I beg to move,
That the draft Agriculture and Horticulture Development Board (Amendment) Order 2020, which was laid before this House on 12 November, be approved.
With this we will take the following motions:
That the draft Direct Payments to Farmers (England) (Amendment) Regulations 2020, which were laid before this House on 12 November, be approved.
That the draft World Trade Organisation Agreement on Agriculture (Domestic Support) Regulations 2020, which were laid before this House on 12 November, be approved.
These are the first regulations produced using the powers under the new Agriculture Act 2020. They lay the groundwork for our new agricultural policy.
Turning to the first of the statutory instruments, the draft regulations will assign additional functions to the Agriculture and Horticulture Development Board. They will enable the AHDB to collect, manage and make available information regarding the identification, movement and health of animals, and to allocate unique identification codes as a means of identifying animals. That information will feed into a new livestock information service.
Of the 165,000 livestock farmers today, nearly 60,000 keep more than one species. Therefore, those farmers need to engage with different services and systems. The livestock information service replaces separate species-specific systems with a single portal for keepers to meet their reporting responsibilities. It should be more cost-effective and easier to use, and it will allow faster and more accurate livestock traceability.
The AHDB will also run a unique number identification service on behalf of England and Wales controlling the issuing of official individual identification numbers to animals. The new system will allow for value-added services where submitted data can be used to generate information in wider areas such as livestock productivity and disease management.
Since the Minister mentioned Wales, may I raise the issue of Welsh lamb? Sheep are already pregnant with next year’s flock, and we hope that lambs will be frolicking all over the hills in the springtime, but the real worry for many Welsh farmers is that they will not be able to sell their product in the rest of the European Union. What plans have the Government put in place to deal with the eventuality that 50% of the product that presently goes to the European Union cannot be sold?
It is a delight to take an intervention from the hon. Gentleman. It is not absolutely on point with this statutory instrument, but it is always a delight to talk about Welsh lamb. I am still very hopeful that we will get a zero-tariff deal with the European Union, which would be a good outcome for Welsh lamb. In the event that we do not get such a deal, as I hope he knows, we worked up various schemes in our previous planning for a no-deal exit, and I am sure that, if needed, those can be got out and worked up once again.
To return to the regulations, this new traceability system, which will be available for sheep in the future, will allow us better to manage disease, which is what we are talking about. We are not talking about deal or no deal at the moment; we are talking about management of disease in lambs, Welsh or otherwise. The system should also enable us to protect human health, giving confidence to trading partners—with whom we hope we will be able to trade—and enable better use of data to manage on-farm productivity and efficiency.
I turn to the Direct Payments to Farmers (England) (Amendment) Regulations 2020. The legislation governing direct payment schemes contains financial ceilings that are used to calculate direct payments to farmers. However, the legislation only includes financial ceilings up to and including the 2020 claim year. These regulations specify how the Secretary of State will set financial ceilings for England beyond the end of this year. These regulations also make minor changes to ensure that the schemes continue to work effectively in England beyond 2020. That includes replacing dates specific to the 2020 scheme year with equivalent dates that are not year-specific. The regulations also remove rules that are not relevant to England, such as those relating to voluntary coupled support.
No substantive policy changes are made by these regulations. They ensure the continuity of direct payments in England beyond the end of this year and are largely technical. Farmers will see no change on the ground as a result of them. The Government remain committed to beginning to phase out direct payments from 2021 as part of their ambitious agricultural reforms in England. We will bring forward separate legislation to make those changes. Direct payment schemes fall within devolved competence. The devolved Administrations plan to make their own legislation in relation to direct payment schemes in their own territories.
I turn to the World Trade Organisation Agreement on Agriculture (Domestic Support) Regulations 2020. The World Trade Organisation’s agreement on agriculture divides domestic support into green, blue or amber depending on the support’s potential to distort trade. Under the agreement, each country must limit the amount of trade-distorting amber box domestic support given to agricultural producers. The UK’s overall amber box spend limit remains unchanged after EU exit. These regulations specify the amount of amber box payments that may be given in each country of the UK. Those limits have been set at a level that will not constrain policy choices, meaning that there should be no impact on farmers. The regulations also outline the procedure for classifying such schemes and permit the Secretary of State to request information from the DAs where that is needed to enable the UK to satisfy its obligations under the agreement on agriculture.
