Agriculture Bill (First sitting)

Danny Kruger Excerpts

Committee stage & Committee Debate: 1st sitting: House of Commons
Tuesday 11th February 2020 Public Bill Committees

[The Chair]

Before bringing in Danny Kruger, I should have told new Members that, when they start questioning—they do not have to do it every time—they should declare any financial interest they have in these areas.

[Danny Kruger (Devizes) (Con)]

Q Certainly, I do not have any financial interests in the business of farming. Martin, I was interested in your point about the way that, under the direct payments system, the landlord gets the benefit, not the tenant. Is that just your experience, or can you amplify that point and explain more how that works? Are you confident that that will not be replicated under the new regime? Does the Bill give you confidence that the tenants will get the benefits from public money for public goods?

Martin Lines: For many of the tenancies, the price per hectare per area went up, compared with the payment, so they see that as a benefit of owning the land. Many landlords get the payment directly and the farmer has to manage, which disconnects the reward from managing the landscape, so the current system does not benefit the farmer. It challenges cash flow, because as a tenant I am paying rent for six to 12 months before I get it back under the payments system, so there a problem with cash flow, particularly with late payments. There is a big issue with the new system about payment timings. There are huge challenges under the new system.

Under the current system, we know that some landlords are trying to get the stewardship payment, or parts of it, but under the new system, if you are delivering habitat, or pollen and nectar, bits and pieces, you are the farmer doing the work. You should be getting the reward. There will be an increase in capital, and the landlord will be rewarded for capital aspects and other things that are delivered on the landscape.

The Bill should be about encouraging the whole-farm approach of better farm land management and looking at all aspects, not just food production—pollination, flood mitigation, soil health improvement and public access. The farmer’s role is not just about food production; it is about providing goods and services. The definition of a farmer is someone who manages land to deliver goods and services. One of those is food, but many other things can be delivered, and if we move the system, we can be rewarded for those and create a better system.

[Kerry McCarthy (Bristol East) (Lab)]

Q Do you think the Bill does enough to encourage the whole-farm approach, or is there a danger that farmers might just pick and choose among the public goods and do some of the things that are easier, but carry on farming as normal on the rest of the farm?

ffinlo Costain: I think you are quite right about the key concern that I and other colleagues I have spoken with have. There has to be a whole-farm approach. If public goods are being delivered, it has to be a combination of public goods and we need baseline assessments supporting that around carbon and biodiversity that are whole-farm. From our perspective, it would be horrible if we go through all this work and have all this ambition but end up with a sparing approach, where we have one bit of land put off for sequestration with Sitka spruce, creating the various challenges that that does, another bit for rewilding, and another bit for ever-more intensive food production. It is critically important that we face the challenges of the whole-farm approach. The best and most efficient way to make progress is for every hectare, as far as possible, to deliver good, nutritious food, climate mitigation and adaptation, and biodiversity restoration. A whole-farm approach is absolutely critical, and we would welcome an amendment that crystallises that and makes it clearer in the Bill.

Martin Lines: The only concern is with those who do not engage in the system and choose not to take public goods money. How are they going to be legislated for against the minimum standards?

--- Later in debate ---

[Deidre Brock]

Q And your readiness for the end of the year?

Simon Hall: The business case has been approved; we have funding in place; we have procured IT systems; we have a team of around 50 people delivering; we are working very closely with devolved Administrations, and we are aiming for implementation from the autumn. There is lots to do. There is lots of complexity. The No. 1 thing we must not do when we effect this change is compromise our quality of traceability. If we are not ready, we will delay, but there is no indication that we will need to at the moment. We are planning for implementation from the autumn, starting with cattle, sheep next year and pigs later next year.

John Cross: A parting message: the important thing for us is to be smart and collaborative with the devolved regions, because disease pathogens—whether notifiable or not—and disease outbreaks do not recognise any political boundaries. We have to be smart and have a UK view on disease. If you look around the globe, on the international trade stage we are seen as the UK. It is a UK story if a product goes out, so from the point of view of access, wherever you go internationally, the UK is the recognised body. It is important that we have a smart, collegiate view on this.

