Sustainable Farming Incentive

Daniel Zeichner Excerpts

Wednesday 12th March 2025 Commons Chamber

[The Minister for Food Security and Rural Affairs (Daniel Zeichner)]

With your permission, Mr Speaker, I would like to update the House on the sustainable farming incentive.

We stand on the edge of an unprecedented global transition for British farming. From leaving the European Union to the challenges of climate change and geopolitical events, we are asking more of farmers than ever before: to continue to produce the food that feeds the nation and to protect the environment on which our long-term food security depends. We are determined to create the conditions for farm businesses to be profitable and succeed. We are proud to have secured £5 billion for farming over two years: the largest budget for sustainable food production in our country’s history. That is £1.8 billion for customers already in agreements, £1 billion for farmers now in SFI agreements and a further £150 million for farmers in the SFI pilot.

Labour has got that money out of the door and into farmers’ pockets. We have invested it to bring thousands more farmers into environmental land management schemes, which were vastly underspent by the previous Government, to make a record number of capital items available for the coming year to help farmers carry out actions under the SFI and countryside stewardship, with £600 million available for productivity, animal health and welfare innovation, and other measures to support agricultural productivity, as well as 50 landscape recovery projects across the country. We have responded directly to calls from the sector to roll out a new higher-tier scheme, and to increase payment rates so that higher-level stewardship agreement holders—many of them upland farmers—are fairly rewarded for their work.

More than half of all farmers are now in schemes, with 37,000 live SFI agreements and 50,000 farmers in ELM agreements. Under the SFI, 800,000 hectares of arable land are being farmed without insecticides, 300,000 hectares of low-input grassland are managed sustainably, and 75,000 km of hedgerows are being protected and restored, which is a huge success for nature. I thank all farmers involved and reassure them that all existing SFI agreements will be honoured.

Farmers will continue to be paid under the terms of their agreement for its duration. If they entered into a three-year SFI agreement earlier this year, they will be paid until 2028. If they submitted an SFI application but this has not yet started, that will also be honoured. All farmers who took part in the SFI pilot will be able to apply for an agreement.

With the high uptake of the scheme, however, the fact is that it is now fully subscribed. This Government inherited SFI with no spending cap, despite a finite farming budget, and that cannot continue. We will continue to support farmers to transition to more sustainable farming models including through the thousands of existing SFI agreements over the coming years and a revamped SFI offer. But this is an opportunity to improve how we do that under a fair and just farming transition, which supports farms to be profitable businesses in their own right through fairer supply chains, better regulation and greater market access, and directs public funding in a fair and orderly way towards the priorities that we have set out on food, farming and nature. We will be strategic in how we design our schemes, and responsible within the available budget. This is about using public money in a way that supports food production, restores nature and respects farmers as the business people they are.

SFI can and must work better for all farms and for nature, and I will set out the details of the revised SFI offer following the spending review, including when it will open for applications. We will work closely with the sector to design an improved scheme so that they can tell us what works best for their businesses. We will also put in place strong budgetary controls so that SFI is affordable to the public purse. The revised offer will align with our land use framework to better target SFI actions fairly and effectively, focusing on helping less productive land contribute to our priorities for food, farming and nature.

The underlying problem facing the sector, however, is that farmers do not make enough money. The Government are changing that. [Interruption.] Opposition Members may laugh but businesses do need to make money; they might need to know that. We announced a new set of policies at the National Farmers Union conference last month aimed at improving farm profitability, securing our food security, and protecting nature. Through our farming road map, we are creating the conditions for farmers to run profitable businesses that can withstand future challenges.

This decision is about investing in long-term stability. It is about a future where farmers are supported to run profitable businesses, and where public money is used in a better way to better restore nature and to secure long-term food security.

[Mr Speaker]

I call the shadow Secretary of State.

[Victoria Atkins (Louth and Horncastle) (Con)]

I thank the Minister for an advance copy of his statement, which I am going to pull apart in a moment. I thank you as well, Mr Speaker, for granting the urgent question that forced the Minister to the Dispatch Box, because the Government sneaked this statement out last night, presumably hoping nobody would notice; but, guess what, the countryside has noticed, because the question we are all asking ourselves is: what have this Government got against farmers and the countryside?

They sneaked out this announcement that they were halting the sustainable farming incentive scheme immediately. The scheme replaced the EU’s common agricultural policy scheme when we left the EU. We set up this scheme with our Brexit freedoms to establish a farming policy that works for farmers, the environment and food production, yet Labour pulled the plug without warning last night.

