Agriculture Bill (First sitting)

Robert Goodwill Excerpts

Tuesday 23rd October 2018 Public Bill Committees

[Ben Lake (Ceredigion) (PC)]

It would perhaps have been a good idea to have representatives from the devolved Administrations, given that the Bill will inevitably have an effect on each of the industries in turn.

[Mr Robert Goodwill (Scarborough and Whitby) (Con)]

Does that mean, Chair, that when Scotland produces its Bill it will ask for evidence from English farming organisations? Is that the logic of what is proposed?

[Deidre Brock]

The point is that elements of the Bill affect devolved legislation and competencies, so it is appropriate that at least Scottish Government officials should be allowed to put those points across to us. As MPs, surely we want to get the full picture. The Bill is the subject of some dispute between the two Governments, so surely it is appropriate that we hear about that.

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[Mr Goodwill]

Similarly, I draw the Committee’s attention to my entry in the Register of Members’ Financial Interests, particularly my membership of the Country Land and Business Association and the National Farmers Union. I have a family farm in North Yorkshire of 250 acres, which we have farmed since 1850. We are currently engaged in a high-level environmental scheme on that farm.

[Colin Clark (Gordon) (Con)]

Can I declare my interests? I am a farmer in receipt of the single farm payment. I am a member of NFU Scotland and an organic producer.

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[Jenny Chapman (Darlington) (Lab)]

Q For better or worse, you have operated within a framework guided by the European Union for as long as probably all of you have been in the business. You have talked about mutual recognition and standards. Do you think the Bill could be doing more about not just undercutting within the UK, which you have talked about, and within different nations of the UK, should they choose to take different paths on some issues, but also about undercutting from overseas imports in the future? How significant a risk do you see that as being, and do you think this Bill is doing anything that could help relieve that anxiety?

Patrick Begg: I would say it is a very significant risk. You would find cross-sectoral agreement that more needs to be done—probably in the Trade Bill—around ensuring that imports do not undercut the environmental standards we already have and are talking about cementing for the future. Without that, it is a huge risk.

Martin Lines: Trade deals are going to be massive. We do not just want to have high standards here and export our environmental footprint; we want to be leading here, exporting those high standards, and buying produce from abroad that matches those high standards. There is a lot of concern around that.

Thomas Lancaster: I would agree, certainly on international trade, standards and imports. As Patrick says, we are speaking with one voice with the National Farmers Union and the Country Land and Business Association and other farming and food organisations on that point. In terms of UK co-operation, agriculture is a devolved policy, and it is right that individual devolved Administrations should have the flexibility to develop policies that are right for their country. We would like co-operation on issues such as how those policies are designed and how we can prevent market distortion. From our perspective, environmental challenges are transboundary—there are shared catchments that span borders within the UK—so how will we secure environmental outcomes across boundaries through future agriculture policy? That is a huge unanswered question.

Martin Lines: I would like to see the Government leading the way in procurement of their own food. Governments throughout the UK buy huge amounts of food. Where are you setting the higher standards in trying to procure that food locally and sustainably, and leading the way? That sets the direction for the rest of the public to follow.

[Mr Goodwill]

Q Talking of public goods, we have been talking almost exclusively so far about environmental enhancement, but there is one public good that many members of the public would like to see: better public access. That can of course produce conflict, particularly with some of the environmental objectives. Indeed, one of the best bird habitats that I have seen was the oil refinery at Immingham, where not only were there lots of things for the birds to perch on, but the public—and their dogs in particular—were excluded. Do you think we can get the balance right? Do you think public access should be part of this, or if we are to encourage ground-nesting birds such as curlews, do we need to ensure that we do not have as much public access as some would perhaps wish?

Patrick Begg: We live and breathe this every day. This is at the heart of what the National Trust does. It is always a balance, and there will always be trade-offs. There is no blanket policy that you can apply here, but I think we would all agree that more public access that allows people to get the spiritual and physical refreshment that our countryside offers is absolutely critical.

