Pestle Analysis Planning Aid 2013

8/12/2019 Pestle Analysis Planning Aid 2013

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AHDB PESTLE Analysis and Outcomes 2014/5

Background

Looking ahead, the AHDB Board and Senior Executive Team held a strategy day to look atAHDB priorities to support levy payers over the next five to ten years. The output was thatAHDB should work to five core priorities and that future business plans would be structuredaround delivering against these by helping levy payers:

1. Improve productivity and cost management (resource management, climate change, soilsand water, managing market volatility).

2. Prevent and manage disease.

3. With trade development (export development, promoting and differentiating assuredquality products, market information and analysis).

4. Understand and respond to the regulatory and policy environment.

5. With the labour market and skills development.

This following PESTLE analysis helps identify the key factors likely to affect the industry andhence the factors which need addressing in the business planning process to address the

priorities listed above


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priorities listed above

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ImpactShort-Term

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ImpactLong-Term3-20 years

Implication for meeting the objectives of AHDB

Political

GREEN GOVERNMENT

Green Government/Climate Change Mitigation willseek reduction in GHG emissions

The Coalition Government has stated it wishes to bethe greenest Government ever. Government seeseconomic opportunity for the UK from thedevelopment of new markets for low emissionproducts and services supported by investment ininnovation.

The 2008 Climate Change Act requires GHGemission reductions of 80% by 2050. The UK

Government and devolved administrations continue toreview how this will be achieved and over whattimescale. A Voluntary Action Plan (GHGAP) toachieve GHG emission reductions from agriculturehas been developed by organisations representingthe industry (including AHDB), with Defra support.

Although there has been less public emphasis on thisarea in the past 12 months, the desire to reduceemissions is likely to remain and may strengthenwhen the economy becomes more robust.

The Government will wantsee evidence of progresstowards the uptake ofpractices designed to reducethe GHG emissions fromagriculture and horticulture.

This should be a win/win inmost cases as increased

competitiveness throughgreater efficiency boostsprofits and invariablyreduces GHG emissions perunit of production.

It is unlikely that agricultureand horticulture will ever beable to reduce emissions by80%. However, as timeproceeds, the relativeproportion of UK GHGSoriginating in primary foodproduction will increase as therest of the economy

decarbonises. The spotlighton agriculture will becomemore intense and moves tointroduce measures designedto effect dietary change can beanticipated e.g. reduced meatand dairy consumption. Theagricultural and horticulturalindustry should be able todemonstrate that their GHGemissions per unit of outputare amongst the best in theworld.

We need to maintain the focus (including via the GHGAP) onsupporting industry (supply chain) competitiveness while ensuringevidence is forthcoming to demonstrate the link betweencompetitiveness (efficiency) and GHG emissions reduction

1(e.g.

through reducing waste). At the same time, We will need to workto ensure that Government and the public understand thelimitations to reducing emissions in the agricultural andhorticultural sectors as compared to other sectors of the economy.We will need to support sectors to achieve efficiency in their sector

which lead to GHG emissions per unit of output that are amongstthe best in the world. The opportunity will be taken to demonstrateconvincingly that importation from less efficient regions will bedetrimental to the global objective of mitigating global climatechange. All six AHDB Divisions are sponsoring work on thedevelopment of a farm-focussed environmental impact tool thatenable farming businesses to make well-informed decisions aboutchanges in practice and land management.

1Please note that straightforward actions such as planting more trees can make a positive contribution to reducing GHG levels.


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ImpactShort-Term

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Political

DEVOLUTION / INDEPENDENCE

Devolution may lead to increasingly differentpolicy environments for our levy payers.

Devolution has meant that agricultural policy hasbecome a matter for the devolved governments. Atpresent, this mainly means that CAP supportpayments and rural development funds are organiseddifferently. This may create distortions but is unlikelyto have significant effect at present. However, greaterdistortion may occur over time and possibly in otherareas such as disease control, etc. This is furthercomplicated by the UK being the competent authorityin some cases still.

There is unlikely to be anyfurther meaningful impact inthe next 3 years unless CAPreform is implementedsignificantly differently from2015.

Particularly if Scotlandbecomes independent in 2014,future differences in policymay become morepronounced and effect relativecompetitiveness or cross-border trade.

We should keep this area under review to understand theopportunities and challenges which might be created and supportlevy payers in managing those opportunities and challengesparticularly where we cover sectors in more than one country.


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Political

FOOD SECURITY

Global food security concerns due to populationand economic growth are moving up the politicalagenda

The global price spikes of recent years, andsubsequent challenge for many in the world to affordfood, has brought the issue of food security on to thepolitical agenda.

Growing global demand for food is not quite beingmet by the growth in supply in years of poor weatherand hence we experience higher prices which willstimulate increased investment in producing morefood.

The 2012/13 season has seen the pattern of poorweather impact significantly on prices across mostagricultural markets. Food price inflation remainshigh at a consumer level, which will probably bringincreased focus on food and agriculture and how toreduce the cost of food over the next few years.

Defras Green Food Project and the GovernmentsAgri-Tech strategy is seeking to set the agendaacross industry to identify ways of producing morefood whilst also reducing the environmental impacts.Global demand for food is also seen as an opportunityto encourage exports and also attract inward

investment.

The short-term implication isthat UK farmers and growerswill benefit from higher pricesand consumers experiencehigher inflation.

With higher cereal pricesmeat prices have increasedaround the world. Iftransport costs continue to

rise then fresh produceprices will rise (all otherthings being equal) as, dueto seasonality requirements,some fresh produce willneed to be imported.

The UK may not be able toguarantee supplies of somefood and feed products fromother countries to fulfil anysignificant reduction in self-sufficiency. It is likely that theneeds of the urban poor willtrump the needs of the ruralpopulation and exporters willattempt to keep domestic

prices down through exporttaxes and export bans at timesof crisis. If demand for meatcontinues to increase indeveloping countries then thechallenge will not bestimulating demand, butproducing enough to meet thedemand.

We need to increase the competitiveness and productivity of UKagriculture and horticulture in order to:

Increase profitability,

Reduce GHG emissions,

Support food security

The ability for farmers and growers to access novel agriculturaland horticultural technologies may be very important to achievethese goals. Please see later (Technological section) for more

details.

We need to continue to work as part of the Green Food Project.


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Political

FOOD LABELLING

Food labelling policy will require more informationon pack

Current proposals on food information for consumersand ongoing discussions about assurance schemesrelating to welfare, origin, environmental impacts andquality may bring changes for labelling rules.

Labelling cannot be used to compensate for a lack ofcompetitiveness in mainstream markets. There mustbe a genuine Unique Selling Point that a majority ofconsumers will actually pay for to achieve more value

through labelling.

Labelling and categorymanagement (in somesectors) is currentlyconfused. Clear and moreconsolidated labelling mayprovide better information toconsumers about what theyare buying. However, it isunlikely that this will have a

significance impact onconsumer buying habits inthe short-term.

