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Q 141 Schedule 5 to the Bill makes explicit provision for Wales, and in particular gives the Welsh Government the power to amend, modify and improve the legacy common agricultural policy scheme. What would be your priorities for that simplification? What are your key concerns about the existing CAP, and, if the Welsh Government had a free hand to improve and simplify it, what would you like them to do?
Thank you, Minister. Obviously, we await any announcements eagerly. We would look to amend where there are, we would say, unfair penalties for minor infractions. There are major improvements to be made there, for instance. There will be a need for more trees to be planted in future; where there are hedgerows or woodlands, at present, they are taken out of any calculation. There are minor adjustments to be done there that could reduce stress quite significantly in the interim period, I would suggest.
We entirely agree with that. Penalties are a huge issue. It is widely recognised that they are very often completely disproportionate to things that have no impact on the wider environment or the general public. Things that may have cost Government, for the sake of argument, a few pounds, can incur fines of many thousands of pounds.
Greening is another issue. The 100 trees per hectare limit has had a very big impact and goes completely against the current thinking on the importance of trees. The way that it has been implemented in Wales—understandably, given the wording of the European legislation—seems counter-intuitive, given the priorities in terms of silviculture and agriculture co-existing.
From the Welsh Government perspective, we consulted on this question in our last document on ideas for taking farming policy forward and future farm support measures. We also identified that, as part of the transition, you would need to look at simplification. The four things that we flagged were very much penalties, as union colleagues have identified; some of the issues around cross-border payments and the single application rule; the basic payment scheme window for unvalidated beneficiaries; and how the environmentally sensitive permanent grassland rules operate. As I say, those are things that we consulted on. We are assessing the consultation responses at the moment and will make policy decisions on how to implement that when we have the powers, through the Bill, to implement—potentially from 2021.
One thing to point out is that the powers relating to Wales in schedule 5 are far more modest than those described for England in clause 9. The scope of the ambition for Wales is perhaps somewhat curtailed by that. In relation to England, you have far more powers to remove and reduce burdens, penalties, financial costs and so on; for Wales, the powers are a bit narrower in scope. That is just something to note.
Q What about the so-called greening rules? When those were introduced, environmental non-governmental organisations said that that was greenwashing and farmers said that it was green taping. Perhaps both were right, in that it has not delivered much, if anything, for the environment and it is responsible for about 50% of all the guidance that we have to issue. Do you take the view that it is better just switched off altogether, so that we do not have the crop diversity rule and do not have the ecological focus area rules, either?
I would say that it is very difficult to farm in a prescriptive way. We have a real challenge this year with the weather, which will cause real issues around the three-crop rule, so we need to be flexible in our approach there, because it is simply not practical in some areas at some times. We need more flexibility.
We agree entirely. Something that is aimed at certain types of farms has actually had an impact on the types of farms that it was not aimed at—I am talking about the impacts of greening. Indeed, that has been recognised across the EU. The European Commission is undertaking the same process of looking at greening and how it should be improved, and has taken steps in that direction. I think it is universally recognised as completely disproportionate.
Good morning, Mr Stringer, and good wishes to those on the Government side who may have a nervous day ahead—we wish you well. My question is one that we have put to other witnesses before. We are obviously very concerned about the potential threat to farmers if food is imported that was produced to lower health and welfare standards. What is your view on that and what do you think could be done about it in the Welsh context?Q
We have a very clear vision and ambition to lead the world in producing the most climate-friendly food, and that is to be realised with proper policy and proper support going forward. Obviously, it would be a disaster if that were then undercut by food production systems that are illegal in the United Kingdom, so we would be deeply concerned about the opportunity there and we would like to see that much more strongly identified in the Bill and ruled on.
We welcome the comments that a number of you made during the Second Reading debate. Also, Liz Truss, International Trade Secretary, said last week:
“In addition, nothing in any agreement will undermine the Government’s commitment to tackling climate change.”—[Official Report,
We lead the world with our commitment to net zero by 2040, so we look to that being honoured. That is an absolutely key statement to us going forward.
In clause 36, which relates to organic products, subsection (5) makes it clear that it is possible to restrict or prohibit the import of organic products. That will be legislated for once the Bill becomes an Act. We would have expected an equivalent paragraph or provision relating to other production standards to have been incorporated in the Bill. It is there for organic, yet it is not there for all these other issues and in particular the key issue that John raised—our environmental and climate change obligations.
