Direct Payments to Farmers (Simplifications) Regulations (Northern Ireland) 2022

Assembly Business — Executive Committee Business – in the Northern Ireland Assembly at 12:00 pm on 7th December 2021.

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Photo of Edwin Poots Edwin Poots DUP 12:00 pm, 7th December 2021

I beg to move

That the draft Direct Payments to Farmers (Simplifications) Regulations (Northern Ireland) 2022 be approved.

Photo of Roy Beggs Roy Beggs UUP

The Business Committee has agreed that there should be no time limit on the debate.

Photo of Edwin Poots Edwin Poots DUP

The current direct agricultural support schemes, which include the basic payment scheme, are worth over £293 million annually to farmers in Northern Ireland. The purpose of the regulations that I bring forward today is to implement improvements and simplifications to the rules governing the schemes.

Earlier this year, the Direct Payments to Farmers (Simplifications) Regulations (Northern Ireland) 2021 gave legal effect to a number of improvements to and simplifications of the rules governing the direct agricultural support schemes for the 2021 scheme year. Since the introduction of the 2021 regulations, my officials have continued to review the rules governing the schemes and have identified the following additional simplifications and improvements, which are designed to make the application and payment process simpler for claimants and those administering the schemes. The Direct Payments to Farmers (Simplifications) Regulations (Northern Ireland) 2022 will give legal effect to those improvements and simplifications.

Part 2 of the Direct Payments to Farmers (Simplifications) Regulations (Northern Ireland) 2022 amends the regulations to limit to three the number of times that an applicant and a farm business can submit an application to the regional reserve.

Part 3 amends the direct payments regulation to reduce the number of payment entitlements to be allocated to a farmer by the number of entitlements temporarily transferred out by the farmer and the number of entitlements permanently transferred out by that farmer in the scheme year of the application and the previous two scheme years, provided that those scheme years related to 2022 or later. While few farm businesses do that, selling entitlements prior to submitting an application to the regional reserve could result in a business not only receiving entitlements at the regional average, which could be higher than the value of its original entitlements, but profiting from the sale of the original entitlements.

Part 4 amends the direct payments regulations to limit to five years the time that a farm business can receive the young farmer's payment, even if there is a change in the head of holding during that period. We find that, in a small number of cases, farm businesses change the head of holding to another young farmer to get the young farmer's payment for a further five years.

The statutory rule (SR) will help to ensure the continued smooth delivery of direct agriculture support to farmers. I note the comments and concerns that Members have raised, and I will work to address them.

Photo of Declan McAleer Declan McAleer Sinn Féin 12:15 pm, 7th December 2021

I welcome the opportunity to outline the views of the Committee on the regulations. The regulations build on similar measures that were implemented by the Department last year to simplify and improve the system of direct payments for the 2022 scheme year. On 28 October 2021, the Department notified the Committee of its intention to make the regulations. The Committee considered them initially at its meeting on 4 November. The Committee welcomes the proposed changes and considers that they will go some way towards improving fairness in the allocation of payments and preventing unscrupulous behaviour.

The limitation on the number of times that a business can apply to the regional reserve will set a cap on the number of applications at a reasonable and fair level. The regulations will also prevent the transfer of entitlements by a farm business to the regional reserve in the year of application or in the two years prior to that, and they have been proposed to prevent gaming of the payment scheme.

The third provision will set a five-year limit for farm businesses to apply for the young farmer's payment, even if there is a change in the head of holding. That will avoid farms unfairly seeking additional payments over many years.

The Committee wrote to the Department seeking further clarity on the provision relating to the transferring of entitlements from the regional reserve. The Department provided a detailed response that the Committee considered at our meeting on 25 November explaining how farm holdings can unfairly profit from such practice. While that is relatively rare, it happened on six occasions in 2020. Therefore, it is necessary to bring in that safeguard.

The Examiner of Statutory Rules considered the provisions on the Committee's behalf and highlighted no concern or issue. At its meeting on 2 December 2021, the Committee, therefore, recommended to the Assembly that the regulations be affirmed.

Photo of Rosemary Barton Rosemary Barton UUP

I welcome the opportunity to speak in the debate on what are minor changes to the farmers' direct payments scheme. While the proposals are termed as "simplifications", they appear to be about the Department closing some loopholes in the system that may allow for claims that are not within the principles of the scheme.

The changes will not make any difference to the vast majority of active farmers in the scheme. The three proposed changes are to limit the number of times that applicants or businesses can submit an application for the young farmer's payment and regional reserve; limit the allocation of entitlements from the regional reserve; and introduce a rule to prevent a change in the head of holding to extend the time that a farm business can receive the young farmer's payment. Those changes will impact on a small number of businesses, and I assume that they are the Department's attempts to close a gap in the system that was not originally intended.