These statutory instruments implement provisions provided for by the Agriculture Act. In the case of direct payments, they provide important and necessary continuity for farmers. I urge Members to agree to these regulations, which I commend to the House.
It is a pleasure to be here and to speak to these statutory instruments, Madam Deputy Speaker. Indeed, they are an eclectic mix of instruments, and I say at the outset that we will not be opposing them. May I say something positive about the Agriculture and Horticulture Development Board? I know it is not always supported throughout the sector, but my experience has been very positive, and it does very valuable work.
On livestock movement, we know how critical a tracing system is. We need only look back to some of the awful experiences with foot and mouth back in 1967 and 2001 and, indeed, to the lessons learned by 2007, and we have only to think about bovine TB and, I fear, African swine fever, which is currently moving across Europe. There are worrying developments around avian flu, which is a different issue, and the Opposition will do everything we can to work with the Government to tackle that.
May I also make reference to my hon. Friend the Member for Rhondda (Chris Bryant), who is sitting patiently? There was a suggestion from the Secretary of State as to what should be done in these circumstances, which I think rather unhelpfully was a suggestion to switch to beef. I suspect that will not satisfy my hon. Friend. He may wish to intervene.
I am grateful to be enticed. Yes, the Secretary of State suggested to me that those affected should all move over to beef. The truth, as far as I can see, is that first, that is difficult to achieve on most Welsh mountains and, secondly, it is not exactly an environmentally friendly direction of travel. More importantly, did my hon. Friend catch the intimation from the Minister that if this produce is not going to be able to be sold, because of tariffs within the European Union, basically all that additional produce will just be burnt?
This is possibly not the place to have this debate, but my hon. Friend is right to raise it and the Minister will have the opportunity to respond later. Of course, we are seeing problems with wool, as well, so it is a troubled time for people. Obviously we hope that we end up without tariffs, because that will be a much better outcome.
Clearly the rules, as the Minister set out, are specific to England, but the shadow Minister referred to the movement of cattle and sheep in the United Kingdom mainland. He will know, as we do, that that movement of traffic is to and fro from Northern Ireland to the mainland. When it comes to the movement of any animals, does he think we need continuity with the payment scheme and the flexibility to be able to move cattle and sheep not only north and south from Northern Ireland to the Republic of Ireland, but from Northern Ireland to Scotland and to England and Wales?
The hon. Member tempts me further and further away from the instrument. I can assure him I will be coming to some of those points, because it is obviously key that we resolve these issues of movement within the island of Ireland. They are complicated and pressing for many, many people.
We are told that this instrument does not relate to withdrawal from the European Union, which is a welcome relief, I suspect, given the number of instruments we have been discussing in recent weeks. Indeed, it comes from the newly passed Agriculture Act 2020. It makes provisions for better traceability. It was noted as an instrument of interest by the Secondary Legislation Scrutiny Committee, and the Minister has outlined many of the proposals, so I will not repeat all of that.
The proposals set out by the AHDB for a new livestock information service system are important. It will provide a multi-species traceability system, and DEFRA tells us that it will enable the Department and the Animal and Plant Health Agency to trace all livestock movements through a single, more efficient system, which would be welcome, because livestock are currently identified through three separate livestock traceability systems: one for cattle, one covering sheep and goats and one for pigs. The service was introduced over the past two decades as various pieces of EU legislation came into force. As the Minister said, the existing systems are species-specific, so keepers with more than one species of livestock need to switch between databases. The existing systems are also designed to collect, rather than share data and, extraordinarily, are paper-based.
I am told that the AHDB will also run a unique number identification service on behalf of England and Wales, which will control the issuing of official individual identification numbers to animals. The Scottish Government and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland have noted that they will pursue their own systems for issuing identification numbers to animals. The service will operate in England but because, as has been said, animals can and do move across borders, the instrument applies across the UK so that AHDB may handle data on animal movements and traceability systems outside England where necessary to allow a complete picture of animal traceability. Further collective work involving all four Administrations is aimed at agreeing a UK view of key data to support traceability.
