Environmental Land Management Scheme: Food Production

Geoffrey Clifton-Brown Excerpts

Tuesday 1st February 2022 Westminster Hall

[Geraint Davies (in the Chair)]

Before we begin, I remind hon. Members to observe social distancing and to wear masks. I call Sir Geoffrey Clifton-Brown to move the motion.

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

I beg to move,

That this House has considered food production and the Environmental Land Management Scheme.

I begin by drawing attention to my entry in the Register of Members’ Financial Interests: I am an arable farmer. It is a pleasure to serve under your chairmanship, Mr Davies. I am delighted to have been able to secure this debate today on food production and the environmental land management scheme. I thank the Secretary of State for Environment, Food and Rural Affairs; the Minister for Farming, Fisheries and Food, my hon. Friend the Member for Banbury (Victoria Prentis), who is here today; and the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Taunton Deane (Rebecca Pow), for addressing us at the highly successful launch of the UK agriculture partnership at the Royal Agricultural University in the heart of my constituency last Thursday.

As more and more land is taken out of food production for environmental schemes, we face the dangerous consequences of becoming reliant on importing larger and larger amounts of food. In short, this debate is all about putting the “F” back into DEFRA. Food should be at the heart of ELMS policy and should be classed as a public good with public money under the scheme. I am aware of the 2021 UK food security report, but it is largely full of dry facts and we are looking for some policy to underpin it.

This is a timely debate because the Public Accounts Committee, of which I am deputy Chair, carried out a detailed inquiry into ELMS and published a report on its findings at the beginning of the year. Now that we have left the European Union, we have a once-in-a-lifetime chance to completely replace our agricultural support system with an ambitious post-Brexit agricultural policy that supports the Government’s ambitious 25-year environmental plan.

Our environmental policy should be joined up with agricultural policy that encourages sustainable food production here at home. Alongside sustainability, we need to help the agricultural sector’s competitiveness and resilience in the macroeconomic, trade and regulatory context. At the heart of ELMS are the changes to the mechanism for distributing funding—that was previously done via direct common agricultural policy payments—to a system that will launch fully in 2024, where farmers will be encouraged towards environmental and productivity improvements.

The Government have stated that all the objectives of ELMS will be delivered for just £2 billion. During our hearing last October, the Public Accounts Committee pointed out that that was a highly ambitious target. As we all know, there are three key elements to the project: the sustainable farming initiative for all farmers to be paid to manage their land in even more environmentally friendly ways; local nature recovery, for more complex and collaborative projects; and landscape recovery, for large-scale projects such as afforestation, rewilding and re-wetted peat.

However, there are clear structural and timetabling issues in ELMS implementation, because details are still not as comprehensive as we would expect by this stage in the scheme. It is not apparent what the aims, objectives or metrics are for supporting more than £2 billion of public funding, whether the schemes will provide good value for money, or how they will help in achieving the Government’s 25-year environmental plan and net zero by 2050. Some farmers are concerned about the practicality of implementing schemes on time. Because of the natural cycle of animals and plants, such schemes can take two years or more to implement, and that is why timely information from DEFRA is so vital.

The Government trialled the first phase of the ELMS programmes with the SFI pilot last year, from which they will draw information before they begin the scheme properly this year. In December, the Government produced a policy paper on how they will expand the scheme over the next few years, but that information is too late for farmers to change their plans. What is clear is that the scheme will require a huge amount of land. For example, the Committee on Climate Change has a target for 30,000 to 50,000 hectares of forestry to be planted every year between 2024 and 2050—an enormous amount of land.

[Mr Richard Holden (North West Durham) (Con)]

I thank my hon. Friend for securing the debate. One concern that my farmers in North West Durham have, especially as they look to diversify and specialise in their production, is that forestry has to be only part of the solution; it cannot be a replacement for food production. As with gas and heating recently, food security will be so important in the future.

[Sir Geoffrey Clifton-Brown]

I am grateful to my hon. Friend. He could have rewritten my speech; if he is able to stay for the end—I know that he has other engagements—he will hear me say almost exactly that.

At our PAC hearing, top officials from DEFRA were certain that ELMS would promote increased efficiency on the remaining land that is not going into environmental schemes, but they were not able to tell the Committee how much more food would need to be imported as a result.

In 1984, the UK’s self-sufficiency in food was 78%, but by 2019 it was down to 64%, according to National Farmers Union data. However, according to Government statistics, just 55% of the food consumed in the UK was supplied by the UK—this being the result of subtracting UK exports from domestic production. In 2019, we imported £11.5 billion-worth of fruit and veg and exported just £1.3 billion, and we imported £6.6 billion-worth of meat and exported just £2.1 billion. From a balance of trade point of view, it is critical that we reverse that trend, bolster our home production and find opportunities to export more of our excellent, high-quality British food.

