Draft Direct Payments to Farmers (Reductions and Simplifications) (England) (Amendment) Regulations 2021 Draft Agricultural (Financial Assistance) Regulations 2021

Victoria Prentis Excerpts

Thursday 18th March 2021 General Committees

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Victoria Prentis)]

I beg to move,

That the Committee has considered the draft Direct Payments to Farmers (Reductions and Simplifications) (England) (Amendment) Regulations 2021.

[The Chair]

With this it will be convenient to consider the draft Agriculture (Financial Assistance) Regulations 2021.

[Victoria Prentis]

It is a great pleasure to serve—for the first time, I think—under your chairmanship, Mr Paisley. The matters in these statutory instruments are closely related. They will be made under the powers in the Agriculture Act 2020, and will implement important aspects of the new agricultural policy that we set out in our agricultural transition plan, which was published in November last year.

The first SI sets reductions that will be applied to direct payments made in the 2021 claim year. The Government are committed to phasing out untargeted direct payments over a seven-year agricultural transition period, which will free up money so that we can pay farmers to improve the environment, improve animal health and welfare, and reduce carbon emissions. All funding released from the reductions will be reinvested in new schemes in this Parliament. The reductions will be applied fairly, with higher reductions initially applied to amounts in higher payment bands. The reductions for the 2021 scheme are modest, at 5% for around 80% of farmers. We published the reductions back in 2018, so that farmers would have time to prepare for the changes. The SI sets the reductions for the 2021 claim year only; we will set out the reductions for later years in future SIs.

The SI will make minor amendments to reflect the fact that direct payments will be calculated in sterling from now on. It will also amend the direct payments rules to remove the euro thresholds below which the Rural Payments Agency does not need to recover overpayments or payment entitlements, or to charge interest.

Finally, the SI will make two consequential amendments that were not covered in the Direct Payments to Farmers and Cross-Compliance (Simplifications) (England) (Amendment) Regulations 2020. This SI will remove a redundant cross-reference—I believe it was helpfully picked up by the Joint Committee on Statutory Instruments—relating to the greening rules that were removed by the 2020 regulations. The SI will also change the percentage figure used to calculate young farmer payments, which makes it clear that the value of those payments will not be affected by the removal of the greening payment.

The second SI will put in place financial data publication, enforcement and monitoring requirements for four new financial assistance schemes: countryside stewardship, the farming investment fund scheme, the tree health pilot, and the environmental land management national pilot scheme, which includes the sustainable farming incentive.

The SI will provide a critical opportunity to test, refine and develop environmental land management and tree health schemes in pilot form ahead of their full launch. It will require information about the financial assistance given under those schemes to be published. Information published will include the total payment received by a beneficiary for each scheme they are in, and a description of the activities financed by the payment. Publication of personal data will not be required for payments below a de minimis level or in respect of payments made under the tree health pilot where, instead, aggregated data will be published.

On checks, enforcement and monitoring, this instrument provides for a flexible and proportionate framework. Provisions include checking eligibility criteria at the application stage and monitoring compliance with individual grant agreements and scheme conditions. A range of enforcement options is available under the instrument in the event of a breach, including withholding payments and recovering payments previously awarded. The instrument will also provide powers of entry and inspection to enforce compliance—for example, to check or inspect land, livestock or machinery. A formal complaints and appeals process will be available if agreement holders are aggrieved by certain decisions.

In drafting the instrument, the Department for Environment, Food and Rural Affairs engaged with key stakeholders in a targeted consultation exercise between 4 August and 1 September last summer, which very much informed the way in which we wrote this SI.

Taken together, these instruments will implement provisions provided for by the 2020 Act. They will begin the move away from the inefficient direct payments model of the common agricultural policy and provide an important framework allowing new financial assistance schemes to operate effectively, in line with our agricultural transition plan. I commend the instruments to the Committee.

--- Later in debate ---

[Victoria Prentis]

I, too, enjoy our ongoing dialogue on the future of agriculture, and I would never accuse the hon. Gentleman of being too gloomy. As I listened to him, I wondered whether he would like to visit one of the tests and trials. There are some near his home.

