to join these schemes. Figures are very hard to obtain, b= ut it appears that less than half of one percent of dairy farmers joined Tir Gofal whereas 18% of applicants to Tir Cynnal stated they had dairy enterprises on their farms. This sugge= sts that around a quarter of dairy farmers have joined the scheme, (although acknowledging that some may have joined Tir Cynnal and since withdrawn from dairy farming.) There are aro= und 100 organic dairy farmers in Wales, most have joined the organic farming scheme, and many are also in Tir Gofal, but generally more attention needs to be made to tailor agri-environmental schemes to be attractive to dairy farmers.= It is only through attending to the environmental aspects of dairy farming that sustainability will be achieved, contrary to the implications = of the first sentence in this paragraph.

The organic farming scheme (OFS) should be included in= the discussion on agri-environment schemes in paragraph four.

It would have been useful to know how many dairy farme= rs are involved in the Catchment Sensitive Farming project discussed in paragraph five.

How do we achieve success= ?

I= t is difficult to see how the statements on how to achieve relate to the foregoi= ng statement of the current situation and challenges and opportunities. It would be useful if there were statements clearly addressing the needs of the second scale mentioned in ‘What success looks like.’&nbs= p;

T= he most important issue is the definition of the term ‘business performance’ in the third aim. At present it comes across as e= conomic business efficiency and does not take into account the other aspects of sus= tainable dairy farming. B= usiness performance should mean the delivery of sustainable dairy businesses in ter= ms of economics, the environment and social contributions, which deliver high levels of animal welfare standards and quality food products. This needs to be explicit.

The climate, infrastructure, legislative framework in Wa= les and consumer interests in the UK militate against competing on the global stage on commodity production and processing. It is a necessary= process to move away from trying to compete in global markets, but will require some bravery in a sector that has focussed on growth and efficiency. It is important to redirect efforts towards a different market based on the story of high quality, clean and gr= een Wales, = focusing on high environmental and animal welfare standards, high quality products a= nd products with a story.

Comments on Objectives and Actions

General

1. Objectiv= e - Agreed, but there is an increasing proportion of organic farmers. The need for data is acute due to = the disproportionate impact of new conversions on the rapidly building market.<= o:p>

Actions. Again, the organic sector should be included in all these points. Organic companies are mentioned ea= rlier as examples of developing companies, and they and others will need tailored support.

Responsible Body. Liaison with Organic Centre Wales = on all these actions would be helpful.

2. See comm= ent under 7. Encouraging the consumption of Welsh dairy products would be better, and should include education, particularly of school children, as part of the development.

7. Objectiv= e. It would be beneficial to change t= his objective to ‘market Welsh dairy products and encourage their consumption’. Objective= 2 looks at barriers to the consumption of dairy products, so this objective n= eeds to build more on the local consumption issue: at individual consumer, public service and public sector catering and public procurement.

The develop= ment of the positive stories mentioned in 7iv is useful, but there appear to be few actions elsewhere to develop the practices on which these positive stories = can be based.

9. This is = clearly very important, but part of supporting trade development should include the development of the story of Welsh dairy farming, and development of customer loyalty

10. A slight modification to this objective would improve it considerably, which is to include ‘performance’ and then to be clear that performance can= and should be improved in terms of economics, environment, animal health and welfare and social aspects, i.e. all aspects contributing to the sustainabi= lity of the sector. We note the inclusion of OCW under ‘responsible body’ and would like to see more communication and interaction with DDC events and programmes.

11. Work ne= eds to be done to identify the most important economically and environmentally important areas from a Welsh perspective.&= nbsp; Animal health and welfare should be included.

12. The qua= lifier ‘appropriate’ is included in the objective, but this term could= be applicable to all objectives; used here it appears to dampen the objective. =

It should b= e noted that welfare extends beyond herd health.&n= bsp; There are animal welfare benchmarking initiatives that have been piloted and could usefully be promoted and developed, particularly to build the image of dairy farming to encourage pr= ide in Welsh production. See: http://www.vetschool= .bris.ac.uk/animalwelfare

13. The ‘based on sound science’ epithet serves to qualify the objectiv= e.

Action (vi) should include the Organic Farming Scheme. A study on the barriers for entry = to agri environment schemes would be very helpful, but needs to be carried out swiftly (as identified in under milestones) to feed into the Land Management Review group deliberations.

14. OCW and= the organic sector have a considerable role to play in assisting with this objective. All organic practi= ces can be used by non-organic farmers, and many will be beneficial in this aim= .

SMF March 2007