My Lords, I thank the Minister for his introduction to these three statutory instruments dealing with proposals for the transition to the new financial support payments for farmers in England post Brexit.
The first SI, which deals with direct payments and reductions, has been well publicised since Brexit and during the passage of the Agriculture Bill. Farmers’ payments under CAP have already started to decrease and this year will see a further reduction in their payments, from 20% for those on £30,000 up to 40% for those in receipt of more than £150,000. This sliding scale has been well trailed and there should be no surprise among farmers about its further reduction. What is more problematic for them is the lack of the implementation of ELMS to replace this lost income. Small farmers will be hit particularly hard.
Consultation on the transfer took place back in February to May 2018 and the new arrangement is now beginning to bite. Are the Government considering a further consultation on the actual effects of the sliding scale of reduction in direct payments, especially as the implementation of ELMS is only slowly coming into effect during the transition period? Meanwhile, food security is moving rapidly up the agenda.
While it is to be welcomed that the Government are focused on biodiversity and carbon sequestration targets, the knotty issue of food production is somewhat ignored. The British farmer is very disillusioned at the trade deals with countries on the other side of the globe which have a very different landscape in which to produce their livestock and huge economies of scale that are not open to British farmers. They also have less stringent animal welfare rules than those which operate here. It is, therefore, much easier for Australian and New Zealand farmers to undercut our own hard-working farmers. Does the Minister agree that farmers are angry about the way they are being treated by the Government and undercut by cheaper imports?
I turn to the financial assistance amending SI. This seems to be all about monitoring of farmers’ financial assistance and enforcement. Over the five pages of the Explanatory Memorandum to this short SI, there are no fewer than nine references to monitoring and enforcement. The whole instrument gives the impression that the farming community is systematically and deliberately attempting to defraud the Government out of money.
There is reference to the tree health pilot scheme and annual health and welfare reviews being exempt from the publication requirements which apply to all other payment schemes. Can the Minister say why this is?
Under paragraph 6 of the Explanatory Memorandum, bullet point 5 refers to the Secretary of State being able to investigate suspected offences. Given the general tenor of this SI, what is the current level of offences? Paragraph 7.1 again refers to checking, monitoring and publication of information. In paragraph 7.3, the fourth bullet point refers to
“investigation of breaches and suspected offences in connection with applications for, or the receipt, of financial assistance”.
Can the Minister say whether wholescale fraud existed in the farming community over payments?
Paragraphs 7.5, 7.6, 7.7 and 7.9 refer to suspicion of fraud, breach of conditions, investigative powers and, again, suspected offences. It would appear that farmers are being accused of wholesale fraudulent activity over their payment claims. The whole statutory instrument wields an awful lot of stick and hardly any carrot in its treatment of farmers. Can the Minister please give the Grand Committee some clarity on just what the basis is for the tone of this statutory instrument, which I find offensive?
Paragraph 7.10 states:
“The instrument does not impose duties that are significantly more onerous than before”.
Can the Minister say, however, whether he thinks a family farmer would be likely to agree with this statement?
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Paragraph 11 refers to Defra planning to provide detailed guidance for each financial assistance scheme. Can the Minister say when this guidance will be published? No impact assessment has been produced, on the basis that participation in the Government’s financial assistance schemes is voluntary. This is insufficient reason for not producing an impact assessment. What will happen if farmers decide that they simply cannot make a living out the new schemes and vote with their feet? The country will still need to engage in biodiversity, and it will certainly still need to produce food, especially given the current situation with the decline in food being imported from Ukraine and the rising cost of energy and fuel supplies.
I regret to say that I think it would be more truthful if this SI were renamed the “Agriculture (Financial Assistance) (Prevention of Fraud) (Amendment) Regulations”. British farmers are not all dishonest and on the fiddle. They are committed and hard-working, diligently and desperately trying to make a living during a very difficult time when there is little certainly for them, in an industry which is under threat in the
long term. I look to the Minister to give reassurance that the ethos of this SI is misplaced and not borne out by the evidence.
Lastly, we come to the Agriculture (Lump Sum Payment) (England) Regulations 2022. It is important that new, hopefully younger, people are able to enter agriculture. Encouraging farmers to retire is important as this releases land for new entrants. I note that the SI refers to releasing land for existing farmers to expand. Can the Minister give reassurance that farmers wishing to expand will not push out the interests of new entrants? While it is important for small farmers to be able to expand their holdings when land is released, it should be in proportion to those wishing to get a toe-hold on the farming ladder.
The regulations make it clear that farmers have to release the land before they can receive the lump sum payment but may retain five hectares of land. Can the Minister say what the rationale is behind retaining five hectares? This may be standard practice but, as I am not a farmer, nor come from a farming family, it would be useful to know just what is behind this.
Paragraph 7.8 of the EM indicates that applicants who are part of a woodland creation scheme would not have to transfer their land. Can the Minister give reassurance that the woodland creation schemes do not include rapid growing conifers but the type of trees that are slow growing and likely to increase the biodiversity of the land and the return of species which have previously abandoned the area?
The instrument contains a formula for calculating what the lump sum payment will be. I readily admit that algebra is not my strong point, but can understand how this will be calculated. The maximum amount payable is £100,000 and Defra calculates that 87% of farmers will not reach this cap. This does not seem a sufficient reward to encourage farmers to leave the land after a lifetime of desperately early mornings, slogging through all weathers and very late evenings in order to supply milk, meat, vegetables and grain, often for a poor monetary return. Perhaps I am overly simplistic in my view, but I am not sure this is going to make the room for new entrants which the Government were hoping for—the noble Lord, Lord Carrington, referred to this.
This suite of SIs work together to give a package of measures across the farming industry which should bring some certainty to the farming community but which I fear are not likely to do so. Together with the existing trade deals and those currently under negotiation, it is no wonder that the British farming industry does not feel that the Government have its back.