Agriculture Bill

Debate between Earl of Caithness and Baroness Rock

Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Tuesday 15th September 2020 Lords Chamber

[Baroness Rock (Con) [V]]

My Lords, I declare my interest as a director of Wrackleford Farms Ltd, a tenant farming enterprise. I shall speak to Amendment 42. The amendment, supported by the NFU, would ensure that farmers entitled to payments receive those payments within guaranteed timescales to help ensure certainty of cash flow. I thank my noble friend Lord Caithness for his support.

I said in Committee that any farmer will tell you that cash flow is their number one consideration. As a farmer, it is one thing to know that financial support will be reduced, but quite a different thing to know when that financial support will be received. Regulations relating to the phasing out of BPS therefore need to include clarity on when a farmer will receive payments.

While it is true that the existing payment windows will come over under retained EU legislation, Clause 9 gives the Secretary of State the right to modify the BPS legislation, including potentially by removing the payment window in place at present. We cannot have a situation where no payment window is set.

Furthermore, it is arguably the case that the current payment window under the CAP rules provides little recourse to farmers if the RPA fails to meet its payment obligations. This leaves farmers waiting an unsatisfactory length of time and in great uncertainty as to when payments will be made. The impact of these delayed payments cannot be overestimated. There is the financial impact: greater borrowing costs, lost business opportunities and less attractive prices for farm produce or inputs. But it also has a substantial impact on the well-being of farmers, their families and their relationships with their farm suppliers, which—importantly—filter down through the wider rural economy.

The payment window for direct payments is seven months: 1 December to 30 June of the following calendar year. Current rules state that payments have to be made only to the value of 95.24% of funds by that time. We all know that farming revenue and costs are both volatile; nothing remains the same month to month or year to year. The overwhelming message from farmers is that they need certainty over the timing of payments.

There need to be payment windows—or dates that Defra has to meet—either fixed in schemes or set out in individual agreements. This will allow holders of agri-environmental schemes to plan with great certainty and to manage their cash flow. It is not acceptable to ask farmers to undertake work at their own cost and to comply with associated strict time limits but then provide them with no certainty on payments associated with those works.

The government department BEIS has a prompt-payment policy that requires payments within a certain number of days: 30. I would welcome a similarly prompt-payment policy approach for agricultural schemes with guaranteed timescales. I hope the Minister will provide reassurance on this matter.

[The Earl of Caithness (Con)]

My Lords, while I thoroughly support the aims of this Bill and the direction in which the Government are taking us, I have to say that I get more and more concerned as we delve into the detail of the Bill and the experts who are farmers—such as the noble Lords, Lord Curry and Lord Carrington, my noble friend Lady Rock and others—expose the concerns that farmers face. It is for that reason that I support many of these amendments.

I tried to put my name to Amendment 36 in the name of my noble friend Lady McIntosh of Pickering, but there was already a full house of supporters. However, I supported this amendment in Committee and would do so again now. The argument is very compelling that the pilot schemes have only just started and it is going to take a long time for them to report and for the department to go through them, gestate them and work out what the future is. There would be very little time for the farmers to implement the results. Therefore, putting the whole thing back by a year would be a sensible, pragmatic and welcome solution to one of the many problems that the farmers face.

The noble Lord, Lord Carrington, made some very good points when he moved Amendment 37, which also deserves support. On the points made by the noble Duke, the Duke of Wellington, on Amendment 38, I reiterate that you do not have to be an organic farmer to protect the environment. You can farm in a perfectly normal way and bolster it. My main concern is Amendment 42, to which I have put my name and which has just been so well introduced by my noble friend Lady Rock.

The noble Lord, Lord Curry of Kirkharle, put it very succinctly when he spoke of sucking out the good of the department—I think those were his words. My concern is that as we move to ELMS, inevitably the department will move the good people into the new scheme and the less good people will remain with the old scheme. I hate to categorise the department in that way because all the members of Defra are good, but inevitably the really bright ones will be with the more attractive new scheme, and as the old scheme runs out, there will be an inevitable tendency for it not to receive the same attention that it gets now.

My noble friend Lady Rock was absolutely right to say that the one thing farmers need is certainty. As that support is reduced, so it is imperative that the payments are made promptly and on time. What recourse does a farmer have if he or she is made bankrupt because the Government, using taxpayers’ money, do not pay as they should? The area of financial support is hugely concerning and we must get it right. As the Bill stands, I am not convinced that we have got it right, which is why I support Amendments 36 and 42.

Agriculture Bill

Debate between Earl of Caithness and Baroness Rock

Committee stage & Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard): House of Lords
Tuesday 21st July 2020 Lords Chamber

[The Earl of Caithness [V]]

My Lords, last week the noble Lord, Lord Judd, was pleased to support what I said about the sequestration of greenhouse gases. This week, I am very pleased to support him on what he said about upland farmers and the concern that a number of them are going bankrupt and their land is becoming part of larger holdings, which is altering the nature of the countryside. It is not just the small upland farms that are under pressure. Small lowland and small family farms are under pressure throughout the UK, and there is now an inevitable drift towards bigger farms, more contracting and fewer tenancies—that is a sad thing.

