Sustainable Farming Incentive: Species Management and ELMS

Baroness Bakewell of Hardington Mandeville Excerpts

Thursday 25th January 2024 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I congratulate the noble Earl, Lord Caithness, on securing this important debate and on his excellent introduction to the subject, and welcome the Minister to his first debate in the Chamber. I am pleased to be able to tell the noble Lord, Lord Sewell of Sanderstead, who is a pleasure to follow, that there is a lot of innovation in science and technology going on in the agriculture industry already.

Every day of every year, the country and its residents ask farmers to perform a miracle. Without this miracle, we simply could not survive as a human population. We ask them to produce the healthy, nutritious and affordable food that sustains us all as a human population. At the same time, we ask them to deliver positive outcomes for the environment, our landscapes and our biodiversity. I have met countless farmers who have decided to ignore the binary choice of producing food or improving the environment. They already embrace a farming approach that seeks to deliver the production of food alongside, and in harmony with, environmental enhancement and biodiversity gain.

There is a great deal of consensus, both within this Chamber and across our rural communities, that this approach is the only way to succeed in future. We cannot deal with the nation’s vital food security without our hard-working farmers. At the same time, it is impossible to rectify the environmental damage that has occurred in recent decades without the help, support and local knowledge that exists within our farming communities.

When first introduced, ELMS had three strands—sustainable farming initiative, local nature recovery and landscape recovery. SFI was a universal scheme available to all farmers and those with land-managing responsibilities. But there have been changes along the way. In January 2023 came the announcement that ELMS would no longer introduce a new local nature recovery scheme. This would instead evolve into the existing Countryside Stewardship scheme. The Government’s rollout of ELMS has been criticised for creating complexity and uncertainty among farmers and other land managers, as was excellently demonstrated by the noble Lord, Lord Robathan.

If the recent changes to SFI announced by the Secretary of State do not underpin this crucially important balance, it will fail. Unfortunately, recent experience with the SFI does not bode well. Since the original launch of the SFI, we have seen flip-flopping after flip-flopping of the measures being incentivised. The constant altering of payment rates and a horrendous underspend have seen farmers’ funding cut by circa 50%, while at the same time their prospects of receiving new funding have become more and more challenging. While there are substantial increases to a few payment options in the January announcement, many are unchanged. There is less than hoped for to attract upland and hill farmers to change their farming practices to deliver more for nature, given that much land is tenanted or common land.

Establishing a single application process to enable farmers to apply for the SFI and the mid-tier Country Stewardship scheme at the same time is welcome. However, the Government have said that this new scheme will be available from summer 2024. The Country Land and Business Association has criticised the Government for not opening the applications for the updated scheme until summer 2024, arguing that farm businesses urgently need more financial support.

It takes six to 18 months to negotiate a Commons agreement, so if the detail is not available until summer 2024, new agreements will not start until late 2025. This is all taking too long. While there are some generous supplements proposed for rewetting and natural flood management, these require farmers and commoners to be able to undertake capital works. But the requirement to defray those substantial costs in advance before being reimbursed remains a major block to moorland restoration. Overall, for the uplands it is too little, too slow and too vague. Historically, this Government wanted to achieve 70% of farmers entering 70% of their land into the SFI. Today, less than 10% of farmers have applied to SFI.

In turn, an annual underspend of over £100 million in such an important policy area is bad enough, but when, in the last few years, over £100 million a year has been taken from the funding that was already going to the very community we are seeking to support, it is almost unforgivable.

The underspending on the farming budget is justly criticised. As part of the rollout, the Government said that they would maintain the annual farming budget for England at £2.4 billion, as has already been referred to. However, as has already been said, the Guardian reported that the figures from Defra indicated that there was an underspend in the Government’s environment farming schemes of £110 million in 2021-22 and £117 million in 2022-23.

I thank the noble Baroness, Lady Bennett of Manor Castle, for raising the issue of the land use framework. Can the Minister perhaps say when, if ever, it will be published?

I concede that the announcements made by the Secretary of State earlier this month have seen some improvements. For example, increased payment rates for species-rich grassland are welcome and long overdue, but let us be clear: this covers only around 0.1% of farmland in this country. There is precious little in these changes to support biodiversity improvement in the remaining grasslands, which can, if properly managed, become a thriving habitat for many iconic species in this country. I am sure that this House does not need to be reminded that we have lost over 90% of our hay meadows since the 1930s.

This is not about creating a chocolate box vision of a bygone era. Diversity of species benefits so much more than the simple flora and fauna of a field. We are now recognising the importance of multispecies pastures as reservoirs of beneficial predators. The technical term biological pest control, which is standard practice today in more than half of our horticulture production, is, at its heart, little more than the eradication of pest, disease or weed populations by a natural predator, whose population can be encouraged by a richer tapestry of habitats for food production and environment. I am afraid that I see little in the Secretary of State’s announcements in this area.

The NFU has always supported sustainable food production alongside environmental work, provided that domestic food production levels are at least maintained, but the impact of this updated SFI is not clear. For arable farmers, some of the best-paying options are where they take land out of production—the right reverend Prelate the Bishop of Norwich referred to this.

On species management, the Government have said that the ELM scheme will support species recovery and management action by farmers, landowners and other managers. The Forestry Commission argues that, although wild deer contribute to the UK’s biodiversity, they can have a negative impact, because they browse on the seedlings and regrowth of certain trees and plant species. Deer populations are currently unsustainable and culling is now necessary. The same applies to the grey squirrel population. The Government have to provide realistic future certainty on a clear and stable ELM scheme, rather than this intensely frustrating drip feed of SFI options.

With 10 Secretaries of State in 13 years, it is perhaps not surprising that the Conservatives have failed to grasp the biggest opportunity in 70 years to recover nature. During the last seven-year period of mismanagement, the Conservatives have, unbelievably, increased core Defra staff almost fourfold, from 1,800 in 2016 to nearly 7,000 in 2023. Investing in nature is good value, and the Liberal Democrats will increase the agricultural budget by an additional £1 billion to ensure that farmers get the fair deal they deserve.

I strongly support using ELMS to support biodiversity, as I have highlighted, including specific management to support populations of endangered species in all habitats across the UK landscape. However, we will not achieve that with the current set of announcements, or without taking farmers with us on a journey where they can be properly rewarded for the vital role they play in addressing the declines we have seen in too many species across the UK. If the current Government continue as they are, with uncertainty and incompetence, before long it may well be the British farmer who becomes the endangered species.