Where do we start with a future system to support UK farmers – public benefits?

Nearly a year ago, our Director-General Helen Ghosh set out the basic principles on which we believed a post-Brexit system of support for UK farming should be developed. Since then, we’ve fleshed out our thinking and joined forces with other charities as part of Greener UK to help the UK and devolved governments develop their proposals. A core focus of our work remains the concept that public money should pay for the delivery of public goods.

With this language now resonating across Defra and HM Treasury, and featuring in more and more debates since the EU referendum was held, we wanted to explore the question on the tip of everyone’s tongues: what does this actually mean?

Today, we publish a new paper that presents our thinking and hope this will help with development of the Government’s proposed Agriculture Bill as announced in yesterday’s Queen’s speech.

Highland cattle conservation grazing above the village of Malham, Yorkshire Dales National Park.

The need for change

Currently under the EU’s Common Agricultural Policy (CAP), some £600 million a year gets spent on ‘Pillar 2’ rural development schemes in the UK, delivering public benefits like wildlife and heritage. In contrast, some £2.5 billion goes on ‘Pillar 1’ subsidies which is based on how much land you happen to have. The large disparity in support between the two approaches continues despite growing evidence of environmental degradation resulting from decades of intensive farming and climate change effects.

Brexit now offers the opportunity to create a fundamentally different model to drive a different strategy for land; one that addresses this imbalance and achieves a thriving, healthy countryside delivering multiple benefits for society. We need the countryside to also provide services like clean water and healthy soils, and the benefits to our well-being that contact with nature brings. In turn, these services can play a key role in securing a prosperous rural economy, ensuring the future viability of farming, and the sustainability of food production.

But to change how decisions are made on the ground, we need to take a broader view of what land is for and what we fund to achieve it.

Wimpole Home Farm in Cambridgeshire. ©National Trust/ Megan Taylor.

Where do we start?

The agricultural sector is associated with a wide array of public benefits which are increasingly valued by society. This includes heritage and cultural landscapes, diverse wildlife, clean and plentiful supplies of water, healthy soils, carbon sequestration, access and recreation, clean air, stable climate and flood management.

These are a mix of social and environmental goods, which is not unsurprising given the fundamental interconnectedness of people and land. But farming also plays an important role in delivering broader social public goods from vibrant rural economies to animal welfare and of course food security and renewable energy.

It is around the issue of food security that there has been much discussion and which it is often argued should be the core basis around which the UK farming sector should continue to be subsidised. However, food security is a good with distinct private characteristics (farmers do receive a return for producing food), so production should be better rewarded through the market.

Food security too often becomes conflated and confused with ideas of domestic self-sufficiency (‘food sovereignty’) but this is an untenable connection. Put crudely, if the aim is food sovereignty, then policy should be to reduce food exports. If the aim is food security, then the policy should be to have good relations and a trade policy to support imports and international supply chains but not at any cost. Under both, the aim would also be to reduce incentives or constrain opportunities to grow ‘non-human’ or ‘non-food’ crops.

And if food security is about the ability of the UK to respond to a global crisis that interrupts global food networks, then a more optimal approach might be to support farmers to deliver other outcomes during ordinary times (eg farming for environmental results) but retain their ability to increase production if a crisis was to emerge (ie to avoid complete abandonment of farmland). Securing the fundamental asset base will be fundamental to securing this flexibility in the future: farming’s long-term future is dependent on the quality of natural resources like soil, pollinators and water.

We agree that, with limited resources and the aim of securing better taxpayer value, the goal of any future public policy should be to improve and enhance the long-term health of the environment, promote more innovative and sustainable ways to increase productivity and manage catastrophic risk, and ensure farmers get paid a fair price for their products.

Even so, previous analysis, much of it by Defra, builds a compelling case for why the focus of any such future policy should be on maintaining and improving the environment. This would open up the opportunity to target more public support on the key environmental and social public goods that are in undersupply from agriculture relative to the scale of societal demand – but which also have a twin purpose in the part they play in securing a more sustainable sector and vibrant countryside.

Gathering the Welsh Mountain sheep on Watkin Path on the Hafod Y Llan farm, Snowdonia ©National Trust Images/Joe Cornish

Where do we go from here?

We believe farming and land management can become more sustainable and remain productive whilst restoring nature and providing wider public benefits. Putting public benefits and environmental delivery at the heart of a replacement for the CAP will help shape effective and efficient policy design, whilst helping to secure a strong, healthy and viable agricultural sector.

A system will be needed that optimises the use of public money in delivering public benefits, aligning the needs of farmers and need for food security with good social and environmental outcomes: the more a farmer delivers for society, the more support they get.

But future investment in green infrastructure and wildlife-friendly farming will need to be supported by a combination of public subsidy and private capital, making it profitable and rewarding to manage land sustainably for both private and public benefit. A new policy framework should therefore also encourage new ‘natural markets’ and incentivise private sector investment in environmental restoration to complement and enhance the impact of public funding.

In summary, our recommendations for government are:

  • Keep investing from the public purse to secure a long-term future for farming by protecting the land and nature on which it depends, and safeguard the countryside’s beauty and heritage which draws in people to visit and enjoy it.
  • Start from the principle of public money for public benefit as the justification and most equitable means to achieve taxpayer value.
  • Public benefits in this context should be defined as goods and services that would not otherwise be provided by markets, or as compensation for farmers and other land managers for income foregone and other costs from changing their approach to land management.
  • Improving the environment should be the focus of any public funding, given the existing market failures and scale of need, whilst recognising the crucial role to be played by farmers and other land managers. This will provide a strong economic, social and environmental return on investment.
  • Although public understanding of the CAP and the potential public benefits from replacing the CAP is low, there is strong support for protecting and enhancing the environment.
  • Include a combination of different mechanisms and wider policy levers to help farmers adapt to and capitalise on a new policy environment.
  • Support the development of new environmental markets which would pay for products that go beyond but complement top quality food production, helping secure additional private funding for farming and land management.
  • Commit to long-term thinking and engage farmers in the journey: move to a system which buys results and sets a destination, not just activity. As part of this, we would like to see farmers and land managers given a clear end date and support with any transition.

We believe that farmers will continue to have a critical role producing safe and sustainable supplies of food, but they will also have a crucial part to play in improving biodiversity, protecting vulnerable natural resources upon which our economy depends, caring for our landscape and heritage, looking after the welfare of livestock, and helping address new and growing challenges like climate change and flooding. Farmers should be rewarded for this role and we believe this justifies continued public funding.

The National Trust is seeking an open and transparent debate about how we use public money to support farming and the countryside after Brexit. We are continuing our discussions with a range of farming and conservation organisations. Please do get in touch if you have any views by posting your comments below or e-mailing us at policy_campaigns@nationaltrust.org.uk.

Marcus Gilleard, Senior External Affairs Adviser, National Trust.

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