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TRANSCRIPT
Martin Collison
An Agri-Food Sector Plan for Greater Lincolnshire
A modern industry in a changing World
30th June 2014
Collison& Associates Limited
Questions to address:
What are the prospects for agri-food in the context of a globalised economy and growing World population?
How important is agri-food to Greater Lincolnshire's economy?
What are the strengths and weaknesses of the Greater Lincolnshire agri-food sector?
How can we grow and strengthen the agri-food sector in Greater Lincolnshire?
Putting food
security into
context
Increased demand
45% by 2030 (IEA)
Energy
WaterIncreased demand
30% by 2030
(IFPRI)
FoodIncreased demand
50% by 2030
(FAO)
Climate
Change
1. Increasing population
2. Increasing
urbanisation
3. The rightful goal to
alleviate poverty
4. Climate Change
Professor Sir John Beddington
alerted us to… the “Perfect Storm…”
The Global Food Challenge
• Global population projected to grow 36% by 2050
• Land is being lost to urbanisation & due to climate change– Resources are becoming more limited and expensive: globally 75%
of freshwater is used for agriculture, under 2% in the UK
– Nutrients in short supply and expensive
• Climate change– UK will be affected, but other areas at more risk e.g. Spain
• Increasing wealth and changing diets– Global ‘middle class’ will treble over the period 2000-’30 to 3bn,
more consumers with choice will demand more added value foods
– Potential to export food products or knowledge & IP
Pressure to increase yield & output in
areas suited to production (e.g. Lincolnshire)
Global Challenge and OpportunityThe global challenge is very complex & includes the following issues:
• Demand: rising population & wealth, dietary change, health impacts of food choices, animal welfare, QA systems (UK global leader), by product use for food, energy, nutrient recovery
• Trade – growth in trade is a long term trend in the food sector, food and drink and/or technology and inputs
• Supply – where will food supplies come from, what will be supplied, who will be supplying it
• Sustainability – energy, water, waste, land use change, climate change and environmental footprints
These challenges demand improved skills, applied research, innovation, enhanced data capture and processing capability to deliver Sustainable Intensification or ‘More Knowledge per Hectare’ (Prof. Allan Buckwell et al, 2014)
Constraints on World Ag Production
40% too dry 21% too wet 21% too cold 6% terrain too rough 2% unsuitable soil
The jury is out, but climate change may make it even more challenging & parts of the World, such as Lincolnshire, with good soil & climate will grow in importance
Grain Yields Around the World
Modern Efficient Production e.g. Yield is Critical- we have fed the World by increasing yield
• Remember global population 2050 +36%
• FAO concluded $83bn needs to be invested annually in LDCs to feed the 2050 World - yield growth is the most important focus
• If we don’t increase yield we convert more natural land to agriculture with big impacts on carbon emissions & biodiversity
Factor 1990 2000 2010 20 year trend
Population Bn 5.27 6.06 6.89 +31%
Crop area MHa 601 587 618 +3%
Average Yield t/ha 3.0 3.3 3.8 +28%
Output million tonnes 1,803 1,941 2,379 +32%
Sample of crops: Barley, Maize, Oilseed Rape, Rice & Wheat (FAO 2011)
Lincolnshire & the UK
Importance of Food in the UK Economy
The Inverted IcebergFood sector GVA £92bn
Catering23%
Food Retail 26%
Food processing & wholesale 37%
Other e.g. input suppliers4%
Agriculture & fishing 10%
For Every £1 of GVA in agriculture there is:
A further £4 in food processing and logistics
&
A further £5 in food retail & catering
Defra (2013) Agriculture in the UK 2012
The Food Chain in Greater Lincolnshire
The food chain is more important in Greater Lincolnshire than the UK economy as a whole
The Greater Lincolnshire Agri-food sector has:
• 101,000 employees (24% of the workforce), of whom:– 56,000 are in the supply chain;
– 45,000 in retail & catering;
• A GVA of £3.4bn (21% of the economy)– £2.6bn in the supply chain
– £0.8bn in retail & catering;
• 10% of total English agricultural output (7% of the UK total) and a GVA of over £0.45bn
NB – data for all part of the food chain is not routinely produced at county/unitary level and the figures are thus best estimates based on collated data from the census, DEFRA, SSC and industry sources
Brands & Big Business50+UK or global leaders (UK HQ, major plant, R&D or £50m+ turnover):
2 Sisters Food Group
Doubleday Group Househam Sprayers Moy Park Tayto Group
ACST Logistics Fastnet Fish Ltd HSH Coldstores Norbert Dentressangle
TH Clements and Sons
Bakkavor Fowler Welch Icelandic Group UK Openfield Tong Peal Engineering
Bernard Matthews Freshlinc Logistics Kerry Group Plc Paragon Print & Packaging
Total Produce Plc
Branston Freshtime Prepared Vegetables
Limagrain UK Pipers Crisps Ultimate Packaging
Chandlers Farm Equipment
Frontier Lincolnshire Co-operative
Princes Prepared Foods
Univeg UK
Cherry Valley Georg Bateman & Son
Lincolnshire Field Products
Produce World Woldmarsh