On that last point, I would be interested to know whether any of you have had discussions with farmers’ unions or equivalent bodies, or Governments in other countries, in anticipation of the new trade arrangements that might be put in place. Do you detect any appetite to break into the UK market and in particular any willingness to adapt farming practices abroad in order to access our market? We represent a very big market for these countries. Do you think those which currently produce food at standards we would not accept might be prepared to develop better practices so that they can access our marketQ ?
If we take America to start with, there is real hunger to access the UK market, but they are pretty adamant that their standards are the standards and that they work on equivalence. Obviously, we would have deep concerns about that for a number of specific aspects. Other countries are more flexible and will look to change, I guess, but I think it needs to be written in absolutely, in black and white.
It is clear from the leaked trade talks document that came out in November—which we assume are valid—that there is that appetite. It seems to provide evidence that that appetite is there. We also know that from the defensive position taken by scores of countries when the UK and the EU first agreed how certain issues would be balanced—in those few areas where agreement was reached—in terms of the splitting of our quotas as regards New Zealand lamb and Australian products. The objections submitted then to the World Trade Organisation by these countries make it clear how important we are as an existing trading destination for them and as a potential destination.
My question is about aspects of the agreement on agriculture. Clause 42 states at one pointQ :
“The regulations may make provision requiring a devolved authority to provide information to the Secretary of State.”
Do you want a corresponding requirement for the Secretary of State to consult the devolved authorities on the operation of those provisions? This is about classifying domestic support in so far as it affects the agreement on agriculture and relates to our position in the WTO. It is a very specific question: do you think that Wales—and Scotland and Northern Ireland—should be consulted, as well as required to provide information?
That question is probably for me. This is an issue that we had extensive conversations with the Minister about regarding the equivalent text in the previous version of the Agriculture Bill. Yes, we would love a consent provision, but in the context of the last Bill we came to a bilateral agreement between the UK Government—the Department for Environment, Food and Rural Affairs—and the Welsh Government on how the provisions would be operated in practice. The Minister has confirmed to us that that agreement will be carried over with this Bill. We look forward to him making that statement again during this stage of the Bill or at a later stage in the House, about how we would work together on that, about the advice and about, were there to be disagreement, our opposition being formally presented to the House of Commons to be part of your decision-making process. We have agreed a way of working to ensure that that voice is heard effectively.
It is not in the Bill, but I have the text in front of me. It is an exchange of letters that was published in the context of the previous Agriculture Bill. In our bilateral conversations with the Minister and DEFRA colleagues, we have assurances that that can be taken forward in the context of this Bill.
Q I do not want to be indelicate—perhaps you are at a useful stage, and I acknowledge that the Minister is very co-operative on these matters—but do you think that there will be any harm in inserting an amendment to the clause, that the Secretary of State should also be required to consult the devolved authorities?
We would also welcome such an addition. It must be noted that this extends to far more than WTO issues, given where we are with our current financial ceiling; we are well below WTO limits. The WTO issue is absolutely essential to avoid disputes, but a key issue for us is the fact that we are moving from a very specific framework of financial ceilings for different areas of spending to one that is almost as liberal as it could be. It appears to us that there will be a single financial ceiling for agriculture expenditure in each of the devolved regions and in England.
For example, under EU legislation, we have multiple ceilings relating to how much we can spend on direct interventions in agriculture production and on young people, how much money can be diverted to rural development spending and so on. I am afraid that this area just screams divergence between nations at an unprecedented level, as do many of the other sections.
My question is on the red meat levy. The Bill irons out an imbalance that has affected many of my farmers—I should say that it is a pleasure to see one of my constituents here this morning. Are you content with that amendment, or would you suggest further amendments to the scheme to improve traceability? That question is particularly for the unions. Mr Render, would you clarify the timetable for the Welsh Government’s equivalent Bill or next steps?Q
On the red meat point, we are broadly content. We have been calling for this for a number of years. The issue of repatriating the red meat levy has been a bit of a running sore for a long time, so we welcome this. There has to be a will on the part of the parties concerned to use the new powers that they are about to have conferred upon them. It is all well and good to legislate, but the parties need to work together and find an equitable solution to this problem.
We are glad to see this change, but we would not preclude collaborative working at a pre-competitive stage between the domestic levy bodies on things such as red meat, health and climate, which are not directly related to the market. Repatriating the levy is certainly something that we welcome.
We recommended precisely this sort of action in the Radcliffe review, which was published in 2006. That is how long this issue has been running for. We very much welcome that this is there, but this is the first step—it simply opens the door. Given that lengthy period of waiting, and the imbalance in where the levy has been spent, this needs to be acted on once that door is open.
