Agriculture Bill

Baroness Rock Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Wednesday 10th June 2020 Lords Chamber

[Baroness Rock (Con) [V]]

My Lords, I declare my farming interests as set out in the register.

This Bill is the most critical piece of legislation for domestic agriculture for more than 50 years. I commend the Government on the significant improvements made in comparison with the Bill introduced to Parliament prior to the last general election. However, there are still some issues around food security, the importance of food production and supporting active farmers and tenant farmers that could be strengthened, alongside the important environmental priorities.

An issue of important debate relates to standards and trade. Although the other place voted to reject the amendment to the Bill, I know that my noble friend the Minister is sympathetic to the arguments that are being made. I am aware of ongoing discussions about establishing a trade and standards commission; this surely would provide a possible way forward.

The coronavirus pandemic has underlined the need to consider issues of food security. The Government’s own food adviser, Henry Dimbleby, has said that this must be included in the new food strategy. This Bill should have food security and the health and well-being of citizens at its heart by listing this as an objective within Clause 1. There is merit in the report to Parliament occurring more often than just once every five years. Is there any scope for that part of the Bill to be looked at?

In the context of this legislation being an Agriculture Bill, there is concern that the Bill does not adequately target either agriculture or farmers in the provision of financial assistance. In order to support our incredibly important farming industry, it must be necessary to restrict the financial assistance powers, such as they are, in respect of individuals who are operating units which are predominantly agricultural. Without changes to the Bill to introduce clauses to both define and target active farmers, how will the Government ensure that financial support goes to those individuals who need it most?

The Bill sets out the intention of a seven-year transition to phase out current direct payments, and that this period can be modified by the Government by regulation. Within the context of an uncertain trading environment with the EU beyond the end of the year, the impact of the coronavirus crisis and the significant delays that there have been in the development of the new ELMS programme, we need more time to develop the new agricultural policy framework, and we should be delaying the beginning of transition from 2021 until 2022.

On Schedule 3 on agricultural tenancies, as a tenant farmer myself, I am concerned that the provisions protecting tenants from landlords who refuse consent for them to enter a financial assistance scheme excludes tenants occupying under farm business tenancies. While I am aware that the government argument was that these tenancies tend to be shorter and more negotiable, I fear that this misses the point that they are often more restrictive than the tenancies let under the AHA 1986 and, as they now account for 50%—and growing—of all land let in England, these tenants need just as much protection. With these tenants facing some of the most restrictive clauses in their tenancy agreements, why have the Government chosen not to extend necessary protections allowing them to object to a landlord’s refusal to enter into a financial assistance scheme in the same way as their fellow tenants can under the Agricultural Holdings Act?

Our farmers and our agricultural industry are the lifeblood of our rural economy. We must support them.

Agriculture Bill

Baroness Rock Excerpts

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Thursday 9th July 2020 Lords Chamber

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, it is a great pleasure to follow the noble Lord, Lord Krebs. I very much endorse his committee’s report and urge noble Lords who have not read it yet to catch up with it. I also endorse his comments about Amendment 57, which is vital. We have seen so much focus on productivity measured purely as calories or tonnes per acre, which I will come back to in later groups.

I will speak primarily to Amendments 43 and 54, which are interlinked. The noble Lord, Lord Greaves, already introduced them so I will not repeat that, but I thank him, the noble Lord, Lord Judd, and the noble Baroness, Lady Boycott, for supporting them. I also thank the noble Baroness for setting out so clearly the huge importance of county farms in allowing opportunities for new farmers and young farmers to get into the industry. It is crucial that this network is protected and, indeed, significantly enhanced.

I also reflect what the noble Lord, Lord Greaves, said about local food and its importance in all communities, particularly those often labelled as “left behind”. Strong local food networks and strong local food-growing systems up and down the country mean that the economic benefits are distributed round the country. What we have in our economy in so many different ways is far too much concentration of economic benefits in London and the south-east. However, I have a word of warning about what the noble Lord said about cheap food. I always want to put scare quotes around “cheap food” in supermarkets. We always have to remember that cheap food is costing us the earth and our health.

