Agriculture Bill (Third sitting)

Robert Goodwill Excerpts

Committee stage & Committee Debate: 3rd sitting: House of Commons
Thursday 13th February 2020 Public Bill Committees

[Theo Clarke (Stafford) (Con)]

Q I want to pick up on the question of divergence. I realise that the Bill affects England, but there are plenty of farms around the border. How will they be affected and what can we do in the Bill to support them more?

Dr Fenwick: There are about 600 cross-border farms. Some are administratively answerable to England and some to Wales, depending on the proportion of land on each side of the border—I think that is how it works. Those guys have consistently been the last people to receive payments of any form for the last 15 years, since basic payments and what is generically called the single farm payment was introduced in 2005. They have a very tough farm and are placed at significant disadvantage.

Divergence will clearly be an issue for those farms. Conversely, some of the powers in the Bill would lessen the impact, allowing their payments to be released earlier by changing EU regulations that make it difficult when one payment authority is slower than the other at processing applications—because unless everything has been processed, payments cannot be released. The ability to change the rules is therefore welcome, but as things diverge, as they may well do—it is difficult to see how they would not—a lot of thought and care needs to be taken regarding those impacts. It is not just divergence over payment systems and policies; it is also about standards. This provides an opportunity for Wales to, for example, have different assurance standards from England, yet we have a 300-mile-or-so border, which is effectively porous.

John Davies: As one of the UK NFUs, we have a fantastic working relationship. We met last week in Glasgow at NFU Scotland’s AGM. Divergence is front and centre of all our minds, because it is vital that we do not diverge too greatly and create a different trading environment in the UK. That is really important. The key basis that we always operate on is that everything should be done through agreement, not imposition. That is our guiding principle.

Tim Render: Divergence is a consequence of devolution, in that you are making different choices to reflect different circumstances, although I have a lot of sympathy for Mr Davies’ points about operating in a common market, and about standards and not diverging in some of those areas.

The issue of cross-border farms keeps me awake at night, as I think about how I move to develop a new policy. It is one of the really difficult issues. We do not have clear answers to it yet. We are working with the industry and DEFRA on what doing potentially quite different things in return for public support on either side of the border means for those 600-or-so farms that are potentially on either side of that. How we manage that is a tricky question. I do not have any answers to that, but it is something that we are working on with DEFRA and the industry, to work out what the most practical, simple and effective way of doing it is.

Dr Fenwick: When it comes to divergence, of course devolution implies divergence. We as a union supported devolution, so we have no problem with divergence, but it was divergence within boundaries. The current EU framework has strict boundaries in terms of flexibility within legislation and flexibility within financial limits. We are looking, potentially, at a complete liberalisation of those boundaries, so that they become far wider and the degree to which divergence can be market distorting becomes potentially far greater under what is happening at the moment.

[Mr Robert Goodwill (Scarborough and Whitby) (Con)]

Q This question is primarily for Mr Render, but others may wish to chip in. In earlier evidence sessions, we heard some of the frustrations with the inflexibility of cross-compliance, such as the three-crop rule or rules on hedge cutting. In particular, farmers tell me that it can sometimes be frustrating that rules on the application of slurries and manures are based on the calendar, not on the particular climatic conditions of a season or the situation on a particular farm. Do you feel that the powers that you will have will allow you the flexibility—even in-year flexibility—to enable you to carry out those sorts of operations under the best conditions, and at the same time to understand your obligations in the way that we implement the nitrate regulations and water framework directive-type regulations that we take over? Do you feel that you can get the balance right between the flexibility and the obligations to the environment?

Tim Render: I think we can. The questions around water and diffuse agricultural pollution are live in Wales at the moment. In terms of our regulations under the various water rules, we are some way behind the rest of the UK, and we are looking to take action to ensure that we have effective measures for the management of agricultural pollution.

One of the things, looking to the medium term, is an ability to think about how we do some of the wider regulation: what conditions we attach to future payment regimes; how we link that to the regulatory floor; and things around earned autonomy for more flexibility, in return for clearer, authenticated and demonstrable actions that take account of flexibility while there are, at the same time, clear ways of ensuring and providing assurance that the necessary actions are taken. Those are some of the opportunities that we have in the medium term, adapting some of the regulations, but it is probably through more sophisticated regulation and earned autonomy approaches that we can really provide some of that greater flexibility.

John Davies: Thank you, Mr Goodwill, for the opportunity to comment on this, because obviously regulation has been one of the reasons that Europe has had less favour. Nitrate vulnerable zone regulations are among the most prescriptive and least effective of those that have been implemented by Europe. Let us move away from that. Let us ensure that regulation, when it comes, fills the gaps and is effective. Anybody who thinks that they can farm by date will fail. It is vital that we farm by the ground conditions. We have a changing climate here, and we have to respond to that. We have to evolve, adapt and work effectively to reduce the number of incidents. It is coming down slowly, but we need to move more rapidly to reduce it. It is vital that we get on top of that through effective, proper, reasonable regulation.

[Deidre Brock]

Q I wish to reinforce the point that Mr Render and Dr Fenwick made. They basically made my point for me: the four nations already operate different policy and regulatory frameworks, within a common framework across the UK, and with certain common frameworks under the EU. That has been the case since devolution 20 years ago. I would hate to see any sort of imposition of a UK-wide situation that would affect that.

Tim Render: I agree with that. Equally, there are some measures that need to operate across the UK for trade and operators. The red meat levy is a very good example of something that needs to be applied at the UK level, but from a devolved Administration perspective, where some of those powers operate at a UK level, that needs to happen with our consent and agreement. Yes, let us agree a common approach to something—that is very often the best approach—but, for us, those sorts of concurrent powers need to be with consent.