While the proposals have an impact on young farmers' schemes, I would be grateful for a commitment from the Minister on how he will ensure that the plans do not discourage our younger generation from entering the agriculture sector. The most significant queries from farmers, which were noted in the AREA Committee briefing for the legislative proposal, asked what the longer-term plans for the agriculture support strategy are, what impact it would have on individual farmers and what the wider implications for the agri-food sector would be. However, those are for a debate on another day. In the meantime, I want to ensure that there is an agriculture industry for our future generations.

Photo of Kellie Armstrong Kellie Armstrong Alliance

It is imperative to stress from the outset the importance of the agri-food sector to the Northern Ireland economy. It represents around 10% of economic activity, which is considerably higher than the overall average in the rest of the UK. Furthermore, the profile of the agriculture sector and associated industries in Northern Ireland varies considerably from those across the UK. The Northern Ireland industry is built around quality, rather than necessarily scale. Standards are fundamental and are a matter of pride to all stakeholders in the sector.

The United Kingdom's leaving the EU and the common agricultural policy (CAP) is one of the most significant changes in policy affecting the agri-food sector in over 40 years. Environmental, food safety, animal welfare and labour issues are now critical considerations when developing the new approaches and support systems that are needed to better address the needs of Northern Ireland agriculture, the environment and rural communities. There are, as was mentioned, a broad range of farming and environmental stakeholders who deserve the opportunity to engage more fully in the development of policy relating to the sector.

In Northern Ireland, direct payments are worth over £293 million annually. Future payments need to support farming and rural communities whilst benefiting the sustainability and profitability of farming and, more crucially, the environment. On behalf of Alliance, I support what is before us, and we hope to secure the continued passage of the regulations.

Photo of Clare Bailey Clare Bailey Green

Whilst simplifications are welcome, certainly for farmers, it is extremely disappointing that, for a second year after leaving the EU CAP system, the changes that we are making in Northern Ireland in how we pay directly to farmers remain so insignificant.

Despite the fact that there are two climate Bills in the system, the regulations lack any environmental focus whatever. Even at the EU level, the CAP is being reformed. In England, the Agriculture Act 2020 has provided a legal framework to reform subsidies to a "public money for public good" model. Scotland and Wales are working on their agriculture legislation for 2024, yet, again, in Northern Ireland, we are dragging our feet.

It would have been really good to see a real move to making agriculture payments a key lever for delivering better outcomes for nature and the climate. The transition towards a better system should have begun with the regulations that we are debating. I have spoken to farmers. They tell me that, while they know that changes need to be made, agriculture's transition to a low-carbon future needs to be more carrot and less stick. Farmers are ready to make the changes, and they understand that they have that role to play in delivering emissions objectives whilst supporting a more productive and resilient food system. However, it is we who have to provide the financial incentives to make that profitable for them. I have been contacted by farmers who are serious about the role that they can play but have extreme difficulty in accessing financial incentives and joining environmental schemes. One farmer said:

"I am a new member of the environmental scheme for heather moorland, but joining the scheme was not easy. It took three attempts to be accepted on to the scheme, whereas we should be encouraging those with peatland to protect it. If DAERA ... [is] serious about climate change, [it] should be looking at soil types and rewarding accordingly. For example, peatland is a superb carbon sink and, if wetted, can hold even more carbon. However, there is currently no real financial incentive to turn bogland back to the original system through rewilding, for example."

We are in a climate emergency, and we should make the case for environmental farming schemes to be easily accessible. Northern Ireland is being left behind. There is no bespoke Northern Ireland agriculture legislation. We hear that it is in development, and that is proving to be a brake on progress, Minister. Northern Ireland needs to move forward with its own agriculture Act, and we need to move to a "public money for public good" model that puts nature and farmers at its heart.

Photo of William Irwin William Irwin DUP

The very fact that we are able to debate the matter in the House is to be welcomed. It is a direct benefit of Brexit and of our ability, as a Province in the United Kingdom, to set our own course on direct payments. Crucially, the fact that we can make simplifications and adjustments is of major importance to our agriculture industry in Northern Ireland.

Officials in the Department continue to look at ways to tailor support mechanisms to our needs in Northern Ireland. That is important work that can provide a vital opportunity to ensure that Northern Ireland's agri-food industry continues to be a shining light and an economic powerhouse in Northern Ireland. Our producers are central to that success, and they work tirelessly, week in, week out, to produce some of the finest food product in the world.

The 'Future Agricultural Policy Framework Portfolio' was launched earlier in the year and is formed around themes such as focusing on increased productivity, environmental sustainability, improved resilience and a responsive supply chain. Those are key themes that underpin the success of our industry, and, therefore, financial support should be tailored around that. That growth and sustainability is absolutely vital.

The Minister has been looking at areas in which rules can be simplified and streamlined, and he will know that I have been keen to see movement on issues of cross-compliance, penalties placed on farmers for breaches and the weight of penalty versus the significance of any breach. There are few industries that I am aware of in which minor details are subject to such significant financial penalties. That area is ripe for reform and restructuring.