Simon Hall: This Agriculture Bill does support the delivery of the programme in the way we set out. In part 4, clause 32 talks about granting additional functions to AHDB that will allow it to deliver that English traceability service through the subsidiary body. It currently has the function to deliver the programme and to design and implement the future service, but not to run it. The Bill provides the functions to do that, and the flexibility to provide any UK functions required, or that are sensible. For example, one might imagine that allocating a unique identity for an individual animal might be something that we choose to do once only in the UK, and we may choose to do it from here or from somewhere else.

The Bill provides the functions that we need to deliver this programme in the way that we want in the future service; it also provides some flexibility, should we work together and decide that we want to carry out some UK responsibilities.

[Danny Kruger]

Q May I quickly return to the trade deals? Mr Cross, you said earlier that we must not export our conscience to other countries to import cheap, low-quality food from abroad. Quite right—we need to export our high standards, and I think we agree that the Bill is the opportunity to set a world-class benchmark model for regulating agriculture and sustainable farming.

My question is on behalf of our producers. The paradox is that everybody complains about the complexity of CAP, and farmers have a tough time filling in the forms. Of course, the principle of CAP is very simple: you just pay for the amount of land that you have. We are proposing to introduce a system with a lot more complex objectives—quite rightly—for all the different public goods. I share Ms Whittome’s point about the opportunity for community-based markets and more locally based producers—more local sourcing. Do we think that those community groups and small farmers will be able to navigate what sounds to an outsider like a very complex set of objectives, and therefore potentially some complex subsidy systems?

John Cross: I can make a comment as a farmer rather than chair of Livestock Information. You make a very good point: we are entering a very different scenario. Some farmers will need considerable help in changing that mindset and getting used to a new environment, because it will require a lot more proactivity from the point of view of seeking rewards for those public goods. It will be a more complex—

[Danny Kruger]

Q Are we going to have an army of new consultants coming in to help themselves to some of the public money?

Thomas Lancaster: Advice is a really important part of the story. We would like to see more clarity from DEFRA as to what advice will be made available to farmers, particularly during that transition period. We also understand that the evidence base around environmental advice is a really good investment. All the evidence, particularly from work commissioned by DEFRA and Natural England, suggests that providing advice to farmers as to how they can meet environmental outcomes and navigate some of the paperwork necessary to access the public money is well worth the investment in terms of the outcomes. We know that outcomes supported by advice are better than outcomes not supported by advice.

We have done some social science research recently on farmers’ experience of those schemes with farmers that we have been working with in south Devon for 30 years on species recovery projects for the cirl bunting. That social science shows really strongly that advice is the key element, not just in getting that environmental outcome but in ensuring that farmers are bought in to the schemes, that they understand the outcomes that they are seeking to deliver, and that they are able to get past some of the bureaucracy, which is an inevitable element of this.

Although direct payments sound simple in concept, you have the eligibility rules, particularly the land eligibility rules; the land parcel identification system; and the fact that you have to measure things to four decimal places. The fact that it is a very poor use of public money and no one really knows what it is for any more, drives a lot of those eligibility rules, because you have to provide some controls around it.

Our experience of the best agri-environment schemes in England, particularly higher level stewardship, is that, supported by advice, they are much more intuitively understandable for farmers—as to why they are receiving that money—than direct payments. Analysis that we have done of Natural England data, which we have not published but will probably publish in the coming months, suggests that payment rates for small farms, on the first 30 hectares or so of agreements, are higher than for larger farms, which is obviously not the case with direct payments. We know that small farms, again when supported by advice, can profit from public goods schemes, given our understanding of higher level stewardship and similar schemes in the past.

Christopher Price: It is important to recognise just how much farming is going to change. It is not just a matter of changing the subsidy rules; it is a much bigger structural change. Farmers will be producing much more to the market, which means that we will have a different type of farmer. We are already starting to see those people—people who do not necessarily come from a farming background, who have made a bit of money doing something more commercial, who are coming to farming with business and marketing skills, and who are making a go of things in a very different way. You will know some of them—Lynbreck Croft, the Good Life Meat Company, Hilltop Farm.

People are already doing it and they have quite a big presence. They think in a different way. It is not just about who can take the biggest beast to the market every week or month. It is about sweating all your assets, so you will be selling the meat, but you will be selling meat with a good provenance, to high welfare standards and with a low environmental impact. If you are savvy, you will be finding markets for the skins, the wool, the horns. It may not be much money per item, but together it starts to create more produce with more of a brand.