Country Style Foods Gleadell Agriculture M&W Mack QV Foods Yara
Dalehead Foods Greencore McCain Foods (GB) Sleaford Quality Foods
Yearsley Group
Daniels Group Holbeach MarshCo-operative
Morrisons (fish processing)
Staples Vegetables Youngs Seafood
High value jobs – estimated GVA per employee in the food chain
Sector Estimated GVA per employee £(DEFRA 2013)
Agriculture 30,500 (GLLEP)18,000 (UK)
Food processors 65,000
Food wholesalers 47,000
Haulage 40,000
Catering 16,600
Food retail 20,900
NB Nationally 28% of road haulage relates to the food chain (DfT freight statistics)
UK Food Sector TrajectoryGrowth:• GVA dominated by 3 sectors: food processing; food retail & catering
• But the largest increase in GVA in the last 7 years has been in agriculture where GVA has grown 75% since 2006
• Food processing GVA has also grown by 20%
• Food retailing has grown & catering after a fall (2008-10) has recovered strongly & its GVA will exceed food retailing this year
• UK food exports have grown for 9 consecutive years (‘04-’13), now worth over £18bn (up over 70% since 2004)
• New product development in the food sector was the highest ever in 2012 with 8,500 new UK product launches
• R&D spending is increasing in the UK and globally as business and governments respond to growing food demand
Key trends are more highly processed foods, eating out & trade
Lincolnshire response
Lincolnshire Food Sector Strengths & WeaknessesStrengths Weaknesses
Scale and critical mass Lack of strategic plan for the sector – the sector plan tries to address this
Strong agricultural base Reliant on migrant labour, local skills gaps and not attracting UK young people
Soils and climate Freight transit times poor and unreliable
UK HQ of many major companies Under-developed R&D base & high levelskills provision for the size of industry
Skills cluster in the industry creates a dynamic labour market
UK: low levels of investment in automation compared to D, NL etc.
Low business property costs Water supply challenges may affect production potential
UK’s largest port, strong logistics sector Food grade industrial space is limited
Cluster of other support businesses e.g.packaging
Some clusters based on historic strengths which are now less significant
GLLEP Agri-food Sector Plan Vision
The Greater Lincolnshire agri-food sector will double its contribution to the economy by 2030 through an ambitious programme of investment in productive capacity, skills & knowledge to drive an increase in high value added sales to UK and export markets
By 2020:
• Reinforce its position as the national centre for commercial investment in high value agri-food production in sectors including fresh produce, fish and poultry;
• Adopt new technology & skills to deliver new product development, productivity & sustainability gains with a target to increase per employee GVA +25% by 2020;
• Grow sector output by 30% through import substitution and export led growth.
By 2030:
• Double sector output & GVA by focusing on high value added food & drink;
• Increase employment by over 10% & GVA per employee by over 75% by increasing the use of technology & higher level skills;
• Exploit direct motorway links to the Midlands, London and the South East to replace 10% of UK manufactured food imports with Lincolnshire produce;
• Treble exports of food and drink from the GLLEP area by building on the area’s ports to service priority markets in Northern Europe and emerging economies.
GLLEP Agri-food Sector Plan
Priority Actions
1. Develop industry representation, map the industry & engage larger employers
2. Build on clusters where the GLLEP area is nationally very strong to facilitate growth (fresh produce, fish, poultry)
3. Develop a sector skills plan (through the Lincolnshire & Rutland ESB) & secure additional applied research funding with GLLEP agri-food companies
4. Develop & implement a 25year water plan & Centre for Water Management –2015/16 following some current research work supported by the LEP
5. Build an economic case for investment in strategic transport infrastructure – LEP
wide process starting later in 2014 and building on the work all LEPs are doing on growth plans
6. Promote exports & inward investment into the agri-food sector in the GLLEP area – part of LEP wide process for key sectors
Back to our ‘Questions to Address’, suggested answers:
What are the prospects for agri-food in the context of a globalised economy and growing World population?
Increased demand
Changing diets and more wealthy consumers
But major resource constraints
How important is agri-food to Greater Lincolnshire's economy?
Largest employment sector and GVA contributor
High value jobs and growing
What are the strengths & weaknesses of the Greater Lincolnshire sector?
Depth and breadth of the commercial sector
But needs more support for R&D, skill training and infrastructure investment
How can we grow & strengthen the agri-food sector in Greater Lincolnshire?
Ensure policies responds to industry support needs
Invest in skills, applied R&D, water and transport infrastructure
Focus on UK and export markets and encourage inward investment
Questions & Discussion
Thank you