The Bill is incredibly welcome, in that one legitimate area for public investment in future will be increased public access. I could not agree more strongly with what has been done in the Bill on that. Sometimes we can find small examples of disturbance where people and wildlife do not match up very well, and think that it is a universal problem. I think it is not universal. Our experience is that there is a large amount of open countryside in which people can happily co-exist with wildlife. There will have to be some careful thought put into how we make sure that the interface between people and livestock works. Dogs and livestock can be problematic—let us be honest. Again, we have methods for dealing with that. There is public education. It is interesting that the countryside code has gone off the agenda and no longer gets talked about. That can be revitalised, and people can be made to feel engaged in their countryside and feel that they have a shared responsibility for what happens out there, not just as users, but as people invested in it.

Martin Lines: On public access, it is good for people’s health to get out into the countryside, but it needs to be managed because of dogs and the health and safety aspects of people walking around on farms. This is also about access to information. Hopefully, we can deliver environmental land management plans to let the community have that knowledge and make it publicly accessible. The community around me can access what we are delivering as farmers, and put it on their community pages, so when they use the countryside and the footpaths, they understand what we are delivering.

As an industry, we can communicate positive messages, and talk about some of the trouble and hassle we get from public access, how people can use the landscape, and the food and public goods that we produce. That should connect back to society, because much of society is disconnected from what the landscape is used for, the food and animals that are used, and the threats that can come from wandering around nesting habitats or letting your dog run free.

Thomas Lancaster: Access is a good one to talk about, in terms of thinking about how you can have a holistic approach to securing public goods and food, with a solid regulatory foundation. We would not want farmers and landowners to be paid to keep rights of way open. That is a legal requirement, so you would not pay for that through public payments. What you might do is to pay for permissive access where it makes sense to join up rights of way, and where there is a real desire to connect one part of the local community to another part, but currently there is no path to do so. The farmers we work with are almost always passionate about educational access. They really love the support for it that they get through current schemes and agreements.

There will be instances where access is not suitable for biodiversity reasons, or on a Ministry of Defence firing range or whatever. That points to the need to have really good advice and guidance when we develop future schemes, to enable whoever is putting together the land management contracts to do so in a way that balances all the public goods and secures the best net outcome from any given farm or area of land.

Gilles Deprez: My knowledge is not good enough for this question. It is important to have public access. From what I have seen, we have a lot of public footpaths in Cornwall, for example. It is not always easy, to be honest. If you have a public footpath that goes across the middle of your most productive area of land, it is not easy, but we are already doing it today.

[Ben Lake]

Q Some organisations have questioned the legality under World Trade Organisation rules of schemes that would pay for the delivery of public goods, as opposed to those that compensate farmers or other land managers for costs incurred and income forgone. Do you recognise those concerns regarding, I think, annexe 2 of the agreement on agriculture? Quite simply, should we also hold those concerns?

Thomas Lancaster: Generally speaking, we are of the view that the World Trade Organisation agreement on agriculture provides pretty much all the flexibility that you would want to develop pretty much any public payment system that you would want. Some of the concerns that have been expressed are about whether paragraph 12 in annexe 2 of the agreement, which limits payments for environmental programmes to costs incurred and income forgone, limits the ability to provide a fair return, but even within the common agricultural policy, there are examples of other member states that have gone much further and have paid more for those environmental benefits. That is within the CAP, in which the Commission sets some stringent guidance about how member states’ managing authorities can calculate those payments. When we move away from the CAP, there is nothing in the agreement on agriculture that stipulates how you should interpret costs incurred.

In hill farming operations, the income is very low. Some people have expressed the concern that that would mean that payments for environmental benefits would be low. Actually, if a whole hill farming operation is loss-making and a cost to an individual, you can interpret that as a cost incurred, and you can effectively pay to secure that ongoing management, and then tweak that management to secure specific environmental benefits for curlews, water quality, flood risk management or other public goods that you might secure from an upland farm. We are of the view that there is huge flexibility in that.

Even if you were to declare your public payment scheme as green box, and you have done some pretty imaginative interpreting of the rules, you would still have the aggregate measure of support—the amber box—sat there as a sort of hedge against any challenge that might come from another member of the WTO. It has been blown up into an issue, but is a bit of a red herring, really, in terms of how we might go about developing future payments and providing an adequate incentive for the public goods that the Bill lists.

