Farming in the Uplands - ARCHIVE: Defra

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Ev 60 Environment, Food and Rural Affairs Committee: Evidence — A UK wide system of community broadband grants using part of the digital switchover underspend. — A Rural Broadband Partnership, including Government and the industry to aggregate demand and help inform the public as to the importance of superfast broadband to the economy and society. October 2010 Supplementary written evidence from the Country Land and Business Association 1. You state in written evidence that income foregone payments should be based on the best alternative occupation away from hill farming. Realistically, how would you define the best alternative occupation for a hill farmer? There are two suggestions on oVer for finding the appropriate magnitude of opportunity cost or income forgone for upland farmers looking at their best alternative of moving oV the hills. — Base it on average earnings levels for comparable (skilled labour) in nearby market towns. Or at the very least some kind of national indicator like the minimum wage times the average working week. There could even be discussion that people living in the countryside take some satisfaction from the tranquillity, open space, quieter life and so on and thus apply some kind of discount to whatever comparable earnings in tow indicator was used. The point is that the figure used would be something akin to the sum of money required to keep a person going and not a small top-up as current LFA payments are (strictly in England, were). — Base it on the full costs of being in farming in the uplands, as CRC suggest—and not the income forgone and direct costs of not intensifying production—which is the basis of the current calculations. 2. Regarding carbon and water markets, you said: “The question is: what is stopping those rolling out further? There are some answers to that.” Can you expand on this point? On carbon the key issue is that there are no formal arrangements in the UK for “projects“ for carbon sequestration through land use, land use change or Forestry. The only such projects which can formally become part of oYcial carbon reduction programmes (eg the EU Emission Trading Scheme, are projects in developing countries (via the clean development mechanism). There are however hopes that with soon-tobe requirements (either mandatory or voluntary, this is not yet decided by government) for the measurement and reporting of GHG emissions by certain business sectors, this could then motivate an industry in EMBARGOED ADVANCE COPY: Not to be published in full, or part, in any form before 00.01am GMT Wednesday 16 February 2011 providing C sequestration projects which would be recognised as correctly oVsetting the emissions of these sectors. In anticipation that there could be a business demand for such projects landowners may even—once the framework is clearer—start to see some economic return from new aVorestation projects or conceivably, (if the technical parameters could be agreed) peat management projects which store carbon. Thus what is stopping these developments is the right institutional structure and framework. We understand this is all within the realms of possibility as some other countries, eg France, already have such arrangement in place—although we do not understand the details. It is a matter of political will and then getting the framework in place. On water purification markets. People have been pointing for many years now to the NW English United Utilities example of how water utilities can find it cheaper to incentivise diVerent land management in water catchments than to pay for water clean-up by technical treatment works. The question is why has this example not been replicated for many other sites. We do not fully know the answer to this question, but we believe that it may be partly to do with the willingness of water regulators to impose the costs of coming to and running such arrangement onto water consumers. 3. The Pack Inquiry recently published its suggestions for reform of the CAP in Scotland—would you support implementation of these recommendations in Less Favoured Areas in England as well? No. Some of Pack’s recommendations are motivated by getting a larger share of UK CAP support funds for Scotland. This is understandable, but not likely to get much support from English or Welsh farmers or their organisations. But also Pack seems to be recommending going back to coupled payments. The reasons are understandable, but we would rather take the approach we suggested of redefining the income forgone basis of the payments for LFA farmers.
