Written evidence submitted by the NFU (ELM0012)

 

  1. The NFU represents 55,000 members across England and Wales. In addition, we have 20,000 NFU Countryside members with an interest in farming and rural life.

 

Introduction

 

  1. The NFU welcomes the opportunity to feed into the EFRA Committee inquiry entitled: Environmental Land Management and the agricultural transition. Like the Committee, the NFU is very interested in the development and delivery of the Government and Defra’s plans to move away from the Common Agricultural Policy to a new domestic farming policy. We have briefly set out below our responses to the six questions that the Committee has posed.  Should the Committee wish for any further clarification around the NFU’s responses below, please do not hesitate to get in contact.

 

Questions & NFU Responses

 

Question 1 - Is the Government’s timeframe for the national pilot, full roll-out of ELM and phasing out direct payments by 2027 feasible?

 

  1. The NFU has significant concerns regarding the feasibility of the timeframe to deliver an equitable transition which provides farm businesses with the opportunity to make informed decisions and effectively navigate the transition to a new agricultural policy. The key concerns with the timeframe are as follows:

 

  1. Lack of preparation time leading into the agricultural transition - The preparation period ahead of the agricultural transition has become increasingly condensed. This is due to the delays in agreeing the terms of EU Exit whilst the timescale for agricultural transition, originally communicated following the first publication of the Agriculture Bill in September 2018, has remained inflexible to the changing circumstances. The original timeline had intended to have an Agriculture Act in place by the Summer/early Autumn of 2019, thereby allowing time for policymakers and businesses to prepare for the agricultural transition period beginning in 2021. The NFU has made representations to delay the start of transition to enable robust scheme design and make sure adequate business guidance is available so that farm businesses are able to prepare and respond to the proposed transition.

 

  1. Given the significant levels of political uncertainty in recent years, an outline of the transition schemes has been communicated only as recently as November 2020, one month prior to the beginning of the agricultural transition.  This is unacceptably short notice for businesses and we touch upon this point again within Q3 below. It is also notable that within the policy document ‘The Path to Sustainable Farming: An Agricultural Transition Plan 2021 to 2024’ (ATP), only the phase-out of direct payments provides the level of information which businesses may use to prepare for the transition. Whilst there is clear information on the profile of direct payments phase-out for the first half of the transition, there remains little detail on alternative support schemes during the transition as the majority of these schemes are still in design. In addition, whilst there is a clear signal that lump sum payments will be offered in 2022 for those wishing to exit the industry, the vacuum of business-relevant information on alternative strategies for navigating transition makes it significantly challenging for farm businesses to evaluate the most appropriate options for them.  It is disappointing that there is little information on what the farm resilience support will offer, for some they see it being geared towards exiting the industry rather than providing businesses with sufficient granularity of information to help increase their business resilience and productivity alongside the delivery of environmental and welfare outcomes.

 

  1. A highly disruptive leadup to the agricultural transition has undermined efforts for co-design of schemes and effective, timely communication and as such we now find that rather than a well-defined transition path, much of the scheme design work will be conducted during the transition itself. In effect we are playing catch-up which has undermined the integrity of an effective transition within the proposed timelines.

 

  1. Impact of phase out of direct payments and Environmental Land Management (ELM) timelines - NFU impact analysis of the proposed direct payment phase-out has shown that medium performing farm businesses on average would see a 14% reduction in profitability in 2022 with profits reducing 25% by 2023 and over a third (35%) by 2024. For some sectors reductions in profitability for medium performing farm businesses would be as high as 28% in 2022, 49% by 2023 and almost three-quarters (71%) by 2024. This demonstrates that the initial signs of financial stress will begin to materialise as early as the second year of the transition and will escalate significantly from this point in the form of pressure in bound cash flow. As a result, many farm businesses need to plan now for the transition in order to restructure their operating models to mitigate the significant impacts of BPS loss in the following years. As stated above, the details of the progressive reduction to direct payments beyond the 2021 payment year were only confirmed in November 2020; prior to that point only information on the maximum cuts that could be implemented was provided.

