The Committee consisted of the following Members:
Chairs: † Sir Roger Gale, Phil Wilson
Antoniazzi, Tonia (Gower) (Lab)
† Brock, Deidre (Edinburgh North and Leith) (SNP)
Chapman, Jenny (Darlington) (Lab)
† Clark, Colin (Gordon) (Con)
† Davies, Chris (Brecon and Radnorshire) (Con)
† Debbonaire, Thangam (Bristol West) (Lab)
† Drew, Dr David (Stroud) (Lab/Co-op)
† Dunne, Mr Philip (Ludlow) (Con)
† Eustice, George (Minister for Agriculture, Fisheries and Food)
Goodwill, Mr Robert (Scarborough and Whitby) (Con)
† Harrison, Trudy (Copeland) (Con)
Hoare, Simon (North Dorset) (Con)
† Huddleston, Nigel (Mid Worcestershire) (Con)
† Lake, Ben (Ceredigion) (PC)
† McCarthy, Kerry (Bristol East) (Lab)
† Martin, Sandy (Ipswich) (Lab)
† Stewart, Iain (Milton Keynes South) (Con)
† Tracey, Craig (North Warwickshire) (Con)
† Whitfield, Martin (East Lothian) (Lab)
Kenneth Fox, Anwen Rees, Committee Clerks
† attended the Committee
Professor Erik Millstone, Professor of Science Policy, University of Sussex
David Baldock, Senior Research Fellow, Institute for European Environmental Policy
Vicki Hird, Farm Campaign Coordinator, Sustain
Professor Terry Marsden, Professor of Environmental Policy and Planning, Director of PLACE,
Diana Holland, Assistant General Secretary, Transport—Equalities, Food and Agriculture, UNITE
Ed Hamer, Policy Officer, Landworkers’ Alliance
Jonnie Hall, Director of Policy, NFU Scotland
Ivor Ferguson, President, Ulster Farmers’ Union
Wesley Aston, CEO, Ulster Farmers’ Union
George Burgess, Deputy Director, Trade Policy, Food and Drink, Scottish Government
Alan Clarke, Chief Executive, Quality Meat Scotland
Public Bill Committee
Thursday 25 October 2018
[Sir Roger Gale in the Chair]
Examination of Witnesses
Professor Terry Marsden, Vicki Hird, David Baldock and Professor Erik Millstone gave evidence.
Good afternoon, ladies and gentlemen. For the benefit of the Official Report, would you be kind enough to identify yourselves, please?
Professor Marsden: I am Professor Terry Marsden from Cardiff University.
Vicki Hird: I am Vicki Hird, from Sustain: the alliance for better food and farming.
David Baldock: I am David Baldock, from the Institute for European Environmental Policy.
Professor Millstone: Good afternoon. My name is Erik Millstone, and I am based at the Science Policy Research Unit at the University of Sussex.
We are very grateful to you for joining us.
Vicki Hird: We very much welcome that move—we have been calling for it for a long time. We would make sure that it enables payments that can deliver a truly sustainable farming and food system, so that it delivers good, healthy and affordable food to people as near as possible to where they are. We would look for a broadening of the payments to make sure that people can actually afford food locally in local markets. We think that the outcome has to be measurable and the payments have to be accessible.
We have talked about having some sort of way in which governance can be defined at local or even regional level, so that you are both covering landscape or catchment-scale outcomes where possible, and making sure that you are truly covering the environmental outcomes that we need to see, including on climate change. That means covering not just edge-of-field features that might be very visible, but also making sure to cover in-field farming systems. We would like to see an outcome that supports agro-ecological systems, such as organic and whole-farm systems that truly look in the field to tackle some of the worst pollution and environmental problems.
Professor Millstone, you are nodding. Would you like to come in on that?
Professor Millstone: I think that the move away from area payments is entirely sound, but the current interpretation of the notion of a public good seems to me to be far too narrow. It certainly does include those things currently on the agenda of the Department for Environment, Food and Rural Affairs, but I think it ought to include, in particular, stability of supplies and prices. While there have been—and there remain—many problems with the common agricultural policy, it has at any rate ensured relative stability of supplies and prices. EU consumers have been paying a premium above world market prices, but they have been getting stability. World market prices are typically far more volatile than those in the European Union, and I think that there is a need for policy measures to ensure supply and price stability, as well as other things, including improved safety, improved nutrition and, when it comes to sustainability, greater clarity on what is to be sustained.
Professor Marsden: There is a real opportunity to set this in stone—it is almost a bipartisan, non-political issue—and build real consensus around integrated food, agriculture and environmental policy in the rural domain. The short bit of evidence I submitted suggests an amendment at the top of the Bill that would interlock what is already there, which is fine, with questions about food security, self-sufficiency and sustainable production. In 1947, we had principles of efficiency and stability, which are just as significant today, but they have changed their expression. Some key principles like that need to be embedded in the vision of the Bill from the start.
David Baldock: I had the pleasure of producing, with colleagues, a study for the Directorate-General for Agriculture and Rural Development—DG AGRI—in the Commission in 2010 on what public goods in agriculture were. It took two years, it was a highly political operation, and we had agricultural economists all over Europe working on it. It is not easy. Intrepid Members might want to look at it.
One of the things we learned was that we must have clear objectives and be clear about what public goods are. They are, by and large, above the regulatory baseline. It is not just about trees and hedges; it is to do with the whole resource base for agriculture and land management. We must be clear about what payments mean. They provide farmers with opportunity costs, as well as other costs. Farmers often perceive public goods as a very unprofitable sideline. Actually, they are much more to do with the holistic management of the farm and the resources beneath it. Maintaining your resources in the long term is important for public good provision.
If you want farmers to take this seriously, they need to know that there is money behind it. Perhaps we can come back to that. They need to know that this is a long-term policy direction, not just a short-term measure. Otherwise, it is difficult for them to have confidence in it.
You need some means of measuring the outcome. Clearly, that involves having a monitoring process and some confidence about the indicators you are talking about. At the end of the day, public goods need to be visible and understandable to people. They are just shorthand for policy makers; we need to make the benefits clear to the whole world.
Professor Millstone: Part 4 strikes me as essentially being about therapeutic responses to crises that have already emerged, whereas I think it makes much more sense to have a more prophylactic, preventive approach, and to take measures in advance of crises to ensure stability. Although the area payments are decoupled, they none the less reduce total costs for producers, so they contribute to the maintenance of farm incomes and give incentives to remain actively producing food.
There have been mechanisms that have operated to stabilise prices in UK agricultural markets, which did not have the adverse effects characteristic of the common agricultural policy—the creation of large surpluses. The deficit payment system, which applied in the UK before we joined the European Economic Community, gave farmers a minimum price for commodities, but only for products that they produced and found a buyer for, so it stabilised prices and farm incomes but did not generate surpluses.
Vicki Hird: We want clause 1 to ensure that farms can continue. One of the ways it should do that is to ensure that the farming system is resilient and robust against the shocks that might hit it. That would include ensuring that the natural base is healthy—the soil, the water and the animals, as system-based resilience factors. It also should ensure that they are diversified if possible, ensuring that they are fulfilling the potential to have import substitution in areas such as horticulture.
We are keen to have a public health purpose in that section, which I do not think is strong enough yet. We are calling for a public health clause because we see a great benefit in boosting the sectors that are good for public health and changing the sectors that are not. That will mean diversifying and making the farming system more able to withstand shocks, because farmers will not be putting all their eggs—to use the wrong phrase—in one basket.
Professor Millstone: It is not just about stabilising farm incomes, but about ensuring adequate supplies for consumers. Futures markets, insurance and so on can create what is conceived of as virtual stocks, but you cannot eat virtual stocks—you can only eat real food. Therefore, you have to have mechanisms to ensure that there is an adequate supply of real food available, and not just financial instruments.
Vicki Hird: We have suggested two additions to clause 1 to deliver a truly sustainable farming Act, which is what we want. We want to bring public health and agro-ecological whole farm systems, such as organic, to the fore.
One of the fundamental things that we think the Committee and MPs need to drive—I feel slightly emotional being here because you have such an incredible opportunity and a responsibility in your hands—is to make the Bill far more robust in terms of duties. One of its weaknesses is enabling; we all said it would be an enabling Bill and the Government do not want their hands tied. As a result, we are extremely concerned that after a few years when there are pressures on the Treasury, there will not be the money to do the kinds of things that we have identified externally as absolutely essential but that the Government have not.
These are things that we know need to happen: we know we need to tackle climate change, soil erosion, animal health and welfare, antibiotic use and obesity. They are all big crises that we need to deliver on, but there is no obligation in the Bill to tackle those things. Ministers want to, but it could all fall apart. It would be adding duties and the responsibility to do those things and the ability to draw down a budget against assessment of needs from all those things, so that the Bill delivers the truly sustainable, healthy, nature-friendly farming that we know we can deliver—a lot of farmers are doing it. The Bill could be truly great if it had those duties, rather than lots of enabling.
