Direct Payments to Farmers (Legislative Continuity) Bill

This Bill will give Defra and the devolved Administrations the legal basis for paying direct payments for 2020. This Bill legislates and works for the whole of the United Kingdom. The Government have worked closely with the devolved Administrations, which have had a unity of purpose in safeguarding the interests of the United Kingdom’s farmers.

I want to address one further important point. In September 2019, the Government accepted the recommendations of the review of the noble Lord, Lord Bew, concerning the allocation of farm support funding in the United Kingdom. I thank the noble Lord for the essential work he did on this review, which paved the way for the Government agreeing to an increase in the funding allocations for Scotland and Wales. The Bill enables the Government to deliver on their promise to uplift the funding for Scotland and Wales, while maintaining the funding for England and Northern Ireland, for 2020.

Turning to the Bill’s main provisions, Clause 1 incorporates the EU legislation governing the 2020 CAP direct payments scheme into domestic law on exit day. This will ensure that the Government and the devolved Administrations can make payments to farmers for this claim year.

Clause 2 applies Sections 6 and 7 of the European Union (Withdrawal) Act 2018 for the purpose of the legislation being domesticated under this Bill. In applying Section 6 of that Act, it provides certainty to the domestic courts about what can and cannot be considered. In applying Sections 7(2) and (3) of that Act and the Schedules, it makes it clear how the legislation we are domesticating can subsequently be amended.

Clause 3 contains five powers. There are two powers, one conferred on the Secretary of State and the other conferred on the devolved Administrations, to make operability amendments to the law we are domesticating to make sure that it works in a domestic setting. For example, it would be used to replace references to the European Commission with the domestic equivalent. I must say, particularly looking at the Opposition Front Benches, that your Lordships will be familiar with this, not least because it is akin to the power in Section 8 of the European Union (Withdrawal) Act 2018, under which the many EU exit SIs were made. There are another two powers, again one conferred on the Secretary of State and the other conferred on the devolved Administrations, to replicate any changes made by the EU to its equivalent legislation during 2020, should it be considered appropriate to do so. Quite simply, this is a discretionary keeping-pace power. Finally, there is a power conferred on DAERA in Northern Ireland to retain policy flexibility for its Ministers to continue to move entitlements in Northern Ireland towards a uniform unit value, like the rest of the United Kingdom.

Clause 4 makes provision for the domestic publication of EU regulations relating to direct payments. It also enables regulations made under the European Union (Withdrawal) Act 2018 on rules of evidence to apply equally to the body of law we are domesticating under this Bill.

As I said, Clause 5 enables the Government to implement, as far as they relate to 2020, the recommendations of the noble Lord, Lord Bew, detailed in the review bearing his name. It achieves this by making amendments to the direct payment regulation. This clause demonstrates the Government’s commitment to all farmers across the constituent parts of the United Kingdom.

This is a small technical Bill but it is none the less significant. It is about providing continuity and stability to farmers. Where the Agriculture Bill provides for the beginning of a transition in England towards a new system of paying public money for the delivery of public goods, this Bill will enable us to pay direct payments for the 2020 scheme year across the United Kingdom while also delivering on the Government’s promise to provide fair funding allocations. I beg to move.

When it comes, that Bill will need to deliver five things. I should like to take the opportunity of this Bill to remind the Minister about those five things. Just in case he has so far not slid those requirements into the legislation, perhaps he could do so between its Commons stages and it coming to us.

The first thing is the core principle of public money for public goods. How are we going to use the support system to help farmers deliver the things that the market would not necessarily deliver? Land management plays a key role in environmental benefits and animal welfare. The Government have shown a consistent commitment to these, but it would be good to get the Minister’s assurance yet again that public money for public goods will be a core principle of the Bill.

The second issue is that we should not widen the definition of public goods too far because that would dilute it. We will have other opportunities to tackle other issues delivered by agriculture. Work is well under way on the food strategy, and I think that food production should be dealt with in that strategy rather than being part of the public goods debate so that we do not see the public paying twice for a benefit: that is, at the supermarket checkout or at the farm shop for the produce they are buying, as well as paying through their taxes.