 

  1. The full roll out of ELM is planned to occur in 2024 by which point on average, medium performing farm businesses are expected to have lost over a third of their profits with losses being a high as 71% for medium performers in some sectors due to the front loading of the phase-out of direct payments. Prior to the launch of ELM, the core elements of the Sustainable Farming Incentive (SFI) will have a central role to play from 2022 to support farm businesses in the transition from direct payments to ELM, but the requirements and level of associated payments is not known at this time. The lack of information currently available on the SFI scheme design and payment rates inhibits the ability of farmers to plan how they will balance their agricultural production with environmental delivery in the years ahead.  Any further delays in communicating scheme details will inhibit the ability of farmers to make informed decisions on scheme engagement and business investment.

 

  1. As a result, there is a risk that in 2022, farmers will be required to make life and business changing decisions on lump sum exit payments without sufficient information in order to make an informed view.  It will be impossible for farmers to evaluate the potential of their business to successfully transition into ELM, particularly as national pilots will continue up until 2024 meaning that the ELM offer will not yet be defined for a number of years yet.

 

 

  1. In terms of current legacy CAP schemes, Defra has implemented some positive changes to Countryside Stewardship (CS) now it is operating under domestic legislation. Whilst the NFU welcomes some of these changes (such as removing the draconian approach to penalty application), fundamental issues still exist that will prevent engagement by farmers. Those with expiring Higher Level Stewardship (HLS - Environmental Scheme) agreements that are not eligible for a rollover are likely to fall out of agri-environment altogether before ELMs is fully available unless some fundamental changes are made to the CS offer. CS does not reward the scope of activity that was funded through its predecessor and in many cases the payments for CS are much lower (around third value), the prescription requirements more challenging and the evidence required onerous. More must be done to enable farmers to engage with the CS transitional offering and bridge the gap to ELM.  The NFU’s transitional CS asks are outlined in Q6 below.

 

  1. Issues with national pilot timelines - With three to four years to full implementation of ELMs, there are still some fundamental underpinning decisions which need to be taken by Defra (as covered in the 2019 NAO report). To write the scheme guidance and mobilise the IT infrastructure requires fundamental scheme design to be in place approximately 18 months before the scheme start date i.e., autumn 2022. As yet, no decisions have been taken on the delivery body or IT platforms to be used for the full roll out of ELMs in 2024. The pilots do not appear to test all elements of the scheme, for example, the inspection and penalty regime as the timelines are insufficient to allow for this to happen.

 

  1. Our understanding is that the National Pilots will be informed by the ELM consultation and the Tests and Trials. There remains a lack of clarity on the intended outcomes of the national pilots. Will they test the end-to-end process? If that is the intention, then we would expect to know much more than we currently do about the pilot at this time. For example, before guidance and agreements can be drafted for the pilot, we would expect to have knowledge regarding the payment methodology and have this applied to actions or options that farmers will be paid for. We would also expect to know the monitoring and penalty regime, so participants can understand the level of risk associated with taking part. All this is happening when the core SFI is due to be rolled out from 2022.

 

  1. One of the issues we had with the roll out of CS in 2015 was the IT platform and programme failed to deliver the original ambitions for CS. Originally, we expected the pilot to test the IT and administration of ELMs, at a scale that would assess both delivery capability and the likely uptake amongst farmers. Defra now state in the discussion document that the delivery arrangements for ELMs from 2024 will be addressed separately to the pilot. On that basis we assume the IT and back office requirements are not actually being tested for a significant scheme by the pilot. How will these be developed and when will they be tested before ELMs goes live in 2024? This is a great concern to us, as we do not want to see the problems of the past resurface in the future.


Question 2 - Will the Sustainable Farming Incentive be a viable support measure for farmers before the full roll-out of ELM? Is further support required during the transition period?

 

  1. Defra’s intention is for the Sustainable Farming Incentive (SFI) to be available to all farmers. It will pay them for actions they take to manage their land in an environmentally-sustainable way. We understand that actions will be grouped into simple packages to make it as easy as possible for farmers to identify what actions are best suited to their land. Defra will support these farmers to develop a whole farm plan to help make their land and their business sustainable. The structure aims to provide for a ladder of progress through ELMs, allowing different entry points depending on level of ambition.

