Farming in the Uplands - ARCHIVE: Defra

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Ev 20 Environment, Food and Rural Affairs Committee: Evidence not disagree with you, but I have heard experts say that what we need to do is plant lots more fruit trees in areas like that and get away from livestock. Mike Keeble: That is all right; I am all for timber, but fruit trees don’t do well above 800 feet. Q86 Dan Rogerson: That is your initial answer. You have already made absolutely clear that you think a headage payment is the way to do it, but do you have any sympathy at all for the view that other things could be rewarded apart from just production and agri-environment? Mike Keeble: I think the other explosive area in the uplands will be timber. You have a big link-up at the moment between Jenkinson Forest Products and Eddie Stobart, which I think will have a very big influence on the timber market. It is already doing that. I can see timber coming in, but we will not be growing for pulp and pit props but for energy and good, hard timber. I think we shall be looking at GM in trees and that sort of thing, which other countries are doing. I can certainly see forestry coming back below 1,200ft. I do not see why it should not come back and do a good job for all of us, but as we know it is a very slow turnover. George Dunn: But my point about the headage payments was not just about them being direct income support. We see those payments very much as being used to deliver some of the agri-environment outcomes we have been trying to get through the back door by removing the livestock, which we have not greatly achieved. As Mike will attest, the amount of bracken up the hills in the North is considerable when we remove that livestock. First, we want direct income support because of the profitability of farming in the uplands, but, secondly, we want that direct income support to do other things for you in terms of environmental management. It is only when you have profitable businesses that they can then invest in walls, watercourses and everything else that you want to do in that area. Rather than have a very prescriptive approach we need an outcome-based approach that you can tailor to each individual circumstance. Q87 Chair: Defra said that when we had headage payments there was over-grazing. How do you propose getting over that problem? George Dunn: I have always thought the issue of over-grazing was overstated. If you look at the cases—I do not have the figures to hand—where individuals were taken to task under the regulations for over-grazing, they were vanishingly small. There was a handful of very high profile situations where over-grazing was taking place, but it was not the widespread issue we were all led to believe when the schemes changed. We need to have an eye to ensure we do not create over-grazing, and we are absolutely up for that, but I think Mike would agree that there was not a great deal of over-grazing, particularly in the northern uplands. Mike Keeble: Certainly in the North there was not, but it was different in parts of Wales. There was some very bad over-grazing, but, generally speaking, I think it was an overstated word played on by people for other reasons. 10 November 2010 George Dunn and Mike Keeble Q88 George Eustice: One of the other things the CRC recommended was that the development of markets for carbon and water might be one way forward. How do you see this benefiting tenant farmers? George Dunn: We don’t. We tend to think that those issues are matters for landlords. If you look at any reasonably standard tenancy, things like soil, trees and watercourses would be exempted from it and reserved for the landlord’s use, so I am afraid we would tend to see that being more a landlord or owner-occupier than tenant farmer issue. Q89 Richard Drax: Do you think there is too great an emphasis on diversification, which we hear about so often nowadays? So often you are told to do these things and when you try to do it you are stopped from doing it. I take your point about landlords who should probably be taking forward these big projects, but as far as tenant farmers are concerned, in reality there is not an awful lot of scope to diversify on a hill farm, is there? George Dunn: As I said in an earlier answer, the first point is that the number of opportunities you have are much smaller in comparison with farming activities elsewhere in the country. The second point, as you rightly say, is that on a tenanted holding normally there will be two restrictions in the tenancy agreement: one is to use the holding for agricultural purposes only; the other is not to add to or alter any fixed equipment that is on the holding without the landlord’s consent. Those two clauses together make it very difficult in the broad range of circumstances for tenant farmers to make use of diversification opportunities. Of course, there are enlightened landlords who will give consent for diversification and a deal will be done in relation to the rent or a sharing of the profitability of that business to ensure that both the landlord and tenant are remunerated, but if the landlord wants to be difficult he will be, normally aided and abetted by agents and solicitors along the way, because of the nature of that relationship. EMBARGOED ADVANCE COPY: Not to be published in full, or part, in any form before 00.01am GMT Wednesday 16 February 2011 Q90 Amber Rudd: Can we look at the issue of succession and tenant upland farmers? Do you take the view that the Government should be involved in any way in trying to ensure that? George Dunn: Mike has a whole raft of issues to talk about in relation to training where I think Government could have a role to play to encourage new entrants and bring in new people and thinking into the hill areas, but in terms of succession on existing holdings probably there is not a major role for Government other than in assisting to ensure that people are well advised on succession arrangements. I have just spent a week going round the country talking to members of the Tenant Farmers Association about a range of issues, many of which are to do with succession. There are people sitting on threegenerational tenancies who do not have a clue about how they go about the procedures for succession, despite the fact they are in prime positions to be able to succeed. There is a role to be played in ensuring that hill areas get access to that good advice and information. If Defra can assist in that, that will be