We welcome the clause on the red meat levy, and we are grateful to the Minister, who has put a lot of effort into working with the devolved Administrations to craft this, to resolve this long-standing issue. On the way the Welsh Government are looking to take things forward, we have said that we plan to produce a White Paper by the end of this year, which will set out the framework for a Welsh Agriculture Bill. Ministers have said that they want to take that forward early in the next Assembly term in 2021.
In terms of operational measures, we have already announced that we will effectively maintain the basic payment scheme approach in 2021 as well, so we have that package of measures to take forward in our own Welsh Bill. That would, I suspect, mirror and address some of the wider issues that this Bill takes forward but are not reflected in the Welsh schedule, as well as dealing with some wider things.
MrQ Render, can I press you a bit further? You were saying that the legislation from Wales will have to be set in law. Yes, absolutely, but when will it actually be up and running? We accept that there will be a time lag, but it is important that it is as close as possible, because what we do not want is divergence, which you have already alluded to. We know that the border is porous, and that livestock and crops travel across it all the time. It is important that where key parts of the Bill do not apply to Wales, such as the environmental land management schemes, we make sure that Welsh farmers are not suffering detriment. I wondered what the panel’s thoughts on that were.
Of course, agriculture is a fully devolved policy area, so we will be developing our own equivalents of the land management approaches that England is proposing. We have already issued two major consultation documents with a lot of detail on that. What we are looking to do through this Bill is to ensure continuity: to make sure that a lot of the important operational elements that mean the agricultural market can work effectively and we continue to have the powers to pay agricultural support to farmers, will be in place and can be maintained beyond the end of this year. From a Welsh perspective, the main thing this Bill does is give us those continuity and keeping pace powers.
However, what we have explicitly decided not to take through this Bill—this is a change from the previous Bill—are powers to make radically new types of payments, analogous to the ELMS in England. We discussed that with the Assembly, and they felt that it was potentially such a large change that they wanted to be able to influence that development of a Welsh agriculture policy, so we have not taken those powers to make major changes in the future; that is what we would do through a Welsh Bill. Obviously, this will depend on the Government after the Assembly elections in May 2021, but we would expect that to be taken forward fairly rapidly as a new Welsh agriculture Bill in that period. As I say, we will be setting out detailed ideas as to what would go in that Bill, particularly the new powers, building on the very detailed proposals we have already set out in consultation documents.
It is vital that we take our time over this, because we still do not know what trading environment we will be operating in, and there is an awful lot of volatility out there. It is absolutely vital that we get this right and do it in a co-production way. If we get it right, there are real opportunities; it needs to be a co-operative model that we not only design with the industry, but across different Departments of the Welsh Government. Recently, the Welsh Government have announced that we have hit our target for food sales from Wales, which is £7.5 billion. If we get our “sustainable farming and our land”—that is the name of our new agricultural policy —and sustainable brand values right, we will have two gears meshing, which will really benefit our climate credentials and validity by being able to prove that what we do and how we do it are totally sustainable. It is vital that we get this right and do not rush it.
WhatQ assessment have you made of the impact of the Bill on food producers, particularly the agri-food supply chain, and are there any missed opportunities in the Bill that you would like to see us take action on?
Probably the biggest missed opportunity is the one about standards, which we have already covered, but there are certainly provisions in the Bill that we welcome. The food security provision, for example, is new and something we have been pressing for for quite a while. The requirement to report every five years is not especially ambitious; it should be every year. Especially as we are transitioning out of the EU and leaving those structures behind, we need to ensure we have a review every year. I would also suggest that the Bill does not impose any positive obligations on a DEFRA Minister—for example, in the light of an adverse finding in a report on food security. You could consider placing obligations on Ministers if we are found to be deficient in food security.
From our point of view, it is about more than farming and food production per se; it is about the families that farm on the land. There are certain types of farming that continue, but effectively the communities do not. We see that in parts of England; thankfully we do not see it so much in Wales, if at all. We would say there has been a missed opportunity to include among key priorities the sort of ambition that is there at EU level in terms of the reforms that are going through, which relate to looking after farming families and communities and to laying out sentences explicitly in legislation.
I refer you back to what Tom Williams said about the 1947 Act, which was in place until it was superseded by EU regulations. He said it was based on providing
“adequate remuneration and decent living standards for farmers and workers”—[Official Report,
with a reasonable return on capital investment. We would welcome that sort of aspiration being inserted into the Bill.
