Common Agricultural Policy Single Payment and Support Schemes (Cross-compliance) (England) (Amendment) Regulations 2006

My Lords, I begin by stressing the reality that about £1.6 billion per annum of public money is being put into an industry. In response to the noble Earl, Lord Erroll, the cost of administering the agri-environment scheme is met by Defra and its agencies, and none of it comes from funds available for farmers. As noble Lords have recognised, this amending statutory instrument does not introduce any new standards. It establishes inspection and enforcement arrangements for the animal health and welfare statutory management requirements that we are required to include within cross compliance from 1 January 2007. There is a serious risk of disallowance if we do not enforce those. We need to make changes to inspection and enforcement arrangements for existing standards to deliver more efficient and better-targeted checks and controls. We need to clarify cross-compliance requirements to provide for the unusual circumstances and—this has been welcomed by the industry and was referred to by my noble friend Lord Grantchester—to give additional flexibility to farmers especially in connection with the soil protection review and soil management requirements for 2007 onwards. The provision also reflects changes resulting from newly implemented domestic legislation, so that, for example, farmers do not have to meet two different standards as a result of recent changes to the law on SSSIs—an interest of the noble Lord, Lord Marlesford—and as a result of the establishment of Natural England. This is an EU requirement that all farmers must meet in order to qualify for their single payment. Most of cross-compliance is existing law or good farming practice—a point that was particularly recognised by the noble Lord, Lord Greaves, my noble friend Lord Grantchester and the noble Baroness. There are two elements that farmers comply with: the first is statutory management requirements comprising obligations under a number of EU articles from 19 directives and regulations applicable to all farmers across the EU. These are legal requirements, and, from 2005, have been subject to a rolling introduction, culminating in the introduction of the first three SMRs—the animal welfare SMR, for which the statutory instrument appoints the State Veterinary Service as the competent control authority. These are baseline standards. Many noble Lords in this House recognise, as did the noble Earl, Lord Erroll, that much of it is good farming practice. Indeed, some organisations promoting responsible farming have been advocating many of those measures for years, including LEAF, with which the noble Baroness is closely involved. Its introduction to integrated farm management recommends leaving buffer strips. So there are occasions on which we cannot please everyone. I made a note of the point made about blackthorn raised by the noble Lord, Lord Marlesford, but, without seeing the letter, I am unable to take it further. Perhaps he could send me a copy. Much has been made of the complexity of standards introduced previously. Many are requirements under existing law and they are reasonable. By comparison with some assurance schemes, there is a light touch. For example, the red tractor scheme contains 150-plus standards to be met. It is worth noting that the instrument also introduces flexibility on post-harvest management of land, which reduces burdens on farmers without negating any of the environmental gains of cross-compliance. My noble friend Lord Grantchester and other noble Lords recognised that this is part of wider efforts to reduce the administrative burden on the farming industry. The debate is not about the cross-compliance handbook, but I will deal with the comments of the Merits of Statutory Instruments Committee on that. The cross-compliance supplement for 2007, for which we consulted stakeholders and took care to ensure the use of plain English, reduces burdens by helping to direct farmers to information key for them. I note the point made by the noble Lord, Lord Greaves, about updating computers and supplements and will look further into that. There is additional signposting of information—calendars of important dates, for example—and those efforts have been welcomed by the industry, including the NFU and the Country and Land Business Association. At this point, I assure my noble friend that although we welcome contributions from organisations such as the RSPB, they are considered carefully alongside the many other representations that we receive. The noble Baroness, Lady Byford, may like to know that although the total number of pages in the handbook and supplements runs to 137, 58 of those are advice, explanation and appendices. The 74 pages of requirements are referring to the SMRs—such as animal welfare—go in to considerable detail, but we have been working closely with the industry. It seems that whenever we set out informal requirements, we are criticised for so doing, but we regard that as a responsible approach that saves farmers having to refer to a wide variety of legal texts and publications. That has been welcomed as a helpful mechanism. In recent research, 75 per cent of farmers surveyed said that their knowledge of cross-compliance had improved in 2006, and 70 per cent found the handbook useful. We are consulting the farming industry to ascertain how we can improve any future publication. We have to balance two conflicting industry requirements: for greater detailed information on specific standards, kept up to date; and the request that I have noted from noble Lords all round the House to keep it as short and simple as