As I said, AHDB has established a subsidiary company, Livestock Information Ltd, to carry out the services on behalf of AHDB and DEFRA. We are told that the estimated cost is £32 million over three years, and the projected monetised net benefit using a 10-year appraisal method is conservatively placed at £30 million. AHDB says that improved traceability data will enable a range of other benefits, including reducing the impact of endemic diseases, increasing our ability to act quickly and proportionately in the event of an exotic disease outbreak, and improving livestock business productivity.
Some questions follow from that, however. Under the provisions of the instrument, each devolved Administration will have their own database. How will we be able to trace animals as they move across borders? On the implementation of the system, will there be an instant switchover, or a transition period in which both old and new systems operate alongside one another? What is the timeframe for getting the new traceability system up and running?
Farmers currently pay a levy for the use of AHDB services. In bringing the new traceability system under the remit of AHDB, DEFRA says there are no plans for a new levy to fund any of the services the regulations bring in. “No plans” is a term that is regularly used, often euphemistically. Can the Minister give a guarantee that there will not be a levy? It appears that Livestock Information Ltd will cost £32 million of taxpayer money that is immediately handed to a subsidiary in which DEFRA has a minority stake. Will the Minister explain why that is?
Looking at the direct payments instrument, we have been here before. The draft regulations are laid under the new Agriculture Act 2020 and need to come into force on 1 January 2021 to ensure that direct payment support will be available for farmers in England for the 2021 claim year. The Government have confirmed the continuation of direct payments for 2020 in the Direct Payments to Farmers (Legislative Continuity) Act 2020, which we discussed back in January, but as we heard earlier this week, some of the payments will be phased out in England under the new Agriculture Act from next year over the following seven years, beginning with a 5% to 25% cut in farmers’ income next year.
This statutory instrument has been noted as an instrument of interest by the Secondary Legislation Scrutiny Committee. According to DEFRA, the instrument aims to maintain the status quo as far as possible for farmers next year. The instrument sets rules about the financial ceilings used to calculate farmers’ direct payments, giving the Secretary of State time to determine the ceilings for the 2021 claim year before the start of that year, as the current financial ceilings extend only to the 2020 claim year. It also removes from 2021 elements of direct payments that have not previously been implemented in England, some of which have been used in the rest of the UK. The Secondary Legislation Scrutiny Committee notes that separate legislation will be required for the Government’s planned reforms to phase out direct payments from 2021.
Back in January, when we discussed the Direct Payments to Farmers (Legislative Continuity) Act, Labour pressed the Government on the need for a legislative mechanism for direct payments to farmers to be continued beyond 2020. We predicted that we would be back later in the year—and here we are, with the Government using the Agriculture Act as that mechanism to use this SI for 2021.
We welcome the shift from supporting land ownership to helping farmers restore land and improve our natural environment, but farmers are rightly concerned about how they are going to survive during the transition the Government propose. On Monday, it was revealed that direct payments will start to be cut next year, and will be cut by 50% by 2024, yet the new environmental land management schemes will not fully up and running until 2024. What was once envisaged as a bridging sustainable farming incentive payment will not be available for farmers until 2022, and in the view of many, including Labour Members, there is still too little detail of the schemes to help farmers to plan for uncertain times ahead. Based on DEFRA’s own statistics, 75% of farming enterprises are currently unprofitable without direct payments. We fear that many farms will be left financially unviable under the Government’s proposals.
A recent survey of landowners and farmers by the Country Landowners Association found high levels of concern about the implementation of the new ELM schemes, with 76% of respondents fearing that the payments would not be sufficient and 57% thinking that administration would be poor. The Rural Payments Agency will be administering new payment schemes—we all know that it has had a troubled history, although it has improved in recent times—and there remain real doubts about the capacity to deliver new systems alongside administering legacy payments.
