Agriculture Bill

Lord Carrington Excerpts

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

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted to follow the noble Lord, Lord Teverson, who is the illustrious chairman of our EU sub-committee. For the record, however, I would like the transition period to remain as it is.

I want to speak to Amendment 143, and I thank the noble Baroness, Lady Jones of Moulsecoomb, my noble friend Lord Caithness and the noble Earl, Lord Devon, for lending their support. It is a simple amendment, which would delay the start of the seven-year transition period away from direct payments coming into effect from 2021 to 2022. I should like to pause here to explain why this is necessary.

In seeking to delay the start of the transition period to the new policy framework to 2022, I accept that there is wide support across the House for the government objectives in the Bill to move towards a new framework of support for agriculture that focuses on public payments for public goods and increasing productivity. Much of the detail will be set out in supporting regulations and in the Environment Bill, of which we in this House have not yet had sight. However, the changes being envisaged will be the biggest in a generation and look set to be in place for many years to come.

I accept that we are leaving the European Union but note with regret that, in the four years since the vote in June 2016 signalled the beginning of a process of change, particularly in leaving the CAP, we have made very little progress in developing the necessary mechanisms, policies and schemes that would be worthy of the major changes that we are expecting in this Bill. I accept that much of this is down to the political impasse leading up to the last general election and, more recently, to the pressing issues around controlling Covid-19, which I am sure have affected Defra as they have many other departments.

It is essential that we take the time to introduce new schemes and measures that will stand the test of time, rather than simply bringing them in quickly for the sake of it. I fear that there is an overarching desire through the Bill to show that things have changed as a result of our departure from the European Union, rather than to ensure that we put in place good, made-for-purpose, fit-for-purpose, resilient schemes. Let us face it: our track record in delivering new schemes and new IT to support them is not that great.

Following the environmental land management scheme tests and trials, which themselves have been impacted by the issues surrounding Covid-19 and are ultimately delayed, the Government intend to conduct a pilot in England of a new ELM scheme in 2021, with a view to it being fully operational by 2024. However, if it is true that the Rural Payments Agency will be in charge of running these pilots—I hope that my noble friend can put my mind at rest on that—we have to question its capacity to run such a pilot when it is already struggling to deliver business as usual. Once again this year, the RPA has had to ask the Treasury for funding to bridge payments to environmental stewardship and countryside stewardship applicants before being penalised for failing to meet the required payment targets by 30 June this year. What reassurance can the Government provide that there is adequate capacity within the RPA to deliver the pilot, or does my noble friend think that another body would be more appropriate?

I also place a question mark on the extent to which the Government would be able to spend any money saved through the reductions in direct payments starting in 2021. I understand that Defra has identified this as a potential problem and is therefore looking to make an announcement in September about enhanced options for countryside stewardship and productivity schemes. However, we have none of the detail available to us today. In my view, the sensible thing is to delay the start of the transition period until 2022. That is not kicking the can down the road but giving the Government and Defra the time and space to deliver the good schemes that we know they are capable of, rather than producing half-baked schemes.

The reasons for this delay are these: we are being asked to take a lot on trust; we have not had sight of the Dimbleby food strategy, which I understand will not reach us before Report; we have not had the results of the trials of the ELM schemes; the OEP has yet to be set up; and we do not know what its relationship to the Environment Agency, Natural England and the RPA will be. We owe it to Defra to give it time, because of the Covid pandemic, to reach a proper conclusion to these schemes. I therefore ask the House to commit to supporting Amendment 143.

[Lord Carrington (CB)]

My Lords, it is a pleasure to follow the noble Baroness, Lady McIntosh of Pickering, whose analysis I almost completely agree with, although my conclusion is a little different. I declare my interests as a farmer and landowner, as set out in the register, and that I have been a recipient of the basic payment over several years.

I tabled Amendment 144, to which my noble friend Lord Curry of Kirkharle has kindly attached his name, and Amendment 145 in order to address the problem of the likely gap that will affect farmers as direct payments are reduced in 2021, while the revenue from the joining of any new environmental land management schemes will not arrive until 2024—although this will be mitigated for some farmers who have existing countryside stewardship schemes. This is no small issue. As we have heard in the debates on the Bill, the BPS accounts for some 58% of farm business income, varying from sector to sector, and around 25% of farms are unprofitable without it.