Current EU country of originlabelling proposals (notrequiring born, bred andslaughtered) may increaseconsumer confusion, impacton supply chain costs andundermine marketpenetration of meat fromdomestic production

systems.

Clear labelling will only havean impact on the market ifconsumers value the attributebeing clearly identified by thelabel. One can anticipateaspects of sustainability willstart to emerge ascomponents of food labellingand assurance although this

may take longer to developdue to current poor economicconditions and consumerfocus on price rather thanother attributes.

We need to ensure that our marketing activities2 and consumer

communication activities support clear and transparent labelling toconsumers. We should also remain close to, and engaged with,initiatives to label food in accordance with specific criteria, e.g.sustainability, country of origin, health.

Where appropriate we should undertake research to determinewhether a label is related to an attribute valued, or potentiallyvalued, by consumers in order to ensure that support is allocated

to the most appropriate labels.

Subject to the outcome of current EU proposals on country oforigin labelling for meat products additional investment in thepromotion of voluntary labelling initiatives such as PorkProvenance, and more explicit communication of assurancescheme requirements may be required.

2In sectors where these activities exist labelling is considered important and activity takes place to work with retailers and policy makers to encourage clear labelling.


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Political

ENVIRONMENT/PRODUCTION BALANCE3

Land use priority trade-offs between differentpolicy initiatives and markets

There is increasing pressure on land use for food,for fuel, for biodiversity/recreation/ amenity uses.

There is a complex interaction between these factors.For example, there may be pressure to set aside landon all farms but this may mean unproductive land hasto be used for food production rather than moreproductive land. It may be better for some farms tobe utilised to their maximum, whilst less productiveland is used to meet other objectives such asconservation of valued landscapes and biodiversity.

The concept of Sustainable Intensification (SI) hasbecome embedded in Government policy relating toland use and production from land. The SI conceptpoints to decisions about the use and management ofland that deliver most productively the outputs mostappropriate for that land (food, energy or other eco-system services). It is likely that valuation of currentlynon-marketable goods derived from land will impacton land use decisions in the future.

This has been examined inthe Defra Green FoodProject and theGovernments Agri-Techstrategy is likely to place asignificant emphasis onachieving SustainableIntensification to meeteconomic and environmentalobjectives. Investment fromGovernment to assist theindustry to adopt SI is likelybut will require industrypartnering. The Agri-Techstrategy is designed to avoidconflicting policies andincentives that have thepotential for perverseincentives and unintendedconsequences to arise. Thisshould help avoid policiesbeing established, e.g.

through CAP Reform,biofuels, biodiversity, etc.,that do not support optimalland use.

Over the long-term this shouldbecome less of a problem asthe science is clarified,allowing more accurate policydecisions to be taken whichare more likely to achieve thedesired outcomes.

This should allow a morestable set of incentives,markets and policies to exist.

We need to consider how we play our part in supporting thedelivery of the desirable outcomes identified by the Defra GreenFood Project and subsequently the Governments Agri-techstrategy. We should be prepared to benefit from new Governmentinvestment opportunities designed to help deliver SI when theyadd value for levy payers.

We need to be able to provide/signpost evidence and analysis tosupport informed debate and choices around these competingpressures amongst levy payers, policy makers and stakeholders.

3Please note this heading covers the next two issues


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Political

National Ecosystem Assessment/EUbiodiversity/Environment White Paper could lead

to conflicts with GHG reduction

The launch of the National Ecosystem Assessment(June 2011) presented a comprehensive statementabout the delivery of Ecosystem Services fromterrestrial and aquatic habitats in the UK. Amongthese, Enclosed Farmland represents by far thelargest single area and the report will likely influencethe way such things as Environmental Stewardshipschemes are configured in the future. At the sametime, the publication of the Government s NaturalEnvironment White Paper has signalled theGovernments priorities and policies towardsconservation of biodiversity and management of other

natural resources. The Governments Agri-Techstrategy is likely to point to the need for deliverablesfrom science and technology which will enable higherlevels of production efficiency from land whilst alsoensuring that non-marketable eco-system servicescontinue to be delivered.

The short-term impact ofthese publications is difficultto judge but there areundoubtedly going to beconflicts with otherenvironmental policies suchas the reduction in GHGemissions. How these mightbe reconciled is already thesubject of a short Defra-funded pilot project whichinvolves several AHDB

Divisions.

The most likely impact will beon changes to the operationof EnvironmentalStewardship Schemes andattempts to quantify theeconomic value of certainEcosystem Services mayhave ramifications for thedirection of Governmentinvestment and the onusplaced on land-owners tomeet new standards ofenvironmental management.

In the longer-term, one canpresume that the so-calledEcosystem Approach couldcome to prevail significantly onGovernment thinking andpolicy making. This placesconsideration of long-range,difficult to quantify impacts ona par with short-term economiccosts and benefits in thecontext of policy making andpolitical decision taking. The

essence is to ensure thatnatural capital isnot erodedand that short-term gain is notat the expense of long-termbenefit in terms of deliveringessential system functions.

The target to eliminate peatcould have a substantialimpact on the horticulturalindustry, particularlyornamentals.

We will need to adopt a longer range, systems-based approach toits strategic thinking about the way agricultural productivity issustained and the relationships between different components ofagricultural systems. In examining possible benefits from workingtogether on the new five corporate priorities the topic of working onagricultural systems across sectors has been identified as an areafor further investigation.

We may need to strengthen working partnerships with non-traditional agencies such as NERC and the EA as well as beingprepared to engage in programmes of knowledge exchange whichenable levy payers to gain advantage from possible shifts in policy

directions.

We will need to be alert to opportunities for the benefit of levypayers presented by new Government investment anticipated toaccompany the launch of Agri-Tech strategy. Some investment islikely to target the area of sustainability metrics and appropriateland use/management to meet the need for both food security andenvironmental resilience.


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ImpactShort-Term

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Political

BIOFUEL DEMAND

Biofuel policy on a global basis will provide analternative demand for food/fuel and useful byproducts

A large proportion of the worldsgrains (and edibleoils) are used in the production of fuel (estimated tobe 41% of the US Maize crop in 2011/12). As longas supply can increase to meet the demand for bothfood and fuel then this should not have a huge impacton price. However, if stocks are low due to increasingbiofuel demand and supply struggles to keep up thensupply shocks will lead to price spikes. There is evena view that you could keep cereals prices from spikingby lowering biofuel inclusion rates in years of lowcereals supply, although whether this would workwould depend on the oil-cereal price ratio.

There is increasing political debate about biofuels andwhether the consequences e.g. diversion of foodcrops, palm oil plantations etc. are justified by thebenefits. In addition, the efficiency of 1

stgeneration

biofuels in reducing emissions is being challenged.

The current support for biofuels may mean thatproduct streams that are currently used for animalfeed may be used to generate energy e.g. off specpotatoes or liquid whey to Anaerobic Digestion ratherthan animal feed.

