Farming in the Uplands - ARCHIVE: Defra

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Ev 36 Environment, Food and Rural Affairs Committee: Evidence Tom Blenkinsop Richard Drax George Eustice Wednesday 17 November 2010 Members present: Miss Anne McIntosh (Chair) Mrs Mary Glindon Neil Parish Dan Rogerson ________________ Examination of Witnesses Witnesses: James Paice MP, Minister of State for Agriculture and Food, , Jeremy Eppel, Deputy Director, Uplands, and Dan Osgood, Deputy Director, Environmental Land Management, Department for Environment, Food and Rural Affairs gave evidence. Q163 Chair: Good afternoon. Minister, may I welcome you on your first visit to the Select Committee? You’re most welcome. Would you like, for the record, to introduce your two officials? Mr Paice: Yes, thank you, Miss McIntosh. On my right is Jeremy Eppel, who heads up our overall Uplands team, and on my left is Dan Osgood, who specialises in RDP issues and things like that, which are very relevant. Q164 Chair: Excellent. Thank you very much indeed. You’ll be aware this is the first time in about 10 or 15 years that the Committee has actually had a chance to look at upland issues. We’re looking at this in the context of the Commission for Rural Communities Report around high potential, and looking to see how we can progress the recommendations there. Just as a general point, could I ask the Minister whether you believe that you’re hampered in your work by the lack of a statutory definition of “uplands”? Mr Paice: “No” is the short answer to that. I don’t know whether it’s convenient to you, Miss McIntosh, but I have a few notes. I would quite like to make a few opening remarks about our approach to the issue. Q165 Chair: It will answer my first question, which is about your commitment to rural affairs, uplands and hill farming. Mr Paice: Perhaps, as you say, it will do that. Thank you very much. I’m grateful to the opportunity to answer any of the Committee’s questions. I start by apologising if, during the course of the proceedings, I burst into a coughing fit—I’ve got some sort of lurgey sitting on my lungs. The Government does fully recognise the value and the significance of the uplands. By way of partly answering your initial question, when we refer to “the uplands”, we tend to mean the areas called the Less Favoured Areas. It’s not an absolute precise term, but it’s fairly close and the one we tend to work to. We’re very committed to promoting not just the economic but the social and environmental wellbeing of the uplands. As you’ll be very much aware, the coalition Government attaches great importance to a sustainable future for the upland areas of England—of course, we are only talking about England—including the role they can play in a range of Government policies, not just pure agriculture, to the extent that, in the Government’s Defra Structural Reform Plan, we clearly state that we intend to develop affordable measures of support for hill farmers and, indeed, the Coalition Agreement refers to that. We are very supportive and welcome the contribution to the debate from the Commission for Rural Communities Report, to which you refer. We are, ourselves, carrying out a wide-ranging review of policies that affect the uplands, including the hill farming dimension, and so seriously, genuinely look forward to the outcomes of your deliberations. We plan to issue a ministerial policy statement on the uplands early next year. I think it’s worth remembering that hill farming provides an important combination of environmental, landscape and social benefits alongside pure agricultural produce. It has helped to shape the uplands landscapes and their communities, and it’s an important source of stock for lowland livestock farming—the old strategic approach. As the memorandum that we submitted to your Committee made clear, all the evidence from Defra’s experts and others tells us, unsurprisingly, that the economics of hill farming are extremely challenging, and that the numerous social and environmental benefits hill farms provide are not fully rewarded by the market for livestock goods, hence the difficulties. A sustainable long-term future for hill farming will require the economics to become more favourable, one way or the other. We want to identify ways where we, as a Government, can work with hill farmers to put them on that more secure economic footing, but we think that hill farmers will certainly need to focus on improving their own efficiency and margins, and on making the most of the income-generating opportunities that are open to them. The work that Richard Macdonald is doing on farming regulations may provide some pointers about barriers that may be in their way, perhaps developing of leisure activities or whatever. As I implied earlier, Rural Development Programme funding through Axis 1 is very relevant in supporting businesses to become more competitive. EMBARGOED ADVANCE COPY: Not to be published in full, or part, in any form before 00.01am GMT Wednesday 16 February 2011 Q166 Chair: Could I stop you there, Minister, because we will cover a lot of these points, and I’m very conscious of time? As regards Defra being one of the Departments that deal with rural communities, and there are a number of other departments involved, do you believe that you will have sufficient influence in steering the Government through the work on rural communities?