The high-risk approach to our farmers’ future security is, I am sorry to say, of a piece with the highly ideological approach that the Government have taken to farming post Brexit. The Government still refuse to back British farmers with a legal guarantee that they will not be undercut by cheaper, lower-standard food allowed in through trade deals that, despite the claims, will still lack proper parliamentary scrutiny.
I will not go over familiar ground again, the Minister will be glad to hear, but let me put some specific questions on this instrument. The draft regulations that she has come forward with today provide farmers with direct payments for just 2021. Will regulations need to be laid every year for the seven years of the agricultural transition period to continue direct payments in their current form prior to phasing out? When are the Government going to come forward with regulations for phasing out direct payments?
These provisions remove a number of elements of direct payments that have not been applied in England but have been elsewhere in the UK. These include the redistributive payment and voluntary coupled support schemes that have been used in Wales and Scotland. They also take out the active farmer provision and basic payment scheme agri-environment transfer. Will the Minister confirm that there is nothing here that will restrict devolved Administrations from making their own choices? While we understand the concerns about the active farmer provision, we still believe that measures are needed to ensure that money goes to farmers, not just landholders.
This is a continuation of direct payments to farmers for next year, which is welcome, but we know that the Government are planning to cut direct payments for next year. What support are they going to give farmers facing a 5% cut in their income next year? Has DEFRA undertaken an impact assessment on what direct payment cuts would look like to farmers in different sectors and farm sizes, and will they release that impact assessment?
We know that different parts of the UK will now be pursuing different payment support schemes for farmers, as agriculture is a devolved area. How will the Government ensure that we do not see market distortions emerging across the UK? Given its past performance failures, can the Minister guarantee that the Rural Payments Agency is competent to administer the many changes and parallel systems emerging over the next few years?
In conclusion, let me turn to perhaps the most complicated of the three SIs before us, on WTO compliance. This instrument has been made under the Agriculture Act but relates to the withdrawal of the United Kingdom from the European Union. It introduces a legal framework to ensure UK-wide compliance with WTO commitments on the use of domestic support for agriculture. I understand that this is a largely technical change following our withdrawal, so this SI was not reported on by the Joint Committee on Statutory Instruments.
While a member of the EU, UK interests at the WTO were represented by the European Commission, which was responsible for ensuring that the UK complied with WTO agreements. That included the WTO agreement on agriculture, which sets out a number of general rules and commitments that signatory nations must follow on agricultural trade practices, including disciplines on domestic support, market access and export subsidies. Following the UK’s withdrawal from the EU, the UK will now represent its own interests at the WTO, and the UK Government will be responsible for ensuring that the UK complies with its obligations and commitments as an independent WTO member. These include obligations relating to the classification and notification of domestic support and the UK’s commitment to reduce its aggregate measurement of support.
As the Minister said, this instrument specifies the amount of amber box payments that may be given in each country of the United Kingdom—amber box payments being those that have trade-distorting effects, which are limited under the WTO agreement on agriculture. This instrument also outlines the procedure for classifying such schemes and permits the Secretary of State to request information where this is needed to enable the United Kingdom to satisfy its obligations. The explanatory memorandum says that it
“allows for each UK administration to design and implement their own agricultural support schemes within an amber box spending envelope.”
These provisions stem from part 6 of the Agriculture Act, and they were criticised at the Committee stage by the devolved Administrations. There were concerns that, despite agriculture being a devolved area, the Act gave the Secretary of State the centralised power to decide how farm support payments everywhere in the UK will be classified in relation to international trade rules, and to set limits on how much can be paid out by each Administration. At the Committee stage of the Agriculture Bill, Labour sought to amend the Bill by requiring Ministers to consult with each devolved authority on a draft of the relevant regulations. This was rejected by the Government, but the Minister committed to consult with the devolved Administrations on the making of regulations under part 6.
The Government have outlined in their explanatory memorandum for this SI:
“These regulations were drafted in consultation with policy officials from the devolved administrations, who were given the opportunity to comment at each drafting stage. It was possible to accommodate the majority of their comments and suggested changes whilst recognising that UK Government’s position is that ensuring compliance with international obligations remains a reserved issue.”