Agriculture Bill (Second sitting)

Robert Goodwill Excerpts

Tuesday 23rd October 2018 Public Bill Committees

[Dr Drew]

Q Just a very quick rejoinder. If the Bill goes through unamended, what type of farmers are most at risk from the changes?

Andrew Clark: The economic modelling that has been done suggests that it is the livestock sector—particularly beef and sheep, and especially in the lowlands. A lot of focus is given to upland farming—I have great interest in that myself, having worked on conservation and environmental schemes for most of my career at the NFU—but lowland livestock farms in marginal situations in the west of the country have few choices other than grazing land. They are particularly vulnerable communities. Very often, they are communities; they are not just isolated farms. They form a network and the backbone of both the landscape and the farming community.

[Mr Robert Goodwill (Scarborough and Whitby) (Con)]

Q In this morning’s evidence session, we had two farmers from different parts of the country, representing different types of farms. One was from Cambridgeshire, where the fields have been amalgamated and production is very intensive, and the other was from the south-west, and he said, for example, that the field margins around hedges discriminated against him because he has small fields. On my farm, I have very small fields, compared with my next-door neighbour, and I always feel that we are being picked on.

As we go forward, how can we manage to have a system that works for the farmers who have intensified their farms and are going to green them up while not being unfair to the ones who are already very green? How do we reward progress and, at the same time, reward the people who have always been doing the right thing?

Andrew Clark: This is one thing I wanted to pick up in evidence to the Committee. The legislation that we are looking at is only half of the formula that needs to be delivered in order for farms to be profitable, sustainable and productive in future. It is the policy that goes alongside that legislation that is important. That policy needs to be one of opportunity, that creates opportunities for farms to follow the approach, whether it is public good provision, or becoming more productive or, hopefully, doing both those things together.

Looking at that policy and the measures that are available, it is important that the Agriculture Bill ensures, in fact, almost places a duty on Ministers, to deliver schemes that help farms to be both more productive and more sustainable in future. Those two themes would apply both to the farmer in the west country and the farmer in East Anglia. There are great opportunities for both of them to manage soils better or protect waters and thereby manage their farms in a more profitable and productive way in future—for instance, by nutrient management and introducing some of the approaches in terms of minimum till agriculture. That would apply to both farming situations.

[Martin Whitfield (East Lothian) (Lab)]

Q This a very straightforward question, but I am not sure you are the person to comment on it. Do you think in this primary legislation an opportunity could be taken to resolve the red meat levy discrepancy between Scotland, Wales, Northern Ireland and England?

Andrew Clark: For fear of breaking into devolved discussions, I suspect that the Agriculture Bill is not the right place. I suspect that the reform of the Natural Environment and Rural Communities Act 2006 that set up the Agriculture and Horticulture Development Board in the first place, might be the appropriate place. Whether legislation is the way to sort that out or having the parties sit round the table and come to agreement, it is part of a wider issue, which again is perhaps not covered in the Agriculture Bill as much as it should be.

Scotland is absent, as we know, from the schedules, which from a UK farming perspective is concerning. We would like to see a common framework in agreed areas across the whole country, because that benefits every farm business and allows the free flow of goods and services and agricultural activity across the whole UK economic area.

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[Chris Davies]

Q 52 If a Minister may interpret this set of rules in one way, how concerned are you that, in the devolved nations, there will be different processes going on right around the country?

Christopher Price: Perhaps this is one thing that the Bill lacks: the important thing is to have a UK-wide framework that allows four national agricultural policies underneath it, so that everyone is operating to a high-level set of common rules, but each country has the power to go and decide what it thinks best for its own circumstances.

George Dunn: Obviously, in a devolved world there is great scope for the four countries of the United Kingdom to take a different view of different aspects of this policy. But, fundamentally, we must remember that we are an economic union of four nations, and we need to preserve that for the benefit of the populations of all four countries of the United Kingdom. That will be the key issue—to ensure that we do not impact the ability to trade with one another in a free and open manner.