The SFI scheme is popular with farmers, but the Minister does not have to take my word for it. To quote one:

“The…schemes have the potential to be the most progressive and environmentally responsible schemes of their kind anywhere in the world.”

Those are the words of the former president of the Country Land and Business Association, and father of the hon. Member for Mid and South Pembrokeshire (Henry Tufnell), who I am sure will agree with his father’s analysis. Why, then, would this city-dwelling Government stop such a successful scheme? In the words of the CLA president, Victoria Vyvyan:

“Of all the betrayals so far, this is the most cruel. It actively harms nature. It actively harms the environment. And, with war once again raging in Europe, to actively harm our food production is reckless beyond belief.”

Does the Minister think she is wrong?

The Secretary of State, by the way, is missing in action. This is a significant statement, yet he is sending out his junior Minister to take the heat. Perhaps it is because the Secretary of State did not want me to remind him of his own words in November, when he said that farmers

“feel ignored, alienated and disrespected”.

I do hope the Minister will tell us how that is going.

This Government’s farming policy can be summarised in three sentences. First, they will halt any farming and environmental scheme on which farmers rely without warning or consultation, using criteria they have never before defined. Secondly, the state will seize their farmland at will through the compulsory purchase orders that were announced yesterday in the Planning and Infrastructure Bill. Thirdly, if families have managed to cling on to their farms despite all that, then Labour will tax them for dying. However, I am delighted to hear that the Minister for farming himself can see that farmers do not make enough money—I hope he will be changing the family farm tax.

It all adds up to nothing less than an outright assault on the countryside. As a proud rural MP—someone who actually likes the countryside—I am already being contacted by constituents and farmers across the United Kingdom who have had the door slammed in their face with no notice, asking how they are meant to diversify, make a living and protect our countryside.

The Prime Minister has said he understood the significance of losing a farm, acknowledging that it “can’t come back”, and warned against “constantly moving the goalposts” for the agricultural sector, yet that is exactly what his Government are doing. The statement issued by the Government last night was a masterclass in Orwellian doublespeak. It says that the SFI scheme has “reached completion”. What criteria have they used? They have not set those criteria out before. The Government’s own website stated that up to six weeks’ notice would be given for the withdrawal of SFI. Why was that disregarded last night? Does the Minister recognise that, in doing so, this Government have betrayed the trust of the farming community yet again? How many farmers does his Department believe will now be caught out without an SFI agreement during the transition period of at least a year? Just as with the family farm tax, Labour has got its figures wrong.

The CLA has asked me to ask the Minister some questions. What are his Government’s ambitions for the two thirds of farmers in England who are not currently in environmental schemes? How much have the vast cuts to payments under the basic payment scheme saved his Department, and where has that money gone? How will the Secretary of State support upland farmers who were intending to move on to the sustainable farming incentive scheme?

Then, of course, there are the legal problems cause by last night’s announcement. How will the Government meet their legally binding environmental targets, given that they rely so heavily on the SFI scheme? I do hope that the Minister will be able to give us a good, clear legal analysis on the impact of the changes to SFI on internal market competition law between England and other devolved authorities.

Any words that the Minister uses about food security are meaningless in the face of this policy, particularly as we all know that this Government have been delaying consideration and grants of these applications since the general election. The figures that the Minister is using are wrong and the theory behind this policy is very questionable, yet the Government would have us all believe that he understands farming and the impact that this measure will have on farmers. Farmers are in despair.

My message to farmers is clear: we have got your back; we will help you, so please hang on in there for the next four years; we will axe the family farm tax; and we will sort out this shocking mess of SFI, to help build a bright future for British farming with British farmers.

[Daniel Zeichner]

Well, really! I had hoped that the shadow Secretary of State would understand how the schemes that her own Government created actually work. Let me explain the problem that we inherited—there are some on the shadow Front Bench who, I think, understand this better than her. This time last year, these schemes were undersubscribed; they are now oversubscribed. It is not a complicated thing to say that, when the budget is spent, a responsible Government responds to that. The budget is spent. [Interruption.] The budget has been spent and what we are doing in a sensible, serious way—[Interruption.] Conservative Members should actually be celebrating the fact that so many farmers are now taking up these schemes. I am confident that we will be able to sort out the mess that we have inherited. Basically, if you set up schemes without proper budgetary controls, you end up in this kind of position. We have had to take the hard decisions that the previous Government ducked.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

Can the Minister confirm that environmental land management scheme agreements will remain in place under this Labour Government, including SFI, and that there will be a new and better targeted SFI on offer as soon as possible, with details to follow in the spending review?

