Environmental Land Management Scheme: Funding for Upland Areas

Tim Farron Excerpts

Wednesday 3rd May 2023 Westminster Hall

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

I beg to move,

That this House has considered environmental land management scheme funding for upland areas.

It is a great pleasure to serve under your chairmanship, Mr Hollobone, and great to see the Minister in his place to respond to what I am going to say.

Our uplands are precious beyond measure. They are on the frontline in the fight to restore nature and to tackle climate change. They provide us with water for drinking and with the opportunity to protect population centres from devastating flooding. They underpin our tourism economy and are home to our most stunning historic landscapes. They provide food and they enable the flourishing of communities that are as much a part of our heritage as the landscapes that they care for.

I support the transition to the environmental land management scheme. The principle of public money for public goods makes sense and is, in theory, a great improvement on the area-based payments of the common agricultural policy. I also welcome a move to a more sustainable payments scheme that supports environmental benefits alongside ensuring food security. In practice, however, the Government are sadly putting our uplands in peril, and they are doing so needlessly.

Farmers across the country are being put at risk by a failure to listen, but in the uplands that failure is worst of all and threatens to be catastrophic. In this debate, I aim to speak for upland communities in Westmorland, but also for communities elsewhere. While preparing for the debate, I visited many farms and listened to dozens of farmers, and my hope is that the Minister will acknowledge the Government’s failings and commit himself to putting them right.

The transition from the old farm payments scheme leaves upland farmers especially exposed as they typically rely on the basic payment for more than 50% of their income. As the basic payment scheme is phased out—every farm will have lost at least 35% of its BPS this year—upland farms will need alternative sources of funding to fill the gap. Those sources of alternative funding are, however, not forthcoming, and the consequences will be devastating.

It is my honour to represent more than 1,000 farms in Westmorland and Lonsdale, but the last time I checked fewer than 30 had registered for the new sustainable farming incentive. Those farms have lost a huge chunk of their BPS, and most of them so far have nothing to replace it. That is the Government’s fault. Department for Environment, Food and Rural Affairs rules dictate that farmers who are not already in the countryside stewardship or higher level stewardship schemes cannot maximise SFI benefits because the schemes do not fit together seamlessly. This means there is a guarantee that almost all upland farms will not be able to replace their lost income and that their financial viability will decline steeply.

If farmers are in a stewardship scheme and also received the basic payment, they can expect to get no more from their stewardship scheme. Meanwhile, they lose their basic payment. Therefore, in the transition, farmers can only lose income. That is the case for many farmers, including lowland farmers, but especially those who farm in the uplands. Why can we not permit those in stewardship schemes to provide additional environmental value by applying for an SFI that fits with stewardship?

The new schemes seem to have been written deliberately to disadvantage upland areas, in particular because Ministers chose to stick with income foregone plus costs as the principle underlying payments for SFI and stewardship schemes. That caps, or limits, income for delivering for nature, climate and water at the amount a farmer could have earned from beef and sheep in the uplands, which is an awful lot less than the famer could earn elsewhere. The lowland rate is £151 per hectare, but the upland rate is only £98 per hectare.

The former Secretary of State, the right hon. Member for Camborne and Redruth (George Eustice), is on the record saying that DEFRA must depart from

“the outdated income foregone methodology”

for payment rates. I wonder why DEFRA has chosen to ignore its former Secretary of State. Why, instead, do the Government not pay farmers a fair rate for the immense value of the environmental work they do, rather than giving them the equivalent of the poorly paid work they have given up? If we valued nature and valued farmers, that is what we would do. Why is there not equality of opportunity? Why are we not allowing all farmers who want to deliver for nature to do so? Why are upland farmers effectively being locked out?

The failure to pay upland farmers a fair rate is a major reason why most have been put off even applying. Another reason is the Government’s choice to reveal the SFI options in a drip, drip, drip fashion over time. Many farmers I have spoken to in the past few weeks, including two in the Eden valley, tell me that they have not applied for two reasons: first, the payment rates are pathetic and it is just not worth their while applying; and secondly, they are waiting to see whether something better comes along from future options that the Government may or may not reveal. All the while, those famers and others are seeing their incomes eroded by the phasing out of BPS and have no alternative sources of funding to replace it.

In particular, we desperately need more detail on the new moorland option. I am glad there is one, but can the Minister tell us when it will start, what it will be worth and when farmers will have the full details of what it will entail? Take-up of the option is slow, yet as the chair of the Uplands Alliance, Professor Julia Aglionby of the University of Cumbria, points out, DEFRA has refused to fund a digital app that would have enabled effective and efficient moorland surveys. Relatively small decisions such as that make a big negative difference, and reveal the Government’s apparent disinterest in the plight of our uplands. It will be a disincentive for our farmers to deliver more for nature and the climate.