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[The Deputy Chairman of Committees]

The noble Lord, Lord Inglewood, has withdrawn, so I call the noble Lord, Lord Carrington.

[Lord Carrington]

My Lords, I declare my interests as a farmer and landowner as set out in the register. I support the proposal in the name of the noble Earl, Lord Devon, to remove Clause 34 and Schedule 3 covering agricultural tenancy provisions. I agree wholeheartedly with everything said by the noble Baroness, Lady Neville-Rolfe.

As drafted, the clause is neither fish nor fowl nor good red herring, in that—despite the important work of the Tenancy Reform Industry Group—the prospective legislative reform is not balanced and reflective of both parties’ interests, and runs the risk of damaging relationships and increasing anxiety and uncertainty. Although I welcome some of the proposals of Schedule 3—such as the removal of the minimum retirement age of 65 from AHA tenants, the widening of the pool of arbitrators and the paragraph to protect both tenant and landlord in new investment—others are more contentious.

In particular, I welcome the introduction of a strengthened condition of suitability for those succeeding to a tenancy, but the detail has not been agreed by the industry and should not be left unclear. Until the regulations are drafted, landowners cannot be certain whether the “improvement” suggested will diminish the effect of the loss of the commercial unit test. Neither is it clear how landowners’ interests are protected in the assessment of reasonableness.

The NFU has welcomed the reforms but also urges that other reforms under discussion at TRIG, such as landlords’ consent on variation of terms under the tenancy Act, are taken forward. Please could the Minister consider separate legislation on tenancy reform, rather than rushing it through as part of the Agriculture Bill? The issues are different, and it is clear from this Bill that what is proposed is only a first step and lacks detail. TRIG has been united on supporting landlord-tenant relationships, and this should be built on.

[Baroness Bakewell of Hardington Mandeville [V]]

My Lords, this large group of amendments—and, indeed, large group of speakers—concentrates on new entrants into farming. I have added my name to Amendments 237 and 245. My noble friend Lady Northover has added her name to Amendments 241 and 244 but, due to unforeseen circumstances, is not able to be present this evening.

At Second Reading, many of your Lordships spoke in favour of ensuring that the passage of new entrants is facilitated. The move from direct payments under the CAP to ELMS is likely to see some of our more seasoned farmers deciding to leave the land to retire or to move on to other, less strenuous occupations. The noble Baroness, Lady Young of Old Scone, and others have spoken against the community infrastructure levy being applied to new farm buildings, and I support her amendment.

It will be vital to encourage younger, more energetic men and women to enter the profession. Some will be the sons and daughters of existing farmers and able to take on the family farms. Others will be graduates from agricultural colleges who have always had an interest in the land and farming. All will need help, support and encouragement. The supply of those not inheriting farms will be an essential element of success. Without land, you cannot farm.

Given the very short timeframes of the average farm tenancy, as relayed to us by the noble Earl, Lord Devon, do the Government see larger landowners making some of their land available for new entrants?

Many county councils have been forced to sell some of their farms to raise money for other capital projects, and local authority funding is, as ever, problematic. I know from my own county experience that these farms come in a variety of sizes, from very small starter farms to large move-on holdings, but they are rarely very large holdings. For some, the starter units give a flavour of what is involved, but they are not always large enough for them to make a living. The role of the county farm estate is to give a helping hand to those starting out. Some tenants will stay until they need to retire; others will wish to move on to larger farms in other areas. Whatever their wish, the Bill needs to facilitate this.

On Thursday, we heard of the valuable contribution that prosperous landowners with huge holdings are making to the debates in this House. However, I believe that it is the smaller farmers—especially those on the edge, such as hill farmers and those on less productive soil—who need our special consideration. I agree with the noble Earl, Lord Devon, that a three-year tenancy is completely inadequate. Farming is a long-term business, and the noble Lord, Lord Curry of Kirkharle, made a powerful case for tenancies to be set at 10 years to allow a continuity of supply of starter farms.