[Daniel Zeichner]

I thank my hon. Friend for her question. She makes absolutely the right point. We should be reassuring people out there that farmers who are in schemes are absolutely safe and are carrying on as before, but the basic point is that when a scheme is full, it is full.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Tim Farron (Westmorland and Lonsdale) (LD)]

I thank the Minister for advance sight of his statement. The closure of the SFI from 6 o’clock last night came without warning or consultation, and it constitutes the breaking of the Government’s word to farmers. Farmers are already losing their basic payment this year, but they are now excluded from the very scheme designed to replace that. Has the Minister not broken his word to farmers and to all who care about nature? Will he clarify how much money he will save from the BPS cuts this year and say that it is not true that SFI is overspent? Is it not true that when the BPS cut is taken into account, more than £400 million of the £2.5 billion farming budget will remain unspent? A bigger budget is pointless if we do not spend it. This money was supposed to reward farmers for nature restoration and sustainable food production. Does this not damage both?

There are 6,100 new entrants to SFI this year, yet only a mere 40 of them are hill farms. Because of the failure of the Conservatives in the previous Administration, the big landowners and the corporates are already comfortably inside the tent, but the farmers who are outside and now locked out without warning are Britain’s poorest farmers in beautiful places, such as mine in the lakes and the dales. As the Tories oversaw a 41% drop in hill farm incomes in just five years, is this not a bitter and unbearable blow for our upland farmers?

This betrayal will outrage everyone who cares for our environment, our upland nature and landscapes and it will outrage everyone who cares about food security and it will outrage everyone who cares about our tourism economy. It will also outrage everyone who clings to that old-fashioned expectation that Governments should keep their word. On Monday, the Secretary of State came to my beautiful constituency to pose for pictures by Windermere. I wonder whether he might come back tomorrow and face up to the farmers who steward the stunning landscapes around our beautiful lakes, and who he has abandoned so shamefully. Will he reopen SFI and honour his promises, or turn his back on the very people who feed us?

[Daniel Zeichner]

Again, I am disappointed in the hon. Gentleman’s comments. He is a thoughtful person, and he and I have debated these issues many times. I am sorry that he did not welcome the uplift in higher level stewardship payments, which he and many others have been asking to see for a long, long time and which will benefit upland farmers. I take him back to the many discussions that we have had about the importance of getting the farm budget out to farmers. That is what has happened. The full budget is actually being spent and that should be celebrated.

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

The fruit and vegetable aid scheme is an important lifeline for our producers. Collaboration between producers has meant that we have had a huge increase in our tonnage of various fruit and vegetables. Given that the scheme finishes on 31 December 2025, what plans do we have to support further collaboration between fruit and vegetable producers in 2026 and beyond?

[Daniel Zeichner]

My hon. Friend asks an important question. This is, of course, an EU legacy scheme, and we are considering the best way of taking that forward in the future, but we are absolutely committed to supporting and working with the horticultural sector.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

We have around 35 minutes remaining. Questions must be short and the Minister’s response must be on point and tight. I call the Father of the House.

--- Later in debate ---

[Sir Edward Leigh (Gainsborough) (Con)]

Will the Minister leave for a moment the hallowed cloisters of Cambridge and accept my invitation to take a rural ride through Lincolnshire, the breadbasket of England, to meet my farmers? Does he agree that sustainable farming is the key to food security, and therefore will he take up with his colleagues in the Department for Energy Security and Net Zero why they are covering 15% of Lincolnshire with solar farms in addition to taking away this grant?

[Daniel Zeichner]

I am grateful to the right hon. Gentleman for his question. I am always happy to visit Lincolnshire; I have done it on a number of occasions. But on the question of how we allocate our land, it is important that we ensure that the new land use framework works effectively, as that is the most rational way of making those decisions.

[Ms Julie Minns (Carlisle) (Lab)]

It is extremely welcome that, under this Government, more money is being spent on schemes and that more farmers are in schemes than was the case under the previous Government. However, there are smaller farms, such as those in my constituency in north Cumbria, that would not have had their plans as far advanced as their larger neighbours and their consultants. Can the Minister outline what support will be available to those small farms going forward?

[Daniel Zeichner]

My hon. Friend touches on the critical point. The schemes that we inherited had no way of prioritising properly; it was a first-come, first-served scheme. Therefore, the kind of farmers she describes were disadvantaged. We have had to work with a scheme that we inherited. I was very clear when I took over that we would not immediately overturn the existing system; we wanted to give people confidence about the future. However, when we come to redesign the scheme, we can design it better to address the issues that she has raised.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I note the Minister’s complaint that he inherited an uncapped budget. Can he tell the House whether that was something that he just noticed on Monday, which meant that he had to close the scheme without warning on Tuesday? On 14 January, the director general from his Department in charge of food biosecurity and trade told my Select Committee:

“I do not think we can expect that every single farm will be viable but if we are talking about 92%, 93% having the opportunity of productivity improvement, that is what we are aiming for.”

