Direct Payments to Farmers (Reductions) (England) Regulations 2023

Lord Grantchester Excerpts

Tuesday 28th March 2023 Lords Chamber

[The Lord Bishop of St Edmundsbury and Ipswich]

My Lords, I shall follow the comments that we have just heard. I declare a new interest as the president-elect of the Suffolk Agricultural Association, where we see the issues that have just been described in the uplands similarly in small family farms in Suffolk.

By and large, the farmers that I speak to want to embrace the ELM scheme and many of them are doing so. What those who are embracing it are saying to me about those who are not yet doing so is that somehow the scheme needs to be made more attractive, the incentives need to be increased—particularly for the smaller family farmers—and the process simplified in some way so that they can gain access to the scheme. I understand that His Majesty’s Government are seeking to achieve 80% take-up of ELMS by 2030. I ask the Minister where we are with that at the moment and what he sees as the possibilities of accelerating and incentivising the take-up by those who, as we heard earlier, might need hand-holding in that process.

[Lord Grantchester (Lab)]

My Lords, I declare my farming interests as set out in the register, being a farmer in receipt of payments. I shall speak from a grass-roots perspective and perhaps be a little more critical.

On 26 January this year, the Minister in the other place introduced the Government’s agricultural transition plan with the words:

“We will learn from the past”.—[Official Report, Commons, 26/1/23; col. 1191.]


I regret that the Conservatives are slow to do so. The errors of the common agricultural policy will not absolve them of their mistakes, repeatedly made. That is not to say that I am not in favour of the new approach towards payments for environmental benefits; it is the poor way in which they are being introduced that I regret.

I regret that Conservatives still insist on basing environmental payments on the income-foregone model, long discredited since the start of Pillar 2 payments many years ago. I had thought that, under the new post-EU system, farmers were to be rewarded for the value of the benefits for the public good of enhancing the environment. Under the cross-compliance features of the CAP it made some sort of sense, but it makes no sense where schemes replace elements of agricultural production and payments go nowhere near the value of cropping, hence the poor uptake in many of the schemes under Countryside Stewardship.

I regret that the Conservative Government paid little attention during the passage of the Agriculture Act to calls that payments need to be worth while under new ELM schemes and that it would be foolish to reduce payments aggressively during the transition before there were meaningful ELM alternatives that could be understood and planned for in future farm business plans. This approach is not a way to build confidence. Conservatives tend to like to reduce, restrict and restrain rather than to undertake positive provisions for growing the market and providing inclusive initiatives.

Against the background of climate change, energy price rises and the war in Ukraine, food security and the lack of certain products on supermarket shelves have highlighted the reduction of support to, and confidence of, farmers. The disastrous trade deal with Australia and New Zealand, agreed by the discredited Liz Truss as Trade Secretary, is not welcomed.

The CAP was an agricultural policy, not an environmental one. Payments were made only to farmers. NGOs and environmental charities were envious that they did not qualify. The Government will say that the same budget of £2.5 billion is still being maintained, but it no longer goes only to farmers. No wonder the NGOs are enthusiastic in their praise. While the money is cut from BPS payments to farmers, can the Minister give the figure for the amount returned to farmers—as distinct from NGOs—from environmental land schemes? Is he able to break down that amount between farm types to clarify the effect of reductions to the uplands, perhaps the most stressed and vulnerable agricultural sector?

I will use another word beginning with R: could the Minister “refrain” from saying it is up to farmers to apply for the new schemes that were introduced in late January? The Minister’s department set itself the ambition of attracting all 80,000 farmers under the BPS to be involved in environmental land management schemes. The department would also need to include tenants, now able to take part under the Rock reforms. That would show the Government’s full commitment to have the countryside in a better state as we drive our ambition to achieve net zero by 2050. As a baseline, can the Minister say how many farmers—not NGOs—participated in schemes last year?

I urge the Minister to learn from the past and develop schemes that are simple and effective. Farmers do not want 100 pages of bureaucracy. Could communication be improved and directed at each qualifying farm in a determination to be inclusive and encouraging, as part of the 30 by 30 commitment? The ambition must be to include all the farms, with their farmers, in schemes at the end of the transition period that began in the Agriculture Act 2020.

Getting the wider 30% of land well-managed for biodiversity by 2030 is a huge challenge. I draw attention here to the fact that all farmers would want to be included, respond positively to challenges and can bring huge benefits across all types of land, in addition to those already protected under designated protections.

Paragraph 7.6 of the Explanatory Memorandum states that the Government intend the 2023 claim year to be the

“last year of the … Direct Payment scheme”.

In the new system for 2024, will the Government repeat the mistakes they committed previously, with a lack of timely detail, a lack of funding and the same philosophy of reduce, restrict and restrain? Perhaps the Minister can be encouraging this evening

[Baroness Bennett of Manor Castle (GP)]

My Lords, I find myself in the entirely familiar position of agreeing with everything said by the noble Baroness, Lady Boycott, particularly her reflections on the stranglehold that supermarkets have over farmers’ lives in this country. However, I find myself in the unusual position of disagreeing with both the Liberal Democrats’ fatal amendment and the regret amendment from the Labour Benches. At base, that is because, if we were not to take the steps that this SI delivers, the shift away would see £770 million—as calculated by the RSPB—taken away from helping farmers to take action on climate change, reduce water pollution, plant trees and restore nature.

It is worth noting that, under the Environmental Improvement Plan, 90% of the funding for tree planting —to meet the target of 16.5% of England being covered by trees by 2050—depends on ELMS funding. Some 80% of progress on nitrogen, phosphorus and sediment pollution from agriculture depends on ELMS funding. Of course, that is not to say that there are not huge problems with where we are, as the right reverend Prelate, the noble Duke, the Duke of Wellington, and others pointed out. The Carbon Brief website has a useful interactive table that lists the 270 activities that farmers can undertake to earn payments, particularly from SFI and CS schemes; 39 of those 270 are still at the planning stage, yet the base payments are being cut away.

The Minister will be surprised to hear that I will pass a small bouquet in his direction: the Soil Association has just acknowledged that payments for organic farming are rising by an average of 25% via the Countryside Stewardship scheme, which is a recognition of the benefits of organic production. But, picking up the points about small farms, it is worth noting—perhaps the Minister can write to me about this—that in Wales they are looking to reduce the size of farms eligible for farm payments to three hectares, or, alternatively, to farming businesses that rely on 550 hours of labour per year. Will the Government look at helping those smaller producers, particularly in horticulture, and perhaps small-scale livestock producers, to do that?

But—I suspect the Minister knew there was a “but” coming—my reason for regretting the Labour regret amendment is, as the Minister identified, the fact that farmers and land managers in the UK now need certainty about the future for long-term plans. If you are going to plant trees or herbal leys, you need to know what is happening not just this year or next year but in the long term. Given where we are in the electoral cycle, the Labour regret amendment will deliver to farmers a degree of uncertainty about where they might be in two or three years, in terms of the schemes that the current Conservative Government introduced—