Who’s slamming New Zealand (Lamb) on Food Miles?

Speech by Dr Mike Cherrett

Acting British High Commissioner

To the Agricultural-Horticultural Outlook Summit at the Duxton Hotel in Wellington 10.30 a.m. 31st May

Who’s slamming New Zealand (Lamb) on Food Miles?

Good morning. It’s a privilege to be invited to talk to such a distinguished and expert NZ audience – a primary sector audience - on “food miles”. Thanks!

Actually, I was invited to talk to a wider brief than that – and I will deal with these issues, but in a slightly different format to that suggested in the programme.

I want to start by giving a background to UK government policies on agriculture and what’s driving them. I will inevitably end up talking a lot about climate change. It is a top priority for the UK Government and our European neighbours. How we respond to Climate Change is a cornerstone of our policies across government.

I then want to cover similar ground looking at consumer and retailer responses. I was in UK in April and met with four of the main retailers. I met with our Department for Food and Rural Affairs (Defra) and the National Farmers’ Union and other organisations in the primary sector/carbon space (including the Carbon Trust).

I want to provide you with some good news from the UK countering ‘food miles’ and share the positive attitudes to New Zealand products.

By the end of the talk I hope you’ll be enthused about strengthening relationships with the UK and our European neighbours and see the British High Commission as another source of advice and help.

Climate Change – the Big Picture

I’ll start with some headline statements on climate change. There has long been widespread agreement across the floor in Westminster on the importance of climate change. It was no surprise that one of Mr Cameron and Mr Clegg first press releases after the election was on climate change.

“The [UK] Government believes that climate change is one of the gravest threats we face, and that urgent action at home and abroad is required. We need to use a wide range of levers to cut carbon emissions, decarbonise the economy and support the creation of new green jobs and technologies. We will implement a full programme of measures to fulfil our joint ambitions for a low carbon and eco-friendly economy.”

We must mitigate our emissions. Though challenging, we see taking action as good for business and our economies. It is also clear that the price of adaptation is going to be high; even if we manage to limit the global temperature rise to 2 degrees.

In the UK, an island influenced strongly by the seas that surround us, we face shocking adaptation costs associated with coastal erosion, as well as coastal and in-land flooding. Storm events are already showing signs of becoming more severe. And farmers and their businesses are going to be on the front line.

The same is true here in NZ. More so, I’d venture.

The benign picture some paint of New Zealand’s lot in the face of climate change, the NZ Ministry for Environment study into the impacts of climate change predicts.

- At least 18–59 cm sea level rise.
- Heavier and/or more frequent extreme rainfalls, especially Tasman, West Coast, Otago, Southland and Chathams.
- Decrease in annual mean rainfall in Northland, Auckland, Gisborne and Hawke’s Bay. Greater high temperature events.
- Extreme weather events are set to happen four times more regularly than we currently see them.

This season’s drought and last week’s ‘weather bomb’ makes this already ring true.
But many of you will recall the February 2004 floods that affected 2600 farmers with a total economic impact estimated at $400 million.

And cyclone Bola in March 1988 - over $300 million costs in lost production and infrastructural damage affecting 1700 farmers. Worse still, native forests and soils were stripped in a matter of hours and dumped in the sea. The resultant loss of fertility (around 40 per cent) haunts the hill country to this day.

This is what NZ should be bracing itself for, and the costs of an ETS should not be discussed without these costs in the same breath.

UK Response

Enough – many of you already know this. And many primary producers have brought this close to the core of their business planning.

I can hear you thinking “Cut to the chase mate; what’s the UK doing?”

• The UK’s 2012 Kyoto target was 12.5% (reduction over 1990 emissions) – we are on track for delivering 23%
• Our 2008 Climate Change Act mandates the UK (by law) to deliver 80% reductions by 2050 (and 34% by 2020).
• The Climate Change Act established 5-yearly carbon budgets which place legally binding ceilings on the level of carbon emissions.
• We are a member of the EU ETS
• Have launched major public awareness campaigns like “Act on CO2” and backed this with regular reaffirmation of public sector leadership (e.g. last week’s 10:10 campaign to reduce public sector Carbon Dioxide emissions by 10% in the next 12 months).

But all sectors, and the likes of the Confederation of British Industries, have built and supported this approach - because it makes sense for their sector – their businesses.






The Farming Context

Farmers are no exception. In 2006, The NFU President Peter Kendall said:

“Climate change is one of the biggest challenges facing farmers and society as a whole and it is important we work across all sectors and with other industry leaders to promote change from within. The farming community is more than ready to demonstrate responsibility and change where needed to tackle the challenges of climate change to ensure we remain economically and environmentally viable.”