I come to Amendments 43 and 54 and pay tribute to work of the Landworkers’ Alliance, Sustain and the Campaign to Protect Rural England, which all had input into them. They highlight how local food systems deliver benefits on a scale from the local to the global, but have suffered from decades of underinvestment. Many of the people involved in them—the producers, processors, retailers and caterers—are small and have limited management and financial capabilities for collaboration and sector development, although I note that other elements of the Bill seek to encourage that. It is something we want to see the Government support across the board.

The benefits of local food strategies and infrastructure are that they reduce our reliance on imported food. That means reducing exposure to volatile global markets and to the uncertainties of a world that now looks increasingly uncertain indeed. Local food systems have the capacity to meet up to 80% of the UK’s food demands through UK-based production, over 50% of which can be produced within 100 miles of where it is consumed. Think what a different system it would be if the majority of the food on your plate was local, with all the economic benefits circulating in the local economy.

This would also have the global impact of reducing “ghost acres”—the land in other countries which should be available to feed their own populations their own local food, but which is currently used for growing export crops. It would allow producers to gain a higher share of the retail pound through short supply chains, make farming enterprises more profitable and make a valuable contribution to those local economies. It should never be forgotten that farmers now get a lot less than 10% of the benefit of every pound spent on food.

On the broader economic benefits, there is evidence from Nourish Scotland that for every pound invested in local food, £6 to £8 is returned to local society and over 50% is retained in the local economy, while with non-local enterprises, such as supermarkets, only 15% to 30% of the money is returned. Local food means that public health priorities are catered to and local communities have fresher, more nutritious, more affordable food. There is also increased interaction with local vendors and the satisfaction, perhaps, of volunteering at local farms and of community-supported agriculture. It also means that we can have more diverse, sustainable, mixed farms that produce multiple products. That would enable more on-farm recycling, lower inputs, reduction of food waste and other environmental benefits.

A five-year mapping study from 2012, Mapping Local Food Webs, estimated that 103,000 jobs across England could already be attributed to the local food economy, with 61,000 flowing from local food sales. Spending in local food outlets supports an average of one job for every £46,000 of annual turnover, while in the three major national chains it is one job per £138,000 to £144,000. We are talking about a system that works for people and for the environment, so I commend Amendments 43 and 54 to your Lordships’ House.

I will also refer to Amendment 61 in the name of the noble Lord, Lord Holmes of Richmond, to which I attached my name. It refers to growing under glass. I not sure that “glass” is quite the right word, but I am sure everyone knows what we are talking about. It talks about using renewable energy and there are real possibilities, such as using waste heat, reducing carbon emissions and using energy and resources well. This is an area in which the UK has very much been left behind compared with countries such as the Netherlands. I express my concern here. I have already tabled a Written Question to the Government about the low-carbon heat consultation, which currently excludes the potential of large-scale heat pumps, which could be fed into this area.

I will also briefly refer to Amendments 12 and 13. My noble friend Lady Jones attached her name to Amendment 12 and has already referred to both of them. It is vital to understand where our food comes from. I refer noble Lords to a fascinating study from the British Nutrition Foundation that found that one-third of primary school pupils thought that cheese came from plants. We have a long way to go to ensure that we have a full understanding of where our food comes from, the importance of food security and how our entire economy is a subset of the natural world.

[Baroness Rock (Con) [V]]

My Lords, I declare my farming interests as set out in the register. I too add my support to Amendment 12 in the name of the noble Lord, Lord Curry of Kirkharle. I will speak to my Amendment 62, which would give the Secretary of State additional powers to enable the support of diversification activities on farms where the purpose of that activity is to support or maintain the agricultural, horticultural or forestry activity undertaken on that holding.