 

  1. In light of the anticipated reductions to BPS, the NFU welcomes the early introduction of the SFI which will be made available to all in 2022. This will be a crucial step on the ladder prior to the full roll out of ELMs in 2024. The NFU also welcomes the ambition to design a scheme trusted by farmers, securing high levels of uptake and also Defra’s commitment to ensure the scheme works for tenants and landowners. Defra helpfully acknowledges that ELMs will reflect environmentally sustainable techniques including organics and regenerative practices, as well as the landscape and character contribution of the uplands, commons, and rare and native breeds. 

 

  1. However, as highlighted in Q1, with the SFI due to be implemented in years’ time, like the National Pilot, details like payment rates and standards for participation are still unknown. Equally concerning is the detail lacking on how the scheme will be delivered or how it will operate, for example, whether farmers enter into different contracts for each element of the scheme.

 

  1. In order to capture the level of engagement and uptake needed from the farming community, it is vital that the SFI is a farm focused scheme which recognises the role farm businesses play in environmental delivery across the whole countryside. However, to achieve this ambition the SFI needs to be a truly sustainable scheme that recognises that businesses need to be viable to deliver environmental schemes. It is not enough simply to introduce another agri-environment scheme within a self-contained silo without consideration of productivity, profitability, resilience, volatility, supply chain fairness, food security and international trade - all things highlighted within the government’s previous “Health and Harmony” consultation. British farmers and growers will compete in a global marketplace in the face of supply chains that often fail to deliver fair returns to the primary producer. Fundamentally the SFI must enable farmers to produce products for the market alongside producing for the environment and the scheme rules must not comprise other elements of farm production without fair reward, for example when livestock graze semi-natural grassland it must be possible to meet dietary requirements for welfare and produce an animal fit for the market. It also relies on Defra matching their commitment to set fair payment levels within the SFI (and the wider ELMs). It must also clearly support maintaining current environmental delivery.

 

  1. As mentioned in Q1, currently there is simply not enough content available to enable businesses to make an informed decision as to whether the SFI (and eventually full ELMs) will be a viable proposition in the future. In addition, and in relation to the SFI packages of actions that could accompany the national pilot, we want to see:  

18.1.                    A scheme that is fit for purpose, simple or accessible for all farmers.

18.2.                    The payments rates offer a fair reward.

18.3.                   The actions required allow farmers to deliver environmental outcomes without constraining the ability to produce marketable products and allow farmers to meet the health and welfare needs of their livestock.

18.4.                 The packages of actions are a means of marketing the scheme and farmers retain the ability to choose the appropriate actions for their land.

 

  1. Farming organisations have come together and have put forward its shared vision for the Sustainable Farming and Food scheme that addressed farmers’ dual role as food producers and custodians of the countryside. We elaborate on this vision in Q4, but essentially the SFFS sets a path for farming to be both competitive and environmentally responsible, incentivising actions that grow productivity with less environmental impact. We strongly recommend that the Defra recognise this shared ambition by our industry and adopt these as its key principles within the SFI, and adopt measures and scheme structure which reflect these principles.   There is serious reputational consideration here for Defra; getting the SFI right for our industry is imperative as history has shown early impressions tend to stick and can hinder future engagement and uptake.

 

 


Question 3 - How effectively has Defra engaged with land managers and other stakeholders on the design of ELM, including on the transitional arrangements?

 

  1. The NFU sees two aspects to this question, first is communication to the industry and second is engagement with the development of the ELMs and associated transitional elements. 

 

  1. Communication – As touched upon briefly in Q1, since the Defra Health & Harmony consultation was launched in February 2018 (which looked at various elements that Defra and the Government sought views on developing its new agricultural policies) there have only been 5 updates officially released on the post CAP support scheme environment since August 2018, these being:

21.1.                    September 2018 - Health & Harmony Response & Policy Statement found here.

21.2.                    August 2019 - Farming is Changing Leaflet (now withdrawn from Gov.uk)

21.3.                    February 2020 – Farming for the Future: policy and progress update found here

21.4.                    February 2020 – Environmental Land Management: policy discussion found here

21.5.                    November 2020 – The Path to Sustainable Farming: An Agricultural Transitions Plan 2021 to 2024 found here (ATP) and an updated Farming is Changing leaflet found here.

