Amendment to the Motion

Part of Agriculture (Delinked Payments and Consequential Provisions) (England) Regulations 2023 - Motion to Approve – in the House of Lords am 5:45 pm ar 13 Rhagfyr 2023.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Lord Benyon Lord Benyon The Minister of State, Department for Environment, Food and Rural Affairs, Minister of State (Foreign, Commonwealth and Development Office) 5:45, 13 Rhagfyr 2023

I thank all noble Lords for their valuable contributions today. I will try to respond to all the points raised. I welcome that there seems to be unanimity of understanding that we need to make the transition we are making. That is of great comfort to the farming community. Regardless of the electoral cycle, there is a basic understanding that the payment system under the common agricultural policy had malign incentives.

As has been said, I have just come back from COP, where one of the things we were trying to do was remove the malign incentives and malign subsidies on production and move more towards incentives that will support nature and carbon sequestration, and lower carbon and greenhouse gas emissions. What the Government are trying to do is very much in that context. At the heart of that is having a farming sector producing food of high quality, in a regulatory framework it can understand, and which trusts the sector to make the right choices, but which also has a regulatory framework for the odd occasion that someone does break the rules. I will come on to talk about that in more detail.

As I have said exhaustively at this Dispatch Box, this Government have set rigorous targets on nature restoration. By 2030, we will see no net loss of species in England. That is in our environmental improvement plan; it is written into law. That is something we are determined to achieve. Six years is a heartbeat in nature, and we have set ourselves a target that is stretching but possible. We will not achieve it, even if we double the number of people employed in our agencies and double the amount of money available for regulation, without working with the farming community. They are the people who will deliver the reversal of the decline of species and deliver on so many of our targets.

We think now is the right time to introduce delinked payments. By 2024, we will be over half way through the agricultural transition period, during which direct payments in England are being phased out. The rules and administration currently associated with the land-based basic payments scheme would be entirely disproportionate. I note that there is an understanding of that in this House.

Replacing the scheme with delinked payments reduces that administrative burden for farmers and, undoubtedly, a serious burden for the taxpayer. The basic payment scheme did little for food production. In fact, decoupling of payments from food production took place over 15 years ago. Delinking will free up farmers to focus on running their businesses and feeding the nation while protecting the environment. It will have no impact overall on the food security of our country. The Government committed to broadly maintain the current level of food we produce domestically, in the food strategy White Paper published in June 2022. We want to see our food security increase and the proportion of food we consume that is produced here increase. The next UK food security report, which will include updated information on where food consumed in the UK is produced, will be presented to Parliament by the end of 2024.

I would also say that the basic payment scheme did little to encourage farmers to take meaningful environmental action. The introduction of delinked payments and the end of cross-compliance is a further step in directing government spending in England to deliver more environmental benefits through our new farming schemes. When cross-compliance in England ends, farm standards will be maintained. Existing regulations will continue to protect the environment, animals and plants, and we have consulted on new hedgerow protections. We will continue to assess the impact of farming activities on the environment.

We are working closely with regulators to make sure that the regulatory system is fair, more supportive and effective at changing farmers’ behaviour. For example, the Environment Agency has been working with farmers to support them back to compliance, expanding from around 300 visits per year to over 4,000 from 2022-23. We have also written to all basic payment scheme applicants so they are clear on the need to continue to meet farm standards when the cross-compliance system ends. The rules they need to meet are on the “Rules for farmers” page on GOV.UK.

I will come back later to the point the noble Baroness, Lady Bakewell, raised about whether this was going to see an inexorable move to larger farms, but the basic payment scheme did nothing for small farmers as over 50% of the money went to 10% of the largest farmers. If anything, it has seen that drift away. We feel that the system can now support small farmers and that they will have a continuing vital role. Whether they own the land or rent it—as was raised by my noble friend Lady McIntosh—they will have a future in our farming sector.

Our expanded 2023 sustainable farming incentive has attracted over 15,000 expressions of interest and, in the two months since the application window opened for the 2023 scheme, there have been over 4,000 applications. This is more than were submitted in the whole of last year. Now with over 32,000 agreements, a 94% increase since 2020, our Countryside Stewardship scheme continues to be popular. This shows that our schemes are working for farmers and delivering for the environment. The first round of our landscape recovery scheme had 22 schemes and 34 schemes are shortlisted for our second round, many of them having food production at the heart of what they seek to do.

The noble Earl, Lord Peel, raised an important point about standards, and I will come on to talk about that. I know that the way he manages land knocks the environmental improvement plan targets out of the park by precisely the kind of management we want right across the country. It is vital that he and others understand that these standards will be maintained. In response to a point raised by the noble Baroness, Lady Hayman, I say that compliance with farm standards will be monitored by the existing statutory bodies. We are working with the Environment Agency to support farmers to undertake farming activities in a way that minimises risks to environmental outcomes; with Natural England to help farmers protect and enhance protected sites and biodiversity; the Rural Payments Agency and the Animal and Plant Health Agency to protect the health of our plants and animals and to maintain biosecurity; and the Forestry Commission to help farmers protect and enhance our trees and woodlands.