The Government have said that they are committed to delivering payments that will enhance agricultural and land management productivity. I will sound a note of caution on that. They should not be in opposition to or separate from measures that deliver environmental benefits or public goods. It would be a real shame if one part of the subsidy system was at odds with another, which was so often the case under the common agricultural policy.

Another issue that we need the future Agriculture Bill to deliver is some security in the face of future trade deals. We must not see future trade deals undermine the ability of UK farmers to deliver not only thriving businesses but public goods if the Government cut trade deals that allow access to the UK market for imported food that is produced to lower environmental, welfare and safety standards.

The third thing we need the Bill to do is maintain the level of funding. It is good to get from the Minister a recommitment of the £3 billion or so figure. This is not because a farmer of my acquaintance recently muttered to me that farmers need every penny, but because, if you look at the calculations done by some of the member organisations of Greener UK, it estimated that £2.9 billion was required to deliver the environmental benefits alone, without any of the other public goods. We must not see an erosion of that £3 billion; in fact, it may need to grow. I hope we can get some assurance from the Minister that, once the public benefits have been established in what will become the Agriculture Act, the requisite funding will be there to support whatever is established by that Act.

My fourth requirement of the future Agriculture Bill is that we introduce powers for better legislation to regulate for a basic minimum of environmental and other standards that must be adhered to by all farmers and land managers. That is not currently in the Government’s plans, and I would like the Minister to comment on how we can be reassured that there will be a baseline of good performance for all land managers.

The fifth point I will raise is the provision of an independent voice for farmers. We are likely to see a massive change in the way land is managed by farmers in this country. They will need all the help they can get if they are to deliver effectively and use public money effectively in the delivery of these public goods. It is not likely to be delivered entirely by their response to the marketplace or subsidy. There will have to be an upskilling and a degree of help with management of change.

That is really important, because 70% of our land surface is managed by farmers, so I also ask that the Government—independently of these pieces of legislation—think of starting work on a land-use framework. We are not making any more land. The pressures on it are increasing. We need regenerative and agroecological farming methods of the sort outlined in the recent report by the Royal Society of Arts’ Food, Farming and Countryside Commission, which I declare that I sat on. We need land to help us combat climate change; we need more trees—I declare my interest as chair of the Woodland Trust; we need to protect our water resources; we need land to help with natural flood-risk management; and we need heat reduction. We need our countryside to help with health and mental health. We need to stabilise our soils. But we also need land for development, housing and infrastructure—even the dreaded HS2. We need food security; do we want to produce more food in future than the amount we currently produce domestically? Do we want to continue to be a massive net importer of timber, or do we want to become more self-sufficient in our timber production?

All these things need land. They cannot all happen to the maximum without some thought being given, on a strategic basis, to what we want our land to be for and the appropriate balances. So I simply put the Minister and the Government on notice that, for however long it takes, I will bang on about the need for a land-use framework for England. We have them for Scotland, for Northern Ireland and for Wales; we need one for England.

My last request is my only request about the current Bill; I have really been a bit of a cheat in the way I have structured this, but never mind. The Minister quite rightly referred to the provision about statutory instruments and secondary legislation flowing from Bills such as this. There will be quite a raft of secondary legislation coming from consequent legislation following Brexit. The environment Bill, the Agriculture Bill and the fisheries Bill—a huge number of Bills—will have a raft of secondary legislation. It would be greatly welcomed if two things could happen. First, the Government could commit to consulting as widely as possible, providing it did not take an age, on secondary legislation before it is laid, so that there is still an opportunity to make it better before it is set in concrete and can only be prayed against. Secondly, could draft statutory instruments be readily accessible, not only to Members of our House but to the public at large and civil society, so that people know that they are being worked on and can head for the bloke holding the pen? Oh dear; I apologise for that sexist remark. It would help the SI process dramatically.

I look forward to the Minister’s response to all my questions, which he would be entitled to ignore since they are absolutely nothing to do with this Bill. I also very much look forward to the proper Agriculture Bill reaching this House in due course.

Will the Minister say whether this information has been calculated or whether it is the case that it is not ready to be released as it is still under review?

There has been criticism from across the board of the Rural Payments Agency, which the Government have strongly defended as having improved its performance. However, continuity is everything for farmers. A consistent service is needed from the RPA. Some moorland farmers have waited three years for payments under Pillar 2. This is simply unacceptable.