Supply is struggling to keepup with world demandmeaning there are low globalgrain stocks and price spikesare likely whenever there is asupply shock (e.g. poorweather) to the system.

Prices will also be at aslightly higher level as lessproductive land will be usedto produce grain.

There is an increasingsupply of co-products for usein animal feed requiringdifferent rationing practices.

Some producers may needto change feeding regimes ifthe economics of biofuelsdivert current productsupplies.

The policy decisions on biofuelinclusion rates and thepotential development of 2

nd

and 3rd

generation biofuels willpotentially have a massiveimpact on demand for grainsand oils.

The best way for farmers and growers to deal with this area is tobe as competitive as possible in their production costs andrecognise that some of the demand is policy led and hence couldchange overnight. We need to provide the KT and MI services toassist farmers and industry in doing these things. Differentiation inthe market for grain products of customised quality for particularmarkets (food, feed, fuel) may become an important driver forresearch.

We need to ensure that the role of co-products from biofuels asanimal feed and any other uses is understood and taken intoconsideration when the role of biofuels is considered.


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Political

JOINING-UP AGRICULTURAL KT

Joining up agricultural support activities will be afocus of future policy initiatives

There is increasing desire within the industry to seeadvice services to farmers undertaken in a more co-ordinated way. Currently there are many sources ofinformation and advice (e.g. CSF advisors, RDP-funded activities, etc.) which can be confusing andtime- consuming for farmers, growers and the supplychain to investigate. In addition, it is unlikely that allthe information is delivered in a best practice mannerand it may even be contradictory as it often is notholistic and focuses on achieving one outcome withlimited consideration of knock-on impacts in other

areas.

The short-term implication isthat farmers will continue tobe confused by themultiplicity of advice andinformation sources andsome of the effort is likely tobe wasted as it does notoperate to best practicemodels.

More co-ordinated andconsistent support and adviceto farmers (operating to bestpractice) would probablysupport faster improvements inperformance across the supplychain, both in terms ofcompetitiveness andenvironmental performance.

We need to consider our role as a potential key facilitator for co-ordination of this activity through both seeking agreement betweenall the parties involved and strategically considering how itundertakes its R+D and KT work. This co-ordination needs tooccur between all the parties without losing the benefits ofspecialisation in specific agriculture and horticulture sectors


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Economic

PUBLIC SECTOR CUTS

Public Sector Cuts/Economic Recovery willreduce Defra funding

The current difficult financial situation within the UKhas two main affects on agriculture. The primary oneis the value of sterling relative to the euro and dollar,and secondly the funding available to supportagriculture e.g. through R&D, etc.

The Coalition is committed to reducing the structuraldeficit in public finances. As part of this, Defra faces areduced budget at present and is expected to have tomanage further cuts during the next few years. .Combined with cuts in public funding in the devolved

Governments, this will probably have some impact onthe scale of assistance provided to agriculture andhorticulture.

Despite economic stringency, the Science Votethrough BIS to the Research Councils has beenmaintained in real terms. Through its Agri-Techstrategy, Government will be seeking to ensure itsfunding is directed in larger measure to meet industry-relevant targets and this may provide an opportunityfor AHDB to use its research budgets as leverageagainst Government funds in public-privatepartnership arrangements.

The poor economic situationis leading to a lowerexchange rate than prior to2009 which is probablyhaving a far greater positiveimpact on agriculturalprofitability than anyreduction in Governmentsupport.

There is less money

available from theGovernment to supportagriculture and horticulture.However, R&D spending hasbeen maintained in nominalterms in the Coalitionsbudget.

There is loss of industryknowledge and expertisefrom Defra/ScottishGovernment/WelshGovernment (SG/WG).

Industry and industryorganisations are beingencouraged to take onaspects of delivery work (andsome costs) previouslyundertaken by Defra/SG/WGand/or their Executive

Agencies.

In the long term it is likely thatthe UK economy will recovercompared to today, whichcould increase the value ofsterling and reduce prices tofarmers (in Sterling terms).

There will be increasing pressure on us to undertake delivery workfor Defra/SG/WG (possibly some which is Government funded andsome which is not). We need to ensure that we only deliver whatlevy payers need and if this coincides with Defra/SG/WGs needsthen there is a win-win. With the increasing pressure, we need toensure that we are focused on delivering activities which havemaximum benefit for levy payers.

There will be increased opportunities for AHDB to lead voluntaryinitiatives such as welfare initiatives and codes of practice on foodlabelling in place of government policy initiatives.

Farmers and growers in those sectors which are profitable shoulduse this period to improve their competitiveness for the long-termthrough appropriate investment.

We should provide information to support the industry in robustlychallenging cost recovery exercises to make sure they are basedon the most efficient ways of undertaking the activity.

In addition, the increasing openness of Government regarding theinvolvement of wider stakeholders in policy making means that ourevidence, resources and information will increasingly be calledupon in policy making decisions. This may be a positive move butwill have implications for our resource allocation e.g. Green Food

Project.

We need to pay attention to the opportunities to support levypayers further likely to be provided by new Governmentinvestment in industry-relevant science and technology associatedwith its Agri-Tech strategy. Opportunities for public-privatepartnerships may require us to reappraise the processes we useto allocate resources to research and KT/E activities.


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Economic

INCREASED COMPETITION

Competitive pressure increases due to highcommodity prices

Higher prices for agricultural products are likely toincrease investment in infrastructure and potentiallybring more suppliers to the world market increasingcompetition to produce food.

This is evidenced by the fact that current estimatesplace the 2013 harvest of coarse grains at its largestever with FAO estimates of 1,266Mt, 8% up on 2011,the previous high, and wheat up 5% on 2012, andonly 1% down on the 2011 high. Inevitably, theweather during the rest of the growing season willdetermine the actual harvest, but the potential is thereat the time of writing.

In the short-term high priceswill increase profitability inmany sectors. However,these can also reducecompetiveness if the higherprofits are invested in thewrong waye.g. moreexpensive productionsystems.

Being sufficiently competitivewill determine futureprofitability, and will alsosupport reduced GHGemissions, therefore being ableto compete with whoever elseis trying to access the samemarket is crucial for futuresuccess.

We need to continue and possibly increase our efforts to supportfarm and supply chain competitiveness, e.g. through R&D, KT, co-ordinated benchmarking and advice services. Part of beingcompetitive is about ensuring the industry has developed the rightproducts for its markets and developed the appropriate exportmarkets for its products.


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Economic

VOLATILITY

Volatility/Speculation in commodity markets islikely to persist

The spikes in commodity prices in recent years havebeen driven by supply not being able to keep up withdemand, with the volatility created by a supply shocklinked to poor weather causing low production.Combined with low stock levels, the lower productionhas led to high prices as buyers seek to secure thesupplies they need.

It appears that the price spikes have been driven byfundamentals although speculators may beexacerbating the height of the high (and low).