In other words, the Government’s aim is to lose 7% to 8% of our farms. What will that figure be after today’s announcements?

[Daniel Zeichner]

I am always grateful to receive questions from the right hon. Gentleman, who chairs the Environment, Food and Rural Affairs Committee. Those figures on future farm viability go all the way back to the Agriculture Act 2020, when a serious attempt was made to assess future farm viability. That is why the Secretary of State and I are so determined to address those problems around farm viability. Farmers will not be supported forever by the public purse—we know that—so it is very important that we address the whole range of issues, but I am very happy to have a further conversation with him.

[Sam Rushworth (Bishop Auckland) (Lab)]

I am sure that the Minister shares my wish to see a bit more humility from Conservative Members, given their failure to get the agricultural budget out of the door. [Interruption.] I would ask the Minister—if I could hear myself think—to ensure that every penny in SFI arrangements will be paid to farmers, and also that those who have already applied and who are eligible for the scheme will have their applications taken forward.

[Daniel Zeichner]

I thank my hon. Friend for that question. I very much enjoyed visiting his constituency and talking to farmers there about these issues. I can absolutely give him that commitment.

[Wendy Morton (Aldridge-Brownhills) (Con)]

How does the Minister expect those who have farming businesses to plan for the future when he sneaks an announcement out like his Department did last night, despite a message on his website saying that they would give six weeks’ notice of any closure? What does the Minister have against our farmers and food producers?

[Daniel Zeichner]

The only thing I have anything against is the previous Government, who set up the scheme in the first place. They set it up in a way that meant that SFI ’22 and SFI ’23 were closed in exactly the same way. SFI ’24 is only different in one sense, in that it is now oversubscribed rather than undersubscribed. As a consequence, it would not have been possible to give notice because it would have led to a further spike in applications.

[Alex Mayer (Dunstable and Leighton Buzzard) (Lab)]

As the Minister has just alluded to, the scheme is called SFI ’24. Might there be a clue in the title that makes this less surprising than people are saying, given that it is now 2025?

[Daniel Zeichner]

I am grateful to my hon. Friend. She makes a sensible point, which is that we saw a succession of schemes announced by the previous Government. I want to get to a scheme that will work for the long term. My hon. Friend is absolutely right; the way the scheme was set up by the previous Government meant that it was first come, first served.

[Mike Wood (Kingswinford and South Staffordshire) (Con)]

The overnight withdrawal of the funding is yet another blow to many of my farmers in Kingswinford and South Staffordshire. The Minister still has not answered the question as to why he has broken his word, which was clearly set out on the Government website, to give at least six weeks’ notice, nor the one asked by the Chair of the Select Committee, the right hon. Member for Orkney and Shetland (Mr Carmichael), which was that if the reason for doing so was because the budget had become exhausted, when that first came to the Minister’s attention. Was it really yesterday afternoon?

[Daniel Zeichner]

It first came to my attention five years ago during the passage of the Agriculture Act 2020, when I warned that exactly that would happen. If we move from a basic payments system, where everyone has an entitlement, to a system that is based on bidding, that is what happens. Perhaps the hon. Gentleman should have woken up five years ago.

[Cat Smith (Lancaster and Wyre) (Lab)]

I thank the Minister for coming to the House to make a statement. However, I woke up this morning to many emails in my inbox from farmers across Lancaster and Wyre. I invite the Minister to join me, because I am going to accept the invitation from my constituent Cath to visit her farm. Her SFI application was ready to go as she was coming out of the countryside stewardship agreement. She has therefore been left in limbo. Will the Minister join me in meeting farmers across Lancaster and Wyre?

[Daniel Zeichner]

As I have said to many hon. Members, I am always happy to try and meet farmers whenever I can, and I will add my hon. Friend to my list. I absolutely understand her point, but there was a fundamental problem with the schemes as designed, which we inherited. We need to do better in future. That is what we will do as we redesign them.

[Andrew George (St Ives) (LD)]

What assurance can the Minister give farmers in my constituency? A site of special scientific interest has recently been designated in the Penwith area, which is supported by a recent designation of landscape recovery. We now seem to be in a position where there will be no support for that at all. How will my farmers adjust to the new regime, and what assurance can the Minister give them that the funding will be in place to support their actions in the SSSI?