It is not right for farmers who have looked after their land diligently to be worse off as we move towards the environmental land management scheme. The prospect of losing 80% of their income, with no real certainty about what the replacement income will be, will not incentivise all farmers. It is likely that many small farmers might decide that now is the time for them to leave the land. Farming is not an easy option as a career choice. In my community, we have seen three deaths of farmers in recent years. These have been men who were not at the end of their life expectancy—far from it. We are too painfully aware of the increased rate of suicide among farmers. We must tread carefully to ensure we do not discourage farmers from their vital husbandry role of the land.

There has been mention of the Bew report and of reinstating money to Scottish farmers that they have lost in the past. I look forward to the speech of the noble Lord, Lord Bew. Can the Minister give the House reassurance that this reinstatement will not be at the expense of English farmers? Will this be new money in addition to the money that has already been mentioned? Can the Minister also say what measures will be in place beyond 2021 for the Scottish farmers? Are they to get only two years’ reinstatement? Will this money be added to their base budgets, as we say in local government circles?

Given that the Government have made a commitment that there will be no payment changes for the first four years of the seven-year transition period, this means that in the final three years, as the ELMS begins to come into effect, there will be massive change. All of us—especially the Minister, who has first-hand knowledge—know that farming is not a short-term function. It requires planning a long way in advance in order for farmers to get the best from their land, livestock and crops. I am extremely concerned that farmers will be somewhat in the dark as to exactly what their income is likely to be beyond 2024. I would be grateful for the Minister’s comments.

While Brexit is now inevitable and is welcomed by large numbers of people, including within this Chamber, it brings a degree of uncertainty. For me, some of that uncertainty is about food security, as we have already heard. Currently, around 50% of the food we eat is imported. This has risen from 35% nearly 20 years ago. It is important that, in changing the system of payment from acreage owned or managed to ELMS, we at worst preserve our food production at its current level; at best, we should strive to increase this above 50% and aim much higher.

I am sure I am not alone in wanting to buy and consume produce that has been grown or nurtured in the UK. One area where I have concern is protection for hill farmers and those who rear rare breeds. As we know from frequent questions in this Chamber, many of your Lordships are concerned about the fate of hill farmers. Could the Minister give a reassurance that hill farmers will not disappear from our countryside as a result of the change to environmental land management payment regimes in farming generally?

While there are hill farmers on Exmoor, Somerset is famous for its levels. Farming there is extremely challenging during winter months, as it can be almost guaranteed that the land will be under several inches, if not feet, of water. While this looks beautiful, with swans and other waterfowl gliding on the rhynes and water, it means that the land is not available for either grazing or crop planting. The point is that, even in one county, there will be many different forms of farming. I am sure that the Minister recognises this and will encourage the Government to ensure that their payment schemes for farmers reflect the many different types of farms, that the contribution each makes to agriculture as a whole will be recognised and that each gets a sufficient income from the land which they manage in order to live and bring up their families.

I cannot say that I am looking forward to a number of SIs, but they will not doubt come along in due course.

“allowing them to plan for the future, sow their crops and care for their livestock with confidence.”

With due respect, certainty is the last thing that the Government’s agriculture policy is affording farmers right now. While the common agriculture policy had many weaknesses and imperfections, farmers at least knew what they were dealing with. Since I took over our family farm five years ago, the industry has been wracked by uncertainty as to its future, wholly unclear as to its purpose, its funding and the competition that it will face. That uncertainty seems destined to continue, with this Bill providing only 11 months of clarity, with the Government then proposing an ill-defined transition period between 2021 and 2028. In an industry that runs on an annual cycle and requires long-term strategic investment, these timelines are inadequate.

I expect that the Minister will point to the forthcoming Agriculture Bill as a purveyor of clear skies ahead. However, as he is only too well aware, the devil is in the detail, and we have no detail. The principles of environmental land management and the provision of public funds for public good have been long discussed, but the scheme remains skeletal and little meat has been put upon the bones. While I am pleased that the provision of food has been introduced as a public good, the real detail of how our land is to be managed remains as obscure as the view of Cornwall from the top of Dartmoor on a wet January morning. I would appreciate the Minister providing insight into the progress of the various ELMS pilot schemes being run around the country and when we can expect an update on their progress and their learning. Such detail will be essential when we are debating the Agriculture Bill.