With CAP support mechanisms continuing to bereduced (or with prices well above support levels inmarkets which are supported) it is likely that priceswill continue to be volatile for farmers and the supplychain.

Volatility is worse now thanin the very recent past, buthistorically it has been justas high if not higher. CAPprovided greater stability onprices in the past fewdecades.

In the short-term, the impactof volatility is huge swings inprofitability for farmers and a

significant risk managementchallenge for the supplychain. This risks destabilisingmarkets and supply chainse.g. pig production falls morethan is economically rationalbecause of the slowness ofthe pig price to respond tohigher cereal prices. Cerealfarmers produce barn fillervarieties rather than thequality of wheat the marketwants, etc.

To manage volatility, supplychains will develop to securesupplies. More integration ofsupply chains is likely with riskand reward more fairly sharedif the chains work well. Inaddition, stocks levels willneed to be considered andpossibly increased to increaseprice stability.

We need to provide Market Intelligence for farmers (and thesupply chain where appropriate), support the development of long-term supply chain relationships where price mechanisms can beused to stabilise prices, and provide information and training onrisk management and the use of futures and options to managerisks.

We need to consider whether we undertake more work onidentifying successful models of supply chain risk sharing, andcreate understanding among the farming and growing industry thatmanaging risk has cost. In particular we cannot remove the down

side risk, but still have all the upside potential if markets risewithout a significant cost involved.


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Economic

SUPPLY CHAIN PRESSURE

Supply chain pressures will continue andGrocery Adjudicator has come in to existence

To maintain a competitive edge, particularly in thecontext of current high inflation, and cost consciousconsumers, retailers continue to press for high qualityfood products but at low cost, potentially creatingconflict in the supply chain.

The challenge is to foster more extensivecollaboration and supply chain integration whichcontinues to ensure supply chains become morecompetitive whilst undue pressure is not put onsuppliers.

This is challenging because some pressure is neededin supply chains in order to maximisecompetitiveness. However, too much leads to lowerthan optimal investment eventually leading to highercosts and lower consumer choice.

The new grocery adjudicator may help supply chainsto work more optimally.

Short-term decisions to putpressure on the supply chaincan lead to lower consumerchoice and efficiency throughlack of confidence to investand huge swings in pricesand supply as the marketover reacts in bothdirections.

Lack of supply chain co-ordination will lead to lessconsumer choice and lessinvestment as the industry isnot confident of making areturn on the investment.

We should promote the development of integrated supply chainsthat reduce volatility and meet consumer demands and increaseefficiency. These supply chains should also be able to managerisk better as well.

One of the ways that this can be done is through the betterexchange of information up and down the supply chain which canlead to more optimal matching of market supply and demand.


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Economic

EXPORT OPPORTUNITIES

Population Growth leading to ExportOpportunities

The world population is growing and getting wealthier,with the emergence of more significant economicpower in Asia, Russia, and South America having anincreasing impact on the world market.

This wealthier and large population will require morefood, energy and water and if supply increases slowerthan demand then prices for all these three factors willincrease. More food will need to be produced fromless inputs.

With increased wealth there is a dietary transitionwhich results in more consumption of animal proteinand less consumption of traditional staple foods. Thisresults in global competition for plant-derived proteinas animal feed but also provides an export marketopportunity.

The Government has identified increasing exports asa key strategy for economic recovery.

Price levels for agriculturalproducts will be higher thanin the past (albeit volatile) ifsupply does not keep up withthe continuous increase indemand.

There will be demand foralternative uses of land andincreasing costs associatedwith producing food due to

higher priced energy andwater.

Population demographicscould lead to change, e.g.Arab Spring making exportdestinations morechallenging in the short-term.

The level of technologicalinnovation and increase in theability to more efficientlyproduce food and energy andmanage water will determineprice levels. The ability toremain competitive, using thelatest technology is key.

Increasing demand globally, particularly in the East, providesopportunities for exports for our industries.Government has stated that exports have a key role to play in therecovery of the UK economy. Export of agricultural andhorticultural products has been identified as an important part ofthis.There is opportunity for us to co-ordinate and deliver Governmentagricultural export activity through our sector divisions. We shouldfocus on supporting market access and the development of exportopportunities for both food and technical know-how.We should maintain relationships with key UK/Scottish and Welsh

Government agencies and departments to support our industriesexport efforts.In addition, the pressure on energy costs, etc, mean that efficiencyof production will be key from a competitiveness and GHGreduction point of view. Our KT services will become increasinglyimportant.

We also need to manage the risk associated with supportingexports to less stable regions.


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Economic

INPUT COSTS

Input costs such as fertiliser and feed remain high

Producers/growers and processors in all sectors faceincreasing input costs, such as energy, fertilisers,animal feed, etc. These are not likely to fall becausethe price of oil, gas and mined minerals will continueto increase due to increasing demand, and potentiallyreducing supply.

In addition, producers will need to consider themanagement of nitrogen, phosphorus and othernutrients following the revision of the FertiliserRecommendations and implementation of the NitratesDirective and investigation of potential diffuse

pollution.

Higher input costs willreduce potential farmprofitability. Closermonitoring and control ofinputs will mean greateroptimisation will be needed.

Higher input costs willencourage lower and moreefficient usage of inputs. Thisshould lead to fewer negativeenvironmental impacts. It willalso lead to less waste.

The exact amount of inputs willalways be determined by theratio of the input cost and theproduct price, with higherproduct prices generally

leading to more inputs beingused, up to a maximum point.

As well as supporting farms with knowing their cost of production,we need to help farmers understand what the optimal level ofinputs is at different price levels in order to maximise efficient useof inputs whilst avoiding any diffuse pollution.


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Economic

FARM LEVEL SKILLS

ADVISOR/SCIENCE SKILLS

Labour and Skills shortages likely to persist

Restriction on immigration has caused someproblems in some agricultural and horticulturalsectors. There is increasing concern within theindustry and Government over the sustainability ofproducers over the next decade. Attracting youngpeople with entrepreneurial skills into agricultural andhorticultural supply chains will be crucial to the futureof agriculture and horticulture.

There are many initiatives springing up in response tothis challenge but they are insufficiently co-ordinatedand are not part of delivering an overall strategy.

It is important to note that the changing structure ofthe farming and horticultural industry and supplychains, with consolidation constantly occurring,means that the future supply of good employees isprobably the key part of this challenge. In addition, insome sectors there is potential for increasedmechanisation and IT to reduce labour requirements.

In its Agri-Tech strategy, Government is likely to

recognise that a highly-skilled and technically-awareworkforce is a requirement if the industry is to beglobally competitive and contribute to economicgrowth. Hence encouragement to achieve greater co-ordination and strategic provision of training at alllevels may be sought.

Lack of skilled labour willlead to lower productivity andcompetitiveness than wouldotherwise be the case. Inaddition, Governments mayregulate and inspect moreclosely if farming cannotdemonstrate and prove a

high level of professionalismand proficiency.

