Farming in the Uplands - ARCHIVE: Defra

26 Farming in the Uplands
60. The current rules for calculating ‘income foregone’ provide insufficient
compensation for uplands farmers and discourage more from joining agrienvironment
schemes. We recommend that Defra set out how the definition of ‘income
foregone’ can be extended for farmers in Less Favoured Areas only to reflect the costs of
running the farm. One of Defra’s aims for the current round of CAP reform should be
a more transparent system of paying farmers for the benefits being delivered through
agri-environment schemes.
Alternative sources of income
61. Defra acknowledge that without support from the Single Farm Payment many upland
farmers would struggle to maintain a viable business. Rather than subsidising production,
the department advocates funding farmers for the provision of public benefits, such as:
provision of clean water; carbon sequestration; access to land for recreation and tourism;
preservation of biodiversity; and maintenance of cultural heritage. The Minister told us:
We have to look at the public benefits in terms of the water retention in the uplands,
the carbon sink that is in the peat bogs, obviously the flora and fauna of the
uplands—all those things. Indeed, the water retention feeds through to reducing
flooding risks further downstream. I think we probably need to do more to put better
values on those public benefits, as the means of channelling more funding in. 138
Defra also notes that that the uplands are “prized natural assets and a favourite tourism
destination”; thereby providing a business opportunity for hill farmers. 139
62. While the uplands may possess the natural environments that make these opportunities
possible, hill farmers may be constrained in their ability to extend their businesses. The
department noted that diversification opportunities are often more limited in the uplands
due to the sparse population and, for a number of areas, longer distances to large
population centres. The CRC’s 2010 Poverty amongst farming households report noted that
for tenant farmers it is often difficult to access capital as they do not own sufficient
collateral and tenancy agreements can be a barrier to some kinds of diversification activity.
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63. Like Defra, the CRC advocate hill farmers seek new sources of income from the
provision of public goods. In High ground, high potential the CRC conclude that:
Current funding mechanisms will not unlock the potential of the uplands and as part
of the CAP reform in 2013 and 2020, Defra and its agencies (and the EU) should
develop a new approach to rewarding farmers for managing national assets in
harmony with developing businesses and market enterprises. 140
The NFU supported this concept:
Combining a more profitable income from farming with other revenue sources is
key to farming’s viability. As yet, the markets for public goods are nascent;
138 Q 174
139 Ev 81
140 High ground, high potential, p 15