[Neil Parish (Tiverton and Honiton) (Con)]

The Department for International Trade, along with DEFRA and the Agriculture and Horticulture Development Board, could do a real trade drive to get experts across the world to promote great British food. At the moment, we are not getting our act together fast enough.

[Sir Geoffrey Clifton-Brown]

I could not agree more with my hon. Friend, the excellent Chair of the Environment, Food and Rural Affairs Committee. He is 100% right: there are a lot of opportunities all over the world for us to export our produce.

As an island nation, it is vital that we are able to feed our population. Considering that we have such a temperate climate, which is well suited to agriculture, we have all the means to increase our self-sufficiency. There is also an argument that we have a moral duty to maintain our food security. With a growing global population leading to increased food demand, alongside climate change, which will have a disproportionate impact on certain countries, it is imperative that we ensure that our own needs are met, rather than being more reliant on other countries around the world.

[Kerry McCarthy (Bristol East) (Lab)]

I entirely agree with what the hon. Member is saying about the need to improve our food security, grow far more in this country and consume it here as well. However, does he agree that the Government’s current policy of pursuing trade deals around the world completely undermines that? It seems as though the whole policy is based on trying to reduce support for farmers in this country and chase cheap food imports from elsewhere.

[Sir Geoffrey Clifton-Brown]

I am delighted to have the support of the hon. Lady. Given the number of times that we have debated in Bristol and been at odds, to have her support is somewhat amazing. I was on a programme the other day agreeing with the right hon. Member for Hackney North and Stoke Newington (Ms Abbott) as well, and I have never agreed with her before, either. The Whips must be getting worried that I might defect soon.

Even for a global trading nation—this goes to the heart of the point made by the hon. Member for Bristol East (Kerry McCarthy)—shocks can expose real fragilities in any reliance on imports. The current severe spike in energy price is a result of an increasing reliance on imports; we became vulnerable to the global squeeze on energy and gas supplies last year, and going into this year. With technical and geopolitical issues impacting on supply across Europe, we have been hit hard for a number of reasons, including our storage capacity, which is one of the lowest in Europe, and our demand, which is among the highest.

Imports will always play a critical role in our food system, but I say to the Minister that the Government must take our own self-sufficiency more seriously. It is stagnating, and the public will not thank us if there is ever a world food shortage, prices rocket and supermarket shelves are emptied of certain commodities. Although the nation is encouraged to be healthier and eat more fruit and veg, our domestic production of those products falls below our potential. We are only 18% self-sufficient in fruit, 55% in vegetables and 71% in potatoes. The figures for veg and potatoes have fallen by 16% in the past 20 years, despite the sector demonstrating sustained investment. The entire economy is aiming to build back better and greener from the covid-19 pandemic. British farming can be central to that green recovery. We have a golden opportunity to place food security fairly at the centre of our food system and become a global leader in sustainable, high-quality food production.

The Government have a crucial role to play. Food security should be at the heart of Government policy, and there needs to be an annual system of reporting to Parliament to ensure that we do not allow our domestic food production to diminish. UK farmers are best placed to implement many of these environmental schemes, while at the same time maintaining the countryside to the high standard that the public have come to accept. I do not think the public are going to welcome the look of countryside that is going to waste growing brambles and shrubs. It feels highly counterintuitive to have such high environmental standards here that food production becomes unprofitable enough that we need to import more.

Not only does physically importing food produce greenhouse gases, but by relying on farmers from the rest of the world to produce food for us in the UK, we are simply exporting our environmental problems and responsibility to other countries with lower plant and animal standards. The public place real value on high standards of animal welfare, environmental protection and the climate ambition of British farmers. We cannot guarantee or enforce those high standards on farmers from other countries around the world. It would be morally unjustifiable for a UK farmer to be put at a competitive disadvantage by imported food with lower standards—a point made by the hon. Member for Bristol East.

The innovation I have seen from UK farmers throughout my lifetime, working towards ambitious environmental goals, has been incredible. The NFU has been working with its stakeholders to outline the policy mechanism for agriculture to reach net zero by 2040, which is a critical goal. I believe that the best way to reach our environmental targets is by supporting British farmers, not by making food production an unsustainable economic model.