We would also like clause 25 on fair dealing to be strengthened. We are really pleased to see it there but we have some specific amendments to it, which we can provide the Committee, on ensuring that it provides the confidentiality for people who need to complain about bad treatment and that it covers all sectors. Again, the duty of the Secretary of State to deliver the new fair dealing measure is crucial, for the reasons that Mr Eustice described, to ensure that farmers can have confidence in the market.
Professor Marsden: To add another issue, on the question of how to improve the Bill, there is nothing in it about rural development, which is important. This is an opportunity to link multifunctional farming, which seems to be where we are heading, with rural development. I am suggesting not the development of a second pillar necessarily but, for example, for the recipients of financing and whatever funding there is not to be restricted to farmers alone. It could go to partnerships, place-based partnerships—some good pilots of which are going on in England and in Wales—and consortiums of landowners and stakeholders in rural areas to work together.
That is the other shift we need—in the mentality of funding for public goods. Rural development forms a gap in that. One might argue that that could be left to whatever comes out of the shared prosperity fund. I am, though, concerned about that, because it might lead to concentrated dollops of funding—to cities mainly—and we really need much more distributed, bottom-up and facilitative funding for things like a post-Brexit LEADER programme.
David Baldock: First, to follow up on that and to amplify what Vicki said about duties as well as powers, I noticed that the House of Lords Delegated Powers and Regulatory Reform Committee pointed out that 36 clauses in the Bill confer 26 powers on Ministers, but include hardly any duties. At the moment there is a duty on the Government to introduce and operate agri-environment schemes, but even that duty is going. We are actually moving backwards on duties.
Secondly, on the budget issue, I understand that the Treasury does not like to have its hands tied and so forth, but we are in a position here that there is no guarantee whatever of multi-annual funding for agriculture. Lots of sectors have special pleading here, but the fact is that farmers do not work on a CSR—corporate social responsibility—cycle; they are not investing on that timescale. Therefore, either in the Bill or through some parallel commitment, it is important—there is a lot of sectoral join-up here on the environment and farming sides—to have some kind of forward-looking structure. That is not just a five or 10-year agreement for an individual farmer, but some sense of where things are going for the industry and infrastructure, and how we are going to meet future Government objectives.
Thirdly—a point that has not come up yet—at the moment the Bill contains nothing about the regulatory baseline, the environmental baseline, for agriculture in future. I understand that that might come forward in separate legislation, such as the environment Bill, but it might not—that Bill might not happen. There is the possibility, which is slightly more than theoretical, that farmers take up the de-linking option, the payment option, under the scheme, therefore finding themselves outside cross-compliance and outside good agricultural environment condition, which means that the baseline in those circumstances—without having a position in law—will be weakened. In fact, we could go back from where we are now. Good agricultural environment condition is a very important part of cross-compliance. It was our major means of protecting soil, so it is the only means of protecting soil through the public sector at the moment. I want to emphasise—although we all know this—that it is a key area that should not be forgotten.
Professor Millstone, do you want add anything to that?
Professor Millstone: I agree with my colleagues.
Vicki Hird: That is a good point. My experience over the past few months, discussing this, is of an unnecessarily divided and polarised debate. Clause 1(1), done well and given the resources and infrastructure to deliver—it is absolutely essential to make sure we have adequate resources for training and advice for farmers that links to their business planning—could deliver a farm support scheme that does not separate out the two and that genuinely supports farmers for being farmers and for producing food or other products of the land or for doing agroforestry or forestry, and for doing that in a way that is sustainable. That really is the prize of the Bill, and it should be. It should be built into the new environmental land management scheme.
I am very keen to make sure that that scheme provides the tools for all farmers, not just those who are already doing these things and who are very clever at filling in forms. It must be available to small farmers as well as large farmers, it must be accessible, and it must facilitate farmers to work in cross-farm, landscape-scale, catchment-scale farming schemes, but it must actually be about farming.
The false dichotomy has probably been set up by the fact that there are two subsections where you could have merged the two. From our perspective, the alternative view is to make clause 1(2), which is about productivity, very much connected with clause 1(1), so that any payment for productivity does not undermine the outcomes from clause 1(1)—the public goods that you are also paying for. That would be clunky, but from our members’ perspective—and we have a broad membership—the feeling is that that could be an option.
The final point to mention is the de-linking payments. There is a real risk in terms of public acceptance of the de-linking payments if potentially very large sums of money are going to farmers for no outcome at all for the taxpayer. We can see the need for de-linking in some form, or for some tool to make the break between the old system and the new, but you could be getting something more out of that—I think you will probably hear about that a bit later—and be making sure that it actually delivers on new entrants or diversification or sustainable investment, so farmers can invest in machinery such as small robots, or new, truly welfare-friendly housing, and those kinds of things, and that it is actually directed towards those kinds of outcomes.
The dichotomy is false, and we should not be thinking of it like that, but I can see why it has happened.
Professor Marsden: One suggestion in my amendment was that, right at the start, you have interlinked and interlocking objectives: promoting farming and food systems for ecologically restoring and protecting the environment, delivering resilient forms of food production and supply, which enhances food security, and improving quality food access, consumer choice and public health benefits. If you put those three things together, rather than in separate subsections, what that conveys is that any financing would have to pass those integrated tests. On the ground, that would effectively mean that it would be re-linking production in many respects. No public financing would be given unless sustainable production was leading to environmental gain or environmental restoration. It is not either/or; it is both together. A lot of research shows that we have spent 20 or 30 years developing very complicated environmental initiatives and processes, but they have been separated from agricultural practice. This is the opportunity to say, “No, we want agricultural practice to be central to delivering on environmental gains.” That is a message that needs to be put right at the start of the Bill.
Professor Marsden: Clearly, that is an institutional question. There are a lot of institutional questions that this implies that may not eventually need to go into the Bill, but it does obviously have institutional implications.
In my view, all of this is leading to more place-based systems of integrated management of land and the biosphere. One way or another, with bottom-up partnerships or with some level of regional sensitivity, we have to manage regional diversity in the land base of the UK. That means the landholders and stakeholders being fostered to come together in different ways, not necessarily through a top-down, dirigiste infrastructure, but to develop whole tracts of land—not just a farm, but whole regions—such that we have catchments and regions that are much more sustainable and that are delivering the big goals on climate change as well as individual farm landscape. There is a big institutional challenge here to get local diversity and regional diversity at the heart of these sorts of policies.
David Baldock: As you said, the Bill does not spell out how the policy would work. We are all wondering how that might operate, and there have been some indications in a separate paper. This is clearly a source of uncertainty at the moment; you have powers with less specificity about how they are used. In principle, the public goods frame provides a good framework for delivering the right outcomes in the uplands or elsewhere, but it would be helpful to spell out how that will be met and how the local dynamics, which Terry talked about, can be matched with national objectives as well. If we look at the implications of the 1.5 degree target for the UK and for the world, we find that agriculture will have to make pretty significant changes over the next 20 years to the way soil carbon is managed and to the way energy is used in agriculture. That means that you need some strategic vision of where agriculture and land management are going, and you need to spell that out in a series of objectives a bit more clearly so that we do not have a slightly random selection of public goods that are produced according to local whims. I very much support the bottom-up approach, but that must be balanced by some quite clear strategic goals—we know we have them, but they have not been incorporated in a way we can see yet.
Vicki Hird: To add something on your question on institutions, David, we do not currently have the capacity to do that—the capacity is quite atomised. There is a lot of really good stuff on agri-environment, nature and conservation that is not doing the job adequately, because it has not got the capacity. We need to build that up, and it would have to fit with the vision, as David said.
Professor Marsden: In a sense, it is fair for them to make that assumption at the moment. The message to get across to farmers’ interests is that it needs to be in there, but it needs to be there in a different way. We need to encourage a transition in the UK towards much more sustainable types of farming and towards the production of food of a healthier sort, which creates health benefits for consumers. It is not business as usual here—the point is that it cannot be business as usual for agriculture post Brexit—but neither is it simply an environmental agenda. That is why I say we need agriculture plus environment at the centre of this.
I am going by your biog.
Professor Marsden: Yes, but we have worked a lot on looking at ways in which agriculture can deliver. It is 98% of land use here, so we have to encourage all farmers to think about public benefits in health and environmental terms. I am not saying that they do not, but why do we not empower them more to do so? Why do we not create the post-war agricultural committees in local areas again to reconsider what a good farmer is. In the 1940s and 1950s, we created the idea that a good farmer takes out hedges and practises economies of scale. We now need a new concept of what good farming and small farming is. There are some great examples of that in the UK, such as the Pasture-Fed Livestock Association. There are all sorts of things going on, so we can feed on excellence. We need demonstration farms.