Hedgerows have been mentioned in this debate. There are existing legal protections for them outside of cross-compliance. The Hedgerows Regulations 1997 prohibit the removal of countryside hedgerows without first seeking approval from the local planning authority. The Wildlife and Countryside Act 1981 contains protections for nesting birds—precisely the point that the noble Baroness raised. We have also recently consulted on the best way to maintain and improve protections after the end of cross-compliance, as well as our approach to enforcement. We will shortly publish a document summarising responses, including our next steps.

It is worth noting that in many areas there are now more hedgerows than there were before farmers got paid to take them out, in the 1970s. In our lifetime, that extraordinary perverse incentive in a drive for production is now being reversed, mainly driven by schemes, whether Countryside Stewardship or others. We are seeing farmers planting hedgerows on a grand scale—and they are vital for carbon sequestration and biodiversity.

The farming rules for water will continue to protect watercourses. This includes provisions for not applying fertilisers and manure 2 metres from a watercourse. The Code of Practice for Using Plant Protection Products also requires land managers to not apply pesticides within 2 metres of a watercourse. Furthermore, the Environmental Protection Act 1990, the Water Resources Act 1991 and the Environmental Permitting (England and Wales) Regulations 2010 protect against a land manager causing water pollution.

Our domestic farming rules for water require farmers to take reasonable precautions which prevent soil erosion, such as establishing cover crops and grass buffer strips. This helps to prevent or limit agricultural diffuse pollution of inland or coastal waters from farming and horticultural activities. Added to that, the sustainable farming incentive scheme rewards farmers for sustainable farming practices. This includes introducing herbal leys and grass-legume mixtures or cover crops that help to provide soil cover and prevent soil erosion by binding the soil, in a way that perhaps was not happening before.

The question of an impact assessment was raised, but one has not been prepared for this instrument because it is not a regulatory provision. However, the Government have already published evidence providing in-depth assessments of the impacts of removing direct payments and assessments of delinking. This includes the farming evidence compendiums published in 2018 and 2019, and our 2018 assessment of the impact of removing direct payments. We also published 2021 and 2022 Agriculture in the UK evidence packs.

A very good question was also raised about public money going to farmers who are not actually farming. Delinking the payments from the land means that there will be no requirement to continue to be a farmer to receive the payments as they are phased out. However, the vast majority of delinked payment recipients will continue to farm. Delinking the payments will benefit those who continue to farm, as well as those who choose not to. For example, recipients will not have to worry about the basic payments scheme land eligibility rules and associated paperwork. When farmers choose to leave the industry, this should create opportunities for other farmers who wish to expand and for new entrants.

It is vital to make this point. A few years ago, the average farmer was me. My friend the Farming Minister Mark Spencer burst out laughing when I said that, and he said, “No, you are not the average farmer”. What I meant was that I am 63. But actually, in recent years, that age has started to fall, and it is a welcome fact that we are now seeing a younger and more dynamic group of people starting to look at farming as a career. We need to assist that.

We have a new entrant scheme. We are working hard to see whether we can develop that hand in glove with an exit scheme that assists those who feel that the new world is not for them. They need to be allowed to retire with dignity and to feel that their contribution has been made but now is the opportunity for new ideas, new techniques and new innovations to come in. Our farm innovation grants, new entrant schemes and much of the support that we are providing are targeted at those groups of people who want to see a sustainable, profitable farming business in their lives. That is what we are trying to do.

We are developing our new scheme so that there is an offer for all farm types, including smaller farms. I have already stated why the system that we are moving away from militated against smaller farms. For example, there is no minimum amount of land that can be entered into the sustainable farming incentive. From January 2023, we introduced a new management payment for the sustainable farming incentive which gives £20 per hectare for the first 50 hectares and supports the administration costs for entering the scheme.

I have done my best to address the points that have been raised, and I hope that I have answered the point about a regulatory gap. There is plenty of provision to make sure that the small minority of farmers who break the rules are still able to be sanctioned. Where we think there may be a gap, and to be absolutely sure, we are very happy to have a belt-and-braces approach—for example, in the protection of hedgerows—and we will make those changes if they are necessary. We want to work with the farming community and want to see farmers succeed in an environment of trust that allows them to run their businesses in a way that has the least impact, compared with the bureaucratic systems that have operated hitherto.

Introducing delinked payments is an important milestone in our agricultural reforms. It reaffirms the Government’s commitment to move away from untargeted subsidies and to continue with our planned reforms, which will better support farmers and the environment. I commend these regulations to the House and hope that I can persuade the noble Baroness not to press her regret amendment.