Agriculture Bill (Fourth sitting)

Colin Clark Excerpts

Thursday 25th October 2018 Public Bill Committees

[The Chair]

Professor Millstone, do you want add anything to that?

Professor Millstone: I agree with my colleagues.

[Colin Clark (Gordon) (Con)]

Q Coming back to the part 1 financial assistance powers, they largely focus on the environment, but clauses 2, 3 and 4 go on to mention productivity. Is there enough in the Bill not to cause tension between environmental payments and food production? How do we avoid that? How do we get the classic situation that we end up with a great deal of afforestation and a reduction in grassland, in particular in the upper parts of the country?

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.

[Colin Clark]

Q Professor Marsden, you mentioned security and stability and an amendment to the Bill. How do you avoid that tension? How do we achieve that?

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.

[Dr Drew]

Q Do you think there is any clarity in the Bill on what the mechanism could and should be? Are the existing institutions the right institutions to do this, or should we be inventing new institutions?

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.

--- Later in debate ---

[Dr Drew]

Q On Northern Ireland specifically, you have to take account of what happens south of the border. We should not get into Brexit, but to what extent does this Agriculture Bill have to fit with what is happening south of the border? You obviously have people who farm both sides of the border anyway, so the support system cannot be radically different from that in the Republic, can it?

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.

[Colin Clark]

Q In your submission, NFU Scotland said that the inclusion of a schedule bespoke for Scotland’s agricultural policy needs is important. Would a schedule in any way limit Scottish policy?

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.

[Colin Clark]

Q Mr Burgess, the same question: would a Scottish schedule in this Bill, such as Northern Ireland and Wales have, limit the Scottish Government in having its own agricultural policy?

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.

[Colin Clark]

Q On that point, Mr Burgess, would this not provide the opportunity? As the Scottish NFU said, the engine is running on this one, and the two other nations have decided to be involved in it. Would you say, if there was a Scottish schedule that would give certainty to Scottish farmers about payment in the future, that the Scottish schedule would limit Scottish policy? Would it limit the Scottish Government in designing their own agriculture policy, which has been devolved for quite some time?

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.

[Colin Clark]

Q Would it limit the Scottish Government in setting their own policy?

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.

[Colin Clark]

Q I have a question for Mr Clarke: would you welcome an amendment to the Bill to deal with the meat levy with regard to Scotland?

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.

[Martin Whitfield (East Lothian) (Lab)]

Q Just to pursue that point regarding the red meat levy, it is my understanding that to make the amendments you need a piece of primary legislation. Has there been any primary legislation since, shall we say, 2006? That was not the start of the challenges with the levy, but certainly problems date from then. Has there been any opportunity to change it until the Bill that is before the Committee?

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.

--- Later in debate ---

[Mr Philip Dunne (Ludlow) (Con)]

Q Mr Burgess, you are very welcome. You are in an invidious position, if I may say so, in coming to this Committee, and I am very pleased that you have. In the light of what you just heard from Mr Hall, what confidence can the Committee and Scottish farmers, particularly those whose farms cross the border, have, given the lack of engagement by the Scottish Government? Absent what you just told us about the letter, which we get to see in your proposed amendment, what confidence can the Committee and farmers have that the Scottish Government will respond to the call from its farmers to have common standards with the rest of the UK?

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.

[Colin Clark]

Q In one of the pieces of evidence we heard today, Jack Ward of the British Growers Association said it would be a nightmare if we had four producer organisation schemes. That is not about cross-border farming or farms; that is about strawberry growers in Angus working with strawberry growers in Kent; and equally, potato growers in north-east Scotland operating with potato growers in Lincolnshire. We have spoken about common frameworks, but surely, for the sake of the unitary market of the UK, we must have an absolute, concrete commitment that we will not have market- altering divergence. Can you foresee a situation in which we had four producer organisations?

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.

[Colin Clark]

Q Do you perceive a risk of divergence? Is that not fundamentally the point, whether it is on the frameworks or on the producer organisations?

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.

[George Eustice]

Q Mr Clarke, the Government are under pressure from the other Mr Clark around the table, my hon. Friend the Member for Gordon, and from my hon. Friend the Member for Brecon and Radnorshire, to give consideration to an amendment that would enable some transfers of levy payments between levy bodies, but only with the agreement of the relevant Governments or of the Secretary of State and the Scottish and Welsh Ministers. It is a bit problematic in the absence of a legislative consent motion, because it would explicitly affect something that Scottish Ministers could do. If that amendment were to get some support, should the Scottish Government bank that advantage and grant the LCM on the Bill?

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.