great, but there is the wider issue about ensuring we develop the right skills base and opportunities for new entrants in the uplands which Mike will address. Mike Keeble: As you have all gathered from the discussions you have held, the uplands give rise to a huge range of problems, not least deeply embedded traditions in genetics, lifestyle, type of holding and everything else. I have been going through this since 2001. I worked for Donald Curry for quite a long time until the Red Meat Industry Forum stopped. I was involved with Northumberland farm college and then became involved with Harper Adams where I was a student many years ago. I can announce to the Committee today—I assure you that you are the first people to hear it because I received the phone call only this morning—that Harper Adams, in conjunction with Askham Bryan, Bishop Burton and Myerscough certainly, will set up, with help from me, a completely new concept for training in the uplands. It will be based around the REEDNet system. You can Google it or I can get Charles Cowap of Harper Adams to circulate the details of the REEDNet to the Committee. It is about linking the food chain from production right through to the retail point. Taking that as the starting point, we shall be looking for graduates coming out of the various colleges to whom we have been able to explain the huge potential in the uplands. The Government have to give us the power to give them that enthusiasm. We also need to do some basic research; it does not need research centres any more. We can do it on farm with graduates; we can bring them on and they can go through a farmer-designed, bottom-up course that will allow them to take a further qualification should they wish. It will be all-embracing. We will get George to talk about succession; we will get the fertilizer industries to come and talk about the improvement of pasture and that sort of thing; we will be looking at genetics. Therefore, Harper Adams are on the ball. They have raised the flag here and now. Charles Cowap gave me permission to say that to you today. He can follow that up with you at a later date. Provided we get Government backing, that is up, alive and going. REEDNet is putting in the base capital. I believe we can raise sponsorship, but it would be lovely to think that Defra could also put some money behind it. Q91 Amber Rudd: That is very encouraging news; thank you for sharing it with us. Can you also say something about the availability of the tenancies themselves apart from the actual training on which obviously you have a handle? George Dunn: I am afraid that the opportunities to farm are few and far between. The two obstacles that new entrants come up against time and again are, first, their calibre, which Mike is addressing with Harper Adams through this scheme, and, secondly, the opportunities that become available. Unfortunately, in today’s marketplace we are in a situation where the number of tenancies, not just in the uplands but anywhere in the country, have become fewer and fewer. More and more people are chasing those tenancies. It is a big concern for us that the Environment, Food and Rural Affairs Committee: Evidence Ev 21 10 November 2010 George Dunn and Mike Keeble Agricultural Tenancies Act 1995, which introduced farm business tenancies and was meant to create a burgeoning market in tenancies, after being in operation for 15 years, has not provided the opportunities we all thought we would get. Q92 Amber Rudd: What do you think we can do to address that? George Dunn: I think the issues go wider than this inquiry in terms of encouraging opportunities for tenancies. We have made some suggestions within our report 20:20 Vision—we can provide a full copy of it if it helps—about the taxation environment in which decisions are made, looking at how we use things like inheritance tax reliefs intelligently to encourage more beneficial lettings in the marketplace. Mike Keeble: If I may add a rider, it is important to remember that if you take a 300-acre all-grass farm in somewhere like Wensleydale, Swaledale, Teesdale or wherever it may be, the working capital required to make a reasonable living, not an expanding business, is about £800 an acre. It is all very well to ask whether tenancies are available. The fact is that if you are offered a tenancy of a 300-acre farm you have to be able to come up with about £250,000. Very few young people have the ability to get that money. However, if we can enthuse the industry we will see bigger and bigger units that will offer very well-paid jobs for highly qualified people. Q93 George Eustice: Given that there is a problem of succession within families—for example, the son says there is no future in it and he cannot make a living from it—why is there a shortage of tenancies? Is there just a huge consolidation going on? George Dunn: I do not think the situation is as stark as you suggest. There are individuals who say they have had enough. They have seen how hard mum and dad work and they do not want to take on the tenancy. But in my 14 years with the TFA I have found an increasing number of young members of families who say they think they can make a go of it and have some good ideas of how to do it and how to get back on to the farm to make it a viable business. Quite a lot of my job is about talking to people of my age and younger who now look at the possibility of getting the succession tenancy on their mother’s or father’s holding. Therefore, with respect the comment you make was one from a few years ago. From our perspective there is now a greater desire to do it. EMBARGOED ADVANCE COPY: Not to be published in full, or part, in any form before 00.01am GMT Wednesday 16 February 2011 Q94 George Eustice: Do you know approximately what percentage take on the tenancy? George Dunn: I do not think those figures are publicly available, but we can do our best to see what we can find. 3 Q95 Neil Parish: Perhaps I can quiz you a bit on the farm business tenancy? On the face of it, it should create a lot more flexibility. If you have threegenerational-type tenancies they might work for the people who have them but there is nobody else who can break into them. Also, if you have a farm will you necessarily let it for three generations? Will you not 3 Ev 56
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