Initial thoughts on Defra’s vision for future farming policy

Following the launch this week of Defra’s consultation on future farming policy, our Senior Policy Programme Manager, Marcus Gilleard, shares our views on the Government’s vision, how that impacts the National Trust, and work we’re doing to contribute to the debate.

Farms at Eskdale and Duddon Valley, Cumbria. National Trust Images/Paul Harris.

Following hot on the heels of Michael Gove’s Oxford Farming Speech and release of the Government’s long-awaited 25 year environment plan, Defra has this week released its command paper setting out its view on a post-Brexit system to replace the Common Agricultural Policy (CAP), largely aimed at England but with relevance for the devolved administrations.

Much of what’s in the paper doesn’t come as surprise, not least because we recognise many of the ideas and language as things we have been developing and calling for ourselves over the last two years – including through our joint work with Greener UK and Wildlife and Countryside Link.  We had also gleaned intelligence on various aspects of the proposals through our interactions with Defra, including our joint work to improve the new Countryside Stewardship Scheme. Our detailed policy proposals get a particular mention in helping shape Defra’s “public money for public goods” approach and the new environmental land management system, the “cornerstone” of Defra’s new agriculture policy and framework of incentives to support farmers.

Overall, we’re pretty happy with what Defra has come out with, but we do have some immediate concerns around the lack of clarity on targets, timescales and funding.  In an attempt to drive the debate on future public funding, we recently launched our scale of need report with the RSPB and Wildlife Trusts, which we sent to Defra, DCMS, Treasury and the agencies.  This is one particular area on which we’ll be pushing and following up shortly with a joint piece of work to test what a public goods payment might look like for different landscapes and farms.

Our immediate public response (from my colleague Patrick Begg) was: “Michael Gove has made an excellent job of developing the Government’s vision for farming and the environment. He’s rightly placed the emphasis on the restoration of our natural environment alongside securing a sustainable future for farming. But it’s important that the Agriculture Bill that follows sets out a long-term approach to funding that is sufficient to put the vision in practice”. You can also read our joint response with partners at Wildlife and Countryside Link here.

So, what’s of specific interest in the consultation paper on which we’re likely to respond?

Ambition

Defra are seeing this opportunity for a fundamental reform of agriculture policy, seeking a more dynamic and self-reliant farming industry – alongside delivery of a better and richer environment in England.  The basis for this will be ensuring public money is spent on public goods, such as creating new habitats for wildlife and increasing biodiversity, reducing flood risk, better mitigation of climate change and protecting iconic aspects of our heritage.  Defra believe their vision could work for the whole of the UK but recognise that devolution provides the basis for deciding different priorities.  Adopting the public money for public goods rationale is a bold move by Defra and something both they and Treasury have been striving for since launching their joint vision on the future of the CAP in 2005.

Transition and proposals for England

As we already knew, the Government are committing to the same pot of CAP funds across the whole of the UK until 2022 (end of this Parliament) although Defra is proposing to begin capping Pillar 1 subsidies (the “Basic Payment”) whilst re-purposing the released funds to support the agricultural transition in England.

Defra are seeking views on three options for capping, each of which would generate some £150m in the first year to help support the piloting of a new environmental land management system and ideas to promote increased agricultural productivity.

We’ve always maintained that farmers who deliver the most public benefit, should get the most from any public funding.  The National Trust already spends all of the money we get from CAP on conservation, but we accept that in the future the amount of support the Trust gets itself might well fall. The critical thing is any money liberated by capping is used to support the delivery of public goods.

We’ve previously said that area based payments should be phased out over time and Defra’s aim is to further reduce and phase out the Basic Payment by the end of the transition, which is expected to last “a number of years beyond the implementation period” the exact timing of which is unclear at this stage.  As part of this process, Defra also wants to examine the conditions for continuing to receive these payments, either simplifying current EU arrangements or, more radically, “de-coupling” payments from land area but retaining a historic reference level. The latter would allow farmers to use the money to invest, adapt or exit the sector but avoiding the risk of farmers splitting up their businesses to avoid capping or progressive reductions.

Defra also recognises that specific support will need to be given to farmers in more marginal areas of England to help them adapt, acknowledging the “environmental and cultural value of rural landscapes and traditional ways of life, including areas such as the uplands” – something we called for as part of our work with Link (see also Helen Ghosh’s speech on the Trust’s role in upland areas).  However, what Defra are outlining is currently quite vague.