Tenant farmers are potentially at the mercy of landlords. It is therefore important for them to be able to access funds and not to be dependent on what the landlord says. For example, there are cases where a landlord hopes to get planning permission and does not want the commitment of a grant attached to the land, especially if it lasts for a particular length of time. Sadly, on some occasions, although not all, they would rather their tenant went under than have a constraint preventing them obtaining planning permission. I support the comments of the noble Baroness, Lady McIntosh, on this amendment. I note that the noble Lord, Lord Marlesford, believes that the conversion of redundant farm buildings to homes is good, but we must be sure that the buildings are indeed redundant and that the farmer is not looking to make more money by converting them into dwellings.

It is important that tenants are protected from a landlord’s refusal to consent to enter into financial assistance schemes. It is for the tenant farmer to decide what he or she wishes for their farm. Can the Minister confirm that landlords will be prevented from blocking their tenants’ aspirations? The noble Lord, Lord Taylor of Holbeach, gave an example of the farming ladder. The ELM schemes need to work. Cropping licences are an important part of the local economy. This is a short-term licence, and I look forward to the Minister’s response.

The terms of inheriting farms are very different from those of other enterprises. Children grow up on farms and it is in their blood. They have developed skills throughout the years. They might not be the sons or daughters of the farmer; they might be the nephews, nieces or grandchildren. Should the farmer die suddenly, as has been the case with three of the farms in the village where I live, members will want to take over the farmer’s tenancy. I note the opposition of the noble Baroness, Lady Neville-Rolfe, to this amendment. Often landlords will be keen for this to happen, with continuity being provided. Immediate family might not be in a position to take on the tenancy, and nor might they wish to do so, but other family members of tenant farmers might absolutely want to carry on the farming tradition, having already invested a large part of their lives in the tenant farm. The noble Lord, Lord Judd, and the noble Earl, Lord Caithness, spoke of the selling off of hill farms to those living away from the land, with it not being farmed in the way intended but often being used as pony paddocks.

As has been said, the average age of a farmer is now over 60, and this is very concerning. We have to make sure that young farmers are able to get started. Given that it is almost impossible for someone without independent means to buy land or to borrow enough from a bank, as predicted profits are so limited, unpredictable and long-term, a tenancy is the only way to provide for young farmers. The noble Lord, Lord Cameron, gave a very powerful example of how elderly farmers are trapped on county farms that are no longer capable of providing a living. Diversification and new ideas are important so that these farms can be taken forward. Therefore, the amendment on widening the inheritance of tenancies seems very important. Can the Minister give an assurance that members of a farmer’s extended family will be able to inherit the farm? This is an important aspect of the Bill and I look forward to the Minister’s reassurance on these issues.

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[Lord Hain [V]]

My Lords, it is always a pleasure to speak after the noble Baroness, Lady McIntosh, who speaks with such authority and passion on these agricultural questions.

I wish to speak to my Amendment 175; I am grateful for the support of the noble Lord, Lord Cormack. The agricultural sector has always been subject to the whims of nature and climate. However, recent years have seen an increase in disruptive weather patterns, such as prolonged, unseasonal periods of flooding, extreme cold and heat, and drought—often with different challenges at the same time in different areas of the country. We have also experienced the impact that invasive diseases, such as bird influenza, blue tongue and ash dieback, can have on plants and animals.

These unexpected, often catastrophic, events can deliver significant damage to our agriculture businesses, both individuals and whole sectors. A year’s worth of income can be decimated by one bad storm or a few rain-free months during a growing season. In Wales, the 2013 heavy spring snow is a good example; by the way, England was even worse hit then. Another example in Wales is the long summer droughts of 2018 and 2019 that caused even secure water sources to dry up and arable yields to drop significantly as water for irrigation was unavailable. These farming “natural disasters” are at such a scale that there is a case for state sector intervention of the kind that this amendment proposes—especially with the growing impact of climate change, which is undoubtedly a cause of them.

These uncontrollable factors uniquely affect the products that we grow from our land. Increasingly, it is not just the market conditions of the globalised agricultural commodity markets that affect our core industry of food and farming; it is the untameable elements of nature that are getting increasingly erratic and wild. This new reality, already acknowledged and understood when we look at actions around climate change adaptation, needs to be extended into the thinking on how we support farming businesses affected by these situations. The drivers of exceptional circumstances have changed, and we must change with them. I hope that the Government take heed of that.