The lack of clarity and the limited nature of the options available are particularly damaging for tenant farmers. How are they to make long-term decisions about their businesses when the Government are dribbling out incomplete information now and again and leaving them effectively in limbo? Meanwhile, as Baroness Rock revealed in her very welcome review of tenant farming, many tenants are being forced out so that their landlords can access ELM schemes for themselves.

I sincerely hope that it was not the Government’s intention to advantage wealthy absentee landlords at the expense of hard-working farmers, but whatever their motives, that is nevertheless happening. DEFRA has repeatedly said that the transition aims to stop big payments going to large landowners, yet we see asset-rich landowners embarking on 21st-century clearances, and scooping up big payments in the process. We are already seeing new money pouring into the uplands and being invested in land for its hope value—for carbon credits or offsetting. It is transparent greenwashing in exchange for wads of taxpayers’ money, while farming families are turfed out and cleared from the land for which they have cared for generations.

Many upland farms have the potential to get into the countryside stewardship higher tier, yet reports from throughout the country show that few of those who might qualify even begin the application journey, mostly because Natural England has had its staffing so badly cut that there is no one to help those farms or groups of farms to get through the process. Just the other week, farmers near Ullswater put it to me that the Government are missing out on a vast amount of nature restoration, water quality improvement, and carbon reduction and sequestration, all because of penny pinching in relation to Natural England and farms being locked out of the schemes that were supposedly designed for them.

Many farms have benefited from the Government’s shift towards more grant funding, and that is a good thing, but even then there is a failure to understand how farms really operate. Capital grants work on the basis of reclaiming outlay that farms have already made, but upland farmers’ cash flow is disappearing with BPS. The grants are often welcome, but they ignore the reality that farms need regular, reliable revenue funding for the good work that they do, not one-off chunks that they have already had to spend up front. The very fact that DEFRA is paying BPS in instalments—which is also welcome, by the way—is a clear admission that it realises that cash flow is vital and that the loss of BPS without replacement will cause huge damage to businesses in the uplands and elsewhere.

This litany of mistakes, incompetence, unfairness, penny pinching and broken promises is putting our vital uplands in a treacherous position. It is surely obvious that the Government will not spend the promised £2.4 billion on farm support. With so few farms entering the new schemes, while every farm is losing BPS, it is surely impossible for the Government to have kept that promise.

In the uplands, where BPS makes up such a large proportion of farm incomes, the betrayal is felt even more sharply. Will Cockbain, who farms near Keswick and is the chair of the Swaledale Sheep Breeders Association, tells me that he has written to the Prime Minister four times setting out very clearly that the BPS cuts for upland farms, even if they are in countryside stewardship schemes, means a loss in farm incomes of more than 50% in direct support. He pointed out that tinkering with countryside stewardship does not come close to compensating for the loss of BPS. Will the Minister clarify whether his Department has done an economic assessment of the impact of the transition from CAP to ELMS on upland farms? If such an assessment has been done, will he please commit today to publishing it? If one has not been done, why not? Will the Minister now commit to doing one?

The forecasts of the farm business income survey show that, in the most recent financial year, upland farms will have seen a 51% drop compared with average farm incomes over the previous three years. The average income for an upland farm is now £16,300. Farm business incomes for upland farms for 2028-29—the end of this process—are not predicted to improve beyond £16,500, even with the full introduction of ELMS. That equates to an average hourly rate for farmers of £4.20, which is much less than half the minimum wage. This catastrophic fall in incomes is a direct result of Government policy and choices, or at least of the incompetent application of those policies.

The consequences are stark. We will see farms fail. People whose families have farmed in our uplands for generations will find themselves in the crushing position of being the one who lost the family farm. We do not think enough about the mental health impact on farmers and their families of the uncertainty caused by this botching of the transition. What does it mean for our upland communities when families that have formed the backbone of village life for centuries get uprooted because the farm has failed because of the Government’s failures? What does it mean in children lost from our schools, jobs lost, lost demand in the economy and the loss of homes and human dignity?

We do not think enough about the damage to our environment caused as farms cease to farm and farmers decide that they cannot afford to farm with care for the environment. Without farmers, we will lose the essential partners we need to put environmental policies into action. Even the best environmental plans in the world are useless pieces of paper in a drawer without the expert hands of farmers to put them into practice.

Many upland farmers will go broke and many more will go backwards. Having spent time on farms in the lakes, dales and elsewhere in the last few weeks, I am struck by how many have looked at their falling incomes and the fact that the new ELM schemes are either impossible for them to enter or too unattractive or restrictive, and made the reluctant choice that the only thing they can do to make ends meet is to farm more intensively and get more livestock, and in doing so undo the good environmental work that they and their families have done for decades. It breaks their hearts, but it seems to them to be the only alternative to losing the farm. How stupid and irresponsible to design a scheme meant to protect and enhance our environment, but to deliver it so badly that it does the exact opposite.