No, take over.
David Baldock: I fully confess to having “environment” in my organisation’s title, and to being interested in the environment. I have spent quite a lot of the last 30 years working for DG AGRI in Brussels, so I have some familiarity with the farming community. I can understand why farmers worry about the lack of warm words about agriculture and food production in the Bill. It is a pretty dry Bill, and it does not give that signal.
When it comes to the actual substance, whether it is here or in Europe as a whole, the future of agriculture policy is about agriculture, environment, sustainability and public goods. That is as true in any other part of Europe as it is in the UK. That is where the direction of travel is going, and there are good reasons for that. Farmers know that if they are to keep receiving public money, it will be on the basis that they are delivering public goods. There has to be a deal between the public expectation—that that is what the money is for—and the absolute value of farming and food production per se. I do not think that the environmental people, who may be over-represented right now, should apologise for being important voices—loud voices, anyway—in the debate, because it has become so central to agricultural policy everywhere.
Vicki Hird: I am a pest management expert by background. I studied how to tackle pests on farms, but obviously my background is about looking at all aspects of farming—the integration of health, farming, environmental and social goals. That is what I have always worked on, and I see the Bill as an opportunity to do that. That is why I was saying that I was quite emotional, because I think the Bill could do that. It is a shame when it is put in a polarised way. A lot of statements from farming groups such as the Pasture-Fed Livestock Association, the Nature Friendly Farming Network and Linking Environment and Farming were very positive about the direction of travel represented in the Bill.
It would be great if you could go and visit these things. I went to a three-day festival called Groundswell in Hertfordshire, and there were a load of farmers there doing things very differently. They are not just tweaking the system; they are genuinely looking at how they can reduce soil erosion and enhance biodiversity on farms through the farm system. That is the kind of system we need to be supporting. We should understand that it is the future, because it is building in carbon into the soil and ensuring biodiversity benefits for the farm.
That is the kind of thing that this farm Bill—it is a farm Bill—should do. As Tom Lancaster said on Tuesday, most of the rest of the Bill relates to farming. One of the crucial elements of it is the fair dealing part. I have said that it needs to be strengthened, but it is great that it is there. The new statutory contracts are absolutely vital to ensure farmers get a fair deal, and the transparency is vital to ensure they understand how they can get a fair deal in the marketplace.
The big gap, which I forgot to mention when you asked for gaps, Mr Drew, is the trade deals and agrifood imports element. Most stakeholders are in complete agreement that we need to be able to control the import of agrifood produce that is coming in at lower standards. I am sure you have covered that elsewhere. We have got a clause, which we are all promoting, that is saying that. I do not know whether that is out of order or not. That is an essential gap, and it makes a difference to farmers. It is another farming-relevant part of the Bill that we would like to see. Sorry, I went slightly off-topic there.
“The Secretary of State may give financial assistance”,
so we do not know whether he will decide to give financial assistance to any or all of these things, but we do know that it does not say that he may give any financial assistance to the production of healthy food in a sustainable way. Is that something that you would like to see in the Bill?
Professor Marsden: That is why I tabled my amendment for a longer first clause that integrates those things so that it interlocks them. The point is not that it is the environment over and above agriculture, farming or food, but all three. This Agriculture Bill should be projecting the integration of those three priorities because they are all priorities and they are all interlinked—you cannot really have one without the other. That is the critical point, from which the rest of the Bill could be much more specified in duties and so on. It is the principal thing that needs to be right at the start. I think that it is important that the Bill gives the vision.
This is a 1947 moment; I was not around then—not many of us were— but we have all read about what happened. This is a clean sheet in terms of taking back control and delivering a much more self-sufficient, sustainable food system for the UK as a whole. So take the opportunity—that is my advice.
Professor Millstone: I certainly agree that the Bill addresses certain aspects of farming, but clearly the National Farmers Union thinks that there are rather important aspects that are not mentioned. As my colleague Professor Marsden says, it is almost completely in abstraction from food, which there is nothing about.
May I please briefly go back to David Drew’s question about institutions and pick up on Vicki’s point about education and training and Terry’s about the need for transformation? Previously, we had the Agricultural Development and Advisory Service, which performed two important functions. First, it disseminated information and knowledge about innovations and new products and processes to farmers. But it also performed a second function, which was gathering information from farmers about the problems to which they would like solutions that the research and development on innovations could provide. When ADAS was abolished, it was essentially replaced by a commercial marketing and sales system, and that second function disappeared in the UK. It remains present in Denmark, the Netherlands, Austria and many other countries, which accounts for why their agriculture is both more productive and more sustainable than UK agriculture. There is scope for important institutional development in that regard.
Vicki Hird: We do not have a position on that—it would be hard for me to say whether we would advocate for grouse moors. I understand that clauses on active farmers, food producers and those gaining financial reward from production of goods from the land are being mooted. I think that would restrict the Bill somewhat and make it very inflexible in supporting systems that can do both in a very extensive way. I am not necessarily talking about grouse moors here; I suppose I am thinking more about extensive livestock in a system that has other huge benefits in carbon capture or tourism. If land is producing not a huge amount of food but a bit of food, and the Bill restricts that, that would not necessarily be a good thing.
The important distinction is that we would not be advocating payments purely for being a farmer on an acre basis. In answer to Sandy’s question as well as yours, we do not think that that would be a good outcome for farmers, the taxpayer or the environment. What is in the Bill is a skeleton, which needs to be built on, and we certainly think that there needs to be an extra clause relating to agri-ecological systems such as organic, to make sure that we can cover them and very small producers. You mentioned small producers. It is really important to get rid of the cut-off, because there are some very small, very productive producers who should benefit from any possible public good payment. I will leave it there.
Professor Marsden: We clearly have a big issue here in what we are saying about the uplands. They are never going to be agriculturally productive in this sense, and they will need support for landscape purposes, amenity and so on. This is a very important element and one of the reasons why I stress this whole issue of the rural economy.
The economy in the uplands is governed not by agriculture but by all sorts of other activities, not least the public sector, which is very significant in rural areas. I think we have to look at upland agricultural systems in a completely new light. We have to look at ways in which we can support them in delivering for the rural economy, as well as for the environment.
Over the last few years we have done some research in Wales which has shown that, okay, there may be some scare stories about cuts in subsidies for hill farmers, but if you look at the amount of household income, not farm business income, many hill farmers are generating a lot of income from non-agricultural activities. They are reliant on non-agricultural income for their household income. There is a lot of cost transfer from different members of the household into upland farm households. That is something we should be encouraging. We should encourage more multifunctional farms in upland areas, which can attract visitors and fulfil more amenity purposes. Again, the Bill provides a real opportunity, not a threat, to our extensive upland areas across the UK.
David Baldock: I think the public goods record of some grouse moors is highly controversial; some of the management practices of grouse moors would not score very high in the public goods test. It is more likely, as Terry has been saying, that money will go into mixtures of agriculture and forestry—agri-forestry—and different patterns in the uplands, producing more return for farmers and land managers, rather than be switched out of the land environment. I do not think that is likely to happen on a significant scale, no.
Vicki Hird: If it was only for the active farmer and food production; if that was the only basis on which you could get any support at all.
Professor Marsden: A key word here is “productivity”, isn’t it? That needs to be in the Bill, but we need a broader definition of what we mean by productivity. We can see—we have evidence—that we can get productivity out of small agri-ecological farms. You can create demand for labour out of those activities. You can create much more work. So we need to redefine the notion of productivity in a much broader way to cope with this variation across the agricultural landscape in the UK.
Vicki Hird: Yes, because they might be producing good carbon capture. There are other ways of measuring.
David Baldock: The main difficulty with the current CAP regime is its bias towards control of very often the wrong thing—micromanagement of farm boundaries and of the way data is gathered and reported. Instead of getting the big picture of what is happening on a farm and how it is complying with its broad obligations, we have a highly burdensome system that, at the end of the day, does not really add a lot of value to the public purse or public transparency. It would be very welcome if the Government were able to shift that whole delivery system so that it focused on real outcomes and was more farmer friendly.
I was involved in the beginning of the cross-compliance discussion in Brussels. At that time, the whole idea was to take out the very worst farmers—to put under scrutiny people who committed large-scale abuse of livestock and so forth. It has become a micromanagement tool for worrying about individual farmers, with ear tags for livestock and a whole process around that. It has completely disappeared into a bureaucratic process. There is a great opportunity here to change that culture and delivery system.