Amendment 159 in the name of my noble friend Lord Dundee is an interesting proposal. It would be a very good way to start development on green-belt land adjacent to towns, but what happens when the idealistic thoughts of smallholdings do not become viable or the owners cannot cope, and the whole area turns into “horsey culture”? This is not good for biodiversity or the land. One sees an enormous amount of potentially good land being ruined by horses because the land is not properly maintained. It takes a great amount of extra work to keep land where horses are kept, on a small acreage, in good health.

I have put my name to Amendments 237, 238 and 246. I support Amendment 246 because I would like to see longer farm tenancies. This an important part of the structure of farming in the United Kingdom, and in England in particular. That is what the Bill is about, and I would like to see this amendment in the Bill.

I support Amendment 238 because it has the interesting additional wording of “full and efficient farming”. This comes back to our discussions on Clause 1, because there is a push from the Government to turn much of our agricultural land into recreational theme parks, whereas this amendment is geared to making certain that the land is farmed in a proper and efficient manner.

I have spoken before of my concern that tenants sometimes do not get a fair deal: because of their tenancy agreement, woodland, streams and things like that are often excluded, particularly from old Agricultural Holding Act tenancies. This hampers the ability of the tenant to carry out full farm biodiversity and restricts the amount that a tenant can diversify.

Looking to the future, what will happen under ELMS tiers 2 and 3? What happens if a tenant is attracted by a scheme under tier 2, or perhaps is included in the ambit of a tier 3 scheme, which involves inappropriate public access? What is the situation for the landlord in these circumstances? The land might be the landlord’s asset, and he might in due course wish to take that land in hand when the tenancy agreement comes to an end. If the tenant takes part in an ELM scheme which includes public access that depreciates the value of that land in the longer term—undoubtedly the public access will become a common established right over time, if not immediately—is the landlord consulted in a tier 3 scheme? Does the landlord have a right of refusal under the proposals that the Minister has in mind that we do not know about?

There are a lot of questions here that need digging into and explaining. I supported these amendments because the tenant should be not only encouraged but treated fairly when they have a holding.

[Baroness Rock [V]]

My Lords, again I declare my interests as a director of a tenant farming enterprise. I support Amendment 237 in the name of the noble Baroness, Lady McIntosh. I was pleased to add my name to Amendments 238 and 243 to 246. I welcome the clear intention to ensure that tenants are not excluded from financial assistance schemes.

Amendment 238 seeks only to ensure that all potential circumstances that could arise for a tenant to need their landlord’s consent are covered. Some schemes, by their nature, require tenants to seek the consent of their landlords, regardless of legislation or their contracts of tenancy. Those individuals would not be able to use the provisions of this legislation to object to a landlord’s refusal, in those circumstances. This amendment merely extends the opportunity for reasonable objection to apply to any and all situations where the landlord’s consent is required. The amendment is not seeking to expand the remit of the legislation beyond what the Government intend, just to ensure that no one is left out of being able to use this provision.

I welcome the provisions of Schedule 3, in particular those allowing tenants to object to a landlord’s refusal to grant consent to enter a financial assistance scheme, but the exclusion of farm business tenants is a mistake. By their short-term nature, restrictive terms and high levels of rent, FBTs deserve the protection of this legislation. Over time, FBTs will become the major way in which non-landowners become farmers, and it is important that the legislative basis for their occupation is secure. As the Government rightly move towards a new mechanism to support farm productivity gains and public goods, it would be tragic if FBTs had no recourse against unreasonable landlords who refuse consent for them to be part of that new direction of travel.

I recognise that there is a balance between ensuring that we do not disincentivise landlords and ensuring that tenants have sufficient opportunities to take part in new schemes. However, given the restrictive terms of many FBTs and the lack of impetus to improve them in the marketplace, the balance should rightly ensure fair scheme access for all tenants.

While it is government policy to ensure long-term FBTs, it is disappointing that the Bill does not contain the provisions to assist with this that were proposed by the Tenancy Reform Industry Group—TRIG— which formed part of the Government’s consultation. Amendment 246 rectifies this. The marketplace does not currently deliver a sufficient number of long-term FBTs and the Government could do more to promote their use. These provisions should provide comfort to landlords who have to deal with tenants who breach the terms of the agreements or when land is required back for non-agricultural use, planning consent for change of use having been obtained. While these new provisions will have direct benefit for landlords, who are prepared to let for longer periods, they will provide indirect benefit to the tenanted sector as a whole, by providing scope for a greater degree of longer-term tenancies.

Finally, on Amendments 243 and 244, many successful businesses are family enterprises, no more so than in agriculture. Tenancy succession provisions ensure the longevity of farming businesses, and it is right that there should be eligibility criteria for who can succeed to a tenancy. Other bits of the Bill speak to that issue. One area that is limiting for many farm businesses with succession rights is the close relative test. Often it is nephews, nieces and grandchildren who are involved in the farm, rather than the children of the retiring or deceased tenant. It is important to recognise that these wider members of a family farm may be the most appropriate individuals to succeed. This issue was considered by TRIG and formed part of the Government’s consultation on agricultural tenancies.

The tenanted sector is responsible for farming at least one-third of the agricultural area of England and Wales. We must ensure that tenant farmers are able to participate fully in schemes to contribute to the future of farming.