[Mr Goodwill]

Q 53 Included in clause 7 of the Bill is a provision to allow de-linking of the payments. The example I was given was where a tenant farmer who wishes to retire could take three years’ worth of payments, which, together with his live and deadstock sale, would allow him perhaps to clear his overdraft and retire. However, if he hands that tenancy back to the landlord, he is left with land that will not attract any payments for two or three years and the difficulty of attracting another tenant. How would that work in practice?

George Dunn: I am not sure there is a problem in what you suggest. It is not just the tenant’s ability to roll up the direct payment with the live and deadstock; the landlord themselves may be willing to give a payment for the early surrender of the tenancy, in order to get vacant possession or to offer the tenancy to a new entrant on a farm business tenancy basis, as opposed to an old-style agricultural holding tenancy. There may be some benefits for the landlord.

[Mr Goodwill]

We have already heard that a major element of the rent that is paid relates to the amount of direct payments that the tenant—

George Dunn: But we know within the landlord-tenant community that many landlords would like tenants who are operating under the old-style secure tenancies to go, so that they get vacant possession of the land back. If they offer it on the open market, plenty of people will queue up to take that land, even in the new environment, because to date, lots of those individuals have felt it appropriate to factor the direct payments into the rent that they pay. If they no longer have to do that, the rents will adjust in the new world. We think that the de-linking and consolidation element is a massive benefit to restructuring the industry.

Christopher Price: We were concerned about the proposal to de-link, on the basis that it could de-legitimise the payments. If we are saying that the reason why farmers are given quite large amounts of money is to provide public goods, this takes away that justification. If you are going to do it, it has to be for a very good reason. We suspect that, in many cases, the amount of money that will be freed up will not be sufficient to enable the tenant without more to move on—the amounts of money involved will not be sufficient for that. If the landlord is keen for the tenant to move on, the landlord will have to make a significant investment, too. George Dunn is quite correct on that.

At the moment, we know so little about what the Government are thinking behind the de-linking proposals. It is very difficult to predict how it could operate; on top of all the considerations that George Dunn raised, there is also how it will be taxed, for example. There is an awful lot to go and think through when deciding how it could work.

[Mr Goodwill]

Q I can understand that a tenant retiring would not necessarily be able to afford to buy a house out of the proceeds, but if he was on the verge of bankruptcy, presumably it would be a very attractive straw to grasp.

George Dunn: Again, I disagree with the premise of the question. This is not something to save people from bankruptcy; this is to allow people to make a rational economic decision about their future. At the moment, lots of tenant farmers cannot make a rational economic decision to retire because they do not have a house to go to or another opportunity to take up. We are not saying that this will be the be-all and end-all in that process, but if it adds to a payment that comes from the landlord, or to the live and deadstock at the end of the tenancy, it could be the thing that allows the tenant to make that change.

[The Chair]

Minister, this may have to be the final line of questioning, because the Minister is on his feet in the Chamber and we might find ourselves interrupted.

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[Sandy Martin]

Q Sorry; I meant consultation on the regulations that will give effect, rather than on the Bill itself. Clearly, consultation on a Bill that does not specify exactly what will happen is one thing. Consultation on the regulations that will specify what will happen is surely something that you might welcome.

Huw Thomas: The Welsh Government have said that they will publish a White Paper early next year that will flesh out what they are consulting on at the moment, which will derive from this. In effect, there will be a consultation around that. Certainly, there would need to be further consultation before Ministers took some of the powers forward and utilised them, because they are so broadly drafted in the primary legislation that they could allow such a range of actions to be taken under their provisions. There has to be consultation with industry and stakeholders following that.

Dr Fenwick: I agree. It is part of a transparent, democratic system to consult. I do not mean on every occasion, on every tinkering, but when it comes to things that have an impact on jobs, people’s lives and so on, those should be consulted on.

[Mr Goodwill]

Q Farmers in other European Union countries have perhaps been more successful than farmers in the UK at attracting the capital funding that the Minister described in schedule 3. Given that those farmers have some very well organised and very large farmer-owned co-operatives that can not only get funding for processing, marketing and grain storage, but are big enough to square up to the supermarkets and other customers, how well organised are co-operatives in Wales, where you have lots of small farmers so co-operatives work very well? Do you see the capital funding going to the industry that the Bill would allow being a good thing for farmers, and would you see them as a preferred bidder to commercial companies that would be doing the same sort of thing?