The other day, we heard evidence from John Cross of the Traceability Design User Group and Simon Hall, who is the managing director of Livestock Information Ltd, which is a new organisation. I thought they were a little vague on details of the traceability service that they are setting up in England, and on how it will integrate or potentially even overrule existing traceability services in the devolved nations. I would be very interested to hear your thoughts on that.
Having only had the time to look at this and go through it as thoroughly as I could yesterday, that clause did ring alarm bells for me. Compared with other systems, Wales has a very successful sheep traceability system that it took into public ownership, rather than farming it out to a private body. It works very well. It could work better, as is the case with all systems, but we hope to develop it into an improved system that will encompass more species. That is certainly the aspiration, and that clause of the Bill certainly raises questions about how those two things interact.
It certainly makes sense to have some form of central data collection point for the UK, given that we are a single country and that it is important for our trading arrangements with other countries. Nevertheless, it depends on how that functions. That part of the legislation would effectively grant powers to non-public bodies—boards that are given certain powers by the Secretary of State. That in itself raises questions; indeed, it is why you took evidence from the witnesses that you mentioned.
To build on that, there are clearly some really important operational issues with the livestock identification systems. We are developing the livestock identification system that we already have in Wales, which works very well. It was co-designed with the industry for ease of operation. We also built it with expansion to different species in mind, so we are looking to turn it into a full livestock ID system, building on a proven IT platform and user interface. It is absolutely vital that we get the behind the scenes IT with what happens in England, Wales and Northern Ireland to have that interchange of data, because you have got cross-border trade and that is how you manage animal health issues, which do not respect borders. That is the big piece of IT work that we are doing with colleagues in DEFRA and colleagues in the other Administrations around the livestock identification system. We will build our own front-end system for Welsh farmers to use, building on what the industry sees as a successful system.
It is vital that we get this right. Animal disease does not respect boundaries well, and I concur with everything said in terms of the databases talking to each other. There is also an opportunity here to bring realtime information to purchasing decisions around animal health and the likes, and we need to get this right.
If I may come back, to lessen the potential adverse impacts of clause 32, which amends the Natural Environment and Rural Communities Act 2006, there needs to be at the very least a duty to consult and reach agreements with Welsh Ministers, the Scottish Government and so on to ensure that this does not hand over an extreme power to, in effect, an English board.
In the UK. The other systems are much more primitive, it is fair to say. For instance, the British cattle movement service is not essentially an online realtime system. This is one area where we have what are technically called concurrent powers and we are in discussion with DEFRA about these powers and those around organics being subject to consent by devolved Administrations rather than just consulting, for the reasons that colleagues outlined.
I want to pick up on the question of divergence. I realise that the Bill affects England, but there are plenty of farms around the border. How will they be affected and what can we do in the Bill to support them more?Q
There are about 600 cross-border farms. Some are administratively answerable to England and some to Wales, depending on the proportion of land on each side of the border—I think that is how it works. Those guys have consistently been the last people to receive payments of any form for the last 15 years, since basic payments and what is generically called the single farm payment was introduced in 2005. They have a very tough farm and are placed at significant disadvantage.
Divergence will clearly be an issue for those farms. Conversely, some of the powers in the Bill would lessen the impact, allowing their payments to be released earlier by changing EU regulations that make it difficult when one payment authority is slower than the other at processing applications—because unless everything has been processed, payments cannot be released. The ability to change the rules is therefore welcome, but as things diverge, as they may well do—it is difficult to see how they would not—a lot of thought and care needs to be taken regarding those impacts. It is not just divergence over payment systems and policies; it is also about standards. This provides an opportunity for Wales to, for example, have different assurance standards from England, yet we have a 300-mile-or-so border, which is effectively porous.
As one of the UK NFUs, we have a fantastic working relationship. We met last week in Glasgow at NFU Scotland’s AGM. Divergence is front and centre of all our minds, because it is vital that we do not diverge too greatly and create a different trading environment in the UK. That is really important. The key basis that we always operate on is that everything should be done through agreement, not imposition. That is our guiding principle.
Divergence is a consequence of devolution, in that you are making different choices to reflect different circumstances, although I have a lot of sympathy for Mr Davies’ points about operating in a common market, and about standards and not diverging in some of those areas.
The issue of cross-border farms keeps me awake at night, as I think about how I move to develop a new policy. It is one of the really difficult issues. We do not have clear answers to it yet. We are working with the industry and DEFRA on what doing potentially quite different things in return for public support on either side of the border means for those 600-or-so farms that are potentially on either side of that. How we manage that is a tricky question. I do not have any answers to that, but it is something that we are working on with DEFRA and the industry, to work out what the most practical, simple and effective way of doing it is.
