Go green? Let us spray...

Yesterday's Independent asked whether a radical attempt to redefine the label attached to British agriculture as the "safest and the greenest" is the only way to ensure the competitiveness of our agricultural industry. In the present climate following the BSE scare many people are asking a similar question. The answer, at least in part, is almost certainly yes, but this does not mean that all of Britain's farms should tomorrow switch to organic production.

The issue should not be polarised. It is not simply a question of whether to change farming techniques or whether organic farming alone is the answer to the industry's problems. Rather, supplying food of the quality and at the price that consumers demand is paramount. Organic food production undoubtedly plays a part but it represents only a part of a diverse and changing industry.

There is not, and never will be, one national label for all British agricultural produce. In fact one of the greatest assets of the British agricultural industry is the very diversity that exists within it. Consumers are looking for value for money when they buy food but value for money for one consumer may mean something completely different to another.

Clearly, the consumer wants food that is safe at a reasonable price but after that simple tenet is established, consumer responses become more complex and varied and at times contradictory. Consumers' demands in relation to such facets as colour, shape and refrigerator life often rest uneasily alongside the marketing of organic produce, where the shape and size may not conform to their exacting standards. In surveys many consumers cite their preference for extensively farmed produce over intensively farmed. Yet over the last 10 years it is the consumption of poultry, which tends to be more intensively produced, which has increased by more than 30 per cent in the UK during a period when total meat consumption has declined.

Although a certain greening of UK consumer tastes over the 1990s is detectable, the extent to which this has swept over the entire population is questionable. Organic produce is only a small niche market. British farmers should be encouraged to fill this market but this an entirely different proposition from switching all UK agriculture to organic production.

Surveys highlight the importance consumers attribute to convenience, ease of parking and the time needed to prepare food. Organic food is well down the list of priorities; so much so that Marks & Spencer, for example, no longer stocks organic products because of weak consumer demand.

Much of UK agriculture, while not actually organic, is already produced using very extensive farming methods. This includes the traditionally farmed large upland areas, UK farmers have also responded in their uptake of environmental schemes and the UK has been at the forefront in Europe in developing environmentally sensitive areas where farmers adjust their production techniques to enhance the environment.

The UK has been the in the forefront of introducing animal welfare legislation in the EU - it is banning stalls and tethers in the pig industry ahead of other EU countries. It will be interesting to see whether the UK consumer will choose British bacon over Danish bacon because of the UK's animal welfare legislation - to date all the evidence suggests that it is relative prices and intrinsic quality that will determine UK market share.

There is a danger that switching to the production of strictly organic food in the narrowest sense would not just damage the UK's share of the food market but place this country's farm produce outside the income range of the poorer sections of our society. While a small number of consumers are willing to pay a premium for organically produced products - thus enabling organic farmers to remain in business - it seems inconceivable that all consumers would be willing to pay this same premium. On average, UK consumers spend around 11 per cent of total consumer expenditure on household food but for poorer sections of society, particularly pensioners and unemployed, this proportion is a lot higher.

What then would be the risks to the British agricultural industry of a radical shift to widespread organic production? First, the quantity produced would fall significantly. For example organic cereal yields are some 35 per cent lower than conventional ones - shifting UK agriculture to organic production would drastically reduce the production of home- grown food and as a consequence considerably worsen the food trade deficit.

Indeed how would British farmers compete with farmers from other countries, both on world export markets and within our own market? Farmers are being continually encouraged to become more competitive and the protection traditionally afforded them is slowly being removed. If British agriculture becomes organic it will only survive against this competition, if it can truly differentiate its product from that produced elsewhere and then charge a premium price for it. This may be achieved in some segments of the market but would be all but impossible across the board.

It is also doubtful that such a radical change would be sustainable at a national level. Organic production relies on the use of organic fertilisers or animal waste. If inorganic fertilisers were not used, there would be a large increase in the demand for organic ones. But without a huge increase in the population of farm animals, for which there would be no conceivable consumer demand, the supply of animal manure simply does not exist. The soil would be slowly depleted.

Which direction then should British agriculture take? We have highlighted the move to incorporate environmental thinking and animal welfare standards into agricultural policy making in recent years, a move in which the UK has been very much to the forefront.

From the UK farmer's perspective it is important that the changes he is encouraged to undertake are endorsed by consumer behaviour. This means that consumers actively choose UK pig meat ahead of pig meat produced from systems banned in the UK and that our grazing livestock systems, which are already the most extensive in the EU, are favoured by the consuming public.

In simple terms, any changes to the UK's farming practices must be market- led. To date, while there is a niche for organically produced food with a price premium, UK farmers will quite happily endeavour to meet that demand. But it would be folly, however, if all or even the generality of the UK's farmers were forced to switch entirely over to organic systems of production - that would not just place UK farmers in an uncompetitive position but require them to produce a product for which there was no widespread demand.

The writers are economists with the National Farmers' Union.