Agricultural Transition Plan

Baroness Jones of Whitchurch Excerpts

Tuesday 8th December 2020 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

My Lords, I start by declaring two interests—at Rothamsted agricultural research institute and as a member of the South Downs National Park Authority, which is involved in several of the tests and trials.

To those of us who sat through the many hours of debate on the Agriculture Bill, the premise of this Statement is very familiar. As we have said many times, the shift from payments made on the basis of land ownership or tenure to payments for improved environmental performance and other social benefits is very welcome. I am sure that the new levels of detail contained in the transition plan are appreciated by those directly affected. Given that we voted to leave the EU in 2016, I am inclined to say, “What took you so long?”.

The Minister will be all too aware of the criticisms from the farming community that these details have been published only three weeks before they are due to take effect. Although the Minister talks about a seven-year transition, the confirmation of an immediate cut in basic farm payments from 1 January 2021 is a bitter pill to swallow, so I would like to probe this decision in more detail.

The transition paper spells out a minimum cut of 5% in subsidies next year, but the opportunity to reclaim these payments does not kick in until 2022. The Statement talks about wanting farmers to come with us on a journey, but this seems the wrong way to go about building their good will towards the huge upheaval necessary to deliver the transformation. Why do the Government feel that this payment gap is necessary? Have they done a risk assessment on the number of farmers who will be unable to operate with this reduced income? Will there be any financial compensation as part of the resilience package for those whose livelihoods are threatened? How will the £170 million saved by this cut in the first year be reallocated? What proportion will be available in 2022 for individual farmers to claim through the sustainable farming incentive?

Between 2021 and 2024, a total cut of 50% in basic farm payments is proposed. The NFU projects that livestock farmers will have lost between 60% and 80% of their income as a result of these reductions. Can the Minister assure us that, during this period, equivalent payments will be accessible to those who are willing to embrace the philosophy of the new schemes? When we will see the details of these schemes, so that farmers can be reassured that it can work for them on their farms? Is it intended for there to be a variety of projects of different lengths and complexities, so that all landowners and tenants will have the opportunity to make the positive difference to which we all aspire? Can the Minister assure us that any money that is not spent in year one, before the schemes are fully implemented, will be rolled over for payments the following year and will not go back to the Treasury?

I also want to ask about the impact of devolution on these measures. This is an England-only proposal, as agriculture is a devolved matter. As we know, the devolved nations are drawing up their own proposals to maintain more financial support for their farming communities. This could have a detrimental effect on the price of English livestock and arable produce compared with their Welsh and Scottish counterparts.

In his response in the Commons, George Eustice said:

“We will set up a joint group across the UK to do market surveillance, to ensure that there is not disturbance to the internal market and to share ideas on what works.”—[Official Report, Commons, 30/11/20; col. 42.]


Does the Minister agree that this sounds far too complacent for an issue that many people fear is an immediate and escalating danger to market access and price stability for English-grown food?

Finally, I want to ask about the ultimate goal of this transition. The Government’s press release states:

“These changes will be designed to ensure that by 2028, farmers in England can sustainably produce healthy food profitably without subsidy”.


Will this mark the end of subsidies for English farming? Is this the future of farming, predicated on a free market principle that you can compete in the market on price or you will not survive? What will this mean for UK farmers competing in a global market where the majority of their competitors, including obviously the EU, continue to receive farm subsidies? Also, what is the strategy for upland farmers, who will struggle ever to make a profit but who represent an iconic part of rural life? What are the implications for our food policy if the race to the bottom on costs becomes the driving principle?

I fear that the consequences of these proposals will be the end of small family farms and the rise of big corporations farming on a grand scale. They may indeed deliver some environmental benefits, but they also risk changing the nature of farming and the rural community for good in ways that I do not think we envisaged when we were debating the Agriculture Bill not so long ago. I hope that the Minister can persuade us that there is a plan for long-term financial support for those delivering environmental outcomes way beyond 2027 and that profit in the long term will not be the only measure of success. I look forward to his response.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I welcome the Statement on the agriculture transition plan. There is much to be commended in the document, which sets out some of the detail that was absent from the Agriculture Bill. However, it is clear that many aspects of the plan are still in a state of flux and are being worked out as the implementation begins.

The document covers the period of 2021 to 2024, although the changeover from direct payments is scheduled to run for seven years. Farmers have been heavily dependent on area-based subsidies and it is welcome that these will reduce on a gradual basis. Next year, the reduction in basic payments of £30,000 will be 5%, followed by a further 15% reduction in 2022 and 2023, and 50% by 2024. For those with payments of over £150,000, the reduction will be 70% by 2024. This is a significant reduction and it is unclear whether it will be replaced by the three components of the Environmental Land Management scheme, especially since the landscape recovery component will not commence until 2024.

Can the Minister reassure us that farming incomes, which will become increasingly dependent on environmental measures, will be capable of sustaining both farmers and their families? I welcome the fact that all farmers will be eligible to apply for the first component of the sustainable farming incentive scheme. This is a step in the right direction in order to gradually introduce some farmers to the Government’s environmental agenda. However, there is no detail of how this will reward family farmers financially. The move by the Government to make all farms financially viable by the end of the transition period will need to be monitored very carefully, as some will see it as a leap of faith in the dark.

There is considerable mention of the environmental measures for which the Government will provide payments, including establishing animal health and welfare pathways. However, there is very little in the document that relates to food. Moving farmers from their previous way of working to a new environmental basis will be successful only if they are also able to produce food, whether in the form of animals or horticulture. Does the Minister agree that food production needs to be at the forefront of the reason for agriculture?

I welcome the scheme to help farmers who wish to exit from agriculture. Can the Minister give details of what the payments will be for this section of the scheme? Will it be funded from the £1.8 billion earmarked for agriculture over the next three years? Can he give reassurances that the land and farms thus released will be reserved for new entrants into farming? If the Government’s aim to transform our agriculture is to be realised, it will be vital that new entrants are given first preference for the farms of those who are exiting the sector.

The Government are clearly still at the development stage of their thinking on environmental land management reforms, and they promise to adapt the components as they go along. If some do not work, they will be altered and amended to improve them. This is to be welcomed but it does not provide certainty for farmers. Farming is not a short-term activity; it takes planning ahead and capital investment. The Government are looking to the private sector to help to finance some of their components, but the private sector is unlikely to come forward if it feels that the Government may be likely to move the goal- posts half way through the scheme. Can the Minister give reassurance that the three components of the Government’s agriculture policy will be fully tested before farmers are asked to commit their livelihoods to them?

The Government expect the environmental land management scheme to deliver the benefits of England’s peat strategy by paying for sustainable peatland management and restoration. Can the Minister provide the House with some more detail on exactly how and when that will be achieved?

I turn to the tree health pilot. It is vital that we protect our iconic trees from pests and diseases, which have decimated our hedgerows and forests in the past. There is evidence that huge numbers of saplings have been planted without any real sense of how they will be cared for and nurtured into adult trees. Can the Minister give reassurance that the thousands of trees that the Government quite rightly want to see planted will be the correct indigenous species to the area in which they are planted? As many as possible must survive to become the forests that the country will need to reach its zero-carbon targets.

I welcome this transition plan and look forward to more detail of the schemes to come, and to the Minister’s response.