This is an agricultural Bill and, as such, it should be about ensuring the resilience of the agricultural sector and supporting public benefits from the farmed environment. There is a real danger that vital support could be lost to our farmers. Therefore, it is important to ensure that we support those individuals bearing the business risk and carrying out the day-to-day management tasks. The key for making the case for financial assistance for diversification projects under this Bill is to look at farm business income. Many farmers make a loss from core farming activities, so diversification becomes an important tool for sustaining a farmer’s income. Some 65% of farmers already have some diversified element on farm. In 2018-19 the total income from diversified activities was £740 million. Diversification is about creating income opportunities for a whole farming family and offers the chance for other family members to use other skills to support and maintain a family unit on farm or by staying in the local area. I think in particular about encouraging young people in rural areas, which can only benefit the local economy.

Given the current reliance on BPS, many farms will need to look for additional sources of income once direct payments are phased out. Enabling the Government to provide financial assistance for diversification activities could help to fill this gap and allow farming businesses to build their resilience and sustainability.

Agriculture Bill

Baroness Rock Excerpts

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Thursday 16th July 2020 Lords Chamber

[Baroness McIntosh of Pickering [V]]

My Lords, I will speak to Amendments 127, 134 and 137, relating to Clause 4, which deals with multiannual financial assistance plans.

Amendment 127, which I am delighted is co-signed by the noble Baronesses, Lady Jones of Moulsecoomb, Lady Ritchie of Downpatrick, and Lady Bakewell of Hardington Mandeville, seeks to enhance the usefulness of the Government’s multiannual financial plans. I warmly welcome the Government’s commitment to produce these plans, as they will provide a degree of assurance to farmers and other land managers regarding the Government’s commitment to schemes and programmes. I also welcome the Government’s commitment to come forward early in the policy transition period with their first such multiannual plan.

However, I fear that the current provisions of the Bill lack any requirements on the Government to specify levels of expected expenditure and how those levels relate to the achievement of each of the strategic priorities set out in the Bill. Without seeking to bind the Government too tightly, it is sensible to have a framework that requires the Government to be clear about what it is planning to spend, and on what. Circumstances can and do change over time, but we must see a clear direction of travel from the Government now, so that we and farmers can judge how well the Government are doing in achieving their objectives and in the targeting of public resources.

Farmers and land managers too will need assurance about the certainty of funding if they are going to enter long-term relationships to deliver outcomes for the public benefit and for the improvement of productivity. Identifying specific levels of budgetary expenditure will also enhance the ability of Parliament to scrutinise government plans and policies, both in advance of them being implemented and by way of evaluating performance afterwards; both are important parts of good governance.

Turning to Amendment 134—which I thank the noble Baroness, Lady Jones of Moulsecoomb, and the noble Lord, Lord Wigley, for co-signing—in framing the financial assistance scheme, it is absolutely right that the department and the Government should have regard to advice from time to time on the funding required to achieve the strategic priorities of financial assistance for the duration of the plan, whether that advice is from the Office for Environmental Protection, or any other public body with a national remit and responsibilities for the natural or historic heritage. In Amendment 137—which I am grateful to the noble Baroness, Lady Jones of Moulsecoomb, for supporting—I go on to say that we need to know that, under the Bill, any advice received from the Office for Environmental Protection and any other public body with this national remit is sufficient to prove that the financial assistance provided is sufficient to meet the strategic priorities of the financial assistance.

It is very difficult for us to take a view on what the role of the OEP and its relationship with these other advisory bodies should be when we have not had sight of the Environment Bill in its current form, or the chance to adopt it. I make a plea to the Minister and her department that the Environment Bill and the Agriculture Bill are mirror images of each other, and their provisions reflect and fully complement each other.

[Baroness Rock (Con) [V]]

My Lords, I speak to Amendment 128 in my name, and declare my interests as set out in the register.

Time is running out to have all necessary legislation and implementation decisions and processes in place in the timescale set. There are still many aspects of transition and the success of future farming support policy that remain unclear, and the concern is that there will be a gap between alternative and effective schemes being in place and the start of the phasing out.

Amendment 128 allows the Government to return unspent funds to farmers as direct payments if they are not being used for other purposes. This enables Ministers to carry over any money left unspent at the end of a particular budget year for spending in subsequent years. Given the extremely welcome commitment of the Conservative Government to maintain current levels of funding, we must ensure that the precious resource of public money is used for its intended purpose of supporting agricultural businesses.

