My Lords, I thank all noble Lords who have contributed to this debate. I will be the first to say, coming from a farming background and being a farmer myself, that I know that change can present these great concerns, and that is why the Government are clear that they want to work with farmers to ensure we get the schemes right. I think we are doing that properly, and I would like to explain why.
On Amendment 36, with which I will also address Amendments 37, 39, 40 and 41, the Government are committed to introducing new schemes that will reward farmers for producing goods that are valued by the public. Our planned reductions for 2021 are intended to send a clear signal of reform. It is important that farmers have certainty about when the agricultural transition will begin. There may be some in this House who do not agree with this. But many people, including those in the farming community, will feel that direct payments are poorly targeted and offer poor value for money. This is something that I have been very seized of, as have many of us farmers who seek to farm well and look after our land. This is a conclusion we all have to draw from the current regime. Therefore, applying appropriate progressive reductions to these payments will free up money that can be used to support farmers better—I repeat, “to support farmers better”—and deliver public goods.
We believe it is important that this process is not delayed. The Government are on track to introduce new schemes from 2021 while continuing to fund new and existing Countryside Stewardship agreements which farmers can apply for until 2023. Signing a Countryside Stewardship agreement gives a viable, long-term source of income for providing environmental benefits. I assure the noble Lord, Lord Grantchester, and other noble Lords that no one in a Countryside Stewardship agreement will be unfairly disadvantaged when they move to new arrangements under ELM. I should also say to the noble Duke, the Duke of Wellington, that the Countryside Stewardship scheme includes a specific uplands wildlife offer.
We will also provide productivity grants to farmers for investments in equipment, technology and infrastructure, which will help their businesses to prosper while improving their productivity and enhancing the environment. These grants will be available from 2021. In addition, the national pilot of the future ELM scheme will also begin in 2021 and will be funded from the reductions in direct payments. The national pilot will be informed by the engagement with farmers, land managers and other stakeholders which is already well under way, including tests and trials.
I have to say again that I think we may sometimes be attending different webinars or whatever, because the impression I have been given is that many farmers have found it stimulating, particularly the younger ones, who have found talking about such matters, and the innovation of the new way forward, refreshing. As I have said before, they will be able to look the taxpayer in the eye and show that we are producing better for the public and better for farmers.
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We have already published the maximum reductions that we intend to apply in the first year of the transition. The maximum reductions for 2021 are at no more than 5% for around 80% of farmers. This is within the margin of the currency rate changes often experienced in previous regimes. We first published these reductions in 2018. We have also provided important commitments on future funding. The Government, in their manifesto, guaranteed the current annual budget in every year of the new Parliament, plus a seven-year transition period. Coming from a farming background, I know that many farmers have actually expressed surprise that this should have been so explicitly generous, and that seven years was the transition period.
As I noted in Committee, we are working across government to develop schemes under Clause 1 and, recognising the need to give farmers certainty, will set out further information on funding for the early years of the agricultural transition period, including direct payments, later in the autumn. I absolutely understand and respect noble Lords’ frustration—but this will happen in the autumn. If noble Lords will believe me, I can add that I am pushing this very strongly—and of course I would have liked to have it with me tonight.
I should note that Clause 11 provides for the phasing out of direct payments under the basic payment scheme. Regulations laid under that clause, including the rates at which direct payments will be reduced, are subject to the affirmative resolution procedure. This will allow for debate on the reductions, the impact of which was set out in the evidence compendium published in September 2018, alongside the previous version of the Bill. By the time the SIs are debated, we will have published further information about funding for the early years of the agricultural transition.
In relation to Amendment 38, while payment for organic conversion is not currently a feature of the basic payment scheme, our existing countryside stewardship schemes will continue to include several options rewarding farmers where they convert farmland to organic condition. I can also say—this is further information—that since 2016 the Government have spent £25.8 million on organic conversion and maintenance. That is £20 million on top of the £6 million for conversion.
As I have set out, during the transition we will offer financial assistance to enable organic farmers to invest in the equipment, technology, and infrastructure that they need to improve their productivity, manage the environment sustainably, and deliver other public goods. Farmers who adopt organic farming methods will be well placed to benefit from our future ELM schemes.
With reference to Amendment 42, I am fully seized of the importance of timely payments. I agree with my noble friends Lady Rock and Lord Caithness that this
is a very important issue for farmers. The amendment concerns payments under the basic payment scheme. The Rural Payments Agency has worked hard to improve payment performance across all its schemes. This is reaping rightful benefits for farmers, land managers and the rural economy. For the 2019 BPS scheme payment window, over 99.9% of 2019 claims have been paid. We intend to simplify the basic payment scheme to make it easier for the RPA to process applications efficiently and to benefit farmers. For example, we are working with the devolved Administrations to try to make improvements in the way we deal with cross-border farms, to speed up payments to these applicants.
Timescales for basic payment scheme payments are already set out in the retained EU regulations. We have no plans to change the payment windows in retained EU law. We do not therefore consider it necessary to set further rules in regulations about the timing of BPS payments.
This has been a very interesting debate. I have sympathy with much of what has been said, but some of the unduly negative words about the Government’s assurances on funding are not apposite. The Government have been clear about our intentions. I hope that noble Lords, particularly my noble friend Lady McIntosh, will reflect on this. I think we should start this reform with a seven-year transition period and that the moneys from these reductions will start to bear fruit in all the things we aspire to do, such as having strong food production and an ever-enhanced environment. I hope my noble friend feels able to withdraw her amendment.