I have to say that, from speaking to some of my Scottish colleagues, I am not entirely convinced they completely agree with that characterisation of the discussion. So can the Minister explain what consultations have been had with the devolved authorities on the content of these regulations, how the majority of their comments and suggested changes were accommodated, and what suggestions, if any, were not accommodated?
In conclusion, these are indeed an eclectic group of instruments, but they are all important to make sure our farmers are paid, to ensure that we use the latest technology to best effect to maintain the health of our livestock and to ensure that agricultural support systems are WTO-compliant. We are not opposing them, but there are questions I have posed, and I look forward to hearing the Minister’s answers.
Madam Deputy Speaker, I rise to discuss the second instrument about direct payments, and I beg your forbearance and that of the Front Benchers, who I expect thought they would get away with being the only speakers this afternoon. I am sorry about that, but I put in because I did not get the chance to speak in the debates on the Agriculture Bill earlier this year. I hope the House and you will indulge me for a few minutes while I speak about Wiltshire farmers and the role I think farming could play in the UK after Brexit.
I much enjoyed the Bill Committee, and especially the erudition and good humour of the two Front Benchers. My hon. Friend the Minister and I have something in common, which is a parent in the public eye—both with some strong farming and food credentials, and both with some suspicions about what the Government are up to it when it comes to agriculture—
The Minister denies it. It is true to say that I do not think she had the pleasure of the experience of a convoy of tractors driving through Banbury in protest at the Agriculture Bill, with a huge placard on the front tractor saying, “Daddy knows best”, which is what I had in Marlborough, with a placard saying, “Mummy knows best”. Of course, Mummy does know best; she just did not understand the question in that instance. I did of course disagree with those farmers on the detail of the Agriculture Bill, but I did and do share their concerns, and I want to try to summarise those today. There are basically two: there is a practical concern about farm incomes, and there is a strategic or philosophical concern about the place of farming in this country’s future.
Let me summarise the practical concern first. We are basically moving the subsidy—some billions of pounds—from farming as it is traditionally understood, as the management of land for the production of food, to environmental stewardship. The overall budget might be the same and individual farm incomes may be guaranteed for a few years, but this is a profound change in the business model of farming. I was very pleased to get assurances on Monday from the Secretary of State in his statement that the switch is not intended to reduce food production or to take land out of cultivation and put it to other uses. I believe him, and I am sure that is the intention. I fully support the overall mission of the reforms, which is to enable sustainable food production in this country, but the design and details of the system are essential to make sure that we do not inadvertently make people, against their best instincts and against the traditions of their own land, become unwilling environmental stewards rather than food producers.
We all know the jokes about farmers being asked, “What do you farm?” and answering, “Subsidies, mostly.” I am all for subsidies, and I am all for stewardship and for paying farmers to maintain the forests, the streams and the soil, but let us make sure they farm animals and crops. The details of the scheme are what matters here, and we need to get on with it. The time is tight for phasing out basic payments, and we still do not know the full details of what will replace them. I appreciate and applaud the reason for this—the Government want to consult with farmers on the best system for them—but I hope this can happen soon and finish quickly.
Let me finish with the strategic question, which, in a sense, underpins all the technical debate that we are having about subsidies. The Opposition spent much of the debate on the Agriculture Bill talking about trade deals. Although, in a sense, trade deals had nothing to do with that Bill, which was about support for and regulation of British farms, I appreciate why they discussed them. The fact is that a bad trade deal could undermine a good Agriculture Bill—and it was a good Agriculture Bill, especially once food production was recognised as something worth including.
I applaud the Government for the deal they did to keep the National Farmers Union and the Department for International Trade happy by ensuring proper statutory oversight of the trade deals to make sure that food standards and farming interests are protected. We are now in the process of negotiating those trade deals, and here is where the philosophical difference arises; I fear that there may be a philosophical difference between DEFRA and DIT.