Dr Fenwick: I agree. My first job this morning, before I got on the train, was to go down to our farmers’ co-op. It has branches all over the west side of Wales, from north to south, and employs large numbers of people. My grandfather has been a member of that co-operative since 1947, and it is one of a number across Wales. We sometimes forget that they are even co-operatives, but they do exist, and there are plenty of them in Wales, across England, and into Scotland.

I would guess that some of the funding made available to European co-operatives comes from rural development funding. We have an incredibly low historical allocation of rural development funding from the EU, as a result of our having handed it over as part of the CAP negotiations in the first part of this decade. We gave up what we were entitled to, effectively, when there was an equalisation process, which was obviously disappointing, and for that reason we have high modulation rates, particularly in Wales. As I am sure Mr Davies is aware, that is a big bone of contention, and it is to fill a gap that we have in our funding. It should not be forgotten that European businesses and farmers have access to far more funds when it comes to direct investment and support, because they make more use of a larger rural development programme budget.

John Davies: You are absolutely right in identifying the balance of power in the marketplace. We have been successful in terms of supply-side co-operatives in Wales, but we have not been as successful as the likes of Müller, Kerrygold and other co-operatives in other parts of the EU. We have to look at how this could work, and help and support that in the Bill, because there are opportunities to focus more on new product development. Having travelled to New Zealand and seen how a real focus of the farmer-controlled meat operations has been new product development and accessing new markets, over and above shareholder return, there are lessons to be learned from other parts of the world. You are absolutely right to identify those opportunities in the Bill.

[Mr Goodwill]

Q Do you think that because in the past, we have had a deficiency payment scheme—or, for some commodities, intervention buying—farmers have been less on the front foot? For example, we could sell skimmed milk powder and butter into intervention, when other countries were developing new products.

John Davies: Having travelled to France and other parts of the world, there is a different approach to co-operative marketing, and we can learn some of that sticking-together principle more effectively. There are lessons to be learned. We need to look at how to do it. I do not think that is because of the deficiency payment; I think there is a slightly different mindset in the UK. We are slightly more independent, possibly. One penny will break a co-operative. I have had experience of being involved in a different farming co-operative in the past, and a 1p difference in your base price will break a co-operative.

[Mr Goodwill]

Q Would you say that the provisions in the Bill give a great opportunity for farmers in Wales to take advantage of this sort of scheme, which will then extend markets and take on the competition that may be coming in from abroad?

John Davies: Absolutely. We need to look to each and every lever we can pull, and there is scope within the Bill to utilise those opportunities.

Dr Fenwick: It requires the political will to use those levers appropriately, and I am afraid to say that in the past, we have not seen that political will when it comes to some co-operatives and some farmer-owned businesses. We have seen bodies broken up, effectively, because it is perceived that they have too much power, and that is the opposite of what we would like to see in terms of empowerment of the industry. We need to make up for that huge imbalance that has developed over the last 30 or 40 years in terms of the supermarkets.

[Deidre Brock]

Q I have a quick question about the consultation that the Welsh Government are conducting at the moment. Does it include proposals around the capping of payments?

Dr Fenwick: Only with regard to the capping of basic payments during a transition period in order to move money over to a public goods scheme. If I recollect correctly, there is no reference to the capping of payments, which is something that we have raised repeatedly. Indeed, some have told us that there should be no cap on payments, which is a huge concern because we saw capping as a great movement forward in terms of the reputation of what is currently the common agricultural policy and in terms of the reputation of the industry.

Sadly, when we see headlines in newspapers about millionaires or racehorse owners getting huge payments, we are all tarred with the same brush. People do not realise that in Wales they took the progressive move back in 2014 to cap agricultural payments. We appreciate that the CAP legislation was not designed as well as it could have been in terms of making it possible in every country; we appreciate that England had problems from that point of view, but it is a massive backward step not to have capping.