There is a lot of nodding going on, but Hansard cannot report nods, so I have to place them on the record for you. I am afraid we are out of time. Professor Millstone, David Baldock, Vicki Hird and Professor Marsden, thank you very much indeed for joining us. We are most grateful to you.
Examination of Witnesses
Diana Holland and Ed Hamer gave evidence.
We will now take evidence from Unite and the Landworkers’ Alliance. We have until 3.15 pm, so slightly under half an hour, I am afraid. Will you introduce yourselves for the record, please?
Diana Holland: I am Diana Holland, assistant general secretary at Unite with responsibility for, among other things, food, drink and agriculture.
Ed Hamer: I am Ed Hamer. I am a farmer and policy officer for the Landworkers’ Alliance.
Diana Holland: We see it as a fantastic opportunity, but at the moment it is a big missed opportunity. We have been calling for a strategy for agriculture that looks at the whole food supply chain for a long time. What is missing from the Bill is any recognition of the agriculture workforce. A whole lot of things have happened to agricultural workers in recent times. There are ways in which they are protected internationally, because they are recognised as a particularly vulnerable workforce. If you look at the most recent report by the director of labour market enforcement, he includes agriculture among high-risk sectors. While a number of bodies are dealing with the most extreme ends, it is really important that the workforce are included in a strategy for agriculture going forward. We are very supportive of the need to look for a positive way forward, but we have proposals and suggestions for how that could include the workforce.
Ed Hamer: I echo those comments. Our members certainly find the proposal on the table progressive. We have a couple of concerns. We would like the Bill to be more supportive of the actual production of food—particularly healthy, affordable food for local and regional markets. We also have genuine concerns, which were echoed by some MPs on Second Reading, that nature-friendly farming could displace active farmers who produce high-quality food. Although we understand that food itself cannot be listed as a public good, we strongly believe that access to healthy and affordable locally produced food can and should be recognised as a public good in the Bill.
Diana Holland: We think a clause should be added that specifically recognises the need to protect standards for agricultural workers. Sustain is supporting an amendment, which we would be happy to be attached to, on the kind of protections that the former Agricultural Wages Board provided. We recognise that this is a framework Bill and there are different ways of expressing things, but in the absence of anything at all we would want something very specific to be added that would recognise that matter. This is meant to be dealing with Brexit, and the treaty of Rome specifically says in article 39 that there should be a fair standard of living for workers in agriculture.
We have seen with the abolition of the Agricultural Wages Board in England a deterioration in pay. You would expect us to say that; we are trade union representatives. We have collected evidence from our membership that in the year after the abolition, 56% of those surveyed had not had a pay rise. Of those who had had a pay rise, 82% had had it imposed, and of those who had not had a pay rise, one third had gone to their employer to ask for a pay rise and been refused. A series of people formerly covered by the Agricultural Wages Board in England have had their pay completely frozen until the national minimum wage catches up with it, whereas in Wales, Scotland and Northern Ireland that is not the case.
In fact, just this month, the estate agent and land management advisers Strutt & Parker said in Farmers Weekly:
“It is difficult to justify suggesting that English employers should pay their employees less than they would receive if working in Wales—particularly given the shortages in skilled labour the sector is facing.”
They have recommended pay rises of 2.5% to 3.5% to deal with what is happening in England. That is a very specific example, but the unintended consequence—or perhaps, given the estimates made at the time, a recognised consequence—of the abolition of the Agricultural Wages Board is that conditions on not just pay but sickness, holidays and all the other things that were protected are deteriorating. We are extremely concerned, and there is an opportunity in this Bill to look at what is happening. If we are going to deliver decent agricultural production for the future, we need workers who are recognised and remunerated effectively. Without that, we are in serious danger of not being able to deliver in the way we should.
Ed Hamer: We see a clear opportunity for improvement in clause 1(1), and we have tabled an amendment on agri-ecology. At the moment, the Bill replaces direct payments with environmental land management payments, which in their current form do not guarantee food production in addition to the delivery of public goods.
By contrast, the agri-ecology amendment would focus on holistic farming systems as opposed to set-aside or marginal conservation measures. To give you an example, the payment identified under ELM would pay farmers for income forgone on the field boundaries, whereas in the middle of the field they could continue to spray pesticides or cease farming altogether. With the agri-ecology amendment, the integration of whole farm agriculture and agri-ecological principles would incentivise farmers to produce food on the field in addition to introducing ecological focus areas or diversity around field edges. Under the agri-ecological amendment, it is the farming system itself that delivers the public good.
Agri-ecology and other whole-system disciplines such as agroforestry would be covered and empowered under clause 1. We are considering that, but I would be interested in your views on the key barriers to your members’ setting up and what type of support would be most useful.
Ed Hamer: The majority of our members are farming on smaller acreages, typically anywhere between 1 and 20 hectares. At the moment our biggest challenge is access to markets. Over the last 20 years or so there has been significant under-investment in the infrastructure needed to support small-scale enterprises such as ours; I am thinking of local abattoirs, local creameries, food processing infrastructure, seed networks and things like that. What would really help us is targeted support for local food funding, to recognise the networks and infrastructure required to get the food from the farm to the market.
To give you my example, I farm a community-supported agriculture scheme in Devon, which we started in 2010 without any money. We got a grant from the Big Lottery Fund and were able to invest in polytunnels and the infrastructure required to get our operation up and running, including the machinery that we needed and a delivery vehicle. With that small grant, we managed to build a business over a relatively short amount of time. We are now independent of grant funding.
Our experience teaches us that our members have had similar challenges, but not all have been fortunate enough to secure an initial capital grant. For local food grant funding, seed funding for SME agricultural start-ups would be a fantastic way of getting small enterprises up and running, to the point where they can be financially independent.
Ed Hamer: Access to holdings has been significantly undermined by the BPS, which has, to a certain extent, consolidated land ownership in the UK over the past 10 years. Many of our members struggle to access land because land prices have gone up by about £2,500—depending on the area of the country—since the introduction of the BPS.
We hope that the end of the BPS and area payments will have some knock-on effect on land prices. If not, we see opportunities within the de-linking, if we could make a condition of it that land should be made available to new entrants. Using the county farms estate would be a fantastic opportunity to provide opportunities as the first step on the farming ladder.
Ed Hamer: For many new-entrant farmers, it is quite intimidating to take out a mortgage to buy their own holding and to then try to pay that money back through farming itself. With the county farms estate, there is still the opportunity to rent a small area to start on, even if it does not come with accommodation and is just the land itself, and to then build up a business and a local market for products, to the point where a farmer can start to invest in their own land or find somewhere else to move on to.
As a stepping-stone measure, the county farms estate is a fantastic resource that has so far been under-utilised. It has been very positive to see DEFRA’s soundings on reclaiming that estate for use by new entrants.
Ed Hamer: We like to think not. Horticulture is quite a unique example. At the moment, in the UK horticulture receives less than 1% of public funding. Since 2005, horticultural production has declined significantly—veg by 26% and fruit by 35%. At the moment, we import 42% of the vegetables and 89% of the fruit that we consume in the UK.
Post-Brexit there will clearly be an opportunity for renewal within the horticulture sector. We would like to see UK consumers prioritise the high standards that we have here in the UK, and to see a new generation of young farmers access some of that current import market. At the moment, we spend £7.8 billion a year on importing horticultural produce that could otherwise be grown here in the UK. We would like to see an opportunity for new entrants to access that market and use that revenue to generate jobs and employment within the sector. We are certainly worried about the risk of importing fruit and veg from countries with lower environmental and social standards, which would undermine production in the UK.
Diana Holland: We see food standards and safe, healthy food as going hand in hand with decent treatment and professional, high-skilled jobs. All the evidence that we have is that recent food scandals have gone alongside severe labour abuses and exploitation, because workers are fearful of speaking out about what is going on. We very much believe that the Bill needs to cover the race to the bottom in all aspects and build in incentives to treat workers properly and ensure that decent standards are followed. That could be reflected in certain parts of the Bill.
Diana Holland: If that was true, paying workers less would mean the cost of food would have come down, and it has not. There are pressures; we have been part of various studies and commissions on access to safe, healthy food and the implications on wages. There are links that need to be made. However, we are trying to say that a minimum standard needs to be built in, below which no one should fall. Alongside that, there should be a possibility for all the stakeholders in the industry to come together in the way that used to be done with the Agricultural Wages Board—we recognise that there may be equivalent ways of doing the same thing, as has been done in Wales. All of us who are involved directly in this industry, including the workforce—not excluded and shut out, but part of it—could come together to say, “How should we conduct ourselves so that people are treated fairly, and what happens if the industry is protected?”
I completely recognise that there are issues in the supply chain. Those players all have a part to play, but we need them around the table to discuss that, rather than the current system where workers are extremely isolated in that process, in a way that they were not before. Before, their voices were part of a system, but now, in England specifically, they are not able to access that any more. That has weakened their position—their pay, sickness, holidays and so on. It has not created the improvements that it was claimed it would.