Agriculture Bill

Baroness Rock Excerpts

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

[The Duke of Wellington (Non-Afl) [V]]

My Lords, as before, I declare my agricultural interests as detailed in the register. During the many days of this Committee a considerable number of thoughtful and constructive amendments have been tabled, but in most cases the Government have suggested that they are unnecessary since the matter is already covered in Clause 1 or can be provided for in the new environmental land management scheme. However, the ELMS will not begin until 2024. During the years between now and then, many farms that are currently barely profitable will suffer or disappear.

I will speak to my Amendment 149. I am grateful to the noble Lord, Lord Greaves, for signing it as well. As I said at Second Reading, my real concern is for the very survival of smaller hill farms during the intervening years from now until the new ELM payments begin in 2024. The Government announced in February that farmers in the lowest band of basic direct payments—up to £30,000 per annum—would have their payment cut by 5% in 2021, with further cuts in the following years. However, the Government’s own figures for 2018-19—the latest available—show that the average cattle and sheep farmer in a less-favoured area received a direct basic payment of £24,000 and still made a profit of only £15,500. Figures for 2019-20, when available, will probably show a slightly better position. Nevertheless, these smaller hill farms are only marginally profitable even with the basic payment and would be commercially totally unviable without taxpayer support.

We all accept that we are moving away from the basic payment system to the new environmental land management scheme payments. The purpose of my amendment is to ask the Government to think again about whether it is sensible or fair to reduce those in the lowest band even by 5% before ELMS payments kick in in 2024.

On Tuesday two weeks ago we debated Amendment 78 in the names of the noble Lords, Lord Bruce and Lord Greaves. Their amendment urged the Government to maintain support for hill farms and other marginal land. I support this general principle. My amendment is more specific and asks the Government simply to protect just the lowest band of recipients from the cuts until the new payment systems come into play.

Last Thursday, the noble Baroness, Lady Bloomfield, stated that since small abattoirs operate on a commercial basis they would not fit into the principle of the public good. My contention is that, unfortunately, small hill farms are not in any way commercial on their own, so I believe the public will consider it more than just for taxpayers’ money to be given for the public good of maintaining our small hill farms, which play such an important part in so many rural communities in this country. When the Minister responds to this group of amendments, I hope he will give the Committee an assurance that the Government will look again at the timing and percentage of the reductions in the basic payments for small farmers in the uplands.

[Baroness Rock (Con) [V]]

My Lords, I declare my interest as a director of a tenant farming enterprise as set out in the register. I shall speak to my Amendments 150 to 153. Although there is an understandable desire to demonstrate that we are moving away from the old regime of the CAP, we must do so in a way that is effective rather than just quick. The delay in our exit from the EU and the implications of Covid-19 point to a possible delay in the implementation of this new policy framework. These amendments would allow greater flexibility in pausing or even reversing the phasing out of direct payments should, and only should, circumstances require it. This would be particularly important in a scenario where payments to farmers had been reduced but where the funds freed up had not been spent on alternative programmes and remained unused.

Amendment 150 would allow Ministers to reverse reductions in direct payments if they were found to be having a detrimental impact on the nation’s ability to produce food. The Covid-19 crisis will have long-term implications for our country, so this amendment would allow for welcome flexibility. UK consumers, who have valued the domestic supply of food over recent times like never before, will not welcome any dip in that supply. In the event of a pause or a reversal for these reasons, the Government should be allowed to maintain independent financing for the development of alternative schemes, such as ELMS, so that they are not delayed or interrupted.

My Amendment 152 would enable those who have opted to take delinked payments to return to receiving direct payments if the direct payment scheme is extended. If a delinked payment is introduced, the powers to extend the transition period in accordance with Section 8(3) will be used. The status of the farmer would be uncertain. He may be locked out of the system for longer than envisaged. The status of such a person in this situation should be defined in the regulations to provide legal certainty. Given the current uncertainty about what future schemes will look like, this amendment would provide a safeguard against unintended consequences for farmers if the agricultural transition period is extended.

