Funding for England’s regional food and drink groups is unravelling – the fate of these champs of all things local is in doubt. So what price will the government put on provenance, asks Sue Scott

William Lambert's family has been farming the spectacular Wensleydale for 500 years. For the last 14 of them, he's known that milk from the 80 dairy cows that graze the steep slopes of Rydill Farm will be used to make one of the most famous cheeses in the world and that he'll be paid a price that makes the job worth doing.

That's because he supplies the Wensleydale Creamery, one of countless businesses to have benefited from help from the Regional Food Group for Yorkshire and Humber. Since 2002, when the watershed Curry Report recommended the eight regional food groups be publicly funded, they have helped build sustainable, durable relationships between buyers and suppliers based on provenance and trust just as Sir Don Curry envisaged.

But despite their success, their future is now in doubt. Provenance and trust have a price, it seems and right now, it's not clear what that is and, more importantly, who is going to pay.

Clegg wields the axe
In June, deputy prime minister Nick Clegg announced the winding up of their principal funders the regional development agencies (RDAs) many of which had already been drastically cutting back support since the beginning of the economic downturn.

The Regional Food Group for Yorkshire and Humber has seen a 30% cut this year alone and, like the others, it has no guarantee that any or all of it will be made up by the time the agencies go which could be as early as next year.

"There is a risk the local food movement could unravel," warns Curry. And that would undermine the domestic supply chain at precisely the time it should be its most robust, he argues.

"My argument to retailers has been a fairly obvious one," he says. "In a world of volatile weather, in turn creating ­volatility in commodity prices, strategically it makes sense to have a significant proportion of your raw material committed from a known group of suppliers with whom you can work for the long term and trust."

This could become a whole lot more difficult if the government fails to make food and drink a national priority when it invites the regional development agencies' successors to bid for £1bn of regional growth funds later this year.

And there's a very real risk that could happen, believes Curry. The coalition, which only finishes consulting next week on how the new regime will work, has completely neglected to consider the ramifications for UK food and drink, he says and there could be a high price to pay.

Curry points to a lack of clarity on "how the rhetoric of the big society and localism will work in practice", and how regional economic partnerships public/private successor bodies to the RDAs are going to pan out.

"There is a risk of significant variation across the country in terms of successful partnerships in some regions and less successful in others."

That could ripple back along the supply chain to raw material producers like Lambert.

"It's not just the farmers like me supplying the milk, it's the 200 people associated with the dairy," says Lambert of the impact the creamery's success has had on the fragile economy of Wensleydale. "It's an awful lot of people that would be affected very seriously if the creamery wasn't there."

The creamery also recognises the significant role it plays. So much so that it has brought in a consultant this year to help farmers make their businesses more profitable and will even be tackling the tricky issue of succession planning to stem the tide of farms that pack up and drop out.

It's the sort of relationship that Curry imagined would be commonplace in every supply chain by now. Sadly, it's not and he's disappointed. "We have a long way to go," he sighs.

The "professional, soundly based, sustainable" relationship between farmers, processors and their retail customers he anticipated would emerge from his report into food and farming in 2002 a response to the foot and mouth outbreak a year earlier is still hampered by what Curry describes as "opaque" buying practices and promotional price pressure. That can't go on, he says.

Curry, who stepped down as a government adviser last year, now chairs one of the eight groups his report helped to establish. The local RDA funds all the North East England Food Group's core activities.

Repatriating that funding to a myriad smaller hyper-local organisations a real possibility under the new plan would be a retrograde step, says project manager Marion Schooler.

"I know no-one is supposed to use the word regional any more, but up here we haven't got the critical mass so the group does need to cover the whole region to make any sense and have any impact on the sector."

Julie West, chief executive of Tastes of Anglia, which also lost its funding in 2007 and has survived on a highly successful distribution trading arm and membership income since, goes further.

She would welcome the regional food strategy being repatriated to Whitehall another suggestion being floated around the food ministry if that allowed the group to work with a broader audience. She says producers have lost out because her local regional development agency does not rank food and drink as a priority. As a result, Tastes of Anglia has cut back on staff and marketing.

"In this region it would be a positive to go back to Defra because we have been completely sidelined," says West. "If we had funding we could truly represent the region. We have done some fantastic meet-the-buyer events with supermarkets over the years, but it's difficult going back to them now to say we're not going to get funding any more, can you please pay."

Snuffing out innovation
Jonathan Knight, chair of the Regional Food Group for Yorkshire and Humber, warns that removing support from regional network could snuff out innovation as well as threaten security of supply.

"A lot of the multiples look to smaller producers to bring in something new and quicker (than larger companies)," he says. "If you do not have joined-up thinking for the food and drink sector you will never reach the challenges of producing the higher volumes set out in the government's 2030 food strategy.

"Unless there is a good conduit from central government to the regions it will be very difficult to get everybody to up their game."

Knight was instrumental in herding his and the other seven groups together under one banner last year when Food from Britain was wound up, leaving them with no strategic voice. They formed the English Food and Drink Alliance and the first task of their newly appointed chair Colin Dennis, former director general of food research institute Campden BRI, will be to save their necks.