It is right that the Departments have slightly different approaches. DIT is there to maximise trade for British companies so that they benefit from lucrative exports and British consumers benefit from cheap imports. Let me take this opportunity to congratulate my old friends Douglas Carswell and Dominic Johnson on their appointments as non-executive directors of DIT this week. They are great patriots with all the right instincts—so much so that I see that DIT has been dubbed by some Conservatives “the Ministry of Sound”. I am pleased about their appointments, but I am not sure that Douglas Carswell or Dominic Johnson has ever so much as grown a tray of cress, let alone planted a carrot or had anything to do with actual farming. I wish all power to the Minister’s elbow in the ongoing oversight that she will exercise over her colleagues in the trade deals that are being negotiated.
We must not offshore our carbon emissions or animal cruelty to other countries. We must not sell out our farmers. We must make a moral and political decision to rely more on British food. Partly this is about food security—as this year shows, it would be unwise to take land out of production that we might need in future crises—but it is also about a way of life. In a mysterious sense, landscape is a human construct bounded by walls and ditches, marked by copses and fields that have been maintained by people who owned or rented the land for generations. Land is made beautiful and meaningful because it is used, not just for the public good of environmental wellbeing, but for the private good of the people who live on it. That is why there is a special place for farmers as stewards of a landscape in use.
Thank you, Madam Deputy Speaker, for your patience; I thank the House too. Let me also express my appreciation of the Minister for her work and my support for these statutory instruments. We must maintain direct payments for our farmers. We must introduce variable tariffs to make it pointless for foreign countries to export to this country food made to lower standards than ours. We must protect our farmers, because their private good is the public good.
There are three instruments before us today. I will not touch on the Agriculture and Horticulture Development Board (Amendment) Order 2020, which affects England and Wales, but I will discuss the provisions relating to the World Trade Organisation and direct payments to farmers.
Before I do that, I predict that the Minister, as she often does, will cite the consent that she enjoys from colleagues in the Scottish Government on these matters. I will expand a little on what the shadow Minister, the hon. Member for Cambridge (Daniel Zeichner), has said —that there is sometimes a huge difference between consent and delight, or even between consent and something remotely similar to what we would do if we had the legislative authority to do it. That is sometimes the space in which our Ministers in the devolved Administrations find themselves.
The World Trade Organisation Agreement on Agriculture (Domestic Support) Regulations 2020 set a limit of 12.67% of total UK amber box support for Scotland. This reliance on a percentage of the total UK quantum means that while Scotland remains within the UK, we must remain subject to the vagaries of the total UK figure. It is not inconceivable that in a mixture of ill winds and fair, high yields and low, we could see the figure to which that 12.67% relates reduce at a UK level—at a time when Scotland may need to increase the support to its growers and producers that is satisfactory even at a conceptual level. In addition, the Secretary of State holds the final say and authority to determine the classification of support as blue, green or amber box support. I am interested in better understanding the principles of consent and safeguards for fairness that will uphold that authority justly.
It is fortuitous that the hon. Member for Devizes (Danny Kruger) is here. During the agricultural transition plan statement on 30 November, many Scottish MPs pressed the Secretary of State for assurances that state aid principles in the United Kingdom Internal Market Bill would not be used to prevent the Scottish Government from providing agricultural support in the way that they choose. No such assurances were provided, yet in answering a subsequent question during the same debate from the hon. Gentleman, who was concerned that Scottish farmers may be able to undercut Wiltshire farmers because of a difference in devolved Government support, the Secretary of State was quick to make an assurance and a commitment to the hon. Gentleman that that would not be possible—I must apologise to the hon. Gentleman for not giving him prior notice that I would mention him in this debate —so perhaps the Minister could address some of these points.
As regards direct payments to farmers, the comprehensive spending review made clear that Scotland will be short-changed, especially rural Scotland. Support for rural Scotland will be £117 million short of what was promised by 2025, despite the fact that the Government made a manifesto commitment to match EU support. The Secretary of State announced that, by 2028, support for farmers in England will move away from the direct payment scheme based on the amount of land farmed, with the initial budget of £1.8 billion dropping to half that by 2024. To be clear, we fully support the move away from rewarding land ownership to rewarding output, productivity and land stewardship. Nevertheless, that leaves several years in which farmers will face a shortfall in payments. That will not happen in Scotland, because the Scottish Government have committed independently to continuing payments at the same level as currently. The National Farmers Union president, Minette Batters, said:
“Expecting farmers to run viable, high-cost farm businesses, continue to produce food and increase their environmental delivery, while phasing out existing support and without a complete replacement scheme for almost three years is high risk and a very big ask.”