Indeed, that imperative is underlined by official Defra statistics showing that our food sector is heavily reliant on imports. We export £2.1 billion of meat but import £6.6 billion, and we export £1.3 billion of fruit and veg but import a massive £11.5 billion. We are so vulnerable as a nation over our food supplies; that is made worse by the ravaging effects of climate change.

The policy objective of this Bill is admirable. It is to encourage and incentivise our farmers, the custodians of our countryside and the managers of our land, to deliver more environmental benefits from their land use and use new trade opportunities and markets to increase economic sustainability. This ambition must be balanced with a fresh look at how, when and why the Government are willing to provide additional support to a key economic sector in crisis. That means looking beyond the traditional and narrow definition of what drives economic failures. It also means acknowledging and providing emergency support tools to deal with the reality that our climate, our weather and our environment are changing and that businesses operating in the natural environment will be detrimentally impacted by factors completely beyond their control—indeed, beyond our control—including the Covid-19 pandemic, an unexpected crisis that has shaken the world economy beyond anybody’s imagination. We should be using this opportunity to make sure that we have the tools and powers in place to allow us to support those businesses if and when a natural crisis occurs, which is what Amendment 175 seeks to do. I hope that it finds favour with the Minister, who has played such a constructive role in his sympathetic handling of this Bill.

[Lord Carrington]

My Lords, I declare my interests as a farmer and landowner, as set out in the register. I had great pleasure in putting my name to the important Amendment 174, and to Amendment 285, proposed by the noble Baronesses, Lady McIntosh of Pickering, Lady Jones of Moulsecoomb and Lady Ritchie of Downpatrick. This amendment has the support of the Tenant Farmers Association, the National Farmers’ Union and the CLA, together with a high proportion of farmers. They have the invaluable experience of farming the land and are well aware of the many unpredictable factors that can quickly turn a crop from profit to loss or livestock from asset to liability.

Amendment 174 widens the definition of “exceptional market conditions” to make sure that as many circumstances as possible are covered. It moves beyond global market changes to other triggers, such as severe weather and disease. The intention is not to provide an easy escape route for farmers to claim that circumstances have conspired against them. The definition remains tighter than many would wish. It is particularly important that we get this right, in view of the removal of the overall safety net of the basic payment scheme, which has protected farmers from so much volatility, often caused by exceptional market conditions, for over 40 years.

The importance of the amendment is shown by the events earlier this year when rain caused devastating flooding. Happily, the Government stepped in and support was given to flooded farms. However, the effects of this—hopefully exceptional—weather event were felt much more broadly, and the result can be seen across the country: land left fallow, patchy crops and much more. Most farmers have relied on the BPS to cover their fall in income. This sorry situation was compounded by the length of time it took the Government to repeal the three-crop rule. Desperate farmers drilled crops in unsuitable conditions to adhere to the rule, and this has caused environmental damage to soil structure and more.

It is also vital that a process exists to ensure that there are no delays in triggering intervention. The impact of Covid-19 on the dairy industry is a good case in point. Although a support scheme was implemented, it took an inordinate amount of lobbying by the industry to achieve a positive result.

Finally, I am not a lawyer, but I ask the Minister to clarify exactly what is meant by “prices achievable” in subsection (2)(b). It is surely a matter not just of price but of income too. Can the Minister confirm that it covers the situation where a farmer or grower cannot achieve the price because he does not have the product to sell, due to drought, flood, disease or other exceptional conditions?

[Baroness Ritchie of Downpatrick [V]]

My Lords, I support Amendment 174, in the name of the noble Baroness, Lady McIntosh of Pickering. This amendment reflects and acknowledges the situation, while also being probing. The nature of our climate is changing and, as the noble Lord, Lord Hain, said, we are now facing disruptive weather conditions. In many ways, those conditions have changed our climate, in geographical terms, from a temperate one to an extreme continental pattern. I hope the Minister will consider that we now have chronic weather patterns and that financial considerations in the Bill should therefore reflect those in some way. The amendment strengthens this clause and brings it up to date in the light not only of Covid but of extreme climatic conditions, and I am content to support it.