COV0045

Written evidence submitted by National Farmers Union

 

 

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: The NFU’s Vision of a Green Recovery

 

The agriculture sector is uniquely positioned to deliver broad environmental outcomes whilst simultaneously driving productivity and levelling up economic growth and job opportunities in rural economies through leveraging improvements in built infrastructure alongside green infrastructure. 

 

How can any fiscal and economic stimulus packages be aligned with the UKs ambition on net-zero, biodiversity, the circular economy, and Sustainable Development Goals?

 

The impact of COVID-19 has been significant on rural communities with lockdown threatening the viability of many rural businesses due in part to the loss of hospitality and food service markets for farmers, reduced capital investment due to low business confidence and a reduction in rural tourism.  As the Government and industry begin work to revive the economy, the current Bank of England Governor Andrew Bailey has said that we have a “once-in-a-lifetime opportunity” to rebuild the economy and its resilience against the threat of climate change. Going further, this is also an opportune moment to accelerate the levelling-up agenda, promoting regional and rural economic growth in order to support a just rural transition towards net zero where no community is left behind in the drive for a more sustainable economy.  We believe that both green and built infrastructure improvements in tandem can work together to provide significant synergies to realise a more resilient, vibrant, and sustainable rural economy.

 

In this endeavour, the agriculture sector has the ability to directly enhance a broad range of natural capital contributing towards net zero targets, biodiversity improvements and improvements in water quality and flow amongst a range of other ecosystem services. In line with the green recovery agenda, agricultural investment in built and natural solutions which create and enhance natural capital is simultaneously able to enhance farm productivity whilst also stimulating demand for rural tourism, local contractors, trade and services from rural SME’s to support the green transition. To put this into context, 65% of farm businesses have a diversified activity with a fifth hosting solar energy, a tenth hosting other forms of renewable energy and a significant proportion operating food processing, retailing, hospitality and leisure enterprises.  Therefore, enabling green investment will be to work with motivated entrepreneurial businesses who can provide a unique route to levelling up economic progress, especially in remote rural areas.  Working with farming is particularly relevant to the manufacturing sector where British agriculture is the bedrock to the agri-food sector worth £120 billion to the UK economy and employing 13% of the workforce. As such, investment in a sustainable farming sector will underpin and shape the recovery and resilience of the agri-food sector as it recovers and adapts following Covid-19. 

 

The Local Industrial Strategies being established by BEIS alongside Mayoral Combined Authorities and Local Enterprise Partnerships as well as the development of the Shared Prosperity Fund being led by MHCLG have the potential to play a central role in the green recovery and the levelling up agenda as do the agriculture specific land management measures being devised by DEFRA.  As such, it is crucial that the role of British farmers and growers in driving the green recovery is reflected within emerging cross-departmental policies in order to catalyse rural economic growth in a manner consistent with the need to safeguard and enhance our natural capital.

 

To achieve our aim of meeting net zero by 2040, we will need a range of measures, including improving farmland carbon storage. Specifically, enhancing hedgerows, increasing tree planting (including single trees, agroforestry and woodland planting) and boosting soil organic matter all contribute to our farmland carbon storage.

 

Policy must develop to address the current barriers that exist which prevent farmers from engaging in tree planting activities, for example the low payment rates which do not cover ongoing maintenance costs or the minimum eligibility threshold of 3 hectares for planting grants through the current Countryside Stewardship scheme. It is crucial going forward that farmers that volunteer to engage with tree planting on farm are offered a fair financial reward to cover the upfront capital, the ongoing maintenance and a price that reflects the long-term commitment being delivered.  To enable the uptake required to help meet the Governments manifesto commitment, tree planting must work for farming business’, alongside food production and it must be incentivised to attract land managers and owners. All forms of trees, including those found in hedgerows, single trees found on farm, lines of trees and woodlands must be encouraged and recognised for their environmental benefits.

 

During the past 30 or so years, there has been substantial engagement by farmers with voluntary environment schemes, with 70% of agricultural land in agri-environment schemes at their peak. We have seen a drop-off in the uptake of agri-environment schemes in recent years – largely driven by changes in policy, design, deliverability and accessibility. There is now a window of opportunity to rectify this decline in uptake with a future environmental policy that consists of a mix of incentive schemes, including an Environmental Land Management Scheme (ELMS), complemented by new approaches to funding environmental delivery, such as Payments for Ecosystem Services, and industry-led action to improve environmental delivery.  There are a number of actions that need to be taken to facilitate the join up between net zero and farmland carbon storage as well as other forms of natural capital.