And in order to prepare and help farmers during the transition, Defra are proposing to simplify the existing Countryside Stewardship scheme, cross compliance and remove or reduce current greening requirements.

Specifically on Countryside Stewardship, we have been working closely with Defra as part of a group of farming and environmental organisations to propose solutions to make it easier and attractive for applicants to apply, addressing the administrative complexity, processing delays and post-Brexit uncertainty that had been weakening the scheme’s appeal.  Getting this sorted is fundamental to transitioning to the new environmental land management system, with Defra introducing a series of simplifications in 2018 and wanting to go further in 2019, with the scheme continuing until the end of 2020.

During this period, Defra plans to explore other ways to help prepare farmers for leaving the EU.  One area they will explore are new business models and the scope for reforming agricultural tenancy laws to support succession planning and remove barriers to investment.

Ideas for the new environmental land management system

Predicated on the delivery of public goods, Defra proposes its new agricultural policy would be underpinned by payment of public money for the provision of public goods, something we’ve been advocating since Countryfile Live 2016 and which we articulated in our paper submitted to Defra early last year.  Defra recognises the key importance of environmental enhancement in this respect, but suggests Government could also play a role in supporting farmers to achieve better animal welfare and plant health, as well as improved public access, rural resilience and productivity.  So, there is still a risk that funding could be spread too thinly across a number of objectives, depending on what final definition of public goods they agree.

Nonetheless, the “cornerstone” of Defra’s policy in England will be a new environmental land management scheme, helping deliver the Government’s manifesto commitment on the environment and key to achieving its goals under the new 25 year environment plan.  Building on agri-environment progress over the last 25 years, the new scheme will pay for the delivery of environmental outcomes, adopting a much greater focus on payments by results, and underpinning by natural capital principles. The aim of the new scheme will be to deliver benefits such as improved air, water and soil quality, increased biodiversity, climate change mitigation and adaption, and cultural benefits that improve our mental and physical well-being, while protecting our historic environment.

A key step towards adopting this new approach will be engaging stakeholders in the co-design process whilst trialling new ideas and piloting the new scheme in readiness for roll-out in 2022.  Given the likely approach of the new scheme, we’re hoping our payment for outcomes work in the Yorkshire Dales will help inform this, as well as our work to link up the Cumbria Catchment Pioneer and ideas for Areas of Outstanding Natural Beauty and National Parks.

Alongside development of this new scheme, Defra also want to understand what other approaches could be considered as part of the broader environmental land management system they wish to adopt. This could include landscape or catchment-level collaborative projects focused on water or habitat improvements, as well as more innovative mechanisms like reverse auctions, payments for ecosystem services and covenants.  Our work on natural markets with Green Alliance will be relevant here, as already referenced in the 25 year environment plan.

Smarter regulation and enforcement

Defra want to design a new, fairer system of enforcement whilst maintaining a robust approach that delivers value for taxpayers’ money.  Work is already underway to examine how inspections can be removed, reduced or improved to lessen the burden on farmers whilst maintaining and enhancing animal, environmental and plant health standards. Part of this is aimed at eliminating the disproportionate approach to penalties but this needs to be balanced against the risks of not sufficiently addressing under-performance, especially with regulatory “simplification” at its heart.

Devolution

The devolved administrations and UK Government have made good progress on identifying where a common approach may be needed – and is something we’ve been working on closely with Greener UK and our Trust colleagues in Northern Ireland and Wales.  It is the UK Government’s expectation and intention that the process will lead to an increase in decision-making powers for each of the devolved administrations. Defra proposes to continue work to agree where a UK wide legislative framework and cooperative arrangements are required and for what aspects of agriculture and land management policy.

Agriculture Bill

The consultation gives an indication of the Government’s current thinking ahead of the Agriculture Bill coming later this year.  To take forward some or all of the ideas presented in the consultation paper, an Agriculture Bill is needed in order to provide the legislative powers needed.  Defra is seeking views on the proposed powers of the Bill and what other measures might need to be introduced through the Bill.

What next?

Keep an eye on this blog for more views from us.  We’ll also share our consultation response in due course, and are working closing with our colleagues in Wildlife and Countryside Link and Greener UK in developing the conservation sector’s joint response.

Marcus Gilleard, Senior Policy Programme Manager, National Trust

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