If you start thinking in terms of your public goods as well—many farms are starting to—and working out what has a benefit, what you can do to improve your soil or your water quality, what plants you can grow that have biodiversity or climate benefits, and start ticking off those, you can get there. It does not need to be particularly complex. In many ways, although I hear what Tom says about the importance of advice, the way that most farmers learn is from other farmers. It is about encouraging farmers to go and see what their neighbour is doing, and not thinking of their neighbour as being their competitor, but as someone who can be a source of guidance.

So, I do not think we need be worried about complexity. Conceptually, what is being promised is more straight- forward. Of course there will be compliance requirements, but many of us think that a lot of the previous compliance requirements were more to do with EU standardisation across 28 member states rather than being particularly necessary to ensure the efficient use of public money. So, I think we can be optimistic about what is happening.

[Kerry McCarthy]

Q May I return to the regulatory baseline issue I raised with the previous witnesses? The RSPB was involved in the Institute for European Environmental Policy report published this week that suggests that, now we have left the EU, there is a real gap in the regulatory baseline because so many regulations were set at EU level. Is there a need for a firmer regulatory baseline in the Bill so that we know what we reward in terms of farmers going above that baseline, and so on?

Thomas Lancaster: We, the Wildlife Trusts and WWF commissioned the report from IEEP, who are independent consultants, to look at a future regulatory framework. Because the Bill includes provisions to move away from cross-compliance, and in particular to delink payments from land, that potentially opens up gaps in aspects of current environmental regulatory protections that exist only in cross-compliance, particularly around soils and hedgerows—for example, cutting of hedgerows during birds’ breeding season and hedgerow buffer strips. We think there is a gap in the Bill in terms of powers necessary for Ministers to bring forward regulatory protections for soils, hedgerows and other environmental features, and we would like to see the Bill amended to plug that gap.

There is a big opportunity coming off Dame Glenys Stacey’s review. The farm inspection and regulation review the Government commissioned reported in 2018. It called for a more comprehensive regulatory framework that enables a more advice-led approach to enforcement, so that, rather than farmers being penalised but not really understanding the underlying issue and therefore not able to address it, the approach would seek to blend penalties with advice and incentives to ensure that you get better environmental outcomes.

There is an existing model of that in the Scottish Environment Protection Agency and its approach. When a breach is detected, there is a visit from an adviser or a member of staff, who says, “You have to address this breach. You can either go and seek advice or invest in infrastructure if necessary.” They come back a second time. If the breach has been addressed, everything is fine; if it is not, they give them a third visit and, if it is still there, then they penalise them. That approach, which Dame Glenys Stacey supported, and we supported at the time, gets better environmental outcomes in a way that farmers also appreciate and can understand, whereas at the moment our regulatory enforcement is very substandard, it is fair to say.

Again, Dame Glenys Stacey found that of 10,600 staff at the Environment Agency, only 40 do farm inspections. As a farmer, you have a one in 200 chance of being inspected by the Environment Agency, and we know that the agency is again cutting back on some of those regulatory compliance visits. There is a huge challenge in the future, not just in how we reward good practice but in how we ensure a level playing field so that the progressive best farmers out there are not undercut by, effectively, cowboys—unfortunately, there are some. The Bill is silent on that, and for us that is one of the biggest gaps and omissions.

John Cross: The only comment I would make—again as a farmer—is that any more regulation would need to be fit for purpose, logical, proportionate and enforceable. Regulation is fine, but unless it is logical so people can understand it, and it is relatively easy to comply with, it is just a source of frustration to everyone. Certainly, the industry is very keen to move towards an outcome-based form of regulation as opposed to constantly arguing about whether a particular margin is six inches too narrow or not. The industry would be interested in seeing a much more outcome-focused approach.

David Bowles: The EU has been moving towards an outcomes approach, but obviously leaving the EU gives us huge opportunities in the animal welfare sectors, such as sheep, beef and dairy, where there are no specific baseline species standards at the moment. There is a real opportunity to introduce those baseline standards, which will help not just the Bill, but in establishing what the baseline is—and then establishing how to move farmers up the scale, through capital inputs or through specific measures, and paying them where the market does not deliver. There are huge opportunities to improve the baseline regulatory standards in those areas where they do not exist now.