Farmers and our rural economy are nothing if not resilient, but with the ever-increasing impacts of climate change and extreme weather patterns, the last thing that farmers need is further years of legislative uncertainty. Given the glacial progress of the previous Agriculture Bill, can we really expect to have a settled agriculture policy and replacement payment system in place by the end of 2020? Why do not the Government give themselves and our farmers some breathing space by making this BPS extension two or even three years instead of a mere 11 months?

As the Minister is well aware, farming productivity in the UK has been in relative decline for many years, and continued uncertainty, which will continue until 2028 at the earliest, will only hinder further investment. The average age of farmers is increasing, as new entrants to the business decrease. At the same time, we are entering a period when our farming industry will be thrown open to unprecedented global competition. Just as we are shaken by increasingly violent transatlantic weather, so we are bracing ourselves to be inundated by transatlantic farming imports without the ability to compete fairly or the confidence to invest for the challenges ahead.

Illustrative of that uncertainty is last week’s Committee on Climate Change report on land use. The headline recommendation of that report was the reduction by 20% in consumption of meat and dairy products, suggesting an equivalent decrease in livestock farming. This decrease would impact mostly the ecologically fragile pasture-rich farmlands of the western counties. This assault upon our farting ruminants is therefore a direct threat to an ancient, world-leading and highly sustainable farming practice.

Furthermore, to mix land use metaphors, it fails to see the wood for the trees. As the Minister is well aware, the huge growth in middle-class affluence, particularly in Asia, is resulting in a massive shift in diet, particularly the increased consumption of dairy and meat products. Many noble Lords will have seen the Royal Family’s valiant, yet much criticised, efforts to promote the sale of Jersey milk to the Chinese this week. Ministers will be aware of the 2016 Defra report that confirmed that a pint of milk produced on British pasture requires approximately 40% of the carbon of an average pint of milk globally. In other words, our dairy farmers are world leaders in the production of low-carbon dairy products. We also have global dairy brands—think of Devon cream—that are unsurpassed. Rather than seeking to restrict and limit our dairy and meat production, we should surely be looking for all opportunities to expand upon it and dominate the global market for ecologically sustainable, low-carbon meat and dairy.

A final word goes to the hard-working staff of the Rural Payments Agency. Delays in the delivery of rural payments can be debilitating to many farmers who are hugely dependent upon this income, and I recognise the improvements in recent years in the promptness of payments despite the considerable cuts to the RPA budget. Given the appalling conditions facing arable farmers in particular this year, with an almost complete wash-out of the sowing season in many northern and eastern counties, the prompt payment of BPS in winter 2020 will be an essential lifeline. This legislation will obviously introduce administrative changes to the manner in which payments are managed. What certainty can the Government provide that payments will be administered efficiently and made promptly? In particular, what insight can the Minister provide about funding and staffing levels at the RPA? Will civil servants be redeployed from their preparations for a no-deal Brexit to assist in the smooth deployment of rural payments?

It was not an easy thing to do. The Belfast News Letter, which I read on a Saturday, has an excellent farming supplement. I picked it up early on in the review, to discover that my report was likely to lead to disturbances in the streets in Northern Ireland—it quite ruined my weekend. That was on the basis that money would be taken from Northern Irish farmers, who are perceived to have done quite well out of the 2013 settlement, and given to Scottish farmers.

In the end, the dialogue with the devolved Assemblies was extremely detailed. Of course, at that time the Northern Ireland Assembly did not exist, but we did meet its political leadership and all the parties that are now in the Executive many times in Belfast to discuss these matters. We needed flexibility from the Government.

I do think there is a moment when we obviously must acknowledge, as other speakers have, that Brexit raises certain uncertainties in the minds of farmers. It was important to produce a result which reinforced stability across the four nations of the United Kingdom. A model of working emerged of intense collaboration between the devolved Assemblies, involving the exchange of information between Belfast, Cardiff and Edinburgh, and dialogue with London. It was ongoing—regular communication and regular refinement of ideas.

When I was preparing this speech, I found a letter I had written to Fergus Ewing, Scotland’s Agriculture Minister. In it, I said:

“The support that you gave to the panel and the secretariat has been invaluable and we are sincerely grateful”.

