• Written by Andrew Davis
  • Posted on Feb 03, 2022
  • Articles

The Oxford Farming Conference seemed a little subdued this year. The decision was taken very late to hold it online rather than in person due to continuing Covid restrictions but it received limited media coverage other than the Secretary of State’s speech. The Oxford Real Farming Conference, the alternative event held at the same time, also online, attracted even less.

The main talking point of George Eustice’s talk was the announcement of new details of the Local Nature Recovery and Landscape Recovery elements of the Environmental Land Management Scheme (ELMS). That was how it was billed but, in all truth, there was very little new detail even in the Defra papers that accompanied the speech. They mainly described how development is still progressing.

Many farmers rely on the Basic Payment to provide an income as profits from their farming activities are hard to achieve. Yet the phasing out of the direct subsidy has started and all payments will finally disappear in 2027. There are fears that many farm businesses may not survive and that this will have a significant impact on food production in this country. If trade deals with other countries open the gates to imports of cheaper from produced to lower standards than ours, the decline will be exacerbated.

George Eustice countered this by saying that farm incomes had risen since the referendum in 2016 and that farmgate prices have increased significantly in the past year or two. It is too soon to judge whether this is structural or whether it is temporary but the Secretary of State is clearly relying on it continuing. In any case, he says that farmers must demand higher prices from their customers. However, much of that increase is offset by a massive rise in input costs, notably fuel, fertiliser and labour.

That brings us back to measures brought in to pay farmers for public goods, ELMS in particular. Already launched is the Sustainable Farming Incentive (SFI) which pays farmers for certain basic options. Initial grants concentrate on soil health but new options for hedgerow management and integrated pest management will be introduced soon. The aim is to attract 70% of farmers covering 70% of all farmland into the scheme. It remains to be seen whether the rates of grant are sufficient to achieve this target.

On rates of grant, George Eustice said that the Government has legally binding targets to reverse the decline in biodiversity by 2030. It aims to do this by planting 10,000 hectares of trees each year in England and to restore wildlife habitat to 300,000 ha of farmland. If these targets are to be met, rates of grant have to be sufficient incentive.

Now that the UK has left the European Union and thus the CAP, we are free to develop our own land use policies, bound only by guidelines laid down by the World Trade Organisation. Thus rates of grant no longer have to be based on income foregone and George Eustice used his speech to announce that rates of grant in the current Countryside Stewardship Scheme have been increased by an average of 30%. Thus, for example, the payment for a buffer strip alongside a watercourse goes up from £512 to £578 per hectare but the rate for winter bird food, one of the most popular options, remains unchanged at £640 per ha. There are also some anomalies, such as an increase in the grant for restoring species rich grassland but not for maintaining it.

Countryside Stewardship was universally unpopular when it replaced Environmental Stewardship in 2014; it was bureaucratic, cumbersome and over-regulated. George Eustice blamed this on European Union auditors who fined the UK an average of £100 million a year for breaches of the regulations. Now that we no longer have that oversight, the scheme has been simplified and applications for last year were up by 40%. Over 40,000 farmers, half of the total, now participate in the scheme or its predecessor.

The emerging policy has been criticised by environmental groups for not being ambitious enough and by farmers for ignoring the importance of food production. George Eustice tackled this last point by saying that 60% of home-grown food comes from 30% of land and that much of our food, such as poultry and horticulture requires little land. There are 9.3 million hectares of farmland in England so, if 300,000 ha is devoted to habitat restoration, it is a small proportion.

The other elements of ELMS to be implemented in 2024 are Local Nature Recovery and Landscape Recovery. The former is described as the improved and more ambitious successor to Countryside Stewardship but there are no details of options or grant rates in the latest paper. Collaboration, as in Farmer Clusters, will be encouraged and the existing Facilitation Fund will be extended to the new scheme. The targeting of options will be set out in land management plans but again no details are given. One trial was based on such plans being drawn up by local authorities but was not successful. Having local planners responsible for farmland use planning would be anathema to most farmers so we must hope it is not part of the final structure. All the evidence shows that these schemes are most successful when farmers themselves are given the responsibility.

Landscape Recovery is aimed at much larger projects, initially fifteen ranging from 500 to 5,000 ha each, designed for large scale tree planting or wetland restoration.

Farming is a long term business and planning for the future is critical. The phasing out of the Basic Payment coincides with other major uncertainties, such as huge inflation in input costs, and many farmers are struggling to find a way to survive. Whether ELMS turns out well in terms of providing essential income is unclear and the total lack of detail makes planning for the future almost impossible.