[Daniel Zeichner]

There is some complexity in that question that I might need to address directly with the hon. Gentleman. Landscape recovery is absolutely not affected, so it depends on the exact nature of the application.

[Markus Campbell-Savours (Penrith and Solway) (Lab)]

Can the Minister confirm more about the timetable for SFI ’25 to provide some reassurance to my farmers in Penrith and Solway that we will deliver? Will he also explain a little more about how we can ensure that more of my hill farmers get into the SFI scheme, which the last Government failed to deliver on?

[Daniel Zeichner]

My hon. Friend’s question is important. We will work with farmers and organisations to redesign the schemes, and that addresses that very question. That will take place over the summer this year, and once we have had those conversations we will be able to announce exact timings. My hon. Friend is right to raise the point that there has been no fair allocation of resources; it has just been done on a first come, first served basis.

[Charlie Dewhirst (Bridlington and The Wolds) (Con)]

The Minister’s statement says,

“This decision is about investing in long-term stability.”

First, we had the body blow of the family farm tax, the reduction in BPS and the pulling of capital grants, and now we have the cancellation of SFI. How is any farming business expected to invest in the long term?

[Daniel Zeichner]

The hon. Gentleman is a sensible person and I have had many discussions with him over the years. When he says “pulling”, what he means is that the budget was completed. It is exactly the same in this case. I think it is important that Conservative Members understand that we cannot spend the same money twice. They lived in a world of cakeism; we do not. Once the money is spent, we have to move to a new set of schemes when the money is available.

[Andrew Pakes (Peterborough) (Lab)]

I thank the Minister for bringing the statement to the House and for showing such honesty about the challenges in the scheme. May I urge him not to take any lectures from the Conservative party, which oversaw chaos in the Department for Environment, Food and Rural Affairs and a £300 million underspend? That is a shameful record. Will the Minister assure the House that he will outline details to ensure that future schemes get the money out the door and into farmers’ pockets and stop the waste and bureaucracy that we saw under the previous Government in DEFRA?

[Daniel Zeichner]

My hon. Friend is absolutely right. I am afraid I was genuinely dismayed, but perhaps not entirely surprised, by what I found when I came into the Department. We have spent the last six or seven months trying to get control of the situation because if we have a scheme that is not capped or managed, or has no budgetary control, there is a problem. The figure of £5 billion overall is the biggest amount for farming that we have had. We will make sure the money gets out to farmers.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

Coming at a time of record low confidence in farming, many farmers in Glastonbury and Somerton will feel that the sudden closure of the SFI scheme will bring them closer to closing their farm gates for the very last time, and at a time when food security is at an all-time low. What communications will go to affected farming businesses and what support will DEFRA give to those who are dealing with vulnerable farmers at the sharp end?

[Daniel Zeichner]

I do not agree with some of the hon. Lady’s question, because the food security report published at the end of last year did not bear out her analysis. The Rural Payments Agency has written to farmers today setting out exactly the situation to give people reassurance.

[Perran Moon (Camborne and Redruth) (Lab)]

Meur ras, Madam Deputy Speaker. Is the Minister surprised that the Conservative party is now crying crocodile tears when it failed to get £350 million of SFI out and into farmers’ hands and failed to stop speculative acquisition of farmland by tax dodgers?

[Daniel Zeichner]

My hon. Friend is absolutely right. I am afraid that, as on so many other issues, we have to clear up the mess that we inherited. That will take time. We are setting out a clear path to the future that, I hope, over time people will come to support.

[Simon Hoare (North Dorset) (Con)]

I do not know how to break this to the Minister: I do not know if he realises this, but when the thousands of farmers come to Westminster, they do not come to thank him or the Secretary of State. Yesterday, we had the sustainable farming incentive announcement. Today, there is an announcement that there is to be no extension to the fruit and vegetables aid scheme, as was mentioned by the hon. Member for Leeds Central and Headingley (Alex Sobel). That, of course, follows the family farm tax.

The Minister’s announcement today speaks very ill of the financial management of his Department. I make no apologies for repeating the questions asked by my right hon. and hon. Friends. When did the Minister know that he was hitting his budget ceiling? When had he set that as a criterion? What discussions has he had with the Treasury to increase the budget? Why was he deliberately, I presume, misleading farmers by pledging a six-week notice period, when it was not even six seconds?

[Simon Hoare]

Inadvertently misleading.

[Daniel Zeichner]

I will take the hon. Gentleman back to the origins of this debate. When we moved from basic payments to these schemes, there was always going to be a point when the budget was spent.