 

Improve Countryside Stewardship

 

A more near-term course of action government can take to invest in net zero and natural capital is to make continued improvements to Countryside Stewardship, the current farm-based agri-environment scheme, to offer better incentives to farmers to participate.  Countryside Stewardship agreements may be still be in place until 2028, so ensuring that farmers can still participate is key. 

 

Recommendations:

 

  1. Simpler requirements for agreement holders (such as a more proportionate and practical approach to record keeping and evidence)
  2. A more proportionate approach to penalties and breaches of agreements to reduce the risks associated with participation
  3. More appropriate options and increased payment rates, particularly for grassland and uplands
  4. Making payments to farmers in the first month of the payment window (December), which would improve business cash flow and give confidence to businesses to invest in a green recovery
  5. Offering greater flexibility through multiple application dates, instead of one rigid annual application window.

 

 

 

 

Ensure timely rollout of the Environmental Land Management Scheme (ELMS)

 

The Government must ensure that the future Environmental Land Management Scheme (ELMS) takes a holistic approach to environmental objectives across the landscape in tandem with promoting productive farming; the dual ambitions of environmental and productivity gains should be viewed as entirely compatible.  From 2024, ELMS, will start to be rolled out and from 2028, the scheme is anticipated to be fully operational. It should seek to deliver for water and air quality and landscape character. The scheme can deliver for wildlife, natural flood management, historic environment, soil management, climate change mitigation and adaptation, woodland, forestry and upland areas.  We have seen the significant role for society that access to the wider countryside has played during Covid-19.  It is also an important way for the farming industry to engage with the consumers and for these reasons we believe it should remain a feature of the future scheme. The effective development and delivery of this scheme has the potential to play a key role in growing the rural economy. Capital grant funding to improve infrastructure will stimulate investment in local contractors, trades and SME’s to promote jobs in green infrastructure development.  In addition, the access and amenity value associated with enhanced landscapes would help support rural tourism, an area which has been acutely impacted by Covid-19, but which also has the potential for a strong revival with domestic tourism displacing international destinations. This focus on staying local has clear environmental benefits in reducing transport emissions whilst boosting local economies. 

 

Recommendations:

 

  1. ELMS should be a farm-based scheme that all farmers can access, in perpetuity.  The scheme needs to encourage the production of food by producers in England alongside environmental delivery for the lifetime of ELMS. A high uptake of ELMS can deliver across the whole countryside supporting multiple environmental outcomes, including net zero (such as hedge management, tree planting and soil management). In addition, the scheme needs to have a high level of farmer uptake in order to deliver a ‘bigger better and more joined up’ approach, as per the principles of Lawton.
  2. There needs to be support in the scheme for environmental maintenance.  For example, hedge maintenance comes at a cost to the farmer but delivers for net zero and the wider environment, providing wildlife corridors and supporting pollinators. Support or payment is needed for the on-going delivery of these environmental goods.
  3. Fair reward.  Payments need to offer a fair reward and an incentive for participation, going beyond the current ‘income foregone’ calculation.
  4. Farms are dynamic businesses and so ELMS needs to reflect those different structures and tenures to ensure inclusivity. Business partnerships are constantly changing as is the land managed by any one business. The average length of a farm business tenancy is less than three years. ELMS agreements for the whole farm of five years plus would not provide the required flexibility.
  5. ELMS should deliver across the whole country. From the current detail available it is not clear how all farming sectors or geographies will be able to engage in the scheme. Upland members are particularly concerned that there is nothing appropriate in the Tier 1 offer to give them confidence their environmental delivery will continue to be rewarded.
  6. Lessons should be learnt from past schemes.  There is a lot of knowledge about successful delivery from past schemes. It is important this knowledge is built on.

 

 

 

 

 

 

 

 

In what areas should interventions be targeted to deliver both economic and environmental benefits in the short and long term?