The agriculture sector in UK accounts for some 7% of our national emissions (vs 9% across EU). (Carbon Dioxide = 1%, Nitrous Oxide = 3.5%, Methane = 2.5%). Methane and Nitrous Oxide have global warming potentials greater than carbon dioxide of 21 and 310 times respectively. Agriculture produces 76% of total UK Nitrous Oxide and 38% of UK methane.

In 2007 “Part of the Solution” was published in by the NFU, the Country Land and Business Association, and the Agricultural Industries Confederation.

July 2009, the Government published “The Low Carbon Transition Plan: National Strategy for Climate and Energy”. This set out how those carbon budgets would be met. It called for an Action Plan to be developed by the farming sector, by Spring 2010.

The Climate Change Task Force (CCTF), which is a partnership between the NFU, Country Land and Business Association and Agricultural Industries Confederation, presented its Green House Gases Action Plan in Feb 2010.

The sector can reduce greenhouse gas emissions in many ways – most of which will save money or boost productivity. For example:

o Nutrient management – tuning fertiliser volumes to the crop, applied in the right weather conditions and targeting optimise crop uptake.
o Animal feed – changing the feeding regimes of livestock to reduce emissions of methane and to improve feed conversion ratio.
o Innovation techniques – when these become available in the future to help reduce methane emissions from enteric fermentation.
o Animal breeding – improving animals’ breeding practices to improve their productivity (ratio of feed converted into useable product such as milk or meat).
o Animal health – Improved farm health planning is potentially beneficial to reducing GHG emissions per kilo of meat.
o Manure storage – aerating or covering slurry stores with an air-tight cover can reduce emissions of methane from stored manure.
o Anaerobic digestion – has the capacity to reduce emissions of methane and Nitrous Oxide from stored slurry and manure, and to convert waste into renewable energy.

Since 1990, nitrous oxide has dropped with a reduction in fertiliser use in UK and methane because of a reduction in livestock numbers. But there are limits to the rate at which current science & technology can deliver the changes we need and the non-carbon dioxide reductions remain a challenge.

That’s why UK is supportive of the bold initiative taken by NZ in proposing the Global Research Alliance on Agricultural Emissions. This is real area where NZ can take a leading role and work with EU and other countries’ technologists to contribute to this global challenge. It’ll be good for the farming sectors and reputations of all who take part.











The Food Chain

There has been quite a lot of attention on the primary sector food chain in recent years. There are two reasons for this:-

i) CC mitigation.
ii) Supply chain resilience and issues around global food availability.

I’ll talk more about mitigation later. But I’ll take a little detour on the latter, because it provides a context that isn’t factored in much by commentators on UK-NZ food relationships.

We’re only 50-60% self sufficient in our total food supply in UK. This picture shows food value, rather than self sufficiency, but it is a useful illustration. After UK sources, we access 30% (or so) of food from our near neighbours in Europe. But we rely on supplies further afield for the rest. NZ is an important part of this complex overseas network.

Cross –departmental work on UK’s food chain began a number of years ago and was given added impetus by the commodity price shocks and domestic supply chain challenges in recent memory. This heightened our attention on a joined-up policy setting around food. This comprehensive approach, encapsulated in the Food 2030 study covers:-
• Resilience and supply chain competitiveness
• Health and diet
• Sustainability and global food supply issues (including from an international development perspective).
• Climate Change
• Reducing waste
• Skills, science & innovation.
This means the UK policy has a number of reasons for focussing on where our food comes from, how and why it gets to us. Climate change issues are an important part of this, so I’ll get back onto that track.

Although ag-emissions account for 7% of our national emissions, the UK food chain as a whole accounts for as much as 18-20%. Significant contributions occur 'beyond the farm gate' in food processing, consumption or waste disposal. The whole ‘chain has been under scrutiny in UK for some years.

Transport is an area that comes under particular scrutiny – within UK and overseas. We are as concerned about it as much as NZers.
But we are not interested in ‘food miles’. Our approach has been on establishing analysis of the carbon dioxide emissions associated with production, consumption and disposal. We then needed to establish methodology that defined these reliably. If the sums add up, there’s nothing wrong with consuming products from around the globe. This is the UK policy.

Now, I can’t promise that you won’t hear the odd ministerial slip referring to ‘food miles’ now and again in UK or Europe. Or that businesses won’t use marketing campaigns to exploit the term mischievously. Or that British/European consumers are informed enough to avoid confusing carbon efficiency with distance travelled, when they decide what to buy.

But, I repeat food miles is not UK policy. It is our policy to establish sound methodology, do the sums around supply chain emissions, do them right, and make these data available to consumers.

Some of the UK retailers and many other business sectors are adopting this approach.