When it comes to divergence, of course devolution implies divergence. We as a union supported devolution, so we have no problem with divergence, but it was divergence within boundaries. The current EU framework has strict boundaries in terms of flexibility within legislation and flexibility within financial limits. We are looking, potentially, at a complete liberalisation of those boundaries, so that they become far wider and the degree to which divergence can be market distorting becomes potentially far greater under what is happening at the moment.
This question is primarily for Mr Render, but others may wish to chip in. In earlier evidence sessions, we heard some of the frustrations with the inflexibility of cross-compliance, such as the three-crop rule or rules on hedge cutting. In particular, farmers tell me that it can sometimes be frustrating that rules on the application of slurries and manures are based on the calendar, not on the particular climatic conditions of a season or the situation on a particular farm. Do you feel that the powers that you will have will allow you the flexibility—even in-year flexibility—to enable you to carry out those sorts of operations under the best conditions, and at the same time to understand your obligations in the way that we implement the nitrate regulations and water framework directive-type regulations that we take over? Do you feel that you can get the balance right between the flexibility and the obligations to the environmentQ ?
I think we can. The questions around water and diffuse agricultural pollution are live in Wales at the moment. In terms of our regulations under the various water rules, we are some way behind the rest of the UK, and we are looking to take action to ensure that we have effective measures for the management of agricultural pollution.
One of the things, looking to the medium term, is an ability to think about how we do some of the wider regulation: what conditions we attach to future payment regimes; how we link that to the regulatory floor; and things around earned autonomy for more flexibility, in return for clearer, authenticated and demonstrable actions that take account of flexibility while there are, at the same time, clear ways of ensuring and providing assurance that the necessary actions are taken. Those are some of the opportunities that we have in the medium term, adapting some of the regulations, but it is probably through more sophisticated regulation and earned autonomy approaches that we can really provide some of that greater flexibility.
Thank you, Mr Goodwill, for the opportunity to comment on this, because obviously regulation has been one of the reasons that Europe has had less favour. Nitrate vulnerable zone regulations are among the most prescriptive and least effective of those that have been implemented by Europe. Let us move away from that. Let us ensure that regulation, when it comes, fills the gaps and is effective. Anybody who thinks that they can farm by date will fail. It is vital that we farm by the ground conditions. We have a changing climate here, and we have to respond to that. We have to evolve, adapt and work effectively to reduce the number of incidents. It is coming down slowly, but we need to move more rapidly to reduce it. It is vital that we get on top of that through effective, proper, reasonable regulation.
Q I wish to reinforce the point that Mr Render and Dr Fenwick made. They basically made my point for me: the four nations already operate different policy and regulatory frameworks, within a common framework across the UK, and with certain common frameworks under the EU. That has been the case since devolution 20 years ago. I would hate to see any sort of imposition of a UK-wide situation that would affect that.
I agree with that. Equally, there are some measures that need to operate across the UK for trade and operators. The red meat levy is a very good example of something that needs to be applied at the UK level, but from a devolved Administration perspective, where some of those powers operate at a UK level, that needs to happen with our consent and agreement. Yes, let us agree a common approach to something—that is very often the best approach—but, for us, those sorts of concurrent powers need to be with consent.
To give an example of the sorts of divergence at a very simplistic level that will potentially have an impact in the coming months, the Direct Payments to Farmers (Legislative Continuity) Act 2020 received Royal Assent the day before we left the EU. That effectively cuts and pastes EU payment regulations back into domestic legislation. However, one section of the Act allows devolved regions—this relates primarily to Scotland—to exceed those financial ceilings that are effectively derived from EU-set ceilings.
Within hours or minutes, effectively, of our leaving the EU, we have the potential for financial divergence that would increase the difference between the average payments received by a Scottish farmer and a Welsh farmer, which is already in the tens of thousands, potentially to far more. That relates to the Bew review, which has given lots of additional money to Scotland. Previously, that money could not be paid to farmers. The new legislation allows them to diverge—I go back to that word—from the ceilings that are set in the legislation.
We have a very clear ambition for a policy made in Wales, where we see the productivity and the environment meshing together, underpinned by a stability pillar that will give us real opportunities. We are ambitious for the future. There is real opportunity out there to make policy in Wales, for Wales, by Wales.
Order. I am afraid that we are at the end of the time allotted for the Committee to ask questions. On behalf of the Committee, I thank the witnesses for their evidence.