 

Investment priorities to drive green growth in the agriculture sector include,

 

 

Investment in integrated water infrastructure (Sustainable water for food and environment)

 

Food security is a national priority as the government pledges “to enable an innovative, productive and competitive food supply chain from farm and sea to fork, that invests in its people and skills”. There is a clear opportunity for British farming to become a global leader in delivering food security as outlined in the NFU’s ‘The Future of Food 2040’ report while managing water sustainably. Key to the delivery of more integrated management of water will be the construction of more sustainable and resilient water infrastructure (built interventions as well as the way water is used) that recognises and adequately values it’s benefit to the environment, communities and the economy.  Approaches to flood and drought risk management need to ‘join up’, to be more innovative and more ambitious. In particular we should no longer discard ‘surplus’ freshwater into the sea when other communities are crying out for the resource.

 

Our case for water for food is based on:

 

 

 

Recommendations:

 

  1. Reform planning and licensing regulations that impede the construction of more on-farm water storage reservoirs
  2. Develop and promote best practice in the management of soil and other resources to improve farm resilience
  3. Introduce incentives through the tax system to encourage investment in infrastructure such as farm reservoirs, innovative water efficient irrigation and water management techniques through new farmed environment schemes to encourage adoption of practices such as good soil management, all of which will contribute to water efficiency measures delivering more crop per drop
  4. Where agricultural land is part of the solution to flooding as part of total catchment management, such as natural flood management or flood water storage, this catchment management must be planned, agreed and paid for. More information can be found in the NFU Flooding Manifesto
  5. Government itself has identified the clear need for water infrastructure (designed to manage water risks and resource e.g. ambitious flood storage schemes, innovative water resource projects) that are fit for the future. Water infrastructure is desperately needed across the country that adequately considers the risks from water as a hazard and as a resource.  In particular, there is a need for strategic investment in infrastructure that will allow water to be moved to where there is a surplus to where there is a resource need, reducing the pressure on stretched resources.

 

Infrastructure to meet net zero, air and water quality targets

 

Investment in modern and new buildings and infrastructure, such as slurry storage, all have a huge role to play in helping the agriculture sector retain the capacity to produce food while also improving air quality and animal health and welfare outcomes.  If the agricultural sector is to meet a number of challenges in future, including to meet ‘net zero’ or meet the requirements of the Clean Air Strategy, new agricultural development will be needed.  A case in point is the interpretation of the Dutch Nitrogen cases (C 293/17 and C 294/17).  However, we are increasingly seeing that relevant authorities have insufficient certainty that a plan or project (planning permissions, permit, etc) would not have an adverse effect on the EU protected site(s) and so these plans and projects are unable to pass ‘appropriate assessment’ required under the Habitats Directive.  If an increasingly precautionary approach is taken by regulators and local planning authorities then modernisation, but also improvement in our emissions reductions, will be hampered in some rural areas.  Such investment also supports economic growth in rural economies where capital investment generally requires spending with contractors to deliver the output, benefiting the wider economy. Farm businesses usually deal with local trades and SMEs. There are a number of key existing avenues for supporting investment which the Government should look to build upon and strengthen.

 

Recommendations:

 

  1. Increase investment in infrastructure in rural areas that will support net zero aspirations including mobile and broadband access, electric vehicle charging points, energy efficient housing, public transportation, and other projects.
  2. Ensure the regulatory approach taken by authorities on infrastructure improvements is more joined up across government and more enabling and consistent where there are clear benefits to reducing emissions. 
  3. Deliver grant funding to underpin the economic viability of infrastructure supporting the mitigation of greenhouse gas emissions. This includes energy efficiency improvements to farm buildings, slurry storage as well as technologies such as ‘low emission’ spreading equipment and low emissions vehicles. 
  4. Devise attractive and accessible grant and land management payments through the Environmental Land Management Scheme (ELMS)
  5. Expand Catchment Sensitive Farming (CSF) across the country. Further advice could also be delivered through an expanded CSF programme as well as industry initiatives, such as CFE (Championing the Farmed Environment), with greater support from the Government.
  6. Allow Countryside Stewardship agreements for capital only activity, beyond the current offer. In Countryside Stewardship there are a range of capital items available that could deliver a ‘win, win’ for environment and productivity. These go beyond the grants available in CSF and could be further expanded.
  7. Increase the intervention rate for Countryside Stewardship capital grants. The example was set a couple of years ago to support the dairy sector. The intervention rate for slurry store covers was increased leading to improved uptake.
  8. Incentivise animal health and welfare improvements through mobilising grants for infrastructure improvements as well as monitoring and handling equipment alongside payments for encouraging best practice.