One approach is carbon labelling based on rigorous carbon accounting.

Carbon Accounting and Labelling

The Carbon Trust is independent of the Government but supported from the UK’s carbon levy. It must thrive by selling its services and generating its own Intellectual Property. Their customers/partners include 75% of FTSE 100 companies, tens of thousands of small and medium sized businesses and over 2,500 public sector bodies.

A significant piece of work has been done on developing a rigorous approach to carbon labelling. This has led to the PAS 2050 standard which is gaining ground as an international benchmark.

The methodology and labelling scheme is applicable to any product. It works for potato chips and micro chips, sub-components to finished items, calculating the whole carbon dioxide emission output.

This methodology is equally applicable to primary produce and was used recently by AgResearch. They proved it makes sense for British consumers to eat NZ lamb sea-freighted to UK. Similar methodology has been applied to English lamb and beef production too.

This is an example of a product label developed in Japan.
Most of the major retailers are doing this sort of work. Some put more emphasis on the relationship to their corporate social responsibility agenda. Some to deliver supply chain efficiencies. In reality, the journey is the same. But it is the approach and the vigour that is interesting.

UK Retailers

The UK retailers are dominated by some familiar names. Tesco, Asda, Sainsbury’s, Morrison’s-Safeway, M&S the Co-op. I could draw examples from any of these, many of whom are developing exciting business-supplier links with NZ primary producers.

But I’ll use Tesco as an example – who have 31% of the UK market. My simplistic maths suggests18m Brits are fed following a trip to Tesco each week. Less well known perhaps is that Tesco is the 3rd largest grocery retailer globally. 470,000 staff, 4300 stores in 14 countries (inc South Korea, Thailand, Malaysia, Japan and China).

Now, I sometimes here commentators here being less than positive about the UK retailers. And I know there are a wide range of views on retailers’ relationships with their suppliers and customers. But I’d like shine a positive light on what Tesco (and others) are doing on carbon labelling, which attacks the food miles approach.

This slide outlines how Tesco sees its role and climate change. It is explicit in saying that Tesco must act to reduce its own emissions (this makes business, energy and climate sense). For the reasons I’ve already covered, their product/supply chain partners need similar scrutiny. But Tesco goes further. The company sees a moral imperative to help its customers to reduce their emissions too.

Some of you might view this with some cynicism or suspicion. I don’t. If you accept that UK (like our continental European partners) put such store on climate change action, I have no problem with the public and private sectors helping customers/ citizens improve their low-carbon behaviour. It’s good for our climate change performance and its good for the businesses (like Tesco and their suppliers) that take a lead.

Tesco (with other retailers and manufacturers) has piloted PAS 2050 and labelling in a number of product areas. This picture summarises a range of them. It shows that the carbon dioxide emissions varies significantly from product to product and from raw material to disposal/recycling.

This is a powerful example of an organisation drawing climate change to the heart of its business, and adopting rigorous methodology to focus its carbon-reduction action, be it 'in-house', amongst its suppliers, or influencing its customers. This is a million miles from ‘food miles’. And it certainly isn’t ‘evil’ or aimed at undermining NZ primary producers.

Believe me? I’ll give you an example.

This advert was run in UK national newspapers (very expensive full page colour ads) in March and ahead of the AgResearch publication.

This advert is pretty explicit in saying “buy NZ lamb” it is as good as the best we can produce in UK. Tesco hasn’t gone as far as putting a carbon label on this product (yet). Tesco is prepared to risk the ire of some UK lamb producers and nationalistic consumers because it has a very sophisticated understanding of the supply chain carbon dioxide emission sums.

Consumer Trends

I probably need to take another detour at this stage, and say something about what’s driving consumers in UK (and Europe). I’ve probably given you the impression that all UK and European consumers are demanding carbon labelling and their customers never confuse food miles with carbon dioxide-equivalent in the supply-consumption cycle. That isn’t so – not yet anyway.

Price and quality are still ‘tops’, as are health-related issues and those around animal welfare and rapid growth for organic and fair-trade foods. But the trend is clear - consumers are putting more focus on the where their food comes from. This might be driven by a ‘shop-local’ or ‘shop-national’ impulse, or respond to a ‘food miles’ impulse to see food travel shorter distances to their table. Organic food has seen rapid growth in UK and this has climate change credentials to boot! Meanwhile a desire for uniqueness or some other form of quality provenance is unlikely to disappear. This has been at the heart of NZ wine makers’ success. And I was struck that a UK company is having growing success in selling high-end mature NZ cheddar as part of its international range. This is complex terrain.