[Simon Hoare]

When did he know?

[Daniel Zeichner]

We have known it for five years.

[Terry Jermy (South West Norfolk) (Lab)]

Having spent several weeks and months encouraging farmers to access the scheme, naturally I am disappointed with the closure and hope that there will be a replacement in short order. However, is the fact that so many farmers in my constituency were not accessing the scheme not evidence that the Conservative party failed farmers over many years?

[Daniel Zeichner]

Many farmers are now in these schemes and are benefiting from them. We are also getting the environmental benefits that the whole transition away from basic payments to the environmental land management schemes was designed to achieve. Let me give some credit to the Opposition—they set this train in motion, but what they did not do was set up the schemes in a way that could properly be managed. That is what we are now doing.

[Ellie Chowns (North Herefordshire) (Green)]

Yesterday, the Government shamefully pulled the rug out from underneath thousands of farmers by cancelling the SFI with zero notice, despite saying that they would give six weeks’ notice, and without putting in place anything to support farmers in future. This morning, my inbox was full of emails from despairing farmers who were on the point of submitting an application, had no way of planning for this and now are utterly left in the lurch. How does the Minister expect the UK to make the vital transition to nature-friendly farming and boosting UK food production if this is how he treats farmers?

[Daniel Zeichner]

I am astonished by the hon. Lady’s contribution. She should be celebrating the fact that so many farmers are now farming in an environmentally sensitive way. I invite her to help us ensure that these schemes work better in future. This is actually a cause for celebration of the benefits of the environmental land management schemes.

[Chris Hinchliff (North East Hertfordshire) (Lab)]

I have also been contacted by concerned and impacted farmers in North East Hertfordshire. Will the Minister assure me that, for the remainder of this Parliament, the revamped SFI that he alluded to will allow farmers to plan seasons ahead, as they need to?

[Daniel Zeichner]

Clearly, over the past five years we have all known that this transition was happening. There was always going to be a point in the transition from basic payments to environmental land management schemes where it would be down to people applying for these schemes. I understand my hon. Friend’s concerns. I encourage farmers to apply early to these schemes. It was a first come, first served scheme before. In future, we will try to ensure that there is a better allocation process, but that is the system we inherited.

[Adam Dance (Yeovil) (LD)]

One of the key messages from farmers at the that forum that I held in my constituency was that they have lost trust in this Government and in investing in sustainable farming. Does the Minister recognise that ending SFI with no warning has only worsened the loss of trust? What plans do the Government have to restore Yeovil farmers’ confidence in this Government?

[Daniel Zeichner]

I hear the hon. Gentleman, but the fact that we have so many people in agreements, and so much land being farmed within them, shows that many people in this country have absolute confidence in what we are doing.

[Greg Smith (Mid Buckinghamshire) (Con)]

How on earth does the Minister correlate his statement that he wants to work with the sector with the Government last night giving just 30 minutes’ notice to the NFU—the sector—of this shameful cut to the SFI budget? What does that say about DEFRA’s previous commitment to transparency, co-operation and co-design?

[Daniel Zeichner]

This process has been going on for five years now. Perhaps the hon. Member should have looked a bit more closely at what was about to happen.

[Carla Lockhart (Upper Bann) (DUP)]

Trust between farmers and this Government is well and truly broken. Farmers feel betrayed and let down, and many are at breaking point. The closure of the SFI is a bitter and, I believe, calculated blow on top of the family farm tax grab. It will be the final straw for many British farmers—the people who feed us. How can the Minister justify sending over £500 million to farms in Africa, Asia and South America, while stripping support for our home-grown farmers?

[Daniel Zeichner]

I am grateful to the hon. Lady for her question, but I point out to her that this scheme relates to England. The different devolved Governments have different schemes. She asked about international aid. The key thing for us is to ensure that we support our farmers here, which is why we are spending a record £5 billion on farming over the next two years.

[Martin Vickers (Brigg and Immingham) (Con)]

The one thing in the Minister’s statement that farmers in my constituency would agree with is that they are not making enough money. When, as I hope, the Minister takes up the invitation from the Father of the House to visit Lincolnshire, will he meet my farmers face to face and explain to them exactly what his Government are doing to increase their profitability?

[Daniel Zeichner]

The hon. Gentleman and I have had many exchanges across the Chamber over the years. I would be very happy to speak to his farmers and to talk to him about the important work that we are doing on supply chain fairness.