This is an opportunity. This was a very rushed abolition, as part of trying to get rid of red tape. The reality of it has not been a minimisation of red tape; it has just been a reducing of conditions, as we feared and said that it would be. If we really want people to choose to work in this industry and to feel respected in it, we need to do something about that. This is a fantastic opportunity to do just that.
Ed Hamer: Our members are largely self-employed—most of our members manage their own holdings. Consumers need to become more aware of the true cost of production, but the problem lies more in the supply chain: if you go to the supermarket now and spend £1 on produce, farmers receive anywhere between 8p and 20p. The rest goes to the middlemen and the supermarkets. Local food systems demonstrate that if you can reclaim a larger percentage of that food pound, you can generate much higher levels of income on a smaller area. One of our biggest challenges is accessing those local markets so we can reclaim the food pound. Then we can support decent livelihoods on small areas.
The briefing from the Landworkers Alliance was very useful, particularly the paragraph stating what France has done to move towards a more agro-ecological approach, but I want to ask about the economics. I think agro-ecology is sometimes perceived as being just about caring about the environment, and not about improving farming productivity. Could you say something about the fact that there may be fewer inputs? We heard some evidence—I cannot remember if it was in this Committee or in the EFRA Committee, which is also looking at the Bill—about how taking some of the land out of production and using it to increase biodiversity, through pollinators and that sort of thing, can increase food yields. Is that just nice to have or could it make farming more productive?
Ed Hamer: The agro-ecological principle is a whole-farm approach; it does not take fields one at a time in individual focus areas, but looks at the inputs to the farm as a whole, as you say. Anything you can do to reduce dependence on external inputs will have not only a beneficial environmental impact but a beneficial economic impact on the farming system. Examples from our membership demonstrate how mixed farms used cereals for livestock bedding and then manure to fertilise the cereals. They used waste from the horticultural enterprise to feed a pig or poultry enterprise alongside. So by being sensible with food waste, in particular, on the farm, you can recycle those inputs and then essentially cut your losses through that margin.
On food waste, it is also worth bearing in mind that small farms tend to be much more concerned about and aware of what food is being wasted. Again, going back to local marketing, consumers are much more willing to accept food of a slightly lesser cosmetic appearance when dealing with local markets, compared with what you can sell through to the supermarkets. So there are a number of economic and environmental justifications for the agro-ecological farming system. Those are just a few of them; I can come back to you with more afterwards.
Ed Hamer: Could you repeat the thrust of the question?
You referred to how we can essentially shorten supply chains, and your answer seemed to be focused on de-linking opportunities. I am keen to understand the opportunities for existing farms—particularly family farms—in upland and lowland areas.
Ed Hamer: My experience is from growing up on Dartmoor, where at the moment many of the farms are entirely dependent on the subsidy to survive. What they would like is to follow our model in terms of accessing those local markets, but the nearest abattoir is 25 to 30 miles away—there used to be one five to 10 miles away. If there was a nearer abattoir or a co-operatively managed meat hanging facility where they could store meat after it has been to the abattoir and then bring it back for processing within the local community, thereby cutting the distance the product has to travel, that would certainly help.
There are also things like local food market infrastructure. You used to have traditional farmers’ markets regularly within each market town. Now the infrastructure does not exist, but if spaces could be set up every Saturday for farmers to get out and market their wares to the local community, that would be a massive step in the right direction. So the infrastructure is quite important, but retail opportunities are also key for those farmers.
We also need to think about skills and training, because a lot of farmers—certainly my neighbours—traditionally do not think they are born marketers; they are happy to stick to the farming. However, they have got many skills, and increasingly consumers want to know the story of where their food comes from. Consumers increasingly want traceability and accountability in the food system. What we demonstrate through our system is that our consumers get to know us personally and support us for a whole season. By doing that, they invest in the farm and—not only that—they have a strong sense of accountability for where their food comes from. Moving forward, that provides a really robust business model.
Ed Hamer: Certainly. We have always said that what we propose is nothing new. It is not a step backwards but returning to the roots of agriculture, where most consumers used to know the farming community where their food came from. It is not a romantic notion. What we are selling is what consumers want: trust, accountability and traceability, and to know that they are supporting the local economy as well.
Any further observations? In that case, thank you very much indeed, Ms Holland and Mr Hamer, for taking the trouble to come here. It was good to see you.
Examination of Witnesses
Jonnie Hall, Ivor Ferguson, Wesley Aston, George Burgess and Alan Clarke gave evidence.
We are now joined by NFU Scotland, the Ulster Farmers Union, Quality Meat Scotland and the Scottish Government. We have until no later than 4.30 pm. Gentlemen, thank you for joining us. Would you identify yourselves for the sake of the record?
Jonnie Hall: My name is Jonnie Hall. I am director of policy with NFU Scotland.
Alan Clarke: My name is Alan Clarke. I am chief executive of Quality Meat Scotland.
George Burgess: I am George Burgess. I am the deputy director in the Scottish Government responsible for trade policy, food and drink.
Ivor Ferguson: I am Ivor Ferguson, president of the Ulster Farmers Union.
Wesley Aston: I am Wesley Aston, chief executive of the Ulster Farmers Union.
George Burgess: Indeed. As I am sure the Minister is aware, the Scottish Government published earlier this year their proposals, “Stability and Simplicity”, for consultation. As the title suggests, those propose a period of stability and simplicity, with no significant changes in agricultural support for an initial period, followed by a period during which some relatively minor changes may be made. Those changes would be a matter for the Scottish Parliament to deliberate on in due course.
George Burgess: The choice between changing and retaining things through the Bill is perhaps not quite the right way to categorise it. Like DEFRA, we will use the withdrawal Act powers to repatriate into domestic law the existing European powers. As far as we are concerned, we have not identified anything in the agriculture space that needs anything beyond that in the initial phase to make existing schemes work. In due course, for the simplicity phase of our proposals, further powers would be required, but at this stage that is seen as a matter for the Scottish Parliament. Obviously, this is a devolved area. The whole thrust of devolution is that it will normally be for the Scottish Parliament to legislate in devolved areas.
Does anybody else from Scotland wish to comment?
Jonnie Hall: We see an opportunity to have a schedule put in the Bill that covers the interests of Scotland in the longer term, beyond 2020. We see that as enabling Scottish Ministers, at some point in the future, to take clear decisions about how to develop and implement Scottish agricultural policy. Nevertheless, we also understand and appreciate some of the reservations the Scottish Government have about the process that that might lead us into.
From the Scottish farming perspective, the impasse between the Scottish Government and the UK Government over this is leading to a high degree of uncertainty and concern. At the moment, as Mr Burgess pointed out, the Scottish Government are very clear about what they want to do in the short term, but they have no clear plan or strategy for longer-term policy development. Although Wales, Northern Ireland and England have all set out their visions for the next five to seven years in that respect and consulted on those, that is lacking in the Scottish context at this moment in time.
I have to be careful now not to invite disagreement from within the panel.
Jonnie Hall: When the Bill was first published back in September—we knew this was going to come anyway—we were concerned that it was an enabling piece of legislation that could be a vehicle to allow Scottish Ministers to develop, implement and deliver a devolved agriculture policy for Scotland, but that the Scottish Government had not taken that opportunity. We understand that that opportunity remains. The offer is still on the table, if you like, for the Scottish Government to utilise this legislation.
The alternative would be that a Bill would go through the Scottish Parliament—a Scottish agriculture Bill—but that is, again, another unknown. It is a ticking clock, because as we all know, legislation of any sort takes time to go through any parliamentary process. As things stand, we have a degree of certainty for 2019-20, but thereafter, into 2020-21, we have no absolute certainty. Farming is a game that relies on a degree of confidence and certainty.
George Burgess: I go back to the answer that I gave earlier. I am not sure that I recognise Mr Hall’s characterisation of the ticking clock on this. Assuming that our work with DEFRA proceeds, the powers will pass to the Scottish Ministers to implement the existing package of support. There will be no issue of agricultural support not being able to be paid. I do not personally recognise the 2020-21 deadline that has been suggested.
That gives time for any necessary legislation to be developed and taken through the Scottish Parliament. As a devolved matter, we see it as principally for the Scottish Parliament to do that. I am sure that our Welsh and Northern Irish colleagues have very good reasons for taking up DEFRA’s offer of including schedules in the Bill, which necessarily largely bypasses the legislative processes in those countries.