As per the short-term impact,although increasedmechanisation and use of ITmay substitute for labour insome sectors.

We have a role to support the development of the complimentaryrange of practical, management and entrepreneurial skills throughour KT activities and funding PhD programmes.

We are increasingly developing our activities in the farm level skillsarena, through our activities such as PIPR, DairyPro, and the workbeing done on skills by Tess Howe, funded by the RDPE. We arealso supporting activities which support agriculture being seen as

a positive career by schools.

We should actively participate in the BBSRC-funded AdvancedTraining Partnerships that will support three HEI consortia led by:Nottingham, RVC and IBERS.

We should ensure that sectors are aware of new technology andits costs and benefits so that they can adopt it as soon as possiblewhere beneficial e.g. Precision Farming


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Economic

CONSUMER BUDGET PRESSURES

The drop in real incomes is leading to consumersbudgeting more carefully and changing theirpurchasing patterns

The effect of high inflation, low wage rises andunemployment have led to reductions in real livingstandards with median income after housing costsfalling by 12% between 2002/3 and 2010/11 for lowincome households. Consumers have respondedthrough less eating out, and trading down both withineating out establishments (i.e. growth in fast foodchain sales compared to restaurant sales) and withingrocery shopping (i.e. trading down from brands and

premium supermarket products to standard and valueown label products). Some consumers are alsoadopting a little and often approach to purchasing asa way of managing expenditure.

For all UK households, expenditure on food and non-alcoholic drinks has increased from 10.2% of spend in2005/6 to 11.3% in 2011. For the households in thelowest 20% by income, it has increased from 15.6%to 16.6% over the same period.

Sales of premium products such as organic have alsofallen during the last few years. Other factors, suchas health, have become less of a primary driver in

purchasing decisions and value has become muchmore important.

Keeping costs of food downin the short-term will be veryimportant and a large driverof the food market making ita very competitive marketplace in which to operate.

Assuming economic recoverybegins to take place in thelonger term, it is likely that thedemand for premium productsand eating out will increaseagain, but possibly at a veryslow rate for the comingdecade. The currentprolonged period of low

economic growth may begin tohave longer term implicationson consumer culture. Thisarea will need monitoring.

We need to ensure levy payers are aware of the likely changes inconsumer habits so that they can meet them.

As the price of products will be increasingly important for the nextfew years, the most competitive products will probably be thosethat are of a standard nature but lower cost, rather than slightlyhigher cost but offering additional added value benefits over thestandard product. Therefore we have to help farmers be asefficient as possible.


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Sociological

CONSUMER DIET CHANGES

Mainstream diet changes because consumers areencouraged to eat a more sustainable diet andbudgetary pressures remain.

There are several driving factors towards changingmainstream diets:

General messages towards encouraging people toeat a healthy and sustainable diet are movingtowards encouraging eating less meat and dairy andmore fruit and vegetables through a balanced plateapproach. In addition, natural changes to a morediverse diet are impacting on traditional products, e.g.

greater consumption of pasta, rice etc.

There is likely to be continuing messaging around thisincluding from the EU Commission with itscommunication on food sustainability being prepared.

Please see consumer budget pressures for more onconsumer changes.

Keeping costs of food downin the short-term will be veryimportant and a large driverof the food market making ita very competitive marketplace in which to operate.

It is likely that these costissues will be a bigger driver

in the short term (seeabove).

It is possible that per capitaconsumption of meat andsimilar products will fall in theUK, although total globalconsumption will increase.

Producing food that isperceived as good for theenvironment and healthy will

be a positive sales strategy forthe future although theopportunities available for thismay be limited in the mediumterm, i.e. until economicgrowth picks up

We need to ensure levy payers are aware of the likely changes inconsumer habits so that they can meet them.

We should help to ensure that what a sustainable diet comprisesis well-defined through our research and educational activities andinteractions with policy makers.

Please see Farming Image row for a key linked area.


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Sociological

PROTEIN FEED

Protein Feed Sources from non EU sources facecriticism

There is increasing awareness of the fact that the EUimports significant amounts of vegetable protein foranimal feed (primarily soya and maize) and there isincreasing scrutiny of the sustainability of the systemsof production employed in South America. Inparticular, close to 100% of imported protein is likelyto be from GM varieties of soya bean and maize.

Concern over imported soyafrom non-sustainablesources or globalcompetition for supplies maylead to calls for lowerconsumption of meat due toconcerns aboutenvironmental impacts orsimply increases in price.

As transport costs increasewith oil costs, and animal feedprices increase minimising theuse of imported protein maybecome more important to theimage and profitability of EUlivestock production.

We will need to work with industry to develop a clear long-termstrategy for the sustainable supply of protein to UK livestocksectors. This is likely to require a reconsideration of the use ofanimal protein as well as the development of differentiated andintegrated supply chains.

We should support research into alternative sources of protein,e.g. co-products of biofuels, which can be grown in the EU andpromote the uptake of those sources on farm.


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Sociological

NICHE MARKETS

Niche/Alternative Markets could grow but will belimited and vulnerable to over supply

There are a number of alternative/niche markets forsupply chains to exploit. These include:

Local, greener, food mile type markets

Non-food uses (such as in biofuels)

Health benefits

A small number of consumers have become moreaware of environmental sustainability in the foodsupply chain and engage with issues such as localfood, greener food, large farms, GM technology,

organic, etc. While still a small minority overall, thisgroup has many influential members who can affectpublic policy and affect the direction of theprivate/public sector.

The development of broad-acre crops for non-fooduses is on the increase globally as a means ofsubstituting for fossil-fuel derived feedstock. Plantderived materials for manufacture, fibres, fine andbulk chemicals, energy and pharmaceuticals are all inthis mix.

Significant additional nichemarket opportunities willremain limited in the currenteconomic climate.

Niche markets are exactlythatsmall opportunities fora few producersnot for themajority of the producers inthe market place. As themarkets are small, over

supply, leading to low pricesis always a potentialproblem.

If renewable greenmaterials becomecompetitive in price with oil-derived products, the marketfor feedstock will grow andthe competition betweenland for food and non-foodcrops may intensify.

Opportunities for additionalniche markets may emerge.

The long- term prospects forlocal food, greener food, slowfood, organic, etc. will bedetermined by the price offood relative to the rest of theeconomy/ earnings. If food isexpensive these niche marketswill be very small. If food is

cheap these markets will grow.

If renewable green materialsbecome competitive in pricewith oil-derived products, themarket for feedstock will growand the competition betweenland for food and non-foodcrops may intensify.

New opportunities for producers and supply chains may emerge.We should approach this area on a market failure basis, and onlyundertake activity that is not being done by commercial players.

Where appropriate we can provide some advice and information tothose levy payers who want to access alternative/niche marketsbut we need to focus on supporting competitiveness not nichemarket development as this will have the greatest potential impact.Much of our information and services will be relevant for allproducers whether mainstream or niche.