Environment, Food and Rural Affairs Committee: Evidence Ev 61 4. Do you have a views or concerns on the European Commission’s proposal for changes to LFA designations that you would like to share with the Committee? We said in our evidence and spell out at greater length in our paper on the uplands (attached) that considerations should be given to reversing the whole approach to the marginal farming areas from the concept of Less Favoured Areas (LFAs) for agriculture in which we compensate for specific natural handicaps, to the concept of Environmentally Favoured Areas (EFAs) in which farmers are paid for the collection of environmental (and perhaps social) public goods which the market does not pay for. If this was to be done it changes the kind of criteria used to define or designate the LFAs. Unfortunately there is no sign that the Commission is ready to do this. Instead the Commission, driven by the non-comprehending Court of Auditors, is engaged in what we regard as a fairly fruitless statistical exercise in re-designating LFAs based on a set of nine biophysical criteria (climate, soils, altitude, topography etc). This is rendered even more unhelpful as they are reluctant to recognise that conditions in the maritime climate and topography of England and Wales produce quite diVerent results from continental Europe. There is therefore an unrewarding to-ing and fro-ing between Defra and the Commission on how to tweak their nine biophysical criteria so that it reproduces the current LFA borders! The exercise is rendered even more fruitless in England as we do not even use the LFA designation for its measures (it uses the boundaries between Specially Disadvantaged Areas vs Disadvantaged Areas, and Moorland Line)! 5. Could you expand on your statement about the need for small and medium sized abattoirs? What we had in mind here was specifically the suggestions to impose full cost recovery for Meat Hygiene Service charges on all abattoirs. If this is done it risks putting small and medium sized abattoirs out of business. Many of these abattoirs are serving the uplands so their disappearance could have severe impacts on the economics of upland farming which is already perilous and on animal welfare as animals would have to travel further to slaughter. It would also disrupt the ability to develop local supply chains which many suggest are a part of the solution for the uplands. This is a long running issue and we are happy to supply further more detailed briefing if required. 6. Do you believe that Home on the Farm is suYcient to encourage the kind of generational overlap that you refer to as being desirable in the oral evidence? Is a policy change needed? No, we do not believe that the Home on the Farm policy will be suYcient to encourage new homes on upland farms for retiring farmers. The Home on the Farm policy proposal has been promoted as a means of delivering aVordable rural housing for local people in remoter rural areas through the use of redundant farm buildings. The policy proposal is very prescriptive in that it proposes that the only planning permission that will be granted for the conversion of redundant farm buildings is permission to convert them to aVordable rural housing units. Whilst one can see the thinking behind the Home on the Farm suggestion it is too simplistic to think that it will produce new homes on farms for retiring farmers not least because a one-size-fits-all solution is too simplistic and thrusting social housing onto farms in remote locations may not be in the best interests of the farmer concerned or the local people expected to live in these homes. The costs of conversion of redundant farm buildings to aVordable rural housing are very high, much higher than new build housing, and the ability by the farmer to set an aVordable rent level that would finance the repayment of the money borrowed for the scheme would take many years to pay back. The scheme costs would be prohibitive and unviable in the long term for upland farmers whose income from farming is barely a living wage now. Indeed it is unlikely that banks would lend to upland farmers for this time of conversion. Secondly, the use of such a house by local people, and their children, in a busy working farmyard where farm machinery is in constant use, and close to livestock housing and slurry pits, would be a health and safety issue. Thirdly, both DEFRA and Communities and Local Government policy since 2007 is to encourage farmers to find alternative sources of income through diversification. This takes the form of converting redundant farm buildings to oYces or small workshops where rents can be set at open market levels thus providing a faster and more cost eVective payback of borrowed money. Notwithstanding the above, there will be some farmers who may be able to aVord to convert a redundant farm building to a retirement home into which they can move, if such a building exists to be so converted but most upland farmers would not be able to aVord to do so. The more cost eVective and incentivising route would be to allow retiring farmers to build a purpose-built retirement home on their farm provided there is a justified agricultural need, and this requires a policy change in Planning policy statement 7:Sustainable development in rural areas, Annex A, paragraph 6 final sentence. The Welsh Assembly Government’s recently published Technical Advice Note 6: “Planning for Sustainable Rural Communities” (July 2010) provides an oV-the-shelf policy solution in chapter 4 Sustainable Rural Housing para 4.5 Second dwellings on established farms. EMBARGOED ADVANCE COPY: Not to be published in full, or part, in any form before 00.01am GMT Wednesday 16 February 2011
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