To ask Her Majesty’s Government what steps they are taking to ensure small family farms remain economically viable during the transition to the Future Farming Programme for England.

My Lords, I declare my farming interests as set out in the register. We will reinvest money saved by reducing direct payments—initially applying smaller reductions for farmers with the smallest claim sizes—into improved environmental schemes and opportunities for all farmers to get their businesses ready for the transition. These opportunities include grants to invest in productivity measures, support for new entrants, farmer-led innovations and improving farm resilience and sustainability.

I thank the Minister for that reply, but he will know that farm incomes are already falling. By 2023, the smallest farms could be losing as much as 35% of the direct payments they received under the CAP. Of course, we all want the sustainable farming incentive to work, but the transition is relatively short and the Secretary of State’s latest letter still does not provide the detail that farmers need to plan ahead. I ask the Minister to confirm that the practical financial impacts of the new scheme are being regularly reviewed. Can he confirm whether contingency plans are in place to ensure continued farm viability, particularly for smaller family farms?

I am grateful to the noble Baroness for allowing me the opportunity to say: yes, precisely. We monitor farm incomes carefully and have data going back many years. The current area payments under the basic payment scheme are no friend of the smaller farmer: the largest 10% of farms in the country receive 50% of the money. We are trying to create a fairer system, and not only so that smaller farmers receive a fair amount. Many farmers who do not receive any—for example, 40% of sheep farmers—will have access to these funds.

Will my noble friend take this opportunity to correct the record? He inadvertently stated that tenant farmers had not complained about their status under the new schemes. If, as our Honourable Friend in the other place has said, legislation is required to amend the tenancy agreements, will the Government bring this forward as a matter of urgency?

I am grateful to my noble friend for the chance to clarify my remarks made to her last month with regard to the Tenant Farmers Association. The TFA provides a constructive contribution to considerations on the letting of agricultural land and a huge input into our rollout of the new schemes. The Government are working to ensure that the design of our future farming schemes is accessible to as many farmers as possible, including tenant farmers. For example, we have designed the sustainable farming incentive scheme rules for 2022 to have shorter agreements and more flexibility to better suit tenant farmers, and we have removed the requirements to demonstrate landlord consent. We recognise that some agreements prevent farmers getting income from schemes because of restrictive clauses, and we are working with the TFA to correct that.

My Lords, while I appreciate the Government’s support for small farmers, as I understand it, unless your farm is over 5 hectares you are not eligible for these schemes. You also have to have been in receipt of the basic payment system to qualify. Can the Minister outline whether this is correct?

There is a threshold for access to the scheme, but it is designed to ensure that we are reaching as many small farmers as possible. As I said earlier, many do not receive any support, particularly in sectors such as the poultry and pig sectors. This is an opportunity for many of them to get access to government money that would not otherwise be available under area payment schemes.

My Lords, I declare my interests as a director of a tenant farm and a trustee of the Prince’s Countryside Fund, whose aim is to enable family farms to thrive. An increasing amount of future farm income will come from the various ELM schemes. However, areas such as biodiversity offsetting and tree planting do not fall within the definition of agriculture. Over a third of farmers in the UK are tenants, and virtually every tenant farmer in the UK will have a tenancy Clause that requires them to use land exclusively for agriculture. If these tenants enter these environmental schemes, they may be in breach of their tenancy, and there would be a huge risk of an incontestable notice to quit from their landlord. What steps are the Government taking to ensure that tenant farmers, particularly those on short-term or restrictive tenancies, will not be constrained by landlords from entering new environmental schemes?

I am grateful to my noble friend. We are working really hard to resolve some issues that predate the changes that we are making. Countryside Stewardship, for example, has had this difficulty with tree planting and possible wetland creation. We want to make sure that we are getting the money to the active occupiers of the land. We are working with the Tenant Farmers Association where we believe that there may still be issues relating to some aspects of the agreements. We are very keen to keep my noble friend and other Members of the House informed of those discussions.

My Lords, in the last 10 years, we have lost something like one-third of small abattoirs, and yet these are very valuable to the rural economy. They improve animal welfare by shortening journey times to slaughter, and, importantly, they aid livestock farmers to be financially self-sustainable by allowing local killing and processing, allowing them to add value and produce food of good provenance, good quality and low food miles. What plans do the Government have to support small abattoirs and prevent further loss of this important aspect of rural infrastructure?

The noble Lord is absolutely right to raise this. At Defra, we chair the small abattoirs working group, which brings together industry representatives. I recently visited a project that is, in part, supported by government funding and which seeks to create mobile abattoirs, which we think could be particularly valuable in certain areas. We continue to find other ways of trying to support this vital sector to shorten food miles and improve farm animals’ access to properly run abattoirs, and I will keep the noble Lord in touch with our progress.

My Lords, I declare my interest as president of the Rural Coalition. Of course, one of the things that is really affecting the viability of small family farms is rural crime: theft of equipment, fly-tipping and, in particular, hare-coursing. As the Minister knows, we have been trying to bring forward amendments to the Police, Crime, Sentencing and Courts Bill, which Her Majesty’s Government are resisting. They have the enthusiastic support of the NFU, police from all around the country and Members from every side of this House, so will the Minister tell us the timetable to introduce provisions to try to deal with this very harmful crime?

The right reverend Prelate is absolutely right to raise this. I speak with some experience, as a regular victim of such crime. Like everyone, I would like to see greater measures brought in. We are working closely with our Home Office colleagues to ensure that proper provision can be brought in to clamp down on this particularly unpleasant crime, and I will keep him informed.

My Lords, does the Minister recognise that, while we may broadly support the general direction of agricultural policy, a number of farmers, particularly more elderly ones, do not think that they will be able to cope with the new system and are considering quitting and selling up? In the light of that, rather than allow their land to be bought by big agribusinesses or speculative funds, would it not be sensible for the Government to facilitate counties acquiring that land to establish a new generation of county farms and bring a new generation of farmers into the industry?

The county farm structure is very attractive to me and my fellow Ministers, and there are certainly discussions on trying to expand it. We are also trying to make sure that those who want to exit the industry can do so with dignity and some resource, through the lump sum payment. We are also supporting new entrants: it is absolutely key that we create some mobility in the industry. So a combination of that and a potential increase in county farms is, I think, the right way forward.

My Lords, the noble Lord, Lord Jones of Cheltenham, wishes to speak virtually. I think that this is a convenient point for me to call him.

With the reduction in help for agriculture since we left the EU and fears about unfair competition from new trade agreements, what special assistance are the Government considering so that British farms can continue to be viable and contribute to the making of—according to the British Cheese Board—more than 1,700 delicious British cheeses, including Stinking Bishop?

I say to the noble Lord and the creators of that delicious cheese that there is no reduction in support. We have ring-fenced the amount of money that goes into the basic payments scheme, and we are rolling this out in a different, more effective and fairer way. In addition to that, we have, for example, our farming in protected landscapes fund; our farming investment fund to help innovation; our research and development and innovation fund; a slurry investment scheme, which is of particular interest to dairy farmers; and farm resilience support mechanisms. So there are a number of ways in which we are supporting precisely the kind of farms that the noble Lord is talking about.