Jonnie Hall: May I come back on that? The clear thing is that, in terms of continuity, the Scottish Government could continue to utilise the existing common agricultural policy mechanisms and all that goes with that, but the UK Government and the other devolved Administrations are setting out an opportunity to move away from the CAP and to put in place a new policy that is more befitting and more bespoke to the needs of British and Scottish agricultural interests, so we can move away from the blunt approach of area-based payments and move on to more focused, targeted payments that underpin productivity in the environment and so on. Our concern is that, yes, things would continue as they are today, but there would be no ability to move away from the CAP, and that is what we all look at as the opportunity here.
Wesley Aston: May I pass that across to my president, Mr Ferguson?
Ivor Ferguson: Certainly, we are quite happy with the approach that DAERA has taken. Of course, as the Ulster Farmers Union, we had a fair opportunity to feed into the framework document that is out for consultation. The other reason why we welcome the Agriculture Bill is that it gives us the ability to regionalise what we are doing in Northern Ireland. Another important point is that it gives us the opportunity for civil servants to take decisions in the absence of an Assembly.
Ivor Ferguson: Okay. Apart from being happy with the framework document, which we have had an opportunity to feed in to as the Ulster Farmers Union with DAERA in Northern Ireland, we are quite happy that we have the ability to regionalise what we are doing in Northern Ireland. We are also happy that the civil servants will be able to make decisions in the absence of an Assembly. We are quite happy with all those things.
Ivor Ferguson: The first thing I wanted to say is that we would not want to move away entirely from the current CAP scheme that we farm under. We would like the opportunity to have some area payments at a lower level. It would certainly take the volatility out of our farming system. Farming in Northern Ireland is somewhat different from farming on the mainland, because we have so many small family farms, and if we took the area payments away completely, that would have a devastating effect moving forward. We certainly have an opportunity to take some of the bureaucracy out of the scheme, and that is something that we would look forward to. That is what we have tried to address in this new framework document. We have just had this consultation period, and I think we have addressed that to a large extent.
Wesley Aston: As far as we are concerned, the key issue in relation to this specific question is the ability to take our own decisions at a local level, and given the absence of the Northern Ireland Executive at the present time, we felt it was important to include that legislative power within the Bill. Going forward, as our colleagues from NFU Scotland have already said, there has to be scope within an overarching UK framework for the regions to tailor, within limits, the support to their individual circumstances—as we do under the CAP at the minute. That is critical going forward, and it is an opportunity for us all to try to address the three broad pillars of where we see support being essential.
From our point of view, that means sustainability and competitiveness, and particularly the whole issue of resilience. That goes back to my president’s point about having some sort of area-type payment as a resilience measure, but equally, the issue of the environment and how we take that forward. The Bill gives us more scope to do that, and we welcome the opportunity that it provides.
Ivor Ferguson: It is essential that we have different structures and devolved powers to handle our different farming systems. You have to bear in mind that farming in Northern Ireland is so much different from farming in England. As I said, there are very small family farms that are very intensive, with large numbers of livestock. From that point of view, we would certainly need the opportunity to tailor a scheme to suit our Northern Ireland farmers.
Wesley Aston: If I can follow up on that, the Select Committee on Northern Ireland Affairs came out at the beginning of this week with a report into Brexit and agriculture in Northern Ireland, and specifically recognised the point that Northern Ireland agriculture had to be treated differently. The Committee came up with various ideas, and that report is a very good one. We largely concur with a lot of the recommendations and conclusions that emerged from it.
Alan Clarke: We are a non-departmental public body in Scotland, responsible for promoting and protecting the red meat industry, and a lot of our activities are to promote some of the best brands around the world, including Scotch beef PGI—protected geographical indication—and Scotch lamb PGI. That is a difficult one for us, because we work within the structure that we have. We are not a lobby organisation like the NFU and so on, and we work very closely with Government. Really, we want to see a clear framework that our levy payers can effectively work within.
Jonnie Hall: May I respond to the question? Today, there are four settlements of the CAP within the United Kingdom, and it is absolutely vital that that continues to be the case going forward. A one-size-fits-all approach across the United Kingdom would be seriously difficult to manage and implement, and it could be seriously damaging to certain areas, particularly in Scotland. Remember that Scotland is predominantly about livestock. Given the nature of our terrain, the agricultural profile of Scotland is very much in that “less-favoured areas” category. It has very extensive agricultural systems. Something that may look right in terms of delivering the right policy outcomes for Cambridgeshire would not look right in Argyll on the west coast of Scotland. We have very different farming structures and very different farming needs, so the support has to be tailored, as it is today, at the devolved level.
The question is really about what vehicle that should be delivered through. There was an earlier point about whether to deliver it as part of a UK Agriculture Bill and having a schedule in there for each of the devolved Administrations, or whether Scotland should do something separately, through the Scottish Parliament, and run its own Scottish agricultural policy. It is vital that Scotland has the latitude to implement the right measures, appropriate to its needs.
However, we also have to respect and protect the internal UK market, so that there is not a huge disparity in how farmers are supported, which could distort trade within the UK. We are not in that game. We recognise the importance of preserving the integrity of the UK internal market, which is vital. We currently operate under the CAP, but we have four different settlements for it. We are looking in the future to operate under commonly agreed regulatory frameworks, so that we all play by the same rules but are not necessarily on a level playing field in terms of how support is delivered. That is the case today.
Dr Drew, I know you have to leave, but if you have any further questions, please ask them.
Ivor Ferguson: I think it can. We fully understand that south of the border they will retain the CAP area payment system. I have been saying that we should not necessarily go along with that. We think that, if the payment structure was of low-level payments on an area basis, it would give us the opportunity to ward farmers on to an activity—producing goods, whether beef, milk or whatever.
The most important thing is that farmers who are actively farming and doing a good job should perhaps receive greater payments, and also related to their productivity and their looking after the environment. At the end of a long day, so long as the system rewards farmers for doing a good job, it does not matter in what way it is developed, because at least the farmers would be rewarded in a similar way or with similar amounts of money. We do not have to deliver it in the same way, so long as we get to the same point in the end.
Wesley Aston: In terms of the importance of the Bill to Northern Ireland, we support the idea of being able to regionalise and have that flexibility going forward. One overarching principle, at a UK level, is budgetary cycles, which are UK-wide, and also things such as standards, which are UK-wide. Those are the areas in the Bill that are important to us. In terms of the support measures, if you like, the ability to regionalise is critical, but at the UK level we have to have certainty around those other issues for all parts of the UK.
Ivor Ferguson: I would like to add on standards that it is so important for us to maintain the standards and to make sure that no food of a lower standard is imported. In Northern Ireland we export at least 80% of our products into the mainland GB market, so any lowering of standards would have a devastating effect on Northern Ireland.
Jonnie Hall: No; if the schedule was written in the right way it would be about enabling and it would provide Scottish Ministers with the powers to develop, deliver and implement a Scottish agricultural policy, as is effectively the case under the CAP. That is essentially what we are looking for. It is a choice of which vehicle the Scottish Government choose to use and whether they want the vehicle that currently has its engine running and is sitting in this particular Westminster process, or something that might be brought forward through the Scottish Parliament.
George Burgess: That would, of course, depend on the terms of the schedule. I know that DEFRA has worked closely with Welsh and Northern Irish colleagues on the drafting of the schedules included there, so I am sure that if there were a Scottish schedule, it would not simply be handed down from DEFRA. Nevertheless, as I said earlier, with the greatest of respect to this Committee, the starting point for us is that the proper place for Scottish agriculture to be determined and debated and for legislation to be fixed is in the Scottish Parliament. There is no burning platform; there is no absolute requirement for a piece of legislation right now to deal with things immediately post-Brexit. Therefore our proposals, as set out in “Stability and Simplicity”, look in the longer term toward legislation that would start to bring in the simplicity and flexibility at that later point, and that should primarily be for the Scottish Parliament to determine.
George Burgess: I am not sure that the schedules give certainty about a future payment system. Most of the Bill and the schedules contain enabling powers rather than precise details of what the future support scheme would be. I am not sure that that contrast between certainty with something in the Bill and the uncertainty of what is happening in Scotland is quite right.
George Burgess: As I said earlier, that would entirely depend on the terms of that schedule. We could get into a theoretical argument about whether legislation created by this Parliament could then be amended or overturned by the Scottish Parliament, but I am not sure that is a particularly helpful way to go.
Alan Clarke: The meat levy has been a major issue not only in Scotland, but in Wales. For a number of years—probably from time immemorial—animals have always moved around the UK. Our figures identify that the leakage from Scotland of animals that are born and reared there but then processed in England means that about £2 million of levy money that should be Scottish is trapped in England. On average, 75% of that comes from producers and 25% from processors, so even if the producer levy could be repatriated to Scotland, it would still be a figure in the region of £1.5 million.
