Paice stresses need to wean industry off subsidies

But in an upbeat speech to the Oxford Farming Conference, he emphasised that the eventual elimination of direct subsidies was a long-term objective rather than something that would happen “now – or even in the next seven years – but a journey with a destination”.

Environment Secretary Caroline Spelman, who is due to address delegates today, created a furore at last year’s conference when she mooted the government’s intention of trying to get rid of farm subsidies overnight – a view that she later retracted.

Paice admitted yesterday that very few farmers would be making a profit without the SFP. But he said current high prices for most farm products provided the ideal opportunity to start dismantling the support system in forthcoming negotiations on reform of the common agricultural policy (CAP).

“For the first time in decades, we are in a position to start weaning the industry from direct subsidies,” he said. “We need to become more competitive and develop a support system which encourages efficiency, rather than stifling it. It is a challenge we can all meet.”

Support for farming, he suggested, should come from the Pillar 2 element of the CAP budget to encourage innovation and investment, as well as research and development, rather than from direct payments currently paid under Pillar 1.

Paice claimed some support for the UK’s approach in the Council of Farm Ministers although he admitted that the European Commission and some member states, especially newer EU members, did not share the government’s vision.

He warned that the SFP was likely to be reduced in the short term because of budget constraints and the need for increased support for new member states.

The UK could not ignore the challenge of increasing food production and could no longer depend on imports, as had been advocated by the previous Labour government, he said. Nor should food security be confused with self-sufficiency. The food market was now global and supermarkets carried produce that could not be grown in the UK.

“It means we have to play to our strengths and do those things which we can do best,” he said. “It means seeking out new markets for those products where we are most competitive and constantly striving for better systems of production. We can set this industry on fire and face the reality of those opportunities by building on our strengths and achievements.”

The new CAP, he added, should benefit the whole of the EU and not just the UK. “We need a policy which helps those very small farms, often with very poor productivity, just as much as it is for the very large farm businesses, whether they are here in Britain or the former collectives in the eastern countries of Europe,” said Paice.

There was also a need for farming to have a professional body to advise on business and technology as farmers moved nearer to the true market and out of the shelter of government. It was a role the Agricultural and Horticultural Development Board could play and he had asked the chairman, John Godfrey, to see how it could be achieved.

Dr Joseph Glauber, the US department of agriculture chief economist, told the conference that greater investment would have to be made in research and development for the world to achieve the 73 per cent increase in food production required to meet the needs of the projected increase in world population over the next 40 years.

Paice said genetic modification (GM) would have a role to play. “GM is not a panacea, but it should be one of the tools at our disposal,” said Paice.

“It’s really up to supermarkets to convince the public that GM food is safe to eat as the public won’t believe the government.”

Shadow environment secretary, Mary Creagh, said there was a need for an open debate on the GM issue between the scientific community and consumers.