possible. Unless we have the measure in place, we will be at serious risk of disallowance of EC funds for not having the appropriate mechanisms in place to administer and enforce the new 2007 animal welfare SMRs, which are now a mandatory requirement for the single payment. We are obliged under EU regulations to sample 1 per cent. In answer to the query about loss, the deductions that we are looking at in the context of the very large amount of money to which I referred are 0.035 per cent. The RPA is currently carrying out the majority of inspections, with appropriate training from specialist bodies, and will continue to do so in 2006-07, with minor exceptions where the RPA cannot be trained in highly specialist fields. I note the comment on how helpful it would be to have one person carrying out the inspections, but there are different areas to be covered in different specialisms. The noble Baroness, Lady Byford, and the noble Lords, Lord Marlesford, Lord Greaves and Lord Granchester, mentioned gold-plating. The implementation of the SPS means that several of the restrictions and the bureaucracy associated with the old CAP have been swept aside, and farmers now have greater freedom to farm to meet the demands of the market. To receive their subsidy in full, claimants are required to meet only the minimum standards of cross-compliance, which are derived largely from existing legislative requirements or are based on good farming practice. I remind noble Lords that we are dealing with a large amount of public money. The noble Baroness asked about the role of the Rural Payments Agency. Responsibilities are not being transferred to the agency; they are being transferred from the RPA to the Environment Agency. The Environment Agency was previously a delegated agent, and carried out inspections for SMRs 2, 3 and 4 on groundwater, sewage sludge, and nitrate vulnerable zones. EA is now the competent control authority for these standards. It is also the domestic inspection body, which means that it can conduct its own risk assessments and can target inspections more effectively. We believe that the regulation is a key tool for Defra in providing high standards in environmental, human and animal health. We have made a commitment to reduce the administrative burdens, as the noble Baroness recognises, and I will write to her on the stage that we have reached in working towards that target. We are optimistic that cross-compliance will fully deliver its part of that programme by the start of 2008. Noble Lords also referred to other countries. There is a wide variation in approaches. Many member states do not include existing legal requirements, or expect claimants to access some requirements electronically or via multiple cross-references. The noble Earl and others talked about reducing the number of pages, but that would of course increase the amount of the work that the farmer has to do to access other relevant information. The Commission is due to report on cross-compliance by December 2007 and, as part of this process, may propose amendments to standards and/or the framework used by member states to develop their good agricultural and environmental conditions. Appeals can be lodged through the appeals process and considered by three independent persons. Decisions by the Secretary of State are subject to judicial review. On competent authorities, Natural England can be asked to carry out inspections for the RPA, and we provided this. The only competent control authorities are the RPA, the Environment Agency and the State Veterinary Service. The Merits Committee may not have been aware that while the total number of pages in the handbook and supplements runs to a high level, the majority refer to existing SMRs. The RPA inspectors are fully trained and briefed. On the point made by the noble Lord, Lord Greaves, about the three documents and where the regulations are placed, the 2007 index is an important help. The GAEC monitors and revues the process regularly to ensure we are as up to date as possible. The competent control authority is the Voluntary Medicines Directive. To my noble friend Lord Grantchester I would say that we are dealing with a very large amount of money: 10 per cent of the £1.6 billion is considered to be at stake if cross-compliance is not properly enforced. Commission authorities apply rates of reduction—5, 10, 25 or even up to 100 per cent. I reassure noble Lords that we are talking about those who deliberately set out to go against the rules, not those who may have a claim due to illness or other problems. We are dealing with intentional negligence. I have sought to answer the points raised as comprehensively as I can. We are obliged to inspect the 1 per cent and are working as closely as we can with the industry to ensure that we do this work as effectively as possible, which is in their interests. I will not follow the noble Lord, Lord Marlesford, down the route of discussing general Treasury problems, which I do not think he would expect. However, I am utterly convinced that the Treasury would not be happy with Defra were Defra to ignore the rules that allow us to be able to access this source of funding. Perhaps I may correct what I said in respect of competent control authorities, which include RPA, SVS, EA and the Veterinary Medicines Directorate, as I thought I said but obviously did not. We will work hard to ensure that we do all we can. The aims are extremely good. Quite frankly, I think to sweepingly attack all bureaucrats in Defra, when we have many professional people who work very hard and share all noble Lords’ aims about the environment and the interests of the farming community, is a little unfair.