Might I suggest that the Government could make one of two choices? First, they could pause the phase-out of BPS to give farmers breathing space to get into the new ELM schemes—and, indeed, to give the Government the breathing space to fix their mistakes and put them right. Or they could choose to turbocharge the introduction of ELMS and demonstrate a commitment to supporting upland farmers to address the nature and climate crises. Throughout covid, we learned that with political will Departments can, at great pace, introduce new schemes to address crises. I suggest that this is a crisis on multiple levels.

There are only 6,500 upland farms. It cannot be beyond the wit of DEFRA to bring in an effective scheme for early next year, 2024, that enables upland businesses to thrive, delivering for nature and climate and underpinning a tourism economy that in Cumbria alone is worth £3.5 billion every year. Surely now is the time to admit that if we want to ensure that we do not devastate our environment and our capacity for food production, £2.4 billion is a wholly inadequate sum of money. If we care about biodiversity, reducing greenhouse emissions, the production of good-quality British food, protecting water quality and maintaining our landscapes, we must surely add at least another £1 billion to the pot. Central to the Government’s failure is that they are trying to do a range of incredibly important things on the cheap.

It is our farmers in Longsleddale, Kentmere and other upland valleys who protect thousands of homes in Kendal, Staveley and Burneside from flooding. It is our upland farmers in the lakes who maintain water quality for the whole of the north-west of England. It is our upland farmers who produce food, and maintain, shape and protect our historic landscape—so much so that UNESCO awarded world heritage site status to the Lake district largely on the basis of how the national park is farmed. We remember that Liverpool recently lost its world heritage site status. That is a warning that if we fail to protect this awesome natural environment in the lakes, we could lose that status, too, causing damage to a tourism economy that employs 60,000 people across Cumbria.

Our upland farmers are at the forefront of the fight against climate change, as they restore peatland and woodland, including imaginatively managed woodland pasture. They are crucial to nature recovery and biodiversity: 53% of England’s sites of special scientific interest are in the uplands. All that is at risk because the Government are not listening to farmers, are failing to understand the impact of their actions, and lack the humility to accept where they have made grave mistakes.

We will not stand by while this Government, by accident or design, cause avoidable harm to our uplands and the people who are their faithful stewards. I am proud to represent and fight for such a breathtakingly beautiful and important part of our country. But I am prouder still to represent the people—the families at the heart of those communities—who take care of that landscape. I hope that I have done them justice today, and that the Minister will acknowledge the peril facing our uplands and act before it is too late.

[Mr Philip Hollobone (in the Chair)]

The debate can last until 11.30 am.

[The Minister for Food, Farming and Fisheries (Mark Spencer)]

Thank you for that guidance, Mr Hollobone. It is a pleasure to serve under your chairmanship. I pay tribute to the hon. Member for Westmorland and Lonsdale (Tim Farron) for calling this important debate.

Farming is the lifeblood of our communities. I know at first hand the invaluable work that farmers do. They keep food on our tables, nurture our natural environment, improve our biodiversity, and protect the environment for future generations. It is only right that we take time to consider how best we can support our farmers —our custodians of the countryside—to run sustainable, productive and profitable businesses, and to ensure that there is an offer for all types of farms with our environmental land management schemes.

We recently announced detailed plans for the nation’s farming sector. Our environmental land management schemes have something to offer for every type of farmer, and we plan to introduce further offers and are updating others so that they can be more focused on producing the great food that we consume, and the environmental gains and climate outcomes that we want to deliver.

Upland farmers can take advantage of 130 actions through a variety of schemes. That is more than 60% of the total actions available to all farmers. The level of coverage is similar for farmers grazing livestock on the lowlands, arable farmers, and those growing horticultural and multiannual crops. Those actions are designed to work alongside farming practices, and to protect and enhance our most environmentally important sites.

In order to ensure that upland farmers can take advantage of what our schemes have to offer, we are making it easier for farmers to apply for paid actions. This year we have improved the application process, increased the rates and broadened the scope of countryside stewardship. That includes allowing agreement holders of higher level stewardship to take up countryside stewardship revenue agreements alongside their HLS. That will benefit farmers who already have an HLS agreement but want to increase their income from schemes by doing more on their land. We have introduced a new, fully improved online service for countryside stewardship mid-tier applications. That service is closer to the application process used for the sustainable farming incentive, which we know farmers find straightforward to use.

In the uplands, a number of farms are on common land, and we have designed the sustainable farming incentive so that it works for those farmers. Eligible single entities can apply for an agreement on common land, and they will receive an additional payment to help with the cost of administering that agreement.