--- Later in debate ---

[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.

[Baroness Bennett of Manor Castle [V]]

My Lords, it is a pleasure to follow the noble Baroness, Lady Rock, and to echo many of the sentiments she expressed on Amendment 246, to which my noble friend Lady Jones of Moulsecoomb has attached her name. I will speak briefly to Amendments 158 and 159. Amendment 158 is on county farms, which is something that we have heard discussed broadly, its importance stressed by many sides, so I will not detain the Committee on that.

I want particularly to address Amendment 159, in the name of the noble Earl, Lord Dundee. This in many ways addresses the question I put to the Minister after the previous group of amendments. Do we perceive our countryside as a place where we can see a growth of a different kind of business and economy—strong local economies, rich communities of small independent businesses producing food and providing services for those businesses? The vision set out by the noble Earl in this amendment reflects some very exciting work that is being done in Wales. We are seeing exciting experiments and developments in the devolved Administrations that could be transferred to England. That is the idea of One Planet Living: that it is possible to create developments that meet our environmental, social and economic goals and are different from what has gone before, which may not increase the concentration of land ownership, but may create opportunities for small independent landowners, businesses, tenants and people to operate different kinds of businesses, in different ways.

I do not need to tell your Lordships that land ownership in England is incredibly concentrated. We have a situation in which half of England is owned by less than 1% of its population. If we were to share the land of England around the whole population, everyone would get half an acre each. In the light of Covid-19, we may see that people wish to explore different ways of living, different kinds of businesses, different ways to work and support themselves, and different ways to work in communities. This amendment is an exciting possibility and way of doing that. I commend it to the Committee.

Agriculture Bill

Baroness Rock Excerpts

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

I very much hope that the Minister will be able to accept my first amendment to help to improve the environment and my second to help to preserve our increasingly marginal small hill farms. I may wish to press these amendments to a vote, depending on the Minister’s response.

[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

Baroness Rock Excerpts

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Thursday 17th 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 Amendments 81, 82, 83, 85 and 86, which stand in my name. I am grateful for the support of the noble Baroness, Lady Bakewell of Hardington Mandeville, for these amendments. I shall also speak to Amendments 69 and 89 in the name of the noble Earl, Lord Devon, Amendment 84 in the name of the noble Lord, Lord Wigley, and Amendments 87 and 88 in the name of my noble friend Lady McIntosh of Pickering.

In speaking to my Amendment 81, I speak also to Amendment 84 in the name of the noble Lord, Lord Wigley, which will achieve the same outcome for Wales prior to it coming forward with its own legislation, as this amendment envisages for England. This amendment is a straightforward change to require the Government to come forward with the necessary regulations to allow an agricultural tenant to refer to dispute resolution an unreasonable refusal from a landlord following a request made by the tenant to join a scheme developed under the provisions for financial assistance.

While the Government may give an assurance that they will use the power available in this part of the Bill to bring forward the necessary regulations, there is no reason why the Government should not commit to doing so in the Bill. Tenant farmers are rightly concerned about their ability to access new public payments for public good schemes in light of their tenancy agreements and some of the restrictive clauses which they contain. Tenants must be given the assurance that they will be able to enter new schemes without the landlord being able to unreasonably withhold consent. The change which this amendment will make is entirely in line with the Government’s policy and should not cause any issue for them but at the same time it would give a tremendous boost of assurance to tenant farmers who are looking at the possibility of taking part in new schemes as they develop.

Sadly, there are circumstances where landlords refuse consent on an unreasonable basis for their tenants to enter schemes. Although it may be considered prudent for landlords to allow their tenants to remain profitable, it can sometimes be the case that landlords seek to use the leverage involved in having to give their consent to make unreasonable demands of their tenants, including surrendering secure tenancies in favour of insecure farm business tenancies, seeking the surrender of land, buildings or dwellings or merely to make the life of the tenant difficult. Having said that, there are, of course, plenty of examples where relationships between landlords and tenants are very good and where the changes being envisaged by this amendment would not be a risk to those good relationships or undermine what the parties are trying to achieve in those circumstances.