Drinking Water Directive

Robert Goodwill Excerpts

Monday 26th March 2018 General Committees

[Dr Coffey]

I thank the hon. Lady for those questions. On the Government’s domestic ambitions, she may be aware that Water UK, which organises all the water companies, has committed to ensuring that each water company has a plan—by October, I think—showing how they intend to roll out water fountains in and around their areas. I am sure that she has already downloaded Refill, which is a wonderful app that I believe started in Bristol, the city represented by the Opposition Whip, the hon. Member for Bristol West. That is a way of ensuring that people know where water is offered. I think that most coffee retailers, although they may not yet advertise it—I am still encouraging them to do so—will refill a water bottle if asked.

I have also worked with Ministers in the Department for Transport to write to airports, railway stations and Transport for London—I think we also wrote to the Mayor. I have just realised that we have not yet written to National Express; we must rectify that. I am pleased that Network Rail launched its first water fountain last week, and that a number of airports have already started offering refills. It is certainly possible to fill a water bottle in Heathrow terminal 5, and a number of airports offer water fountains of the kind many of us used at school, where it is necessary to lean down, although that is not quite as straightforward as filling a bottle. I understand that more and more airports are coming through with such proposals, and I have certainly taken advantage of those facilities myself.

I am aware specifically of Austria’s reasoned opinion, but we look forward to working with other member states that have good domestic plans to see how we can share best practice. I have not specifically engaged with them, or indeed with the Commission, on the different opinions that have been expressed. I believe that the deadline for us to return our initial views to the Commission is within the next week, which is part of the reason we are having the debate today: to make sure that we can reflect the will of Parliament, as expressed by the reasoned opinion.

[Mr Robert Goodwill (Scarborough and Whitby) (Con)]

Having served on the European Parliament’s environment Committee, I am well aware that the European Commission often misinterprets—deliberately, I suspect—the principle of subsidiarity and uses it as a power grab. Does the Minister agree that if we were to take the principle of subsidiarity to its sensible conclusion, decisions such as the provision of water fountains should be made by local authorities, not central Government?

[Dr Coffey]

I would certainly like to see more local authorities undertake to provide access to water. Perhaps it was a century ago when water fountains were very much part of public health provision. Fortunately, we have somewhat moved on from there; the water that we get from our tap is very safe and readily available. I agree that if we can do more to work with local councils to take that forward—to some extent, water companies will be able to do that with their plans—that would be an appropriate way to ensure that water is readily available.

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[Dr Coffey]

Absolutely. I respect entirely the hon. Gentleman’s opinion and how he represents the Scottish National party’s interest in this matter. The quality of drinking water is formally a devolved matter and we have worked together closely with the devolved Administrations. I assure him that they have been involved in our deliberations so far.

[Mr Goodwill]

The Environmental Audit Committee is carrying out an investigation into nitrates in water. I am sure that the Minister is conversant with annex 1, part B, which lists the chemical parameters in water and maintains the 50 mg per litre measure, which has always been used and goes back a long way, and which many would suggest was just an arbitrary figure. Will the Minister consider whether it would be appropriate to set different levels for ground and surface water on the one hand and drinking water on the other hand, given the evidence that is emerging about the effects of nitrates on human health, as opposed to the well established information on eutrophication and the way that phosphates and nitrates in water can result in environmental problems?

[Dr Coffey]

My hon. Friend is enjoying his time on the Back Benches; not only is he embracing the Select Committees that he has joined, but he is taking the opportunity to demonstrate his vast experience in the European Parliament.

On the different levels to which he refers, I will have to look at that in a bit more detail, but I am reliably informed that we want our standards to be as good as, if not better than, what has been prescribed. I will ensure that we consider that in more detail when the time comes to respond to the Environmental Audit Committee’s proposal on nitrates.

Thinking of another member of this Committee, I am aware that there are some challenges in Poole harbour about eutrophication, involving different kinds of activities that need to be dealt with. Certainly, the water company is concerned about the run-off of nitrates from agricultural land, which is why we need constantly to make sure that our natural environment and water are of sufficiently good quality, not only for the benefit of the drinking water that we all enjoy; he will be aware of the wider responsibility that we hold dear.