 

  1. In the NFU’s view, the industry has not been given regular updates on the significant changes that are being implemented from this year. We believe that Defra now recognises they should have done more in the past, but even recently external factors such as funding implications and cross government clearance has stalled delivery of vital and timely information to farmers.

 

  1. In terms of the information provided in the latest ATP document and associated Farming is Changing leaflet (the latter being sent to farmers), there is useful information on what is happening over the next 3 years for the existing CS and ES schemes. However, many farmers will already be familiar with these schemes and there is other information available to refer to for the detail.

 

  1. In contrast, the detail given is still very high level for the future ELM schemes and new scheme transitional arrangements (National Pilot which to launch in Spring 2021 / core elements of the Sustainable Farming Incentive which is to launch in 2022). It fails to give the granular detail that farmers desperately need to work with or give them any confidence to plan the future against. Equally, there is still at this stage many elements and details not fully explained or key information missing. Defra provide some helpful narrative explaining their rationale and thinking within the ATP and how they intend to carry out the National Pilot and transitional element of the SFI from the ELM.  But the programme of schemes feels disjointed and there remains a wide gulf between Defra’s vision and the firm plans and granularity urgently needed by farmers.

 

  1. A critical challenge over the next couple of years is there is going to be a proliferation of schemes available to farmers: the National Pilot and early core elements of the ELMs, will be launched alongside existing domestic and EU based legacy schemes (CS and ES), at the same time as a range of schemes covering tree health, woodland creation and protected landscapes are developed, piloted or are available to farmers. Very careful management of information and critically how all these schemes fit together (or not has the case may be on farm, taking account of multiple funding considerations) is going to be a key challenge for Defra and its delivery bodies. The goal must be to avoid confusion, (which is already becoming evident amongst farmers) and create conditions that farmers will engage and feel confident that they are making the right decision given all the multiannual schemes options open to them.

 

  1. Engagement – The NFU appreciates the efforts of Defra to engage with the industry as it develops the ELM. However, there are several points we would make in respect to the approach being taken:

 

  1. Defra appears to be engaging a wide range of farmers, land managers and stakeholders through many routes, numbers are not known. It appears from the outside that this engagement is rather scatter gun. Consequently, it is not clear whether any one stakeholder group has full oversight of ELM development. Whilst engagement is good to see, there appears to be a lack of coordination and our concern is that this could ultimately absorb disproportionate amount of time, raise expectations (and deliver disappointment) and not necessarily arrive at the best outcome for those that manage most of the rural environment and crucial to the delivery of outcomes - farmers. Whilst there are current challenges to face-to-face engagement, the NFU has offered and Defra has at times accepted and engaged with several of our member boards, forums and interest groups, but this has not always been easy to achieve. There is clearly a lot happening that is not being shared externally, which breeds suspicion and undermines trust.

 

  1. There are still at this stage many fundamental issues that need factoring in to design that we are unclear on and that could become a barrier to participation. For example, is Defra’s planning assumption that this will be a whole farm scheme and contracts will be multi-annual. 

 

  1. Defra refer to ‘co design’ when engaging with the industry and stakeholders. Our experiences to date are that this has been very limited, very controlled and not a two-way conversation that we had hoped it to be. We recognise co-design is a new approach that everyone is learning about. We have concerns that the process is not engaging at the level it needs to be. Defra’s engagement with stakeholders to date has generally been through large stakeholder meetings, but it is unclear how Defra gather a view to go forward from such events and there is limited feedback following such sessions. The NFU feels there needs to be smaller groups that can talk about technical issues, actual implementation and delivery, rather than higher level lobbying, especially as time marches on and 2021 is the first year of delivery. There are various workstreams in existence, such as advice, payment rates, but not as expected across the range of elements to ELMs and often engagement has been very sporadic and again disjointed. As a leading organisation representing the majority of farming businesses in England, we are deeply concerned with what we have seen to date.

 

  1. In terms of the current Test and Trial of elements of ELMs, the NFU and its members are directly leading on 4 projects and other members will be involved in many of the other projects that Defra quoted. It is also unclear how much of what is being tested will eventually be part of the final ELM scheme. Equally it is not entirely clear what the underlying logic of why some projects have progressed and some perhaps have not.