There is a good wildlife trust test and trial in Bedfordshire and Cambridgeshire that demonstrates well the significant environmental benefits that we think will come from our future agricultural policies. From memory, the trial involves farmers working together, and it is a good model of our mid-tier schemes. That is not precisely what we are discussing, but I think it would give the hon. Gentleman an idea of the iterative and careful process that we are going through in creating our new policies.

We have about 3,000 farmers involved in our tests and trials. The pilots we launched last week for the sustainable farming incentive are slightly different from the tests and trials in that they look to pilot the whole process, whereas the tests and trials are there to deal with specific issues and questions that we have asked farmers to test for us.

[Daniel Zeichner]

I would dearly like to come to see one of those—that is part of the problem of the past year—but, while I understand that those engaged in the process are probably positive about it, my worry is not for them, but for the huge number who are not engaged. That is where my concern lies.

[Victoria Prentis]

We are undertaking policy as we go; we are testing and trialling it as we develop it. That is innovative and not usual for Government, but I remain convinced that it is the right way to go about making these significant changes to our agricultural policy, which will affect not only how our food is produced, but what our environment looks like, is, and produces over, I hope, many years to come. It is important that we do this slowly and carefully, which is why we are testing everything so carefully as we go along.

The pilots we launched last week are there to test how the administrative aspects of the process work, whereas the tests and trials are there more to test individual aspects of the land management. With the enormous amount of outreach done by DEFRA—oh boy, have we embraced technology to do that over the past year—and the vast number of meetings and Zooms we have had with farmers, much more widely than those involved in our trials, we hope for and see all the signs that the industry is coming on board with these new policies. This is an exciting time for farming, and the more people outside the industry we can get to understand the value of that, the better, in my view.

Yes, the SI deals with payments for one year only. We did that with our eyes open, in order to retain flexibility. We know the overall envelope, and we set in November last year the direction of travel and the reductions farmers could expect. That gave them the ability to plan, but there will be further opportunities—many further opportunities—for Parliament to debate future reductions. I accept that we will be back here repeatedly as the policies develop, and I do not apologise for that, because it is right that this is an iterative, piloted process and it is right that we develop it carefully.

All the money saved will be going to farmers. The Treasury has demonstrated again and again that it is keen to support farmers in this, and I am convinced of its backing for these new schemes. The environmental element is the priority in what we are doing. We want farmers to produce food, but we want them to do so in a way that is more environmentally friendly than has been encouraged under CAP.

It is true that a large number of farmers—probably about 30%, who own about 60% of land—are already engaged in extra environmental schemes. I for one am keen always to conflate the idea of a farmer with that of an environmentalist in many cases. All we are doing is enabling, encouraging and training farmers who want to help the environment to continue to do so.

I do not think this is the place to rehearse the shape of our new agricultural policies. We are here today to talk about the financial aspects and some of the more enforcement-like aspects of the policies, but we have a clear structure, set out in many different documents. We will continue to inform both the public and the industry, slowly and carefully, as we learn from our tests and trials and our pilots.

Countryside stewardship is a critical part of what we do at the moment. We have simplified it drastically over the past year to make it a much more attractive offer for farmers to get involved in. I would say to farmers who are considering an environmental scheme but are sadly not able to be in the pilot, as not everybody can be, that they should join up to a countryside stewardship scheme. I undertake that the transfer for anybody who joins up with a countryside stewardship scheme into the new policies will be as painless and automatic as possible.

Indeed, one of the changes we are making is that there will no longer be any penalty for coming out of a countryside stewardship scheme early. We will ensure that those who are in an existing environmental scheme are not penalised, and we will make the transfer as smooth as we can.

On land management plans, one of the learnings we took from last year’s consultation was that, while they are a very useful tool, we and those we consulted with did not feel the need for them to be published. We will find many different ways to ensure that the general public are aware of what is happening on farms and where their taxpayer money is being spent. Access is a critical part of our new policies.

Question put and agreed to.

DRAFT AGRICULTURE (FINANCIAL ASSISTANCE) REGULATIONS 2021

Resolved, 

That the Committee has considered the draft Agriculture (Financial Assistance) Regulations 2021.—(Victoria Prentis.)