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Sociological

IMAGE OF FARMING

IMAGE OF PRODUCTS

Farming Image in mind of consumers confused byconflicting media coverage

There are many mixed messages about farming andgrowing being relayed to mainstream consumers. Onthe one hand consumers tend to be supportive offarmers but, there continues to be a lack of trust,confusion and skepticism by some consumers overlarge herds/farms, modern disease and pest control(e.g. neonicotinoids and bees), GM crops, cloning, TBcontrol, GHG emissions from agriculture, etc.

The industry could do more to engage withconsumers and policy makers and help themunderstand about modern agriculture and horticulture.In addition, farming must be prepared to considerwhether all of its practices which we are familiar withon a day by day basis are appropriate in the modernworld. To do this, consumers must be engaged withactively and constantly.

Increasing transparency of the world through socialmedia is both an opportunity and a threat, but thefarming and growing sectors should actively engagein these areas in order to promote the industry.

If there is not a goodunderstanding of farmingand growing then consumersand politicians may haveknee-jerk reactions withoutexamining the evidencebase. This could impede thedevelopment of UK farming.

If UK agriculture andhorticulture is not able tobecome more competitivethrough the use of moderntechnologies, either UKconsumers will have higherfood prices than elsewhere inthe world and/or we will export

our food production tocountries where newtechnology is more readilyaccepted. Consumers will thenhave little option but topurchase food produced inways that contravene UKregulations, (an example ofthis would be the export ofmuch of the UK pig industry tothe rest of the EU).

We need to help ensure that the policy makers in the UK/EU,mainstream consumers (and future consumers througheducational activities) have a good and balanced understanding ofmodern agriculture and horticulture and the evidence/informationthey need in the format they need it in.

We should work with global colleagues to gather the informationand evidence needed for this activity.

We should work with others in the industry to promote the farmingand growing industries e.g. through Open Farm Sunday and oureducational activities.


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Technological

ACCEPTANCE OF GENOMIC TECHNOLOGY

Genomic Technology is becoming more acceptedelsewhere in the world.

Genomic technology offers many potential benefits toagriculture and horticulture. There is increasinglyrenewed interest in the benefits of biotechnology,including GM, diagnostics to support conventionalbreeding, genotype based diets and cloning, etc, as aroute to improving production efficiency/yield/humanhealth.

Concern exists around these technologies for severalreasons including the fear of the unknown, themonopolistic control of these technologies by large

multinationals and the lack of public scienceinvolvement. This leads policy makers and the publicto be concerned that profit is the only motive andconcern that safety or animal welfare may be givensecondary consideration.

There are signs of movement with retailers nowcontent to allow poultry to be fed on GM corn feedand strong support from the Secretary of State for theEnvironment, Food and Rural Affairs for GMtechnologies.

The benefits from geneticand genomic technologiesglobally have beenconsiderable in a few tradedcrops (maize, soya, cottonand oilseeds). Themomentum is likely toincrease as demand grows.The productivity of thosecrops has increasedenormously in recent years

by comparison with so-calledorphan crops such aswheat. The EU continues tobe resistant to theintroduction of GM crops butthe uptake and impact ofgenomic selection and othernew technologies is likely tohave rapid impact.

New technology brings thebest hope of the significantstep changes in productivityneeded to feed a growingworld population.

The inability of EU/UK toaccess and adopt newtechnology will seriouslyhamper the ability of the EUand UK to compete with other

countries and be profitable.

We need to ensure the industry and policy makers understand thepros and cons of new technologies and the opportunity costs ofnot being an early adopter.

The involvement of more publicly-funded scientific activity inproduct development is probably crucial if new technologies aregoing to receive wider public acceptance in the EU.


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Technological

LACK OF R+D AND KT

Lack of applied R&D and KT

There is a need for technical research and knowledgeexchange/transfer to maintain competitiveness and torespond to the need to reduce GHG emissions as wellas minimise waste, increase resource use efficiencyand counter threats from pathogens and parasites oflivestock and diseases, pests and weeds of crops.

There is growing concern about the need to increasethe level and reach of Research and KnowledgeExchange (both publicly-funded and industry-funded)that is clearly directed towards the resolution of majorchallenges in order to increase longer-term

productivity on a sustainable basissustainableintensification.

This concern has led to action being taken includinglikely outcomes from the Governments AgriTechstrategy. There is likely to be an initiative to ensure acloser connectivity between research providers andthose organisations which provide KT/E services tofarmers and growers. It is likely that new Governmentfunding will be predicated on industry contributionwhich may provide an opportunity for AHDB in thisimportant area to leverage funds for the benefit of levypayers.

There are shortages ofcapability in the sciencebase with the erosion ofsome key disciplines, suchas soil science, animalnutrition, weed science, croppathology, etc. Also, the agestructure of the science baseis problematic and there areissues of succession forsome areas of applied

science of relevance toagriculture/ horticulture.

Additional funding e.g. theAgri-Tech strategy maybegin to act as a catalyst tobegin to tackle thesechallenges.

Current initiatives such as theAgri-Tech Strategy may havesupported tackling the threat oflong- term lack of appliedscience and KT focus leadingto the weakening of thecompetitive position of UKagriculture/ horticulture.

We must act as the knowledge house for the sectors we work for,bridging the gap between scientists, policy makers, industry andfarmers and work with policy makers to ensure there is adequatefunding of applied R&D and KT. We must work to preserve thewhole pipeline of research, from strategic to applied, to KT. Wemust also access knowledge from around the world in orderovercome the lack of indigenous researchers.

Funding of this area and leveraging funding from other sourcesmust be a key priority for us. The KT part of this area is at least asimportant as the R&D area as R&D without effective KT is

worthless.

On a value-for-money basis, we should engage with initiativessuch as the Agri-Tech strategy, Horizon 2020 etc. in order toensure that these opportunities provide benefits for levy payers,


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Technological

SLOWING PRODUCTIVITY GAIN

Crop and Animal Performance is slowing after thepost war boom

There has been a slow down in the increase inproductivity in many sectors in recent years. This isfor a variety of reasonslow profitability, lessinvestment in applied R&D and KT, lack of focus onimproving production levels.

Much of the financial incentives, technical advice andsupport, implementation of new varieties of crops,etc., ended when supply of food in the EU exceededdemand. With the expected increase in world demandfor food, the EU and UK has an opportunity to scale-

up productivity.

This has been the primary driver for the GovernmentsAgri-Tech strategy and the need for the UK toincrease the productivity has been recognised as asubject requiring public-private initiatives to achieveprogress.

One issue in keeping productivity up is the availabilityof pesticides. This comes to three issues:Consumer attitudes (see farming image), legislative(see Legislative) and finally resistance/newpesticides.

Lack of improvement inproductivity will lead to lowerprofitability and greatercompetition from othercountries whose productivityis improving.