 

  1. The current approach of co-design and in particular iterative working does not fit well with a sector like agriculture that is based on long-term decision making and is in need of certainty after several years in limbo.  This is needed to inform investment plans which realistically cannot be done much quicker than in a 1–2-year period.

 

 


Question 4 - How can ELM be made an attractive business choice for farmers and land managers while effectively delivering its policy goals?

 

  1. In 2020 farming organisations came together to propose a Sustainable Food and Farming Scheme (SFFS) that should form the scope and approach of the Government’s forthcoming ELMs programme. This proposal sets out that the new scheme should command the interest of the majority of farmers and land managers, and each agreement should be driven by the aspiration and capability of each farm business. The proposal sets out key elements of what we think a successful public benefit scheme should look like.

 

  1. We firmly believe that the SFFS could harness the potential of British agriculture to produce food and care for our environment, wildlife, land and animals. Fundamentally, we do not want farmers or land managers to face the dilemma of producing food or conserving their land. Our shared goal is that farming should be to grow food, fibre and energy, while delivering more for the environment and biodiversity.

 

  1. That is why our SFFS outlines how farming can be both competitive and environmentally responsible, incentivising actions that grow productivity with less environmental impact. It is, in a word, sustainable.

 

  1. The SFFS must be broadly based, with engaging and accessible options for farmers, growers and land managers to achieve multiple environmental and public good outcomes. The expectation is that SFFS will provide the basis for farming to deliver across a wide range of areas, including: maintaining and restoring soil, water and air quality; reinforcing a sense of place and landscape character; unlocking farming’s ambition to be net zero by 2040; enabling those managing our land to mitigate flood impacts and make best use of water; applying the Lawton principals for more, better managed and better connected habitat, helping meet the ambition for thriving plants and wildlife in the 25 Year Environment Plan; protecting animal health and delivering continuous improvements in the welfare of our farmed animals; and, improving public access to, and public understanding of, the countryside. To enable this, we propose a ‘ladder’ approach to environmental sustainability, while retaining sufficient flexibility for the majority to participate according to the applicant’s skills, environmental setting and ambition, and environmental features present.

 

  1. In addition, to secure business engagement the scheme needs to be simple, accessible, deliverable on farm in return for a fair reward. It needs to reward existing delivery and maintenance of environmental outcomes as well as encouraging additional delivery. There is a need to learn the lessons from the implementation of CS which has led to low uptake. 

 

  1. It is important that farmers and growers do have the ability to choose what is appropriate for their farm. They should not be constrained by artificial barriers created by different schemes within ELMs or groups of options. Farmers and growers should be allowed to select the most suitable actions for their farm.

 

  1. Going forward in ELMs there needs to be a delivery body approach that is about finding solutions to enable good delivery, rather than being blocked by, say, an IT programme. For example, current agri-environment schemes have had the scheme rules dictated by the way a computer has been programmed.

 

  1. As mentioned briefly in Q3, land tenure and business change have been barriers to participation in previous schemes. The length of the agri-environment has excluded land managed under shorter tenancies. The ELM offer should start with annual agreements. The average length of a Farm Business Tenancy is less than 3 years. Under a tenancy the land manger may not be able to engage in all aspects of agri-environment schemes. For example, where farm infrastructure is inadequate and is the responsibility of the landlord, not the tenant, and the landlord refuses to repair or update it or refuses the tenant consent to build adequate infrastructure. ELM does need to come up with simpler provisions for dealing with tenanted land.

 

  1. Farm business structure can change due to events such as deaths, marriages and divorces. ELMs must provide for such change during an agreement, as clearly some of these situations are unplannable, where those agreements are longer than a year. Farmland holdings can change annually. Under existing agri-environment schemes it has been very difficult to make changes to business structures or land arrangements. It takes too long.

 

  1. Many farmers and growers will look at ELMs as a separate enterprise within their accounts and it will need to provide a suitable economic return fully accounting for the resources invested, the risk profile and the return on investment to secure uptake. The NFU has been critical of the income forgone calculation within CS which has led to low payments for grassland and upland options.  There is a need for Defra’s narrative to reward public goods to be matched by the payment approach in ELMs.