Dr Fenwick: To give an example of the sorts of divergence at a very simplistic level that will potentially have an impact in the coming months, the Direct Payments to Farmers (Legislative Continuity) Act 2020 received Royal Assent the day before we left the EU. That effectively cuts and pastes EU payment regulations back into domestic legislation. However, one section of the Act allows devolved regions—this relates primarily to Scotland—to exceed those financial ceilings that are effectively derived from EU-set ceilings.

Within hours or minutes, effectively, of our leaving the EU, we have the potential for financial divergence that would increase the difference between the average payments received by a Scottish farmer and a Welsh farmer, which is already in the tens of thousands, potentially to far more. That relates to the Bew review, which has given lots of additional money to Scotland. Previously, that money could not be paid to farmers. The new legislation allows them to diverge—I go back to that word—from the ceilings that are set in the legislation.

John Davies: We have a very clear ambition for a policy made in Wales, where we see the productivity and the environment meshing together, underpinned by a stability pillar that will give us real opportunities. We are ambitious for the future. There is real opportunity out there to make policy in Wales, for Wales, by Wales.

--- Later in debate ---

[Kerry McCarthy]

Q Meeting net zero is a public good, looking at climate mitigation and adaptation. Do you feel the Bill could be stronger on that? My concern is that while in a sector like transport it is quite easy to make big policy moves that shift us, say, to electric vehicles, because there is only a small number of car companies, in agriculture there are lots of different types of farmers with a large geographical spread. How do you get them all working towards that net zero goal, and could the Bill be a mechanism to do that more effectively? I have not heard much from the National Farmers Union about the road map for getting there.

Gareth Morgan: It is fantastic that the NFU has taken the position of committing to an early net zero target for the agriculture and land use sector. That has shifted the debate enormously. Establishing the route map by which you do that is quite difficult. I am not entirely sure that a net zero clause in the Bill is the right way to go about it.

In several sectors—such as transport and energy generation—we have a clear idea about what that route map needs to be. Land use will be much more complicated. We do not know all the answers yet—for example, in the current argument about red meat, we are veering a different way each month. Setting a clear trajectory in farming to net zero in law could be counter-productive. The easiest way for us to go net zero in terms of land use in the UK is to stop farming and plant trees everywhere and import food off our balance sheet. That would be madness, but it could be an inadvertent consequence if we get the wrong sort of legal fix into law. I think the Bill could be more explicit about net zero and the need to achieve it, but we need to be careful about the way in which we phrase that.

[Mr Goodwill]

Q Conversion to organic farming is quite an expensive process, because during that conversion period one cannot sell organic products. Do you think there should be more incentives for farmers to switch to organic production and, if so, how can we ensure that we do not flood the market with organic food and therefore undermine the whole economic basis for organic farming?

Gareth Morgan: That is a well-made point. In food, demand and production need to be balanced. That is true not only of organic produce; it is a general point.

One key point is that it would be helpful if the Bill recognised the specific contribution that organic farming can make against a whole range of public goods. Rather than inventing a complicated system in parallel with organics—for example, saying, “If a farm satisfies the carbon criteria, the biodiversity criteria, the rotations and the rest of it, then we will make a payment”—let us just cut to the chase and say that it makes sense for there to be some kind of organic maintenance payment to recognise additional public goods that are there but cannot be recovered through the market. I think that would in some sense help with the conversion issue, because if farmers are clear that if they move to an organic model they will be rewarded, both by the market and for the public goods that they provide in the longer term, then that will give them that level of certainty.

Regarding conversion, you are right—I think there needs to be caution around doing that, because in the past we have had examples of where there has been over-conversion to organic ahead of the market being ready to be there. So I think the focus on some sort of organic maintenance payment in ELMS is absolutely vital.

There is a role for help with conversion, but it may not be in terms of straightforward payments during that period. It may be through things like the ancillary productivity payments or some of these other issues that are acting as a barrier to conversion. For example, bringing livestock back on to arable farms will be quite a difficult operation, and most people who convert to organic would need to do that if they are an arable farm. So help with the process of establishing those things might be the way that one could assist in that process.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

Q As you know, clause 1 provides financial assistance for protecting and improving the quality of soil and, as you mentioned earlier, soil is highly variable and it is difficult to set the standards equally across all the farmers. You mentioned something about tools for farmers—being given specifically, I guess, for the 25 years that you mentioned. Are there any specific measures that you would like to see mentioned in relation to soil health?

Gareth Morgan: At the end of the day, there will have to be some sort of whole-farm planning process. I am sure the Minister has thoughts about this: there is an aspiration to reduce our transaction costs, around the amount of advice and so on that schemes involve. I think there is a limit to how far that can go, so at the end of the day I suspect that any farmer who is receiving substantial public good payments will need to have some kind of system of working with an adviser around a whole-farm plan, which will enable them to put the measures into place, particularly for something like soil.

There are general measures that are great for wildlife and the environment, like having flower margins around fields, having rough grass margins and the rest of it; they will be useful anywhere. With something like soil, I cannot really see how that can be done without the support of an agronomist, or a specialist, or someone helping the farmer and working on the nature of the soil on that particular farm. That need not be done by Government advisers; it could be done by certifiers, or private suppliers and so on. But without that level of support being built into the system, it is quite hard to see how farmers will be able to make the transition that they might want to make on their farm to things like sustainable soil management practices.