[Helen Morgan (North Shropshire) (LD)]

Farmers in North Shropshire are really keen to improve the environment and farm in a friendly way, but they are also running businesses and they need to plan. There are farmers in my constituency who were hoping to apply for grants to raise the water table in peat soil areas, but had not yet applied because those grants were not yet open. Now, the opportunity is gone. What will the Minister do to enable farmers to plan, and what will the replacement scheme look like?

[Daniel Zeichner]

The hon. Lady raises an important point. SFI is only one part of the set of Department’s schemes to work with farmers on nature restoration. The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Coventry East (Mary Creagh), has told me that £300 million is available for peat restoration, so other schemes are available.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

No notice and the scheme immediately closed. The Minister says it is full. When did he know that? Why did he not tell the farmers that it was going to happen?

[Daniel Zeichner]

I think there is still a misunderstanding about how these schemes work. If there is a first come, first served scheme and people have known for weeks and weeks—months—that it would be full at some point, there comes a time when we have to make a decision. If the Department is working within its budgets properly, it can hardly say a week or two before that suddenly it will close, because there will be a spike in applications. It is like a run on a bank. Basically, when the scheme is finished, it is finished.

[Dr Roz Savage (South Cotswolds) (LD)]

Nature, food, farming and farmers are the foundation of British life in every sense. This change is deeply regrettable. Can the Minister assure the House that every support will be given to farmers to adapt to these changes and to give them help with the technology that they do not have? They are already on their knees. Will the necessary support be given to stop them from buckling under the load of these successive changes?

[Daniel Zeichner]

I hear the hon. Lady, but I repeat that we have 50,000 farmers in ELM agreements. The majority of farmers are already working with us to make that change to environmentally friendly farming. It was never clear how many farmers overall would make the transition into the new schemes. Obviously, it is not a matter of compulsion. We invite people to apply, and they were invited last year. When the new scheme comes along, I will invite people to apply.

[Mr Andrew Snowden (Fylde) (Con)]

The Minister is ducking and dodging questions like a Poundland Alastair Campbell. He started out with, “We knew five years ago,” but that very quickly it turned to “just weeks ago”. He said that this is “cause for celebration”. I do not think that any of my farmers will be celebrating this. Will he come and say these things directly to my farmers’ faces and see the response that he gets? Does he really want to be a Minister that much that he is willing to say such ridiculous things? He can find money for lots of other projects. He should come to Fylde and speak to the farmers.

[Daniel Zeichner]

I was going to say that I was grateful for the hon. Member’s question, but I am not sure that I am. I invite him to come and talk to people who are engaged in nature-friendly farming, who benefit from these schemes and who are undertaking the transition, for which I give the previous Government credit for starting. We wanted to move away from the common agricultural policy to a new system. That is what we are doing. The schemes were not designed well enough, and we are now addressing that.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

I was contacted by members of the Great Big Dorset Hedge initiative three weeks ago, who told me that capital grants under SFI had already been frozen. Can the Minister confirm when the decision to close was actually made, whether applications submitted will be granted and how long applicants will have to wait? As farmers are already obliged to improve hedges with more than 10% gaps under their agreements, how will they access funding to do so to enable their existing funding to be maintained?

[Daniel Zeichner]

The hon. Lady raises an important set of points. We now have 75,000 km of hedgerow within these schemes. The basic point is that we have a fixed budget and, just as with the capital grants, when they are spent, they are spent. Another set of grants will be available, and I invite her constituents to apply at that point. We cannot get away from the fact that there is not an endless supply of money. We have to work within the budgets.

[Sir Julian Lewis (New Forest East) (Con)]

I understand the Minister’s point that it has been known all along that at some point the fixed budget would be exhausted. A simple question for him: on which day were Ministers first informed that that budget had been exhausted?

[Daniel Zeichner]

We made the decision yesterday because we reached that point.

[Caroline Voaden (South Devon) (LD)]

It is beginning to feel a little like a game of Top Trumps in who can cause the most financial unpredictability to farmers, be it through the botched ELMS roll-out or the cancellation of this scheme at a moment’s notice. Half of Britain’s fruit and veg farmers expect to go out of business. The Minister says that he will support farmers to be profitable through fairer supply chains, but will he explain what that will look like?

--- Later in debate ---

[Daniel Zeichner]

I am grateful to the hon. Lady for that very big question. I point her to the fair dealing powers in the Agriculture Act 2020, some of which have already been brought forward in the dairy sector, and we will be working on the pig sector soon. Basically, sector by sector, we are trying to sort out the improvements that are needed to get fairness throughout the supply chain. That is a big, difficult and complicated question, but it is essential for the future.

[Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)]

The announcement was sneaked out with no notice last night. If the Minister knows anything about farming, he will know that it takes months, if not years, to plan. Farmers had no notice of this. Will he tell us what will replace the SFI, when he will consult, and when it is likely to come into operation?