 

  1. When ELM is planned to be fully available in 2024, there is a need to provide continuity and consistency to provide time for farmers to develop their confidence and trust in the new scheme. This is important as the industry will be operating under a new policy framework. There will be numerous new schemes available that farmers will need familiarise themselves with. Defra’s agricultural transition plan listed more than 15 new schemes between now and 2028. Many relating to environmental schemes.

 


Question 5 - How can the Government ensure that ELM agreements achieve their intended environmental outcomes, reduce bureaucratic burdens on farmers and deliver value for money

 

  1. Government needs to design a scheme that can be delivered simply, alongside productive business activity, that will secure high uptake delivering a wider range of public goods across the whole landscape. For example, this is important for climate change outcomes, air and water quality, wider biodiversity, for example, farmland birds. However, if the requirements for entry into an ELM agreement are set in such a way that they undermine or severely restrict the ability of that business to continue to secure income from the market, then it is likely that the scheme will be significantly less attractive and in some cases entirely financially unviable.

 

  1. The scheme must set out clearly the actions required on the ground, the rewards, and risks of participation so a farmer can make an informed business decision whether to engage. The scheme needs to make available good clear guidance and advice to support a farmer and for this to be available in good time.

 

  1. The actions required with in ELMs need to be appropriate to the location, for example, if planting dates are used for arable actions/ options they need to reflect geography and weather conditions. Also, the actions required need to clearly link to the environmental outcome desired, and the applicant can see the requirements deliver.

 

  1. The schemes need to be flexible to address unforeseen circumstances without lots of bureaucracy for example, drought, or wet weather. The scheme rules need to be simple, for example, moving away from arbitrary dates for actions to be completed. We cannot continue to operate by fixed dates which are there for the benefit of inspectors. There should be the ability to have options that are locally relevant, for example the Norfolk Broads an area that currently cannot enter CS due to the lack of suitable options.

 

  1. Farmers and growers will want to know how they are going to be monitored to understand whether it is deliverable. The monitoring requirements need to be practical and make sense on farm. In CS the high on-farm evidence requirements are a barrier. One error around evidence can lead to a significant penalty. There needs to be a proportionate scheme in place.

 

  1. The NFU accepts that there will be an element of targeting for environmental outcomes in the higher components of ELMs e.g. SSSIs and priority habitat management. However, ‘lines on maps’ have created an arbitrary approach that should be avoided e.g., all the farm’s fields are in the Catchment Sensitive Farming (CSF) target area, but as the farmyard is not the CSF infrastructure improvements cannot be delivered.

 

  1. Within the Defra ELM proposals, it is unclear how the local priorities will be determined. The NFU suggests that any local governance arrangement involves farmers and growers who will be delivering ELMs on the ground. As farmers and growers will be affected by the priorities there must be a requirement to consult farmers and growers effectively on the local plans, not least as they will occupy the majority of the land covered by the scheme. Local priorities or opportunities should be based on robust local evidence and data. Any local priorities to be used for ELMs targeting must sit within a national framework that recognises the need for productive farming. The priorities should be signed off by the responsible Government body. The priorities need to be relevant to what can be delivered by ELMs and suitable for the land. Again, what we do not want to see is a postcode lottery given local adds a new dimension to what farmers have been used to up to now.

 

 


Question 6 - What lessons should be learned from the successes and failures of previous schemes paying for environmental outcomes?

 

  1. Over the last 30-40 years, there has been substantial engagement by farmers with voluntary environmental schemes. In England, the area of farmland covered by agri-environment agreements rose gradually during the 1990s so that by 2004 they covered around 14% of all farmland. From 2005, the introduction of the Entry Level of Stewardship (ELS), which could apply to all farmland, increased the area covered considerably to a peak of around 72% in 2013. But the area covered since the introduction of CS (2015) has fallen and is unlikely to rise significantly in coming years.

 

  1. Under ELS and HLS schemes, more than 30,000km of hedgerows were planted or restored, providing habitat and shelter for a range of wildlife. Farmers created around 37,000km grass margins and 2,600km stone walls active managed as part of schemes. ELS and HLS schemes were a great success with high farmer buy-in and huge environmental delivery. We need to see such pre-existing land management activity and much more done voluntarily by farmers being formally recognised under ELM.

