My Lords, it is a pleasure to follow the noble Lord, Lord Carrington, particularly as I agree with a lot of what he had to say, although, as he will see a minute, I come to some slightly different conclusions. Where I agree with him is that this is a tricky problem, and I speak as a farmer who grows and irrigates potatoes—or at least my son now does. I am aware that you can hardly sell unirrigated potatoes nowadays. It is all about skin finish: in the old days, you could, because mostly, of course, we peel the skin off our potatoes before we eat them, so the skin should really not matter. It should be the taste of the flesh underneath that is important but, apparently, or so we are told by the supermarkets, skin finish is king, and for that I am afraid that you need irrigation.
The second thing that makes this a tricky problem, as the noble Lord, Lord Carrington, referred to, is the huge capital involved in most of the crops needing irrigating. Returning again to the humble potato, you need stone separators, potato planters, ridgers, harvesters, grading lines and cold stores, not to mention the underground and overground pipes, as well as the pumps and irrigation equipment itself. All this could easily come to well over a million pounds, which huge
sum most farmers will have had to borrow from the bank. The threat of all that borrowing going to waste or not returning the required interest is indeed frightening, although if your abstraction licence dates back to the 1960s or 1970s, as some of them do, and your capital is all paid off, it is slightly less frightening.
A third factor that makes this a tricky area is that whereas a water company has a network of pipes and many different sources of water, and so can juggle its extraction plans to cater for where the water might be in abundance, the farmer can get his or her water only from or adjacent to their own land. They cannot abstract water from a different catchment or a different aquifer from the one they farm on.
Why, might the Committee ask, am I wanting to shorten the leeway allowed to farmers from 2028 to 2023? The answer is that I am not; what I am saying is that no compensation for amending an abstraction licence should be allowable after January 2023. However, the Environment Agency should be able to extend the enforcement of the necessary licence modification for several years if it believes time is required by the individual business—for the building of a reservoir, for instance. This should be done on a case-by-case basis, and in that way most modifications can probably happen sooner rather than later. However, and this is my key point, the days when you can be compensated for not causing environmental degradation have, in my view, long since gone: you cannot be compensated for not causing environmental degradation.
At the risk of straying into the realms of the bleeding obvious, I should state that, as has been made clear again and again in our discussions on this water chapter, some of our rivers are in a pretty poor state: sewage overspills, road run-off, agricultural run-off and generally just having too many people or too much livestock per square kilometre all contribute to ever more damaging stuff—to use a highly scientific technical term—entering our rivers. Unless we can ensure sufficient water in the river to dilute that stuff, then trout, grayling, carp and perch, dragonflies, mayflies, shrimps and dippers could all disappear, along with irises, water violets and multi-fruited river moss, to name but a few lifeforms that are important inhabitants of our rivers. This dilution is important, and it must have been obvious to all farmers for years that anyone causing environmental damage by overabstraction was going to have to change what they did and how they did it; but, in some cases, very little has happened, and too many farmers have taken no action at all. There are still people extracting from rivers in the middle of summer.
It is possible for a farmer to build one, two or even three small on-farm reservoirs to ensure that they abstract only during the winter months. It is possible for farmers to share reservoirs. It is possible for licence sharing to exist between abstractors in a single catchment. It is possible to use precision irrigation systems which save huge amounts of water. There are a variety of possible solutions and it is to be hoped that all abstractors will be able to find some form of compromise on rivers and waterways where the environment is threatened. I gather from data produced by Defra last year that this amounts to some 18% of our rivers and waterways
and over a quarter of our groundwaters. We cannot just go on allowing abstractors to continue to cause environmental degradation.
My proposal is that the Environment Agency should start talking now to farmers on an individual basis with a view to modifying licences which are deemed to be damaging rivers, especially where there are habitats of particular biodiversity importance. This obviously includes SSSIs, referred to in my Amendment 179A, which largely speaks for itself and I would have thought was indisputable.
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The farmers will know that no compensation is ever going to be payable and it is up to them and Environment Agency to work out a reasonable solution as soon as possible and not wait for 2028. Where they cannot agree on a solution, I believe there should be an appeal process up to the Secretary of State, or a panel appointed by the Secretary of State. In their recent fact sheet, Defra tells us that there already is an appeal process, but perhaps it needs to be made clearer in this legislation. It is to be hoped that most cases will be resolved long before January 2028, but I think that that long stop should probably remain after which offending licences will be revoked or modified anyway. It is important that the Environment Agency provides the business certainty of a 12-year period for any new contract with farmers. One cannot go to the expense of building a new reservoir only to find that the rules are changed again.
If I can be so presumptuous as to suggest to the Government, I think that these abstraction clauses need to be slightly rewritten—first, to confirm that no actual compensation is payable after January 2023; secondly, to state that by then, or soon after, the Environment Agency and individual abstractors should have agreed a plan of action where necessary on how to modify any damaging abstraction licences before January 2028; thirdly, to set out a formal appeal system when the Environment Agency and the abstractor are unable to agree a way forward; and fourthly, to clarify that any new agreement would remain in place for a minimum of 12 years. That would make these clauses as fair to both sides as is possible.
Finally, I have great sympathy for the farmers involved. All businesses would love to have a framework of certainty and constancy in which to make sometimes risky and long-lasting financial decisions, but this situation has been on the horizon for years, if not decades. I repeat again: some of our rivers are in a very precarious state and the time when you can expect compensation for not causing environmental degradation has, in my view, long since gone.