[Daniel Zeichner]

Over the next few months, through the spending review, we will review how we can improve the scheme to avoid the very point that the hon. Gentleman has just made, and I will report back to the House later in the summer.

[Ben Maguire (North Cornwall) (LD)]

I met young farmers at Duchy College in North Cornwall last week, and it was clear that confidence in the farming sector is at an all-time low, with many looking for alternative careers. In the light of the Government’s hammer blow to SFI payments, on top of the family farm tax, how does the Minister plan to incentivise young people to get into farming, now that they face huge tax bills upon inheriting their family farms and will no longer be incentivised to undertake environmental stewardship and sustainable farming?

[Daniel Zeichner]

I completely disagree with the premise of the question, as the hon. Gentleman will probably realise. He is right to say that we need generational change in farming, and there are a number of ways in which that can happen—

[Ben Maguire]

It is not funny.

[Daniel Zeichner]

I am not laughing. This is a very serious point. I am genuinely concerned about the future of the farming sector if we do not get generational change. We will look closely at how we can do that. The £5 billion budget that we secured was a very good first step for stability.

[Jess Brown-Fuller (Chichester) (LD)]

Farmers in Chichester are exhausted by the ever-changing schemes and the time it takes to apply for them. Imagine their surprise when they found out that the SFI scheme had been closed, not with no notice—I think that is unfair—but with the NFU given 30 minutes’ notice, as opposed to the six weeks that it was promised. At a time when BPS schemes are being significantly reduced, what communication and support will be provided to the family farms that have missed out on this round of SFI funding?

[Daniel Zeichner]

It should have been clear to people for a long, long time that this transition was coming. It was the move away from a system based on entitlements for every farmer through the basic payment scheme to a system that relied on people applying to what was essentially a fixed budget. I agree with the hon. Lady and many other Members that the way the system was set up did not allow for proper prioritisation or fairness in allocation. That is what we would like to change in future, but it is the system that we inherited, and I am afraid that that is where we are at the moment. The House should remember that the majority are already in schemes, and to those who have not yet come forward, I gently say for the future that the advice in these kinds of schemes is that it is better to apply early rather than to wait.

[Steff Aquarone (North Norfolk) (LD)]

The sudden completion of the SFI scheme will be a worry for many farmers and local people. I am also very concerned by reports that the NFU was given only 30 minutes’ notice on such a huge change. To give my local farmers the confidence that they need, can the Minister assure them that DEFRA will learn lessons from the poor communication and lack of clarity that have plagued this and past initiatives?

[Daniel Zeichner]

Let me repeat the point: this is not about communication. If we suddenly say that a scheme with a fixed amount of money in it will close in two or three weeks, we would get a surge in applications and have to close it the same day. That is a flaw in the way the scheme was originally designed, and we want to do better in future.

[Dr Danny Chambers (Winchester) (LD)]

International events have pushed national security right up the agenda, and I am sure that we have cross-party acknowledgment that food security is a vital part of national security. Given the changing geopolitical situation, has an impact assessment been undertaken on changes to and stressors for family budgets and cash flow, such as the removal of SFI, and their effect on food security?

[Daniel Zeichner]

The hon. Gentleman makes an important point. I refer him to the food security report. There has been no change to the amount of money available. The £5 billion budget is there; this is a discussion about who gets it.

[John Milne (Horsham) (LD)]

Will the Minister explain to farmers in Horsham why he did not feel any need to consult any farming stakeholders in advance of this announcement?

[Daniel Zeichner]

Again, I refer the hon. Gentleman to the point that I made earlier. If we started a consultation on a first come, first served scheme, everybody would apply that day and we would have to shut it at that point. That is a flaw in the way the scheme was designed.

[Jim Shannon (Strangford) (DUP)]

The Minister is much liked in this Chamber, as we all know. However, it is disappointing to hear that new applications for the sustainable farming incentive have been paused in England. It is understandable that that is seen as a betrayal by so many farmers. Agricultural support is different in Northern Ireland, but the funding comes none the less from central Government. Will the Minister assure me that funding for Northern Ireland farmers, which comes from here, will not be reduced or falter as a result of today’s announcement, and that steps will be taken to protect our agriculture industry and our farmers, who are the backbone of our economy?

[Daniel Zeichner]

I thank the hon. Gentleman for his kind words, and I suspect that we shall renew our acquaintance in Westminster Hall this afternoon. I can assure him that this announcement will make no difference to the funding arrangements for Northern Ireland.