The second of the key issues in the report from the National Audit Office—a highly respected institution—on which the Public Accounts Committee inquiry majored is that, without subsidies, most farms in England make an average profit of just £22,800 a year, after labour costs and investment, and a third of all farms would not make any profit at all. That makes the sector pretty financially vulnerable. For small and tenanted farms operating on wafer-thin margins, there is a real fear that many will go out of business. The consequence would simply be that the average size of farms would increase and the environmental benefits they provide would be lost. ELMS should provide advice and funding to help those small farmers diversify.

The future farming programme for England, which will replace the direct payments with a new scheme based on public money for public goods, will see small farms have their direct payments reduced from December 2021, and 50% will be lost by 2025. There is a real concern that some of the ELMS options will be completely unprofitable, given the amounts available, and too complicated; and that many farmers will simply not take them up, especially if they do not have the administrative capacity to negotiate the complicated bureaucracy. That could mean that only large institutional landowners, such as the National Trust or the Royal Society for the Protection of Birds, benefit from these Government schemes. It would be quite wrong if such landowners received a bigger and bigger share of the agricultural subsidy cake when they provide less and less food each year. ELMS should have a part to play in protecting small, tenanted farms and upland farmers—I class small farms as less than 100 acres—alongside their significant environmental aims.

The final problem I would like to take up with the Minister is the average age of farmers, which is currently 59. My own farming situation has been discussed here; my farm is in north Norfolk, in the constituency of my hon. Friend the Member for North Norfolk (Duncan Baker). I am delighted to see him here today and I have issued an invitation to him to come and visit my farm. I know from my own farming situation that my son, who is in his thirties, is much more adaptable than I am to new technology, which would have two key effects of increasing productivity and innovation. ELMS should have a structural element to help young people who wish to enter agriculture, particularly those who are leaving education, because agriculture tends to be a highly risky, capital-intensive business, combined with very low returns.

DEFRA is providing money to councils, landowners and county farm estates via the new entrant support scheme, to support young people joining the sector with access to land, infrastructure and support for successful and innovative businesses. My own farming business, to which I have referred, provides an opportunity for three different businesses to get on to the farming ladder. Chris is my long-term farming contractor; Ben runs a successful outdoor pig-breeding business; and we are currently discussing an arrangement with a lady who has a rotating ewe flock of sheep, to graze our increasingly over-wintered green cover crops. Existing farmers could do more to help young people into agricultural employment and business.

All in all, if farmers are to survive, they must produce better returns, either from increased productivity, Government subsidies or increased prices from the market. Otherwise, many will simply not survive. The consequence will be that the average farm size increases, employment in agriculture falls and social cohesion in rural areas is lost. The Government are formulating a new policy on ELMS, and we need to see much more detail before it is launched in 2024. I appreciate that a lot more was published at the beginning of the year, but I still do not get the full sense of where the Government’s aims for ELMS really are.

As I have said, we cannot become over-reliant on other countries to fulfil our food needs. We have the means to produce food here in more sustainable and smarter ways, but to do that we must support farmers across the country, and not make the industry so unprofitable that only the largest farms survive. The Government should be much more ambitious with their aim of producing food in the UK. Well over 60% of the food we eat should be produced by UK farmers. That would well and truly put the “F” back in DEFRA.

[Geraint Davies (in the Chair)]

I call the Member behind the green mask.

--- Later in debate ---

[Victoria Prentis]

Fair enough. This is an important issue, and the clever statisticians are always reluctant for Government to commit to an absolute figure. That is not because of any theological argument, but because we cannot stop people eating, for example, rice or bananas, and nor do we want to. The important measure to look at is food that can be produced here.

[Sir Geoffrey Clifton-Brown]

Will the Minister give way?

[Victoria Prentis]

I will not, because I want to give my hon. Friend time at the end of the debate.

The figure at the moment is about 74% and that seems about right. I am committed to buying local, buying sustainable and promoting buying British wherever possible. It is important that we keep a close eye on our food security and our ratios. As hon. Members know, we are changing the way we support farmers and moving away from area-based payments. It is clear that there are worries about how this will affect food production levels, but many of the sectors where we have the greatest self-sufficiency are those that were not traditionally subsidised. We are close to 100%, for example, in poultry, eggs, carrots and swedes, and for many of those successful sectors, direct payments have never really been part of the business model.

There is no reason why we cannot produce the food we need while accommodating some land use change. We know that there is not a direct correlation between the amount of land farmed and the output. For example, around 60% of our output comes from just 30% of our land, farmed by just 8% of farmers. Delivering our environmental targets will inevitably require some land use change in some places, but we need to look at that in a wider context. We have 9.3 million hectares of farmland in England, so we are looking only at a small proportion being taken out of production. I associate myself with what has been said about carbon capture in permanent grassland and I commend my hon. Friend the Member for St Ives (Derek Thomas), who made some important comments about restorative agriculture.

