My Lords, I, too, shall hurry to get us back up to time. I do not have many points to make, but I should first declare an interest because I am married to a farmer, whose farm is medium-sized. As support has moved from production-Pillar 1, as the noble Earl, Lord Cathcart, said-to Pillar 2, the environmental stuff, she has taken land out of economic production and moved to high-level and entry-level agri-environment schemes and so on. That shows that, if you put incentives in the right place, people will respond. That is the important thing. If you had a bit more carrot and bit less stick, you would get a better response. It is also a lot easier to administer; it is how we used to do things.
I read some of the discussion about this issue. There is a very good section of the Defra website, which is full of laudable and good intentions. How could we fault the provision of something that states aims such as,
"internationally competitive without reliance on subsidy or protection ... rewarded by the market for its outputs ... and by the taxpayer only for producing societal benefits ... environmentally sensitive ... socially responsive to the needs of rural communities"?
All of that is up there on the web if you want to read it; it is good stuff. However, the problem is how you translate that through a bureaucratic system and inspire lots of people across Europe. There are different cultures and objectives, economic differences, differing awareness of the rule of law and different levels of willingness among people who run the system to co-operate with the farmers.
I listened, for instance, to the point made by the noble Lord, Lord Greaves, about fairness to eastern Europe and providing a flat rate. We are going to transfer money from our taxpayers to eastern European landowners. I think that I shall get myself a bit of land out there and then sit back and get all that lovely money for doing very little. I do not know if that is what will happen, but if you do not get your incentives in the right place, you can end up with unintended consequences. That is the biggest danger of doing things that way.
The biggest cost is in administration. I was delighted to read that the Luxembourg farm council in late June heard calls from member states,
"for EU rules to be simplified across all legislative areas affecting farming-including health, food safety and environmental rules".
They stressed the need for the simplification of EU regulations. That is one of the most important things.
At the sharp end, farmers used to be people who loved the land and loved their animals. That is why they farmed. It was not because they wanted to sit and read papers. Why should a farmer need a degree in paperwork-you now need one-to run his farm? To release ourselves from paperwork, we need someone with the mindset of an auditor, accountant or actuary. They must be very precise, because they must reconcile large areas to 0.01 of a hectare. They must make sure that all the boxes are ticked correctly. When they have cows that live out all year round because they are a native breed and very hardy, they must know how to respond to questions such as, "Do you have animal housing?". The answer is no. They are then asked: "Do you have adequate ventilation in your animal housing?". If they answer no, they fail; they have to tick yes to say that they have adequate ventilation in their non-existent housing. There are many such things. Someone who is used to ticking boxes can do it, but farmers cannot, because they think properly and logically and deal with the real world.
Every two or three years, thick booklets are issued. They get bigger and bigger. It is a challenge to wade through them and spot the changes. A lot of it stays the same, but there is always change. It does not make it easy to plan and manage. With uncertainty, you cannot plan. You read up on new schemes, but will the money be there? The goalposts move and suddenly there is no money. If you do not get into a scheme by such and such a date, you will not get the money. Is it worth trying to change? We were lucky. We got on with it just in time and hit the window by a few days. You cannot get into the HLS scheme until early or mid-spring of next year. The money that is being taken out of modulation is going into that. Where has it gone? Probably in administration.
Another thing that I have noticed is that on the whole there should be light-touch inspections, unless you have caught someone who is deliberately abusing something-tearing it to pieces and trying to make too much out of it. Most mistakes are inadvertent. Someone is ill, ear tags fall out of cows and calves, things happen and people get muddled, but for minor infringements there are now heavy fines, because the EU is fining Defra for not enforcing hard enough. That is madness, but the bigger madness is fining Defra, a government department that has budgeted to produce an administration in order to run this thing efficiently. What happens? The first year, the EU fined us £70 million or £80 million, which was taken from flood defences. What happened a few years later? We had flood problems.
What happens now? We have too few people on the mapping side. I suspect that money has been taken from there. I have just redone the mapping for the fourth time since 2004. The first lot of mapping was when things went digital-we covered just the cropped areas. Then we spotted that environmental stuff was going on, so we remapped the land to the field boundaries-the ditches and hedges-because we were going to get paid for that. Two years later, the decision was made to go for a more accurate master-map system, so we remapped all the areas because it had been decided that all the field sizes had changed slightly. Last year, the EU changed the definition of boundaries, which led to fields being amalgamated changed around. It sounds great, but we have to change fields and field names and synchronise with the agronomy system, as we use agronomists. Multiple systems are involved and it is a nightmare. I still have not finished doing it properly.
I have another point. We are encouraged to make the single farm payment online, but when we want to make sure that we do our entitlements properly-under Defra's "use it or lose it" principle-we have to do it on paper and make sure that it gets in on time by snail mail. It is dotty. Why is there not another box on the end of the form? If Defra cannot get the systems right, it should fire the people who are writing them-and fast. My advice is: keep it simple, stupid-or KISS.