 

The pause in economic activity, fall in traffic, and increasing in working from home during the lockdown has resulted in rapid reductions air pollution and greenhouse gas emissions; what measures can be utilised in the recovery to continue these trends as economic activity resumes?

 

A key area of opportunity is a focus on greening supply chains and prioritising domestic sourcing to lower transportation footprints, promote high environmental standards and enhance supply chain resilience. The role of domestic food production and the development of local agri-food businesses should be a key component for any approach to a green recovery. More broadly, green recovery should be addressed through “place-based” actions, where particular consideration is given to the challenges and opportunities of different areas.

 

Our recommendations include:

 

  1. Support provision of key rural infrastructure (digital, energy connections, EV charging, building modernisation). Enhanced and more extensive mobile and broadband coverage to support new agri-tech such as data collection on livestock movements, precision agriculture and guidance for semi-autonomous machinery as seen in our annual Digital Technology Survey; upgraded capacity, streamlined regulatory processes and support for energy storage to enable on-farm renewable energy to interface with the electricity and gas grids; prioritisation of electric vehicle charge points to support rural dwellers and tourists alike; planning practice guidance (last updated 2015) needs to specifically reference how energy-efficient agricultural buildings and energy infrastructure (including energy storage) contribute to ‘net zero’ not just ‘low carbon’.

 

  1. The rollout of broadband and mobile is imperative in order to help make the transition to more people working from home, allow businesses to thrive in rural areas (including tourism-based businesses). As demonstrated by the NFU’s Digital Technology Survey there are significant productivity gains for farmers who are better connected, in addition to the wider benefits of connected rural communities.
  2. Provide an exemption from non-domestic rates on renewable energy and associated battery storage installations so as to remove a barrier to innovative green investment.

 

  1. Deliver a robust carbon price to enable on-farm C storage in vegetation and soils (for example, ELMS could use a 'shadow' carbon price to drive a range of environmental outcomes). Given the proposals to introduce a UK-wide Emissions Trading System (ETS) and a need to align with a potential future EU Carbon Border Adjustment mechanism, we propose that a real or ‘shadow’ carbon price is adopted by Defra as the basis for payment for public goods/results instead of income forgone.

 

  1. More explicit support for a strong domestic bioenergy supply chain, including primary as well as secondary resources. BEIS and Defra must join up their interests and endorse the flexibility and versatility of bioenergy feedstocks, available in significant quantities from UK land to meet multiple different uses that contribute to net zero, and often a source of additional profit alongside food production rather than competing with it. Bioenergy is much more than just the diversion of wastes.

 

  1. Develop a competitive market in greenhouse gas removals at a range of scales, accessible to all players. Carbon-negative technology is not confined to large-scale capture and geological storage of CO2; we believe smaller-scale opportunities will exist for farmers, coupled to AD (biogas) plants or in the form of novel land spreading of charcoal or “enhanced weathering” minerals.

 

  1. Extend existing grant support to electric non-road vehicles. The Department for Transport and the Office of Low Emission Vehicles does not currently provide 20% grant support for electric non-road vehicles like quadbikes, because they believe agriculture falls outside the General Block Exemption Regulation (GBER) for state aids. This is counterproductive for our net zero aspirations.

 

  1. Ensure that tax legislation supports wider Government policy. For instance, the definition of ‘agriculture’ for capital tax purposes should be reviewed, as noted in the recent Committee on Climate Change report ‘Land Use: Policies for a Net Zero UK’, to ensure it reflects the new expectations of land-based businesses and does not act as a barrier to desired alternative use.

 

  1. Focus on greening supply chains and prioritising domestic sourcing to lower transportation footprints, promote high environmental standards and enhance supply chain resilience. The role of domestic food production and the development of local agri-food businesses should be a key component for any approach to a green recovery as it underpins one of the largest manufacturing sectors in the UK.

 

 

  1. Local Industrial Strategies led by BEIS and the UK Shared Prosperity Fund have a key role to play in driving investment activity in green localised economies. EU structural funds have played an important role in helping farmers develop enterprises which contribute to local value-added food production, tourism and rural infrastructure development such as broadband. It is important that farming stakeholders are actively engaged in broader government dialogue beyond Defra on the green recovery and in designing the scope of future structural funds for mobilising investment to rural economies.

August 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

             

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