Pesticides which dont haveresistance problems but donot have a significant impacton the environment are

needed to control pests anddiseases.

Greater environmentaldamage, greater foodinsecurity and less profitabilityin the UK agricultural andhorticultural sector than inother parts of the world.

Lack of pesticides that areeffective is inherentlyunsustainablemethodsshould be developed to make

pest and disease control moresustainable.

We must work with partners to ensure the UK productivityincreases at least as fast as competitors. This will involve workingwith policy makers to ensure policies do not hinder productivity,supply chains to ensure the incentives exist and through KT withfarmers and growers to improve business management andtechnical performance.

We should support the development of sustainable methods ofdisease and pest control which can be used to maintain yields atcurrent levels.

We need to pay attention to the opportunities to further supportlevy payers likely to be provided by new Government investmentin its Agri-Tech strategy.


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Technological

IT/PRECISION FARMING

Uptake of IT/Precision Farming is patchy acrossand within agricultural sectors

There is a poor understanding and uptake of ICTperformance-based measurement tools, and precisionfarming techniques and technology, within somesectors.

With increasing growth in ICT applications used forsupply chain operations there is increasing potentialfor producers to gain efficiencies in supply chain co-ordination.

The rate of change in electronics, information

technology and sensors will continue to be very rapid.In the next 25 years, this may result in miniaturisedbiosensors actively monitoring crops and animals andcontrolling highly targeted inputs for water, nutrition,crop protection etc. Robotics may begin to play apart, further reducing the need for low skilled (andeven some high skilled) labour on farm.

This area continues to grow and it is likely that newtechnology will surprise us with applications notpreviously considered. The use of Big Data mayprovide opportunities in agriculture in the context ofR&D, better supply chain management etc.

If farmers and growers donot (or cannot) take up newtechnology their productivitywill not keep up withcompetitors and profitabilitywill suffer. In addition,greater precision can meanless waste and lessbystander exposure, etc.

As for short-term plus the costof technology and thecomplexity of it may mean thatfarms and growers maycontinue to get larger in orderto be able to exploit iteffectively and efficiently.

We will need to support the uptake of this technology throughcommunicating its value and benefits in order to meet ourcompetitiveness and environmental objectives and also to improvethe image of farming with consumers and policy-makers.

This means that we need to stay abreast of technologicaldevelopments. To do this we need to ensure that we havesufficient IT/technologically skilled staff within AHDB to understandthe trends and technology.

We need to pay attention to the opportunities to further support

levy payers likely to be provided by new Government investmentin its Agri-Tech strategy. The area of big data and agri-metrics/informatics has been identified as a high priority by Government.


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Legislative

TRADE DEALS

Trade Negotiations under WTO are not complete.Bilateral trade deals are emerging

In the absence of a multilateral trade deal, bilateraltrade agreements will continue to influence globaltrade flows in the short to medium-term.

Current tough economic conditions are likely to delaytrade deals as there has been a shift of emphasis inmany countries towards greater protectionism which,although not significantly reducing access at present,is leading to limited new access.

Mercosur talks are ongoing but still have some way to

go before successful conclusion. This may be ofserious concern to EU beef producers, as Argentinaand Brazil may look for greater European access.

The proposed EU-US trade deal will need to bemonitored to see what impact it may have onagriculture. It is likely that EU regulation of GMtechnology will feature in these discussions.

The increase in averageworld commodity prices toEU prices in many sectorshas reduced the potentialimpact of free trade in manyproducts (cereals, dairy)whilst in others remainscrucially important (beef,sheep, pigs).

Increased access to EUmarkets for meat productswould probably lead tosignificant pressure on UK/EUfarmers.

We need to provide the industries with information on the likelymarket impacts of any agreements.

We need to ensure the industries are as competitive as possible inthe markets in which we operate in order to maintain profitability.

We should promote trade based on equivalent sanitary andphytosanitary standards.

Our own policies on GM and other potentially controversialtechnologies in the EU need to be kept closely under review in the

context of a US-EU trade deal.


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Legislative

NEW TECHNOLOGY BANNED

EU GM/Novel Foods/Pesticide legislation is not asresponsive as many other parts of the world

The approach to GM and other new food productiontechnologies from the EU is crucial to the uptake ofthese technologies. Legislation could prevent ordelay the uptake of technologies widely in use in otherparts of the world and also discourage thedevelopment of technology specifically suited toEU/UK climatic and production conditions.

There are signs of movement with retailers nowcontent to allow poultry to be fed on GM corn feedand strong support from the Secretary of State for the

Environment, Food and Rural Affairs for GMtechnologies.

As per the long-termimpacts.

The UK/EU agricultural andhorticultural industries arepotentially falling behind thecompetitiveness of othercountries because they cannotuse the same technology.This could increase the cost offood for consumers, increaseGHG emissions and possiblyexport our industries to othercountries with standards that

would not be allowed in theEU.

We should help the scientific community ensure that policy makershave the evidence and information that they need to makeinformed choices.

We should both support and promote a science led, risk basedapproach to analysis and decision making.


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Legislative

CAP REFORM

CAP Reform will change the policy backgroundincluding the greening of Pillar 1

Following detailed proposals to change the CAP inlate 2011 discussions about the implementationdetails are ongoing. The changes to CAP will bewithin the context of the forthcoming widernegotiations on the EU budget framework post -2013.

The key development will be greening ofPillar I.This will mean that farmers have to undertakeadditional actions to receive their Single FarmPayment. The exact impact of CAP Reform willdepend on the implementation details and this will

become clearer during 2013.

The precise impacts aredifficult to predict withoutknowing the final shape ofthe the Reform. However,the farming and growingsectors are likely to need toget to grips with a newsupport system from 1

stJan

2015. This is likely to bringnew rules and regulationswhich will have to be

implemented within on farmpractice. This may distractfarmers and growers for aperiod of time as ensuringcompliance in order toreceive support will be highon their priority list.

The precise details of CAPReform will affect the entireindustry. However, until thedetails are known it is notpossible to determine the fulllong term effects.However, it is important tonote that the need for acommon market andcompetitiveness are key,which if not supported by CAP

Reform may lead todisadvantage to parts of EUagriculture. At present there issome concern that CAP will beless common after this roundof reform and this may changethe long term competitivenessbalance and hence change thesupply/demand balanceacross EU.

We need to work with the farming unions to analyse and explain tofarmers and the supply chain what the impacts may be and ensurethat policy makers have the information they need access toensure that the outcome they want is likely to be achieved by themeasures they propose to put in place.

We need to consider how and whether to implement technical KTevents at around the time of CAP Reform implementationparticularly if there are CAP Road shows being held as farmersattention is likely to be on CAP compliance rather thantechnological/productivity improvements.