A lot of work has been done behind the scenes on this. The Scottish Government in particular have been leading on it and trying to put some of the processes and procedures in place that could help with it. We have an interim solution at the moment, which is called the ring-fenced fund. The ring-fenced fund is £2 million of levy collected in England by the Agriculture and Horticulture Development Board. It has to be ring-fenced and used for the benefit of levy payers in England, Scotland and Wales. If we look just at having an equitable part of that £2 million, in theory £666,000 could be valued to Scotland, to Wales and to England respectively. In reality, the money does not change hands.
That is only part of the issue. We would very much welcome a long-term solution that had the opportunity to look at the size of the issue; as I say, Scotland on its own is a minimum of £1.5 million annually.
Alan Clarke: I joined Quality Meat Scotland 16 months ago, so I came in during part of this. It has been an issue for many years. We have a real example of the three levy bodies—QMS, the Agriculture and Horticulture Development Board, and Hybu Cig Cymru, or Meat Promotion Wales—working together really well, this year in particular. We are working on a range of projects. I have just come back from SIAL—Salon International de l’Alimentation, or Global Food Marketplace—in Paris, where we have been exhibiting together on joint stands. We are doing market access work. We have just signed off a £500,000 programme to promote the benefits of red meat in England, Scotland and Wales.
There is certainly evidence that we can work together, but it is not the long-term solution that we need. I am comfortable saying that in the long term the three levy bodies will continue to work on pre-competitive issues, but at the moment we do not have full control over all that money. Approximately 34% of the money is coming back to Scotland at the moment. There is now a real opportunity. The Bill is here, and the engine is running, to quote Jonnie, so let us get on with it.
Jonnie Hall: Certainly from NFU Scotland’s point of view, we would echo the views that you probably heard from the National Farmers Union of England and Wales, on Tuesday of this week and in other submissions: that the Bill does not really spell out the need for an agricultural policy that underpins food production of the highest standards—animal welfare and health, as well as environmental—and how we bring those things together. Food production and the environment do go hand in hand, and our thinking about post-CAP agricultural policy is about how we drive productivity improvements. At the same time, such improvements contribute to environmental challenges around such things as climate change, water quality, biodiversity, habitats and so on.
Clearly, as I am sure Mr Eustice would say, an awful lot of the Bill is about delivering a new agricultural policy for England that has a significant focus on environmental delivery, public goods and so on. We buy into that philosophy as well, but we would probably want to do it under our own steam and at our own pace using different measures and approaches, because that is the nature of Scottish agriculture.
Such things as grazing livestock in the uplands of Scotland add huge value in terms of their environmental contribution, but they also underpin many rural communities and the local economy. It is about ensuring the continuity, as much as anything else, of such activities, and how we manage ourselves regarding the continuation of that ongoing land management, respecting the fact that people are producing food and managing the land at the same time. That is where we need to be.
We would argue strongly, as we have done, that it has to be a devolved delivery, but the principles around productivity and environmental delivery, which are not mutually exclusive, have to be adhered to as well.
Jonnie Hall: As I said in response to Mr Whitfield’s question, I agree that on the face of it there is not a direct and clear reference to driving agricultural production of the highest standards that delivers both on animal health and welfare and the environment simultaneously. That is important; it is the Agriculture Bill.
Food and drink as a sector in Scotland is hugely important to the economy—it is the largest manufacturing sector in the Scottish economy—but it will not go anywhere without the primary producer. If we end up in a situation across the United Kingdom where the primary producer is steered more and more to the delivery of purely public goods and not market goods, in terms of food production, then you could see significant implications for food security and our ability to generate exports of high-quality product.
Ivor Ferguson: The document that we have out for consultation at the moment in Northern Ireland certainly recognises the need to produce food. Northern Ireland farmers are very passionate about producing food, but they are also very passionate about the environment. Not only do we need the ability to produce food to the high standards that we do, but we would like the ability to expand our business. We see the mainland GB market as a very big market for us and, as I said, we export 80% of our food, so there are opportunities there for us. We would certainly like the ability to be allowed to expand our food business. From that point of view, we are happy that that is already in our Northern Ireland document.
George Burgess: Yes.
Jonnie Hall: You are making two points. First, there is no doubt that the Scottish Government will be able to continue making payments, but they would be governed by the existing rules of the CAP. We want to get to a point beyond the implementation phase—December 2020, if that is what it is—whereby Scotland is ready and able to move to a Scottish agricultural policy beyond the CAP, to deliver support in a way that is more befitting and a more efficient use of taxpayer funding, and a better outcome in terms of supporting not only Scottish farmers but everything that Scottish farming then delivers for society as a whole. That is our concern there. Yes, continuation of payments, but we need to move away from, or out of the shadow of, the CAP at some point.
On the second point you made, I think we share those fundamental concerns about some of the schedules in the Bill—in particular part 7 and the World Trade Organisation reporting requirements. As the UK is the signatory to the WTO, the powers would rest with the Secretary of State. We have been quite clear that the Secretary of State would have, essentially, in theory, unilateral power to determine the funding allocation to different types of support measure, in order to be compliant with WTO requirements. That, in theory, could then impinge on policy decisions at a devolved level, a Scottish level. That is our concern, but if such concerns can be fundamentally addressed and resolved in practice, I think we would be in a different place.
As things stand with how the Bill is written—our legal and academic advice has backed us on this—the Secretary of State has unilateral power. Where we would like to get to is a situation in which there is much more involvement by the devolved Administrations, and in which the devolved Administrations have a role in agreeing those spending limitations. The same applies to the producer organisation element and to the fairness in the supply chain element.
However, there will always be an issue around how that should work because on the one hand the Secretary of State could have unilateral power, but on the other we certainly do not want Scotland or any other devolved Administration to have a veto over the rest of the United Kingdom either. We need to meet somewhere in the middle where some sort of consensus is established and agreed, and then we can move forward.
Jonnie Hall: We have always argued that there is a need for common frameworks, particularly on regulation, across the UK, but they have to be commonly agreed frameworks. It is as much about the process of getting to the framework conclusions as it is about the conclusions themselves. And this is the same.
George Burgess: As I think I commented earlier, there is no question but that the ability to fund agricultural support will continue, for day one and beyond, and I think Mr Hall has already agreed with that.
I actually agree with quite a lot of what Mr Hall has said. For the benefit of the Committee, our Cabinet Secretary has written to the Secretary of State with a number of proposed amendments to the Bill that the Scottish Government would like to see being made. I will ensure that a copy of that letter, and of the amendments, will be made available to the Clerk, to be shared with Members.
On the WTO clause that Mr Hall mentioned in particular, yes, we have a constitutional concern there that it relates to the observation and implementation of an international obligation. While international relations per se is a reserved matter, observation and implementation of such obligations in relation to devolved matters, such as agriculture, is itself a devolved matter. Therefore we see it as being entirely right and proper that Scottish Ministers, Welsh Ministers and Northern Ireland Ministers have a direct input into setting the limits within the WTO provisions and indeed into the mechanism for ensuring that the UK as a whole complies with our requirements.
I wanted to ask you about protected geographical indications, or PGIs, and how damaging they could be, particularly to the meat sector, and to what extent. I wonder whether you could give us some information on that.
Alan Clarke: First of all, PGI is very important to Quality Meat Scotland. I mentioned earlier that we have Scotch lamb PGI and Scotch beef PGI, and we are able to promote those world-class brands—both of them—in Scotland, in the UK and worldwide.
We have been doing a lot of work with other partners, including Scotch whisky, Scotch salmon and so on, and they care about what the implications of this are. We really hope that there is a seamless transition for PGIs going forward; we would be very, very concerned if there was not, particularly if we ever had to reapply for a PGI. That would be a major concern to us.
We also know that the current consultation has identified that there would be a need for a new logo, for example. Our concern would be the packaging costs for the processing sector to do something like that. More importantly, would we confuse consumers? They have trusted this logo and it is something that they have recognised. Over the years, we have invested millions to try to establish that logo in the minds of customers, and we have a real concern that all that really good work could be lost. That is one area within the red meat industry in Scotland, but we really are part of the much wider food and drink sector, and that synergy has really benefited us as well.
Jonnie Hall: We do have members who farm in different parts of the United Kingdom under the same business and it has always been something of a challenge in terms of which Administration deals with which component—whether it is land inspections, the payment claims and so on. I suspect that the lack of a publicly clear strategy from the Scottish Government poses some doubt and questions in the minds of those farmers who straddle borders, but equally it probably poses a lot of uncertainty for any farmer in Scotland, not just those who straddle the border.
One thing that will be vital—it goes back to common regulation—is that when you have cross-border farmers, you have to apply the same regulatory approach in terms of pesticide use, animal traceability issues, food hygiene, feed rules and all the rest of it across the United Kingdom in a uniform fashion. That goes back to the statement that all farming unions have always agreed: we need a commonly agreed regulatory framework. We are playing to the same rulebook, but we are not necessarily supporting farmers in the same way; the support requirements for a hill farmer in Argyll are different from those of someone growing fruit and veg in Lincolnshire.