The wisdom of pursuing such changes at a time of such broad upheaval is a challenge for the industry and perhaps deeply questionable.
It is also necessary that the UK Government clarify that there will be no undermining of the Scottish Government’s ability to set and administer support for agriculture in whatever way they see fit. The statutory instrument makes changes concerning the new system of direct payments for farmers in England, including setting a ceiling on payments in England. Can the Minister assure me that that will result solely in positive consequences for Scotland through Barnett consequentials?
It is lovely to have you in the Chair, Madam Deputy Speaker. A large number of questions have been asked. I will endeavour to answer them as best I can, but if I miss any, hon. Members should not hesitate to catch up with me afterwards.
The hon. Member for Cambridge (Daniel Zeichner) mentioned avian flu and his constructive approach, which we have discussed outside the Chamber. As is clear, poultry will not initially be part of this new scheme, but I have asked and have been assured that the scheme and the new framework is sufficiently flexible possibly to include poultry one day if that were considered sensible. The service will be delivered by Livestock Information Ltd, which will be a public company jointly owned by DEFRA and the Agriculture and Horticulture Development Board, and its constitution will ensure that both Government and the farming industry are involved in key decisions.
The projected monetised net benefit over a 10-year appraisal period is, conservatively, £30 million. We might well hope for better. The new system is not yet live, but the existing sheep service is due to transition to the new arrangements in the spring of 2021. Cattle and pig services—pigs, in particular, are dealt with quite differently at the moment—are due to transition to the new service in 2022. The new service does not replace the individual traceability services run by the devolved Administrations. All data provided by the DAs and DEFRA to enable the AHDB to run the UK view will be handled in accordance with the data-sharing agreement that will be agreed by all Administrations. The AHDB will not be able to use data outside the terms of that agreement.
An important part of the traceability aspect of the programme is the work with the DAs to share data to ensure seamless traceability throughout the UK, which is important. DEFRA and the DAs will enter into an agreement to control and share data jointly—that is the UK view—and each territory’s traceability systems will be able to communicate with each other to support day-to-day business operations. That is clearly important for all parts of the UK.
Let me turn to the Direct Payments to Farmers (Legislative Continuity) Act 2020, which was focused, as we said at the time, on maintaining the status quo as the UK left the EU. It was not there to extend the scope of the regulations beyond 2020. The Agriculture Act is, in my view, the proper place for our post-2020 changes, which is why we have introduced this SI. The changes in the SI are not specific to 2021, so we will not need to bring forward SIs to deal with direct payments in future years of the transition.
I reassure the hon. Member for Angus (Dave Doogan) that Scotland has not been short-changed. Our manifesto committed to guaranteeing the current annual budget to farmers in every year of this Parliament, and we are delivering on that manifesto. The Secretary of State mentioned this several times when asked about it when he gave his statement to the House on the agricultural transition plan—was that only on Monday, Madam Deputy Speaker? I repeat what he said: EU funding currently still flows to the various nations and we will top that up to the agreed level, which is £595 million for Scotland annually. We used 2019 exchange rates, which were very favourable—a good thing—and that means that our commitment is greater than that which was spent under the common agricultural policy.
The Rural Payments Agency was mentioned, and I thank it enormously for its work to pay farmers over the past two or three days. The figures this year have been superb. A number of Members of this House who are in receipt of direct payments have been at pains to come up to me to thank me for their speedy payment this year, and I know that many farmers are impressed with the current service. I have a great deal of confidence in the RPA and I am very grateful to it for its hard work in these difficult times.