 

  1. The change to CS in 2015 has led to the significant drop-in engagement. In 2020, Defra received just under 1,000 Wildlife Offer (WLO) applications in the same year, only 1.3% (13) were upland offers across the four WLO schemes (uplands, mixed, lowlands and arable). Uplands have historically had high levels of engagement with agri-environmental schemes; however, the CS offering is wholly inaccessible for many. This is largely due to onerous evidence requirements, low payment rates and barriers within specific option prescriptions. This is not only the case for our upland farmers, but also true for many farmers across the country particularly those with grassland/livestock. HLS rollovers are crucial in bridging the gap to ELM and avoiding a cliff edge scenario for those farmers who are unable to engage with CS, but lessons must be learned from past mistakes as the future ELM scheme is developed and rolled out in the years ahead. 

 

  1. More generally, the current CS offer is not fit for purpose. The scheme is complex, bureaucratic by nature requiring onerous record keeping and evidence gathering. The payments are not proportionate to the level of burden and risk associated with the scheme. The payments can occur 18 months later than the first agreement costs are incurred. Whilst administration is improving agreement offers are still going out months after the formal start of an agreement. The NFU encourages the Government to address the fundamental issues in the transition period (from the present to the launch of ELMS in 2024) to improve uptake and engagement and prepare farmers for the future domestic environmental scheme. 

 

  1. The recent move to domestic legislation has allowed various improvements to be made. The NFU welcomes the recent development to start to move away from the draconian approach to penalty application that in previous years has proven to be a barrier to engagement for farmers. The continuation of HLS rollovers until ELMs is available is also appreciated. The NFU hope to see further positive changes in the coming years to the way the CS scheme is domestically operated, such as:

54.1.            A commitment to pay agreement holders 100% of the money due in December for the works undertaken in that year.

54.2.            A reduction in record keeping and evidence requirements for agreement holders, moving to a more proportionate and practical approach, for example, through re-drafting option prescriptions to reduce the inflexible option requirements e.g., dates for planting compared to broader requirement to plant within the season.

54.3.            Payment calculations need to be reviewed to align with ELMs to offer an incentive for participation and reward the delivery of public goods.

54.4.            HLS rollovers can be improved, for example by offering multi-year extensions with the removal of penalties backdating to the start of the original agreement. HLS and CS rollovers should be able to include new capital items.

54.5.            The requirement to complete capital works in two years can be very tight. We want to see continued flexibility offered by RPA to enable works to be completed to longer timeline where difficult circumstances have prevented delivery.

54.6.            Move to monthly start dates to enable continuous support for agreement holders providing the public goods desired.

54.7.            Ensure the RPA is resourced to continuously improve delivery performance, for example, to enable agreement offers to be made before the agreement starts.

54.8.            Break the requirement for SSSI land to be included in the application if a landlord/ tenant arrangement or common land arrangement is preventing the SSSI for entering a CS agreement.

54.9.            Simplification of the scheme and application process so agents are not required to submit a successful application, which is the current position.

 

Additional Points:

 

  1. We have set out below a couple of points that the Committee should be aware of and that are not covered in the responses above:

 

  1. Regulatory Baseline – The current situation is that Defra are still working up the details and approach it will take for both interim schemes – ELM National Pilot and other schemes and what the approach should be from 2024 onwards when ELMs is said to be fully up and running.  As we know the Government is clear that they are going to pay for public goods and new schemes will be set over above this legal baseline.  Details currently are lacking.

 

  1. Non-ELMs elements of the Agricultural Transition Plan - Whilst ultimately ELM by 2028 will be the main Government funded vehicle for supporting the farming sector, it is not the full Agricultural Transition Plan.  It should be noted that there is a lot of activity and (public) money being used on a whole suite of non-ELM schemes and initiatives, a couple of which are referred to in passing above.  Therefore, whilst not the focus of this current Inquiry, it is important that the Committee is aware of these other important elements vital for a successful agricultural transition. The NFU has several concerns about how those non-ELM elements are progressing.