Concluding Remarks

NZ has some of the most efficient, globally competitive and innovative primary producers. When I visited the retailers and the NFU, I was struck by the unanimous admiration for the quality of Kiwi produce, the quality of your approaches to production. And for your off-shore representation and support from the likes of MFAT, NZTE, Meat & Wool NZ etc.

These guys weren’t just being nice – they were real fans. And businesses are prepared to be bold enough to overtly market Kiwi brands and products, albeit responding to the developing challenges I’ve spoken of.

Conclusion 1: There’s a lot of positive good will and awareness in UK around your brand.

A great foundation to build upon, both in getting your positive messages heard, and in ensuring some of your internal debate isn’t off-shored with negative effects. (NZ doesn’t have a monopoly on this – believe me!)

Articles like the one published in the Dom Post in December really shoot NZ primary producers in the head.
• I hope our climate change credentials are pretty clear and our willingness to walk-the-talk shows we’re not hypocrites (not government, not business, nor your British farming colleagues).
• If someone is going to label the 61 million Brits as hypocrites, then they need to do the same for the 500m in the EU too.
• And fundamentally, I hope I’ve explained that ‘food miles’ isn’t our on the UK Government’s or retailers’ agenda.
• It certainly isn’t Tesco that’s slamming NZ lamb on food miles!

Conclusion 2: counter the ‘food miles’ issue in partnership with businesses that are willing to debunk it too – but avoid incorrect slagging matches.

NZ is well served by some great research capabilities in the primary sector. The sort of work I’ve cited at AgResearch or Lincoln University is critical and aligned perfectly with what UK retailers want to see. I think there is a need (and opportunity) to get these teams working with higher profile European partners. Frankly, I expected their work to have a higher profile in the UK than I saw. This goes for the current visibility of the Global Alliance too. And I was unaware of any NZ collaboration with UK centres of excellence being funded by the big retailers.

Conclusion 3: we can do more to work together on the fundamental challenges.

Finally, I attended a talk by the eloquent CE of MFAT the other evening – John Allen. He was talking about the importance of NZ building relations with Asia. In the discussion after his talk, he and the learned experts in the audience mused on the importance of understanding language and culture. The best deals are made when you understand your market and customers and know what makes them tick. This makes perfect sense to me.

However, it is all too easy to forget this when markets seem more familiar – again, not a Kiwi monopoly. I think many underestimate the real conviction around climate change in Europe.

Now, I’m not suggesting that the cultural challenges for NZers working in UK or Europe are as interesting as those in other markets. But don’t underestimate how important climate change and low carbon issues are to us. It is at the heart of what we believe and central to our governments’ policies. It is driving our businesses and a massive issue for many our citizens. We are prepared to judge ourselves and others by how we respond to the challenge.

So…..Conclusion 4: Awareness of carbon issues needs to be at the core of your business plans for the future.

Links

The UK Low Carbon Transition Plan
http://www.decc.gov.uk/en/content/cms/publications/lc_trans_plan/lc_trans_plan.aspx

Committee on Climate Change
http://www.theccc.org.uk/

2006 UK Climate Change Programme
http://www.defra.gov.uk/environment/climatechange/uk/ukccp/index.htm.

Agriculture and Climate Change
http://www.defra.gov.uk/foodfarm/landmanage/climate/index.htm

Rural Climate Change Forum
http://www.defra.gov.uk/foodfarm/landmanage/climate/rccf/index.htm

Carbon Trust agriculture and horticulture pages
http://www.carbontrust.co.uk/energy/startsaving/sectorselector/agricultureandhorticulture_2_1.htm?compsize=1

Climate Change Adaptation
http://www.defra.gov.uk/environment/climate/adaptation/index.htm

Defra Science and Research
http://randd.defra.gov.uk/Default.aspx?Location=None&Module=FilterSearchNewLook&Completed=0

Agricultural Change and Environment Observatory https://statistics.defra.gov.uk/esg/ace/index.htm

Biomass Task Force
http://www.defra.gov.uk/farm/crops/industrial/energy/biomass-taskforce/index.htm

Non food crops
http://www.defra.gov.uk/farm/crops/industrial/non-food/index.htm

Bioenergy
http://www.defra.gov.uk/farm/crops/industrial/energy/energy2.htm

England Forestry Strategy
http://www.forestry.gov.uk/forestry/hcou-4ucf8j

UK Climate Impacts Programme
http://www.ukcip.org.uk/

National Farmers’ Union Climate Change pages http://www.nfuonline.com/x3960.xml

Country Land and Business Association
http://www.cla.org.uk/Policy/Policy_Reports/Environment/Climate_Change/2555.htm/?CLA=e594af6f46bbfce89849ec5e9962d89b&lnkCk=ART_CONTENT_7&statID=1518026

Farming Futures
http://www.farmingfutures.org.uk/

ENDS

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