George Burgess: In terms of observing and implementing those regulations, it is all of the Administrations within the United Kingdom. That is a well-established legal fact. The Scottish Government understand that, within their areas of responsibility, they must ensure that their actions are compliant. In terms of reporting into the international field, there are mechanisms through the European Union and the Commission. Such obligations are common in many international mechanisms, some of which the United Kingdom is a signatory to, and it is well established that, where necessary, the devolved Administrations provide information, often through a central contact point within the United Kingdom Government, as part of our international obligations.
George Burgess: I think that is quite a narrow reading of clause 26, because only one of the subsections deals with that information provision and reporting. As has been already noted, we have considerable concerns about the other provisions in the clause. As I have said, we have nearly 20 years of experience of the devolved Administrations providing the necessary information to the United Kingdom Government for onward routing—whether through the European Commission or direct to the necessary international body—across a range of international obligations. There is absolutely no reason why we would stop providing that information now.
George Burgess: My understanding is that it is the UK schedule, not the UK Government schedule. That there need to be mechanisms in the United Kingdom for co-operative working on this, to ensure that we meet our international obligations, is not at all in question. We have been working with DEFRA since the turn of the year on what a framework in this area should look like. It was therefore a bit of a surprise to us to be presented with a clause that puts all the power into the hands of the Secretary of State, acting alone.
We are looking for greater involvement for all the devolved Administrations in the setting of the limits, so that we can ensure and demonstrate to all parts of the United Kingdom that there is fairness all round in the way the international limit is being allocated.
“a process for the resolution of disputes between the appropriate authorities”.
There is a dispute resolution process in an instance where Scotland might say, “We want to spend even more on market-distorting support and we think it is unfair that you have constrained us from doing that.” There is a dispute resolution process.
George Burgess: That there should be a dispute resolution process we have no difficulty with. If we read further in that provision we will see that it says that the dispute resolution process
“may include provision making the Secretary of State the final arbiter on any decision on classification.”
That particular provision, which sounds a little “judge and jury” to us, does not feel like the best way forward.
I do not think we will reach a conclusion on that this afternoon.
George Burgess: Essentially, the Scottish standards and arrangements are not changing here; it is the ones on the other side of the border that will change. Under the powers in the Bill, as yet we do not know quite what they will change to. We know what the Scottish standards are, but we do not know quite what the English standards will look like. Any disparity would arise in that situation as a result of a change in England rather than a change in Scotland.
George Burgess: It is important to understand the way the producer organisation recognition system operates at the moment. This is a devolved area, but one in which all the Administrations, in our case through agency agreements, have chosen to delegate the function to the Rural Payments Agency. There is one body that does the work on behalf of all the Administrations. That system works well in a number of other areas that I am aware of. We are certainly not proposing that that should change. That it is devolved has been well recognised. There was a court case in recent years—a challenge to a Scottish-based producer organisation. Although the work was done by the RPA, the Scottish Ministers were ultimately in the frame.
We have absolutely no difficulty with a system of producer organisations. We do not quite see the need to have the provisions in the Bill, given the existing European provisions on producer organisations. All that we are suggesting through our amendments is that, in relation to Scotland, to mirror the existing position—nothing new—the powers should be with the Scottish Ministers. I would fully expect them to be delegated in turn to the Rural Payments Agency, as they are at present.
George Burgess: If we look at the producer organisation provisions that we have here, and at the amendments that we have proposed, none of them would create that risk any more than it exists at the moment.
Jonnie Hall: I agree with Mr Burgess.
Alan Clarke: I made the point earlier, when I was asked whether there was a particular vehicle that could be used, that I thought the amendment was a really good vehicle, because it is timely and it is opportune. The reality is that we need a solution.
We have shown that the three organisations can work really well together, but we are not maximising our potential. If we can get the full £1.5 million back to Scotland, and the same value back to Wales, using a mechanism that the three organisations would agree, we will have a real opportunity. If that amendment were made to the Bill, and a process was put in place to make it happen, that could happen very quickly. That would be a real benefit, particularly to us in Scotland, and to Wales. We can show evidence of what we have done working together over the last 18 months, and, as I said earlier, we would continue to do that.
George Burgess: The Scottish Government have been seeking an amendment to deal with the red meat levy issue, as Mr Clarke said earlier, and have been asking for the Agriculture Bill to be used for that. I prepared a detailed policy paper on the subject more than a year ago and I have been discussing it with DEFRA officials since.
We do not yet have a commitment from the United Kingdom Government to use the Bill as a vehicle to deal with the red meat levy, but we hope that that commitment will be forthcoming. I have heard that two amendments deal with the subject, and we will look at those with great interest. It is certainly something that the Scottish Government have been seeking.
Jonnie Hall: May I add the weight of NFU Scotland to that, to support the Scottish Government and Quality Meat Scotland? The Bill is a clear opportunity to resolve an issue that has been ongoing for several years. We have waited for the right legislative vehicle. This is a clear moment to get the right amendment in the Bill and make it happen.
Ivor Ferguson: The level of support we need in Northern Ireland will largely depend on our trade deals. That will be a big deciding factor. If the trade deals are against us in some way, we will certainly need more support. A lot of the support will depend on that. The difference in livestock between north and south does not really come into it. In Northern Ireland, we produce under the Red Tractor quality assurance scheme. As I said, we supply more than 80% of our product to the UK mainland market. That is not complicated by southern Irish livestock, because the standard is not the same as in Northern Ireland. I am not saying the standard is any lower than ours, but the Bord Bia standard is completely different from Red Tractor assurance.
Ivor Ferguson: We have £300 million of support in Northern Ireland. We certainly would like to continue to avail ourselves of that level of support. If the trade deal went against us, we would probably need more support than that. We are taking the opportunity with our new framework document to look at the system differently. We think we can develop a more efficient system than the CAP system in Northern Ireland. As I said, we would like to retain a small amount of area payments, but looking forward, we want to give opportunities to progressive farmers who are efficient and do a good job. That is one of the changes we would like to see. Of course, we would also like to increase our share of the UK mainland market. We see opportunities there for us as Northern Ireland farmers.
Wesley Aston: My president has outlined the key issue—we will not be sure what type or level of support we need until we see the outcome of a trade deal. However, in a scenario in which existing market access continues, we see scope to regionalise agricultural policy in Northern Ireland. As I mentioned, the schedule to the Bill that deals with Northern Ireland gives us scope to do that; there is sufficient scope in the Bill. We are keen to take forward measures that are best suited to the Northern Ireland circumstances. We are also keen to pilot ideas.
In broad terms, we are keen to look at two broad aspects. One is to encourage more young farmers into the industry. We see this as an ideal opportunity to do that. We also have a particular issue in Northern Ireland with land tenure and the ability to develop and improve land. We have an 11-month conacre system, which is a short-term let of land, and there is no certainty for either the landowner or the tenant that they will be dealing with the same person the following year. From that point of view, there is no investment in that land. About a third of all Northern Irish land is farmed on that basis. We see that as coming within the scope of developing our own agriculture policy. We would like to address those two broad areas fairly quickly.
We are keen to pilot ideas. Northern Ireland is a small region. We are flexible and we talk to one another. The document my president keeps referring to was drawn up in conjunction with our own Government and our industry, including environmental stakeholders, so it has high-level agreement. We are very keen to implement that. In fact, that is one of the recommendations in the Northern Ireland Affairs Committee report about Brexit that I mentioned. That Committee states that it is keen to support such measures and for Northern Ireland to pilot them.
There are some things we can do of our own accord within the scope of our abilities, but there are others—particularly fiscal measures—for which we do not have devolved powers. We are keen to look at whether we can do something in those areas through measures such as tax incentives for longer-term land tenure, which would not be direct support. That is a fundamental issue in the restructuring we need to become the changed industry we ultimately need to be.
Thank you very much. Mr Hall, Mr Clarke, Mr Burgess, Mr Ferguson and Mr Aston, you have come a very long way for a relatively short time, but I hope you feel it has been time well spent. I am certain that it has been of value to the Committee. We are indebted to you. Thank you very much.
Ordered, That further consideration be now adjourned. —(Iain Stewart.)
Adjourned till Tuesday 30 October at twenty-five minutes past Nine o’clock.
Written evidence reported to the House
AB21 NFU further submission
AB23 Central Association of Agricultural Valuers (CAAV)
AB24 Brian Worrell
AB25 National Office of Animal Health (NOAH)
AB26 UK Pesticides Campaign
AB27 The Ramblers
AB28 Richard Bruce