Dennis sits on several advisory groups with Sir Don, including the Countryside and Community Research Institute, which flagged up the positive impact of quality local food production on the environment three years ago.
While the nominal worth to the economy of regional foods is about £5bn [IGD], its contribution to rural landscapes is without price.

In that context, arguments over how you define local, which have bugged the sector, are irrelevant and against a background of increasingly fragile global food security, probably academic.

For David Hartley, managing director of Wensleydale Creamery, £20m of whose £21m turnover is generated by the 4,000 tonnes of territorial cheese it produces every year, "local" is about authenticity, not the number of miles between source of production and point of sale.

"It's local milk going into a local cheese, but sold nationally," he says. "My definition as a supplier is, if someone in Exeter wants to buy "local" Wensleydale cheese, that's the one made from milk in Wensleydale, not Gloucestershire."

Premium potential
So important is authenticity to his business that Hartley has spent the past six years and several thousand pounds chasing PDO status for his Real Yorkshire Wensleydale Cheese.

Due to clear its last hurdle in Brussels next summer, he reckons it will add massively to sales not just in Yorkshire but throughout the UK and help him claw back trade from others piggybacking on his regional brand.

"It's interesting the number of people who say we buy your product in such and such a retailer when, in fact, we know they don't," he says. "Provenance and authenticity are becoming more and more important. The premium potential is there and the retailers are behind it."

For Curry, supporting regional foods is a no-brainer. "In terms of food security, climate change and population growth are the big global issues, but it makes national sense to encourage food production if you can produce it sustainably and closer to our markets."

He believes the chief executives of major food companies are coming round, but he feels there are still too many breaches of trust. For every Wensleydale Creamery there is a Birds Eye pea factory.

Birds Eye cancelled its dedicated grower contract with 18 suppliers this February.

"Until that point, it was the most professional relationship I saw," says Curry. "They ticked all the boxes in terms of what I thought ought to have happened. And then they ended it."

Disloyalty on such a grand scale is rare in the regional supply chain. Perhaps there is a lesson there.

If Chancellor George Osborne, now busy compiling his comprehensive spending review, which will be published this autumn, has put a price on provenance, he hasn't disclosed it.

But William Lambert and the 57 other farmers in the Wensleydale Creamery group have some advice for him. "The best way to save money in the long run is to invest some in the first place," says Lambert. Then maybe there's a chance his family will be farming the Wensleydale in another 500 years. 

‘The multiples are all over us’
"The day British, speciality and local food becomes the preserve of the independent sector is the day British food starts to stagnate," says Alexia Robinson, organiser of British Food Fortnight.

Her comments might enrage the Arkwrights among the independents, but in her mission to get British food into the hands of every British shopper, having the biggest retailers in the land on board is crucial.

"And they are all over us this year," says Robinson. "I'd like to see them run British Food Fortnight promotions right across their shelves so they are playing as powerful a role as other communities."

Robinson answers any criticism of her strategy with a typically no-nonsense riposte: "British food has become a hugely competitive arena. The independents whine that the supermarkets are getting in the on the act but there was always an opportunity for the indies to do this better. Our view is that the more retailers getting involved in selling British and local food, the better."

The fortnight is "as much about the British carrot as the amazing Somerset brie", she says.

Past events have proved successful for both ends of the food spectrum with sales up as much as 34% in some stores while footfall increased by a quarter. But you ain't seen nothing yet, says Robinson. Two years out from the Olympics she is planning her biggest ever push.

"The Olympics present a huge commercial opportunity for everyone in retail," she says. So huge, in fact, that it could have a fundamental, long-term impact on British food production if all the eggs supplied to the Olympic village are to be free-range, every flock in the UK would have to convert, she points out.

A grass roots movement, run by a skeleton staff from a small London office with almost zero budget, BFF is now in its eighth year, and survives on passion, persistence and some well-placed friends. The Prince of Wales, Boris Johnson and even the PM are all rumoured to be lined up for next year when BFF will move from its usual slot to mid summer to coincide with the Games.

Robinson is hoping that she can take retailers from every sector with her. This year's British Food Fortnight runs from September 18-October 3.

Stuck in a funding jam
Food and drink has never been a priority for the East of England RDA, which hasn't funded the Tastes of Anglia group since Defra funding ran out in 2007. ToA would like to see the sector declared a national economic priority and be allowed the funds to work with producers.

Cold winds in the west
Taste of the West relied on its RDA and other public bodies for 90% of its income until 2008, when the funds disappeared to zero. It cut staff and offices, but survived by concentrating on membership services.

Northern exposure
The North East Food and Drink Group is one of the most exposed to changes. It's totally reliant on the RDA for core funds of about £500,000 a year. The future is also unclear in the south east where funding came to an end in March.

Thin end of the wedge
The Regional Food Group for Yorkshire and Humber lost nearly a third of its core funding this year as the RDA struggled to find £40m of savings. Rather than cut back on activity, it says it will have to find smarter, cheaper ways of working. Food North West has also suffered significant cuts.

Hearts and arrows
Heart of England Fine Foods had positioned itself as the delivery organisation for a range of services on behalf of the RDA. It's now facing the prospect of them being cut. In the East Midlands, the regional group was swallowed up when funds ran out in 2007 and now just exists as a brand.