Sustainable Farming Incentive Grants

Question

Asked by

To ask His Majesty’s Government what steps they are taking to increase applications for the Sustainable Farming Initiative grants from farmers.

My Lords, I declare my farming interests as set out in the register. This June, we opened applications for the sustainable farming incentive, the first of our environmental land management schemes. Though it is early days, we have already seen positive interest. The scheme is being introduced incrementally, and the full offer will be in place by 2025. As the SFI offer is expanded, uptake is expected to accelerate. We are continuing to promote the scheme through our various communications channels to raise awareness of its benefits and to build interest.

My Lords, the sad fact is that this scheme, which was the bedrock of the Agriculture Act, had hardly got going before the Government announced that it was being reviewed. As a result, fewer than 2,000 farmers have signed up for the new payment scheme, while the old basic payment scheme, on which some 80,000 farmers are reliant, continues to be phased out. This has left an almost £1 billion hole in the rural economy, and we know that farmers are already suffering huge financial costs at this time. The department’s handling of this flagship policy is widely considered to have been a shambles. When will the revised scheme be up and running? Can we be assured that it will maintain the environmental and biodiversity ambitions that underpinned the Act in the first place? How will farmers be compensated for the financial consequences of the delay in rolling it out?

I do not accept that there has been a delay, with respect to the noble Baroness. We are tapering out the basic payment scheme—which is understood right across this House as being bad for both the environment and farmers, particularly smaller ones—and replacing it with a scheme through which farmers are starting to see how they can fill the gap created by that taper down. As things stand, the standards that we have published give farmers roughly between £22 and £60 per hectare. We are going to roll out another four standards next year, another five the year after and another five the year after that. There has been no greater degree of consultation in the history of Defra in terms of how we have engaged with the farming community here. This is an iterative process. We have improved the scheme as it has gone on. The response we have had from farming organisations and individual farmers has been positive.

Will my noble friend join me in paying tribute to tenant farmers? In north Yorkshire, 48% of farms are tenanted. The farmers have done quite well under the existing schemes. What will they benefit from under the new initiative? Most of it seems to be environmental and, of course, they do not own land.

It is absolutely vital that we have a strong tenanted farm sector in this country. It gives a plurality of land occupancy that encourages new entrants—that is, people who cannot inherit or buy land but can access farming. We have benefited from a really interesting report from my noble friend Lady Rock, which we are currently reviewing and which has more than 80 recommendations. We will respond in due course. Under the SFI, more tenant farmers can access this scheme than has been the case under previous schemes; this includes farmers with tenancies on a rolling, year-by-year basis. We have worked closely with the Tenant Farmers Association; we want to make sure that it can see a future in British farming in England.

My Lords, I declare my farming interests as set out in the register. It is actually quite easy to apply for the SFI but, of course, the devil is in the detail. A major contributor to the lack of take-up so far is the vast amount of record keeping and record taking that has to take place. The farmer needs to assess the soil of every single field at different levels, do a worm count, take photographs and so on. According to Agrii, the farm consultants, a consultant can analyse six fields a day. Most farms in this country have up to 100 fields that need to be analysed. That is one problem.

The second problem is that samples need to be taken every five years; this includes organic tests in laboratories, which are expensive and require the use of helium. Helium is in extremely short supply. Can the Minister say what he is doing about this?

First, what we are trying to do is bad news for land agents, because we have created a system that is simple; it takes somewhere between 20 and 40 minutes to enter the schemes currently in the process. We are turning those around within two weeks, in some cases, and within two months at most. I give credit to what the RPA has done in trying to get this right.

The noble Lord is absolutely right that there are conditions. This is public money. However, every farmer I know is doing soil tests and working with agronomists. The idea is that the cross-compliance and rules that govern this system should be straightforward and should not be a huge amount more work than farmers would be doing anyway—and in return, they will get public money.

My Lords, many farmers are reporting that the sustainable farming initiative payments fail to cover the costs of the actions that the scheme requires farmers to take. Does the Minister recognise this assessment? Does he agree that this is one reason why uptake has been so poor?

This year we have rolled out our arable and horticultural soil standard, our improved grassland and moorland standards and the annual health and welfare review for animals. Next year we will roll out nutrient management, integrated pest management, hedgerows and advanced levels for the two soils standards, so farmers will start to see what they are doing. They will also receive £265 to cover the cost of the time it takes to fill in the forms. We want to make sure this is as easy as possible. As farmers see the benefits that will accrue to their businesses from the standards that will be applied, I think they will readily accept that this bedrock scheme is of great interest.

I should add that 36,000 farmers—nearly half the farmers in England—are already in agri-environment in the Countryside Stewardship scheme, which will morph into our mid-tier system, which is local nature recovery. So I hope that over the next few months noble Lords will see a really thoughtful, environmentally based system that is attractive to farmers and shows them they can get an income in return for good environmental actions that will support their businesses and give them a future in this business.

My Lords, the Secretary of State said in a recent speech at the CLA conference that the scheme the Minister just mentioned, the local nature recovery scheme, was not going ahead but its aims would be incorporated into the Countryside Stewardship scheme. Can the Minister comment on how on earth this is going to work in practice? Will there be extra money, or will the Countryside Stewardship money be divvied up yet further?

Countryside Stewardship is already an established agri-environmental scheme. Many farmers are used to it. Roughly half the farmers in England are in some type of scheme, either the high level or another tier. As those schemes come to an end, they will be able to transfer into the mid tier, local nature recovery or whatever it is called at that time—it is Countryside Stewardship-plus. What is really important is that there will be a seamless continuity. Within that scheme they will be able to do similar sorts of things to what they are already doing in Countryside Stewardship.

My Lords, the rollout of the SFI is extremely slow and, according to the NFU, only 849 farmers have so far joined the scheme—a fraction of the 5,500 that Defra suggested could apply. At the same time, the basic farm payments are decreasing year on year, having no regard for the extremely slow rollout of the ELMS replacement. Can the Minister say how the Government plan to support farmers now—not in two years—at a time when feed and fertiliser prices are rocketing, coupled with increased energy costs?

We are helping farmers with the latter point. First, the noble Baroness’s figure was not right; the number of farmers in the scheme is roughly double what she said. Secondly, we are helping farmers through bringing forward half their basic payment, which was an annual payment, to last July. We are doing a number of different things on energy. We are trying to support businesses, not just in farming but right across the board, with the spikes in energy costs. We are also rolling this out in a way that allows farmers to contribute to how the scheme is run. It is an iterative process. We have changed the schemes, working with people. There is a determination to see 70% of farmers operating within the sustainable farming incentive, the entry-level scheme, and many more in other tiers as time goes by. So I hope the noble Baroness will agree that this is the right way forward as we move away from the very unfair, anti-farmer, anti-small farmer basic payments scheme.