In the last 20 years, the appreciation of the scale of the challenge we face on issues such as biodiversity loss and climate change has grown. Those challenges mean we must act now to establish a new system of rewards. That is why the Government have chosen not to remove the farming budget, but to repurpose it. The amount of money available is the same and I expect the number of farmers to broadly be the same in the future, though some of those farmers may be farming in a different way to the way in which they farm now. We are designing our new schemes in partnership with farmers, and to that end it was good to hear from my hon. Friend the Member for The Cotswolds, my hon. Friend the Member for Tiverton and Honiton, the hon. Member for Strangford (Jim Shannon) and my hon. Friend the Member for South Dorset (Richard Drax). It is always good to hear strong farming voices in this House.

We want to support the choices that individual farmers make on their own holdings. Farmers will be free to choose which elements of our new policies work for them. Some people may decide to embrace them extensively, but for others the schemes may be a smaller part of their business model.

I have spent the best part of 25 years in different roles in Whitehall, and I have never seen iterative policy making quite like this. We are doing it over a seven-year period, in close conjunction with the industry. Today, we have about 4,000 farmers actively testing things for the new schemes. I accept, and indeed embrace, some of the criticisms made in the PAC report about the beginnings of the policy. We will be responding to that report formally next month.

I agree that regular, annual impact assessments are a useful and positive part of the development of these policies. In many ways, I have enjoyed the cut and thrust of this debate. It is important that these policies are not set in stone. We are developing them in conjunction with farmers, as we make progress.

I know this is a time of huge change for farmers, but it has been good to see how many have embraced that change. The Chair of the Select Committee, my hon. Friend the Member for Tiverton and Honiton, wants carrots, and I would gently say that one of the most useful carrots this year has been the extensive take-up of the countryside stewardship scheme. We have seen a 40% increase in applications, including, I should add, from my own farm. We are encouraging farmers to join that scheme as an interim, while we roll out the new scheme.

As a carrot, we have announced a 30% increase in countryside stewardship payment rates, which I hope will act as a bridge to our new schemes. Using the future farming resilience fund, we are supporting farmers through the transition. The fund awards grants to organisations that are trusted in the farming community, to help farmers work through how the policies affect them individually.

Tenant farmers are a vital part of our farming industry. For DEFRA’s agricultural reforms to succeed, tenant farmers must be able to fully engage in these schemes. On Friday, I was pleased to see my Secretary of State announce an independent tenancy working group, chaired by Baroness Rock, who has long been a champion of this sector, and dedicated to looking at ways to ensure our new schemes really work for tenant farmers. In passing, I should say that BPS has not always worked for tenant farmers and may have been one of the reasons why rents have been artificially inflated. We want to ensure these new schemes work.

This is a period of change and it is understandable that there is worry, but there is also great opportunity ahead. One year into a seven-year transition, it is clear that there is much agreement in the House with the principle of the policy. There is also agreement that food and food security are at the heart of everything we do. I look forward to working with Members on both sides of the House and with our 86,000 or so farmers to make sure we get the roll-out of the policy right.

[Sir Geoffrey Clifton-Brown]

I thank my hon. Friend the Minister for that encouraging winding-up speech. What I would like to see is substance on her words, which is a much bigger challenge and something our farming constituents in the Cotswolds and elsewhere really want to see. They face a situation where BPS is being cut by 50% over the next two or three years. They are worried not about how they are going to get to the end of it in seven years but about how they are going to survive the next year, two years or three years. That is the real worry out there.

On the substance of what my hon. Friend said, I challenged her in my speech to have an annual report to farmers on food sustainability, not a three-year report, because three years is too long. If we leave it three years, and it takes another three years to rectify the problem, that is six years gone, which is too long.

I welcome the initiatives for tenant farmers. One thing that has come out of this debate is the fragility of farming, particularly in England. I repeat the figure I gave earlier: £22,800 is the average farming profitability in England without subsidy. That means that in some areas a third of the sector does not make any profit at all without subsidy. In some parts of the sector, particularly at the small end, which I define as under 100 acres, the tenant farmers, the small owner-occupier farmers and the hill farmers are extremely vulnerable, and we need to consider them very carefully.

All in all, I have never known such unanimity as in this debate. I hope the Minister takes it back and translates it into real policy so that the farmers really know what they are supposed to be aiming at.

Question put and agreed to.

Resolved,

That this House has considered food production and the Environmental Land Management Scheme.