Amendment 82 closes a potential loophole in the provisions of the Bill around gaining the consent of the landlord, which is required to be obtained by the tenant in entering a financial assistance scheme. The Bill contains a relatively narrow set of criteria which need to be in place before the tenant has recourse to potential dispute resolution for an unreasonable refusal of consent to join a financial assistance scheme. The Bill envisages providing the tenant only with the option to object where the tenancy agreement or legislation governing the relationship between the landlord and the tenant restricts the tenant’s ability to participate without the landlord’s consent. However, there may be individual requirements set out within the financial assistance schemes which require tenants to seek the landlord’s consent. It may be because of the nature of specific land use changes envisaged by schemes being considered by tenants. Currently, that situation would not be covered by the provision in the Bill, and the amendment seeks to address that by ensuring that all refusals by a landlord can be referred by the tenant to dispute resolution on the grounds of reasonableness.

The Government may say that they will ensure to address this point in the way in which they design schemes, and I have some sympathy with that, but it would be better to have the provisions in the Bill rather than have to rely on individual schemes having their own appeal mechanism.

Amendment 83 would address specific issues around unreasonable restrictions within tenancy agreements which prevent farm tenants investing in their holdings to carry out activities or improvements which assist with the productivity or sustainability of the holding. This could include using the holding for non-agricultural activities which are in keeping with and complementary to its agricultural uses, which many farms want to do and which adds much-needed financial stability to those holdings.

Many tenants will have agreements which require them to seek their landlord’s consent for the installation of new fixed equipment or to carry out new activities where the requirement for the landlord’s consent is absolute. In these circumstances, there is no recourse for the tenant, who feels aggrieved by a refusal from the landlord. In that it is a point of public policy that farming should become both more productive and more sustainable, it would be an error not to allow tenants the same ability to fulfil those objectives as others. Of course, reasonable landlords will give reasonable consent for activities which improve the productive capacity of the holding and/or its sustainability, but, sadly, there are situations where such consent is not forthcoming. This is mostly because landlords are seeking to extract other concessions from their tenants, as I have set out previously. This amendment does not seek to provide a carte blanche ability for tenants to avoid reasonable clauses within their tenancy agreements, but it would provide the opportunity for them to appeal against an unreasonable refusal from their landlord. Indeed, this suggestion formed part of the recommendations of the Tenancy Reform Industry Group in its report to Defra in October 2017.

Amendments 85 and 86 would enhance the franchise of individuals who are able to apply for succession of tenancy for the limited number of Agricultural Holdings Act 1986 tenancies which continue to have rights of succession. Where those rights of succession apply, a narrow list of close relatives are able to apply to be considered to be eligible to take on succession tenancy. Up to three generations of members of the family can be tenants of the same holding. The current franchise includes husbands, wives, civil partners, sons, daughters, individuals brought up in farm families and treated as children of a marriage or civil partnership, and brothers and sisters of the deceased or retiring tenant. However, crucially, the list of potential successors does not include the grandchild, the nephew or the niece of the deceased or retiring tenant, nor does it include children from a cohabiting partner of the deceased or retiring tenant. The amendment seeks merely to correct for those omissions. This is also an issue that was considered by the Tenancy Reform Industry Group. It is often the case that the most appropriate successor in a family business is not to be found in the immediate generation but in the next, and there is no reason to deny the ability for the tenancy to be passed to those individuals should they also be able to meet the other eligibility criteria.

I strongly support Amendment 87 in the name of my noble friend Lady McIntosh of Pickering, as it seeks to provide a framework for encouraging longer-term farm business tenancies. As the noble Earl, Lord Devon, raised, the average length of FBTs is under four years. With 90% of all tenancies let for five years or less, this is a crucial issue. I look forward to hearing what the Government plan to do about it and ask that consideration be given also to the taxation environment within which landlords make decisions about farm tenancy letting, as has been proposed by the Tenant Farmers Association.