I could have written that to any of the other devolved entities. The noble Lord, Lord Gardiner, was quite right to refer to this issue in his speech. This was a model of the devolved Assemblies working together, with flexibility on the part of the Government. It did require some flexibility and a willingness to accept that, financially at least, certain changes might have to be made. The flexibility shown by the Government here allowed things to move ahead, and we now have consensus in this area. We have at least, on this tricky subject, not added to the instability and to the other doubts and concerns that farmers have, of which I am perfectly well aware.

The Bew report recognises the importance of food security and acknowledges the uncertainties in future policy and market trading conditions. It is important that welfare standards are taken into account in any future trade deals, and I was pleased to see that that was a manifesto commitment of our party. Importantly, the Bew report recognises that future policy must be fair to all farmers across the four countries of the United Kingdom. Maybe that is for the future but how will it be achieved? It is quite a big challenge. It might be outwith this Bill but it is worth raising it now.

As has been said, 2019 was a very difficult year for some farmers, who experienced difficulties with heavy flooding, resulting in crops rotting in the ground. Their land is still waterlogged and decisions have to be taken on whether to plant spring crops or keep the land fallow for the rest of the year. Variations in climate patterns affect other countries around the world, putting greater pressure on food security. The effects of climate change will be a challenge for us all, be it drought—as we have seen, sadly, with the fires in Australia—flooding or the spread of disease, which has not been mentioned. Therefore, as reflected in the Bew report, we must be flexible in formulating our future plans. We must not be constrained by past rigid rules from the EU, some of which are outdated. Technology and other things have moved us forward.

Returning to the Bill before us, how confident is the Minister that the payments will be made promptly? That is key. Can he also update us on payments for countryside stewardship schemes—a matter referred to by the noble Baroness—over the past three years? I understand that there have been delays in those schemes, with in some cases, farmers not having received the payments. I believe that could affect their willingness to participate in future countryside schemes, which would be a retrograde step. Therefore, I also ask the Minister: will the planned ELM scheme pilots use some of the existing demonstration farms, such as LEAF farms, which are already part of environmental schemes, or will they start with a completely blank page? It would seem a shame not to use the experiences that already exist.

I support the Bill and reflect on its importance, as conservation and food production go hand in hand. Both are important for the health and well-being of the countryside, but—no one has touched on it—farmers need to make a profit. You cannot go green if you are in the red. It is hugely important that farmers make a profit. As I said, I support this small Bill. In future, I look to schemes that will allow us greater flexibility, are more focused on outcomes than they have been in the past and, if possible, are tailored to the needs of individual farms, particularly those in upland and less favoured areas.

I have five or six quick questions for my noble friend the Minister. Is he confident that all the farmers in England know exactly what is going to happen in the next year? I got an email from the Scottish NFU today saying that it has emailed all its farmers to tell them exactly what the process is and that they have to abide by the rules to get their payments. We live in the Westminster bubble; we think we know what is going on but, if you are a busy farmer who has been subject to recent weather conditions, you might not know. It would be very sad if some farmers were not kept as up to date as possible.

The Countryside Stewardship Scheme is not as I understand it part of the Bill, but is there any flexibility for increasing payments this year? On DAERA and Northern Ireland, when does the Minister expect the uniform entitlement to come into operation? It is, as he rightly said, operational in England, Wales and Scotland. When can we expect it in Northern Ireland? Also, talking of the devolved Administrations, do we have the legislative consent orders from Scotland and Wales yet? If not, does this pose a problem? We are told that the Bill must be passed by 11 pm on 31 January. If we do not get the legislative consent orders by then, will that mean that the Scots and the Welsh will not be able to claim money this year?

On greening, under Pillar 2, I ask my noble friend to bear in mind the point again mentioned by the noble Earl, Lord Devon, that there are a number of farmers in the upland and West Country who have not ripped out hedges, who farm on small fields and who are not so prone to being able to get greening under Pillar 2. It would be wrong if they were penalised for having been the good guys all along.

It was a delight to hear the noble Lord, Lord Bew, comment on his review. I will not say any more, because my noble friend Lady Byford covered that. So I hope that my noble friend will be able to answer her points and therefore mine.