Draft Direct Payments to Farmers (Reductions) (England) Regulations 2023 Draft Agriculture (Financial Assistance) (Amendment) Regulations 2023

Lord Spellar Excerpts

Tuesday 28th February 2023 General Committees

[Mark Spencer]

The Direct Payments to Farmers (Reductions) (England) Regulations 2023 were laid before the House on 31 January. I draw Members’ attention to my entry in the Register of Members’ Financial Interests. The matters in these two instruments are closely related and apply in England only. The instruments implement parts of the agricultural reforms we are making in England, using the powers in the Agriculture Act 2020.

The direct payments regulations apply progressive reductions to direct payments made to farmers in England for the 2023 scheme year. These reductions were first announced in the agriculture transition plan in November 2020 to help farmers with their business planning. We are now into the third year of our seven-year agricultural transition period, during which we are gradually phasing out direct payments.

We are committed to these reforms. We remain convinced that direct payments are not the right way to support farmers or to improve the environment. The payments are untargeted, provide poor value for money and have imposed unnecessary bureaucracy on farmers. We are continuing to reduce the payments in a fair way, with higher percentage reductions for payment amounts in higher payment bands. We also plan to continue to make direct payments in two instalments each year for the remainder of the agricultural transition period to help farmers with their cash flow. By continuing to phase out direct payments, we are freeing up money so that we can reward farmers through our new and existing schemes. That will deliver improved environmental outcomes and support sustainable food production. The Government will do that while remaining committed to maintaining average levels of investment in farming of £2.4 billion per year in England over the life of this Parliament.

The funding being released from direct payments is being reinvested back into farming and the countryside. That means we can accelerate the roll-out of the sustainable farming incentive, with six additional standards being added this year. As we announced in January, we will be making the sustainable farming incentive more attractive —particularly to small farms—by introducing a new management payment. We have also increased the payment rates under our simplified countryside stewardship scheme. That will help more than 30,000 farmers, who are already enhancing the environment, to keep up with the rising input costs they are facing.

Under the farming equipment and technology fund, we are offering grants for equipment to increase productivity, boost environmental sustainability and improve animal health and welfare. Under round 1 to date we have paid over £31.5 million, supporting over 3,000 farmers with their investment plans, with a further round of the fund opening last week.

[John Spellar (Warley) (Lab)]

The Government are outlining policy objectives. Given the impact on supply chains over the last year, and particularly in the last few weeks, to what extent will increasing the domestic content of food production be part of those objectives?

[Mark Spencer]

It is very much front and centre; these things are not diametrically opposed. We can have a positive environmental benefit and an increase in biodiversity while also becoming much more efficient in the way we produce food. Looking back over the last few decades, we have got about 1% more efficient every year. We think we can accelerate and improve on that with investment. Some of the grant schemes are aimed directly at allowing farmers to invest in new technology and new equipment to make the way in which they produce food more effective and efficient.

There is an array of other schemes and policies that the funding released from direct payments will go into. Those include slurry infrastructure grants to help farmers invest in better storage; the new entrants pilot, which will bring new talent into land-based businesses; and a tree health pilot that will help farmers tackle tree pests. The instrument also makes a minor change to correct an error made by the Direct Payments to Farmers (Reductions) (England) Regulations 2022. It does not change the reductions figures that were applied to direct payments in the 2022 claim year.

Turning to the Agriculture (Financial Assistance) (Amendment) Regulations 2023, many of our new financial assistance schemes are launched under part 1 of the Agriculture Act 2020. They are part of the transition as farmers move from direct payments to payments that produce a specific benefit, and that includes the schemes I have just detailed. The schemes pay farmers and land managers to improve their productivity, the environment and the health and welfare of animals and livestock. The Agriculture (Financial Assistance) Regulations 2021 provide the legal framework for the Department for Environment, Food and Rural Affairs and its delivery bodies to enforce and monitor schemes and to publish data about grant payments.

The instrument makes technical amendments to those regulations to support the requirements of the financial assistance schemes we plan to deliver in 2023 and beyond. The amendments include removing the definitions of three financial assistance schemes from the 2021 regulations so that we can be more flexible in adapting our schemes to suit farmers’ needs. For example, we will launch the animal health and welfare grants through the farming investment fund.

We are amending the data publication requirements so that the Secretary of State may exempt financial assistance schemes awarded to improve the health of livestock or plants if publication would hinder the scheme’s purpose. For example, identifying a land manager who has received grants related to diseases in livestock could be damaging to their business and deter them from reporting future cases.

We are also amending data publication requirements so that, where the Secretary of State is required to publish the aggregate of financial assistance paid under the scheme, they must also publish the number of agreement holders who receive financial assistance under that scheme. That will ensure that the taxpayer still knows where our funding is going.

The amendments allow the financial assistance schemes to run more efficiently and effectively for farmers while still making sure that there is accountability to the public. I hope that I have assured Members of the need for these instruments, which will help safeguard the long-term prosperity of the farming industry in England and protect the environment for future generations.