Amendment 88 in the name of my noble friend Lady McIntosh of Pickering is crucial to this legislation. FBT tenants should not be left out of the possibility of objecting to their landlord’s refusal to allow them to enter into a financial assistance scheme. Should my noble friend push this matter to a vote, I would certainly vote in favour of the amendment, as it closes a dangerous loophole for nearly half the tenanted sector of agriculture.

Finally, I turn to Amendments 69 and 89 in the name of the noble Earl, Lord Devon. I cannot support the removal of the tenancy provisions in the Bill that those amendments would achieve. However, I understand and fully agree with his view that we urgently need a specific Bill covering agricultural tenancies. It could pick up on many of the issues already recommended by the Tenancy Reform Industry Group. I urge my noble friend the Minister to give an assurance that an agricultural tenancies Bill will be brought before this House in the not too distant future.

I know that my noble friend the Minister is very supportive of the tenanted sector and highlights its importance to the whole agricultural industry. I thank him particularly for his empathetic engagement on this. It is therefore right that new legislation, providing security and stability to the tenanted sector, should be brought before the House. Although I am minded to test the will of the House on my amendments, I will listen carefully to what the Minister says before making my final decision.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted to follow my noble friend Lady Rock and thank her for her staunch and eloquent support for Amendments 87 and 88. Perhaps I may briefly address Amendments 69 and 89, in the name of the noble Earl, Lord Devon. I have great difficulty with them because they would remove from the Bill all provisions relating to agricultural tenancies. That would be a very regrettable move. However, I support Amendment 84 in the name of the noble Lord, Lord Wigley, which is a mirror image of the amendments standing in my name.

I will address my remarks primarily to Amendments 87 and 88. Clearly, as I say in my explanatory statement, Amendment 87 would seek to

“bring into effect a legislative change proposed in the tenancy reform consultation carried out by DEFRA and the Welsh Government, which has not been covered by the Bill, to encourage landlords to let longer Farm Business Tenancies.”

I would like to draw out some of the comments made by my noble friend Lady Rock in speaking to her amendments as passionately and eloquently as she did. I am minded to press Amendment 88 to a vote, not on my behalf but on behalf of all the agricultural tenants for whom, I know, this is close to their hearts.

I have had cause to raise this issue at previous stages of the Bill and I feel passionately about it. I grew up in a part of the world—Teesdale, in the Pennines in the north of England—where the farm incomes are among the lowest in the land. The farmers there probably survive only because their wives go out not just to help on the farm in all weathers, particularly at lambing time. In normal circumstances, outside Covid, they also go out and try to earn a living to keep the family afloat.

The basis of Amendment 88 is very simple. It is to put the tenants’ agreements under the Agricultural Tenancies Act 1995 on exactly the same basis as under the Agricultural Holdings Act 1986. My noble friend Lady Rock referred clearly to the devastating effects of moving from a secure tenancy agreement to an insecure tenancy, which do not bear thinking about in the present climate. Tenant farming is the bedrock of this country; it is almost unique to the English countryside. I remember so clearly from my years as a Member of the European Parliament how we stand out as one of the few areas of Europe with such a well-developed system of tenancies.

What I find so heartbreaking about the current situation is that the two Acts have not yet been brought together. To me, the provisions covering tenants under them should be absolutely as one. This is a highly regrettable situation. To be fair, my noble friend the Minister tried to go to some pains to put my mind at rest in Committee. Yet I find myself tabling the same amendment on Report, and potentially putting it to a vote, because I have not had satisfaction on this point.

I believe I am here as a voice for those people who cannot be represented otherwise than through our good selves in this House. I urge my noble friend to consider any reason why the tenancies under the two Acts cannot be treated in exactly the same way. It would be grossly unfair if any tenants’ possible access to financial assistance could be refused at the whim of a landlord. I accept there are good tenants and bad tenants; there are good landlords and bad landlords. But we have to look at the worst-case scenario.