Sustainable Farming Initiative

Sarah Dyke Excerpts

Tuesday 19th December 2023 Westminster Hall

[Tim Farron (Westmorland and Lonsdale) (LD)]

I beg to move,

That this House has considered the matter of transitioning to the Sustainable Farming Initiative.

It is an ongoing pleasure to continue serving under your guidance this morning, Dame Maria. I welcome hon. Members to their seats and the Minister to his. I start by wishing everyone merry Christmas, in the spirit of the debate we have just had.

The sustainable farming incentive is a cornerstone of the Government’s environmental land management schemes. The hallmark of SFI in particular, and ELMS in general, is that public money should support our farmers for delivering public goods. The principles underlying that transition are supported by farmers across the country, by environmental groups and, for what it is worth, by me. The point of this debate is to issue a plea to the Minister, the Secretary of State and the Prime Minister that they start listening to farmers and acknowledge the damage they are doing to farmers, food production and our environment by the way they are managing the transition from the old scheme to the new.

The Conservative manifesto promised £2.4 billion to English farming, yet in the past year the Government spent only £2.23 billion on various schemes and, crucially, only £1.956 billion of that went into farming. The Government have, therefore, broken their promise to farmers to the tune of £444 million last year and, with the phasing out of the basic payment scheme stepping up, they are set to break their promise to farmers to an even greater degree next year.

[Sarah Dyke (Somerton and Frome) (LD)]

I congratulate my hon. Friend on securing this important debate. Recent figures show a remarkably low uptake of the sustainable farming incentive. Does my hon. Friend agree that it simply does not have enough incentive for farmers to join?

[Tim Farron]

My hon. Friend makes an excellent point; I will come to that in a little while, because I think that does explain a lot of why that underspend has happened. It is easy to see how it has happened; it is not a mystery. It is down to two things: first, the Conservative Government have been very good at phasing out the old BPS, and secondly, they have been relentlessly incompetent at bringing in the new schemes, including for the reason that my hon. Friend set out.

Department for Environment, Food and Rural Affairs figures show that around £460 million has been removed from farmers’ pockets in the form of the BPS phase-out, which eclipses the increase in environmental payments of around £155 million. Much of that has not even gone to farmers. It has instead found its way into the very deep pockets of large landowners, including new entrant corporate landowners, looking to do a bit of greenwashing at the taxpayer’s expense.

In the spring of 2021, the Government promised to spend £275 million on SFI schemes in the 2022-23 financial year. Yet, in reality, excluding the pilots, they spent literally nothing—zero pounds, zero pence. This year, the Government plan to spend just shy of £290 million on SFIs. One question for the Minister is: how much of that money will actually go to farmers in this current financial year?

--- Later in debate ---

[Tim Farron]

My hon. Friend makes a really good point, and that also happens in my constituency. Accidentally, the Government are acting in a counterproductive way when it comes to the environment.

Others at that meeting in South Westmorland near Kendal told me that they are putting off investing in capital equipment because the loss of BPS and the lack of replacement income means that they do not have the cash flow to invest in a long-overdue new dairy parlour, a covered slurry tank or other things that would increase productivity and improve environmental outcomes. The Minister will say that many grants are available to farmers to help them in that respect, and in some cases they absolutely can, but not if contractors need to be paid up front as DEFRA expects farmers to demonstrate that they have the money in the bank to do that before releasing those grants.

DEFRA’s own figures show that upland livestock farmers have lost 41% of their income during this Parliament, and that lowland livestock farmers have lost 44%. One famer near Keswick told me, tongue in cheek, that he had calculated that the fines he would receive for committing a string of pretty terrible crimes would not amount to what he lost in farm income thanks to this Government.

[Sarah Dyke]

My hon. Friend is making a very good point. Does he agree that financially aware farms help make financially secure farms, which build food security for the country?

[Tim Farron]

Absolutely. If we do not give people stability of income and certainty, how can we expect them to provide the food and the environmental gains that we need?

I challenge the Minister to come up with any industry that has been penalised as badly by the Government over the past four years as our farmers. To be fair, I do not think the Government actually intended to do so much harm to farming and farmers. I do not believe they sat down and decided to break their promise to farmers and make a net cut of more than a sixth in farm spending, but those cuts have happened all the same because of flaws built into the system either by accident or by design, which have led to predictable and ever-increasing sums of money being taken out of farming, while smaller and less predictable amounts have been introduced.

Let me set out some of the flaws, in the hope that the Minister will address them. First, the system has built-in perverse incentives, as my hon. Friend the Member for North Shropshire (Helen Morgan) said, which mean that farmers at the forefront of environmental work are penalised. Farmers who are in an existing higher level stewardship or uplands entry level stewardship scheme lose their BPS—by the end of this month, they will have lost between 35% and 50%—yet they cannot fully access SFI. In other words, farmers already doing good environmental work can only lose income from this process. That is especially so in the Lake district, the Cartmel peninsula, the dales and the Eden valley—some of our most treasured and picturesque landscapes. In upland areas, basic payments typically make up 60% of financial support. Farmers in those beautiful places, which are so essential to our heritage, our environment and our tourism economy are stuck. They are already in stewardship schemes, but their BPS is being removed and they cannot meaningfully access SFI.

The Lake district is a world heritage site. If the landscape changes dramatically for the worse in the next few years because of the Government’s failure to understand the impact of their error, that world heritage site status is at risk, and its loss would cause huge damage to our vital hospitality and tourism economy in Cumbria, which serves 20 million visitors a year and sustains 60,000 jobs.

The Government’s failure to allow farmers to stack schemes to deliver more for nature is foolish and bureaucratic, and it means that they were always going to be taking more away from farmers than they could ever give back.