Although they were broadly out of the scope of this debate, I wish to take a few moments to respond to some of the substantive points made by the hon. Member for Cambridge about “The Path to Sustainable Farming”, which we published on Monday. This document is an important publication that sets out detail on the early years of the agricultural transition, including, of course, the reductions that we are going to make to direct payments. In 2021, we intend to apply a reduction of 5% to the first £30,000 that a farmer might receive. Higher reductions will be applied to amounts in higher payment bands. We intend to legislate for those reductions in an affirmative statutory instrument early next year. We will then reduce direct payments by around 15% in both 2022 and 2023.
The money each year will still go to farmers. We will ensure that they can access new schemes as receipts from direct payments fall. In 2022, we will start to roll out some core elements of the new schemes, and our sustainable farming incentive will support new approaches to farm husbandry. We are also offering a range of interventions to help farmers to get their businesses ready for transition, including a slurry scheme and a research and development scheme, and from 2022 we plan to offer an exit-support scheme.
We have confirmed our intention to make further simplifications to direct payments schemes from the 2021 scheme year. These simplifications will be made through a separate statutory instrument, which we intend to lay shortly. Changes will include removing the so-called “greening rules”—if ever anything were misnamed. it is those; they are in fact complicated red tape and have delivered very little for the environment—removing the requirement for farmers to use all direct payment entitlements at least once every two years; improving the arrangements for farmers whose land crosses borders between our nations; and extending the application period for farmers to make force majeure applications.
2021 is going to be a crucial year for agriculture and we will continue to work with farmers to get the start of the transition right, including consulting on delinking of direct payments and exit schemes and starting the national pilot for the new schemes. We are keen to continue working with Members on both sides of the House as we progress our reforms.
Turning to the comments made by my hon. Friend the Member for Devizes (Danny Kruger), let me say that of course his mummy knows best. I learnt to cook at her school, so I have always been a big fan of his mummy. I went on a catering course there. It was a very long time ago, I am ashamed to say, but I use what I was taught almost every day of my life and I think of her often. As he mentions my dad, I also ought to mention that it is his 78th birthday today—so he is only slightly older than the average basic payment scheme recipient. It is right that in a debate about farming he is congratulated on his birthday. My hon. Friend made a thoughtful speech, and his local farmers should be grateful for not only his mother’s support, but his. I welcomed his input into the Agriculture Bill Committee. He is right to mention the more philosophical aspects. It is right that we discuss those as we make the most important changes in British farming for 50 years. I reassure him that I very much feel it is my job to stand up for British farming, and I believe that this Government, who have committed to total spend on agriculture for each year of this Parliament that is generous and right, will do that.
A few other points were made on the WTO statutory instrument. The powers given to the Secretary of State by part 6 could not allow the Government to deviate from the standards on animal welfare or animal food labelling. We discussed that in Committee at length. The issues are not within the scope of the agreement on agriculture, so the Agriculture Act simply could not apply in that way. The instrument is reserved to the UK Government because the functions within it simply cannot be exercised by the devolved Administrations—they do not have the legislative competence to act in these matters for other parts of the UK. However, I would like to say, as I have said before, that England, Scotland, Wales and Northern Ireland officials have worked closely throughout the process of drafting these regulations and the final version takes into account the views of all four Administrations.
I am sorry that I have taken rather longer than anticipated, Madam Deputy Speaker, but a number of important questions were raised. I hope I have been able to answer them. What I hope will be clear to Members is how important these instruments are in implementing the intentions of the Agriculture Act. They provide continuity and certainty for stakeholders and beneficiaries in continuing direct payments beyond 2020. They enable us to fulfil our international obligations on agriculture and they provide the basis for the beginning of the agricultural transition. I urge the House to accept them.
Question put and agreed to.
That the draft Agriculture and Horticulture Development Board (Amendment) Order 2020, which was laid before this House on 12 November, be approved.
That the draft Direct Payments to Farmers (England) (Amendment) Regulations 2020, which were laid before this House on 12 November, be approved.—(Victoria Prentis.)
That the draft World Trade Organisation Agreement on Agriculture (Domestic Support) Regulations 2020, which were laid before this House on 12 November, be approved.—(Victoria Prentis.)