There is more to our offer than countryside stewardship and the SFI. Upland farms can also apply to the landscape recovery scheme, which funds large-scale projects to produce environmental and climate benefits through bespoke, long-term agreements. The uplands were well represented overall in round 1; a majority of landscape recovery projects involved groups of land managers and farmers, including tenants, working together to deliver a range of environmental benefits across farmland and rural landscapes. Applications for round 2 open this year, and projects in upland areas are likely to contribute to the focal areas for that round.

For farmers in areas of outstanding natural beauty or national parks, our farming in protected landscapes programme provides funding for one-off projects. We have funded more than 2,400 fantastic projects, and earlier this year we decided to extend the programme for a further year; it will now run until March 2025. Farmers who have livestock can also get funding for a vet, or a team chosen by a vet, to visit their farm and carry out health and welfare reviews for eligible livestock. That is part of the SFI offer.

Additionally, we are offering grants to support animal health and welfare. The first round is open, and grants will go towards the cost of a list of items designed to improve the health and welfare of livestock. We are also funding free business advice for farmers through the resilience fund. More than 10,000 farmers have taken up the offer so far. I encourage all upland farmers to take advantage of that free service and find out what might work for them and their businesses.

The hon. Member for Westmorland and Lonsdale said that he welcomed ELMS and that he wanted to see the schemes go forward. I therefore find it strange that his party chose to vote against our new environmental schemes only a few weeks ago. His party voted to retain the old EU common agricultural policy, which to my mind was a vote against food security.

[Tim Farron]

I am happy to clarify.

[Mark Spencer]

Let me just finish the point. In my head, that was a vote against food security, given that the old area-based payments were specifically de-linked from food production in 2005 and have inhibited productivity improvements. I am happy for the hon. Gentleman to clarify why he chose to stick with the old common agricultural policy.

[Tim Farron]

At the moment, the BPS is set to be reduced by 35% this year. As I set out in my speech, one of the options, which would get farmers out of the mess that the Government have put them in, is for the Government not to make that cut this year, given that they clearly have not spent all that money on the environmental schemes, as they promised. That would be a way of keeping farmers farming, which is the best thing for food production and the environment. That money could have kept many people focused on environmental delivery, rather than either moving out of business altogether or choosing to intensify their farming. Both those things are happening on the Minister’s watch.

[Mark Spencer]

So the motion put forward by the Liberal Democrats was misworded, because its effect would have been to take us right back to the beginning of the process. It would have scrapped countryside stewardship and the ELM schemes. It was basically a vote against river restoration, because it would have ended all the funding to our environmental schemes. That includes 32,000 countryside stewardship schemes already in existence and signed up to by farmers, which would have disappeared if the motion had passed. It feels like a gimmick. We are in the business of delivery—of trying to help farmers move forward and improve our environmental output and biodiversity. The hon. Gentleman wants to play games, and I think that is really disappointing.

Let us look at what we have actually done. We have set out all the details of our farming schemes, which are designed to make farms profitable, resilient and sustainable food producers while protecting nature and enhancing the environment; we have announced an additional £10 million of support through the water management grant to fund on-farm reservoirs and better irrigation equipment; we made 45,000 visas available for seasonal workers in 2023 to increase productivity in horticulture; we launched the £12.5 million fund for robotics and automation to help with innovation in agriculture; we announced plans to regulate pig contracts to ensure fairness in the pig supply chain; we doubled the money for slurry infrastructure for farmers to £34 million through the slurry infrastructure grant; we have registered New Forest pannage ham under the geographical indication scheme; we have increased payment rates for farmers under countryside stewardship and the sustainable farming incentive; and we passed the Genetic Technology (Precision Breeding) Act 2023, unlocking key technologies to improve UK agriculture.

That is a fantastic record of support for our farmers, but it is not the end of the process. We are very keen to engage with our farming communities and our farmers to support them. We will continue to listen to those farmers, engage with them and understand the challenges that they face. We will constantly review the process, and we will work with farmers to ensure that they continue to be profitable as well as to improve our environment and biodiversity.

[Tim Farron]

I asked a number of questions and I would be grateful if the Minister would answer them all, although he may not have to time do so verbally. One question I am really keen that he answers is whether his Department conducted an economic impact assessment on the transition from CAP to ELMS for upland farmers. Did that assessment take place?

[Mark Spencer]

We have consistently and constantly engaged with farmers through the development of the SFI. There have been a number of farmers on working groups, working directly with DEFRA to design the schemes to ensure that they work for farmers in a practical way. That is an ongoing process. Instead of saying, “At this moment in time, this is our assessment of this brilliant project,” we consistently and constantly engage with farmers in the real world to understand the challenges they face, to improve the schemes, to listen to their views and to support them.

We have had an interesting debate. We stand ready to help and support farmers on the uplands, the lowlands and the arable fields of the east of England wherever we can to continue to produce great food and look after our environment.

Question put and agreed to.