There have been improvements in the appeal process, and I have had some experience of dealing with those issues, as I have accompanied farmers to appeal panels on numerous occasions. At times, I have been critical of the procedures and their impact on already stressed-out farmers, who have to juggle so many variables, such as the weather, pricing and input costs. Further improvements in procedures would, of course, be welcome.

There are, of course, many other areas where reform and adjustment are needed. I have had many conversations with the Minister on those matters, and I look forward to further discussions in the months and weeks ahead. It is positive and encouraging to have a Minister in place who knows agriculture and has a great understanding of the issues that farmers face. Minister Poots is not afraid of the issues, and I welcome that. I encourage him to make the changes that are necessary to ensure that our agri-food industry continues to grow and, outside the restrictive shackles of the European Union, ploughs its own furrow and remains an economic linchpin for this country.

Photo of Patsy McGlone Patsy McGlone Social Democratic and Labour Party

I rise in support of the Direct Payments to Farmers Regulations as proposed by the Minister.

I might not have the same reservations about Europe as Mr Irwin has. Goods traverse daily from the North into the Republic and back again, so it is crucial that the industry has as much access as possible to those European markets. Our industry needs to be supported in that regard. The Minister is a pragmatic person, so I trust that he recognises those markets and sees where the opportunities are.

Basic payments to farmers must continue. As we know, previously, upwards of 80% of farm income came by way of subsidy or payment — call it what you will. It is crucial that that continues, but I want to add to that, and I am sure that the Minister will hear what I say. We have two climate change Bills working their way through the Committee for Agriculture, Environment and Rural Affairs. Irrespective of which Bill, perhaps in amended form, comes through at the end, changes will be needed to how farmers do their business.

On Friday morning, I met and had discussions with a group of farmers. Farmers will require not only educational support but support of another nature: in how they do things and with what types of science they should involve themselves. In that regard, yes, direct payments are crucial to the success of our farming and agri-food industries, and we will all want to do what we can for them. The payments are part of how we incentivise, encourage, inform and educate farmers in how they should develop in the future. How they develop the economy and their businesses will be a crucial part of that.

I am sure that the Department is doing that sort of thinking. We hear evidence from its officials at the AERA Committee about different aspects of climate change legislation. However, it will be crucial that the Department and its agencies — the Agri-Food and Biosciences Institute (AFBI), for example — along with other Departments, provide financial support. I do not rule out the Department for the Economy. That support should be provided to the farming and agri-food industries as, necessarily, we move to address the worst excesses of climate change. <BR/>I am sure that that factors into departmental thinking. I hope that it helps to allay the concerns that I heard on Friday morning, which were not unknown to me. The future has to be about education and science, but it also has to be about support. Educational and financial support will be required to help people working in the industry to make that just transition.

Thank you, Minister, for introducing the regulations.

Photo of Roy Beggs Roy Beggs UUP 12:30 pm, 7th December 2021

I call on the Minister of Agriculture, Environment and Rural Affairs, Edwin Poots, to conclude and wind on the debate.

Photo of Edwin Poots Edwin Poots DUP

I thank Members for their commentary, which, by and large, was very positive. Mrs Barton is right: the regulations will tidy up the rules and ensure that there is no corruption of previous simplifications. That will help us to ensure that we can provide support to the agricultural community. She mentioned young farmers, and there are a number of areas that will assist greatly in that.

Tackling bovine TB is critical. It is necessary for us to do that as a Government, not only because we spend £40 million on it and need to reduce that overhead, but for the agricultural sector, because it has had a devastating impact on farm after farm, mentally and financially. It is devastating for wildlife as well. If we do not bring bovine TB under control, it will manifest itself repeatedly in wildlife until it is addressed. Unless we take forward that challenge, bovine TB will continue to be a massive problem for wildlife.

We also need to ensure that future agriculture payments are directed at people who are actively farming. That is where we want to spend that £50 million. That is where we have a lot more latitude, and we will develop that course of work.

I was surprised at Ms Bailey's comments. As a member of the Agriculture, Environment and Rural Affairs Committee, she should know that we are doing a course of work on future agriculture payments and that that has informed this piece of work. Therefore, I was surprised to hear her, in the full knowledge that an ongoing different and separate course of work will come before the Committee shortly, make a speech on the basis that it is not included in these regulations.

Ms Bailey indicates that she would like to be helpful to farmers. Of course, the greatest assistance that she could give to the farming community would be to accept the scientific advice on climate change. We are moving towards taking the United Kingdom to a position of net zero as part of our commitment to the Paris Accord, and, with a significant Northern Ireland contribution, that can be achieved. I encourage Members to take cognisance of that over the next number of weeks, because it is causing an awful lot of concern amongst many farm families, who are looking to the future and saying, "I'm not sure that I have a future". We need to lift the sword of Damocles off those farmers and ensure that we do what is right for not just the environment but the people living in our rural communities. I welcome the support for the regulations and thank Members for it.

Question put and agreed to. Resolved:

That the draft Direct Payments to Farmers (Simplifications) Regulations (Northern Ireland) 2022 be approved.