I beg to move,
That this House has considered family farming in Devon.
It is a great pleasure to have been able to secure a debate under your presidency, Sir Mark. I am extremely grateful to the Minister for attending.
With exquisite timing, the Conservative party has managed to list an Opposition day motion in the main Chamber tomorrow on exactly the same subject as this debate. Although I welcome that, I also welcome the opportunity of having the Minister much more up close and personal than is normally possible in the main Chamber for what I hope will be a relatively civilised debate—we do not always manage that in the main Chamber, perhaps, although one would hope we would. We are here to discuss not the general questions affecting the entire country in connection with farming, but questions most specific to Devon, although they share common themes and subjects.
I forget whether I have yet been able to induce the Minister to visit Devon, but we hope that he will do so in the new year because we are likely to have a Dartmoor forum, which he and I have already spoken about, in connection with an important development for the management of Dartmoor—the Fursdon review and its implementation. I will speak of those in due course.
To set the scene, in 2022 the economic output of farming in Devon was valued at £1.369 billion. More than 20,000 people are employed in farming in Devon on more than 1.2 million acres of farmland. By far the largest proportion of those acres are held and worked by modest-sized family farms of between two and 400 acres. No farming families in Devon continue in farming to grow rich; Devon’s farms are principally grazing livestock and dairy farms. They do it because it is a way of life, and because of the pride that they take in producing some of the finest food and produce on the planet.
Those families also do it because many, even most, of them have farmed in that place and within those communities for generations. The names of their forebears, engraved on the tombstones of their churches and chapels, bear witness to the continuity of which they are the stewards and custodians. It is that value, which is precious to the entire rural fabric of Devonshire, that I will speak of most acutely and strongly to the Minister.
There is a preciousness about farms, many of which have herds that may have been looked after and developed over dozens of years, sometimes even a century. There is all that cultivation and nurture and all those traditions that those farming families represent. Often a farm will support not simply one family, but several; I know of many surrounding my home. I refer the House to my entry in the Register of Members’ Financial Interests—although I do not farm, I have farmland in Devon, and, depending on the vagaries of the sustainable farming incentive, I may well be a beneficiary of those schemes in a modest way. I tell that to the House and the Minister in candour before I start substantively.
I am familiar with my neighbours, my friends—those who farm near me, around me and throughout the whole of Torridge and Tavistock, which I have the honour to represent. As I have said, those farms sometimes sustain not just one family but several: there may be two or three brothers, with their families. Children on those farms may be hoping in due course to have the opportunity of farming themselves.
These people do not farm to grow rich; they farm for the reasons that I have given. But they also farm because they love that way of life—they have grown used to it, and know that they are following in the footsteps of their forebears. They farm because they are proud of the produce and the animals that they rear.
That is why there is a special value in farming families and family farms in Devon. True it is that the produce is the most important thing, of which they are most proud, but they also contribute to the fabric. The Minister would love to come to the rural shows—the Clovelly show, the Okehampton show, the Holsworthy show and all the shows that take place throughout the summer months in Devon. They are extraordinary events at which people—not just the farmers, but the ancillary trades that depend on them—get together. In a convivial setting they discuss their industry and trade and create the fabric of rural life, which is so precious.
Farm incomes have been falling. That is not a secret—the Minister will be well aware of the fact. From time to time, fortunately, farmgate prices have remained relatively buoyant, but average farm business income for the year 2023-24, to the end of February 2024, was lower for all farm types except specialist pig farms and specialist poultry farms. Almost all the farms in Devon, bar those relatively rare exceptions, saw falling average business income.
On dairy farms, following the two better years, when farmgate prices were relatively buoyant, average farm business income was 68% lower, with a fall in the farmgate price of milk being the primary driver. On lowland grazing livestock farms—beef, sheep—average farm business income fell by nearly a quarter, to £17,300. For grazing livestock farms in less favoured areas, higher fixed costs were only partially offset by an increase in output of £23,500, which was 12% lower.
From those falling incomes must be deducted the living of those who work the land. Those incomes do not take into account the unpaid labour of those who own or tenant those farms. Families who live on them—sometimes several families—must from that £17,300 or £23,500 take their own living. We can see that most people would not regard the figures we are speaking about, falling as they have been in the last year or more, as easy to live on, particularly for more than one person, for multiple families.
These farming families, of course, have to live with not only the hardness of their way of life but the unpredictability of the weather. They also, sadly, live with a different kind of unpredictability and a different kind of weather: the political weather. I would not be exaggerating if I said that these days those farmers in my constituency, and I suspect it is not much different in the rest of the county, probably regard the political weather as even more random and unpredictable than the actual weather itself.
I mean no party political point, because I accept entirely that the weather under successive Governments has always been relatively unpredictable, but recently the weather has achieved a combination that could be described, without too much poetic hyperbole, as a perfect storm. We have had the Budget’s accelerated cuts to the basic farm payment, the delinked payments. It is true that the progressive reduction to the basic payment was introduced in 2021. It is perfectly true that, across all farm types, the average net payment received in the reference year 2023-24 was approximately £18,300—but that was 21% lower than the year 2022-23. Nevertheless, that average of £18,300 still accounted on average for 40% of farm business income.
In the meantime, the environmental land management scheme, which includes the sustainable farming incentive, is not replacing the income lost to farms. Considerable progress was made this year to improve those schemes under the last Government, but, while across all farm types net income from agri-environment activities increased by an average of 14% to £10,600 on average, which is welcome, that is by no means sufficient to replace the 40% of farm business income that the basic farm payment still comprised in the year 2023-24.
As a result of this Budget, family farms will now experience a further 76% cut this year in the delinked or basic payment, with a cap of £7,200. For many families, that will represent a dramatic and unexpected reduction, for which farm businesses have been able to plan, and which will require readjustment and inevitable retrenchment of investment and employment. The payments will, of course —as they were always intended to—reduce progressively over the next three years, but farmers were entitled to believe that they would be reduced proportionately. Instead, the Chancellor of the Exchequer has reduced them by 76% against the reference year, in a manner wholly unexpected to the industry.
Cumulatively, I will describe the additional problems that that has meant. There has been an inability to plan and an inability to adjust one’s cash flow. Halfway through potential investments on their farm, farmers find that the income they expected to have is not the income they will have. That is unhelpful. At the same time, the countryside stewardship higher tier scheme has been postponed, it is said possibly until mid-2025—I would invite the Minister to give us his view on when that scheme will be available.
The new, expanded sustainable farming incentive for 2024 does not appear to be readily available to all farmers, particularly to upland farmers, who have had so far very little access to that scheme. The countryside stewardship higher tier and the SFI 24, with the activities that are now coming onstream—or that will do, because I understand that some of the endorsed activities are still not ready—offered some prospect of mitigating the dramatic losses that the Budget has imposed, but the postponement has been a serious blow. Farmers are marooned in legacy schemes that are being extended in mirror agreements and cannot conceivably make up or mitigate the loss of direct payments that they are suffering because of the unexpected reductions.
The Ministry has also suddenly halted capital grants. The sudden closure of the capital grant applications has been a huge shock. Farmers are being asked to adopt measures to improve the environment, but have been left without access to the very grant schemes that would enable them to do so and help with their cash flow and their productivity. With applications timed specifically to fit in with the farming year and their enterprise activities, and no confirmation that all applications already in the system will progress, further uncertainty is caused to these businesses. Will the Minister comment on that?