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Legislative

LEGISLATIVE COMPLIANCE

Compliance with Legislation is becoming morecostly

By complying with a wide range of environmental andother food regulations, producers are increasinglybearing higher costs of compliance. With growingconcerns over environmental protection and foodsafety the EU will be continuing to focus on foodhygiene/safety and animal welfare/diseaseregulations.

The EU is currently considering proposals on animalhealth and welfare and is reviewing air quality(ammonia emissions) as well.

The horsegate scandal is likely to lead to furtherfocus on how the food supply chain is regulated andmonitored.

As new regulations come infarmers/growers and industryhave to understand themand implement them. Thistakes time and money to do.

The implementation of therecommendations of redtape task force may help tomitigate some of the historiclegislative perverse

outcomes and gold plating.

Higher standards in the EUthat importers do not have toalso meet will simply result inEU consumers consumingfood that would not be allowedto be produced in the EU andthe exporting of the industry toother countries. Any morestringent regulations in the EUshould be compensated for bythe introduction of payments to

farmers, or import controls onfood stuffs not produced in thesame way if the regulationsare not to be self-defeating.

We should ensure that policy makers have the evidence andinformation that they need to make informed choices.

We need to work with industry organisations to engage with policymakers and regulators over the implementation of regulations,including horizon scanning regarding new regulations and takinga pre-emptive approach to EU proposals.

We need to support the industries in understanding and preparingfor EU-wide bans on particular products, e.g. neonicotinoids, ornew regulations.


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Environmental

CLIMATE CHANGE ADAPTATION

Climate Change adaptation will be required in theEU

Adapting to climate change is becoming increasinglyimportant across many parts of the world as globalaverage temperature increases, changing the climate.Farmers and growers will need to review croppingand production choices and methodologies.

In particular, weather windows may change intiming, sometimes with positive resultse.g. a longergrowing season, sometimes note.g. new pests geta foothold in UK due to a more favourable climate.

The role of plants in mitigating climate changes andmaking the urban environment more comfortable in achanged climate situation should not be overlooked.

Novel plant and animal diseases may increase, eg.,blue tongue, Schmallenberg, ash die back, etc.

The current run of poor weatherdry in 2011, wetand dull in 2012 and cold in early 2013 has providedsignificant challenges to UK agriculture andhorticulture. Whether these are due to climatechange and what climate will take hold in due courseis not yet clear. What is clear that any permanentchanges in climate such as the concerns that lessarctic sea ice might lead to the Gulf Stream movingsouthwards more regularly would impact the patternof production in the UK.

The Governments National Adaptation Plan is due tobe launched soon and agriculture is likely to beprominent.

The weather is likely to havemore of an impact than climatechange in the UK. However,there is increasing concernabout whether our weather isnow starting to be affected byclimate change

Novel animal and plant

disease outbreaks may needto be managed.

The UK was expected to beone of the countries leastaffected by Climate Changein the modelling that hasbeen carried out. However, itremains to be seen whetherthe models are correct ornot.

Adaptation will need to takeplace within the UK, but it is

currently too early todetermine what the longerterm climate of the UK will beand hence what changes UKagriculture will need to make.

We need to ensure that the potential increase in importance of theUK as a food producer is understood by stakeholders and policymakers, with particular reference to the land use trade off and foodsecurity issues.

We need to work with industry to support adaption of productionsystems to any long-term changes to climate through the provisionof existing knowledge, and commissioning of new R&D wherenecessary.

The role of trees and plants in public spaces and gardens to help

mitigate the effects of climate change through temperaturereduction, rainfall buffering, etc should be promoted.

We should work with industry and government to identify anydisease risks which may migrate into the UK from warmercountries.

We need to consider the need for monitoring and forecasting thelikely changes to pests and diseases due to c limate change.

Adaptation to climate change may require sufficient capitalinvestment by farming businesses (e.g. livestock housing, watercapture and storage, precision irrigation, etc.). We need toconsider where we will access the knowledge and skills to provideadvice and support to levy payers.


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Environmental

WATER MANAGEMENT

Water Management is an emerging priority

Fresh water availability is one of the key globalchallenges. However, in the past most of the UK isreasonably well-supplied for most of the time in mostyears. The exception is the densely populated anddrier South East of England where there is less waterper capita than in Morocco. Farmers in the dry SouthEast of England often have limited extractioncapability and certain crops (sugar beet, potatoes andvegetables) are reliant on irrigation. Horticulture inthat region is also constrained by the availability ofwater at certain times in most years.

The substantial issue in the UK is water managementaround pollution and waste controlcoping with theWater Framework Directive and related legislation.The sustainable use of water is a growing concern asindicated in the Water Framework Directive and willprobably affect attitudes to food production in thelong-term.

Ensure that those crops thatrequire irrigation can beirrigated by investing in waterstorage and distribution.

Ensure that NVZ and otherregulations are complied with.

Concerns about embeddedwater could lead to lowerconsumption of meatproducts, but could alsoprovide a boost to homeproduced foods where wateris more abundant than inmany other countries andproduction systems arebased on grass from naturalrainfallpotentially providinga competitive advantage.

For UK products which areheavily dependent onirrigation, there is a need forstudies of comparativesustainability in terms ofyields per m3 extractedwater relative to importedproduct. There may be re-distribution patterns of cropproduction based on wateravailability.

We need to ensure that the industry has the evidence it needs todemonstrate that water use is often needed for efficient cropproduction. This means policy makers can have the informationand evidence they need when they are developing strategies,policies and regulations. We can also ensure consumersunderstand the situation regarding water in UK produced products.


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Environmental

SOIL MANAGEMENT

Managing natural resources like soil will beincreasingly important

Soil is a natural and finite resource that underpins allagricultural production systems. Its functions includecrop anchorage, distribution and provision of nutrientsand water, sequestration of carbon, filtration and lock-up of water pollutants and contaminants andnumerous other ecosystem services related tobiodiversity amongst others. Soil condition andcomposition has a profound effect on productivityalong with costs associated with workability. Conditionis also implicated with respect to water holdingcapacity and resilience to drought, flood management

and mitigation of diffuse pollution. Events relating toerosion frequently hit the press and compromise thereputation of agriculture.Research into soil management has historically beenpiece-meal and ad-hoc often without a longer-termrotational context and adoption of best managementpractices has been ham-strung.

Poor management of naturalresources such as soil andpeat will impact productivityand lead to poor consumerviews of farming and lowerproductivity if we allow soils todegrade.

Further consequences ofdegradation are that moresoils will migrate from goodto marginal or from marginalto unproductivecompromising rotations.

We should ensure that researchers, funders and policy makersrecognise the potential benefits of creating a fully integrated soilsresearch platform capable of sharing methodologies andappreciative of the need for long term, rotational approaches tosoil improvement.

We should ensure that farmers are provided with information onconsumers and policy makers attitudes towards farming practicesso that they can take them in to account when making decisions.In addition, we should ensure farmers and growers have access tothe best practice advice about how to manage soils and reduce

peat usage.

Documents

Pestle Analysis Planning Aid 2013