Environment, Food and Rural Affairs Committee: Evidence Ev 37 17 November 2010 James Paice MP, Jeremy Eppel and Dan Osgood Mr Paice: Yes, we do. My colleague Richard Benyon leads on the wider rural issues in the Department, but we work obviously very closely together, and one of the reasons, as I’m sure the Secretary of State has already explained to you, why we decided we didn’t need the Commission for Rural Communities any more is because there is a great wealth of knowledge within the ministerial team, for a start, but also within the Department and on the Government benches in the House of Commons—indeed, much of it in this room this afternoon. We feel that the understanding of the problems of rural areas is there already. Yes, we’re determined to take forward the rural agenda and I know that Richard Benyon is in close conversation with other Departments. Q167 Chair: On the actual proposal that the Commission for Rural Communities gave in oral evidence to the Committee, they would be quite keen to have a Cabinet-level post coordinating rural communities that they thought would be best placed in the Cabinet Office. Do you think that would be a useful addition or identification in Government? Mr Paice: Obviously the structure of Government is not for me to comment on; it’s a matter for the Prime Minister. As I said, we believe that we have the competence within the Department to do that. Q168 Chair: As regards absorbing the staff of the Commission for Rural Communities into the Department, how is that being undertaken and do you believe that it might dilute the work that they’ve been doing on rural communities, which has been so welcome? Mr Paice: I certainly don’t believe that it will, to use your word, dilute the work that has already taken place. I can give you the precise situation as far as the absorption of the staff, etc. We announced, as you know, the intention on 29 June. Part of the reasoning behind it is the fact there is already a Rural Communities Policy Unit within Defra, as well as the CRC. That Rural Communities Policy Unit will be expanded and shared with staff from the CRC. We’re not able to absorb all the staff from the CRC; we never expected that to be the case. The new Unit will have a total of 33 members of staff, as well as another three members who are operating the RDPE National Network, who will transfer from the CRC. We have about 17, in fact a bit more because of some vacancies that are already there, so 17-plus posts vacant that will be open to members of the CRC, and they will be interviewed in the normal, conventional way. That’s the latest situation, as far as that process is concerned. Q169 Neil Parish: Good afternoon, Minister. The CRC recommended the development of a national integrated strategy for the uplands. In February, do you intend to produce a rural strategy, an uplands strategy, a hill farming strategy or all three? Mr Paice: Uplands. Q170 Neil Parish: Uplands, okay. The Defra memorandum stated the issues facing hill farmers were common to all grazing livestock enterprises. Do you think then that hill farmers are deserving of extra support? Mr Paice: Yes, I do, and I made that clear in Opposition and remain of the view. Hill farming is particularly challenging. Obviously the climatic conditions can be pretty severe, with some very high levels of rainfall, and that impacts on the direct economics, because you tend to be using breeds of sheep and cattle that are hardier but slower growing and perhaps less suitable for their meat, hence the origin of the uplands being a source of breeding stock for the lowlands. Of course, they’re often far more remote areas than other grazing livestock sectors, so there are a series of challenges there that make it a particularly unique thing. Then there’s also the issue of actual farm structures. There are still a lot of basically very small single-person units in the uplands, which again provides challenges. One other factor I would add is that not all uplands are the same. The uplands in the north of England are very different, for example, from those in your part of the world. I was on Dartmoor last week. Q171 Neil Parish: Being blunt with you, where do you see that money coming from? Mr Paice: It’s going to have to come out of existing resources, if we find any more. The precursor to that is to find the channel by which you can get the resources into the uplands. My original proposition was that we would try to put more money into the issue that I’m sure you’ll want to talk about—the Uplands Entry Level Stewardship scheme. In fact, because that stewardship scheme is required by European regulations to be based on the concept of income forgone, it actually makes it very difficult to put any more money in, because it would be doing more than income forgone. Obviously post-2013 CAP reform, the picture may change but, in the short term, we’re stuck with that. Assuming that we can find the right vehicle, it will have to come out of the Rural Development Programme money and, yes, that means something else will be cut. Ask me what; I’m afraid I can’t tell you at this stage, but I do believe that it is deserving of more support, if we can find it. Neil Parish: There is a special case. Mr Paice: I believe there’s a special case, if we can find a fair mechanism to do it, which doesn’t contravene either UK or, more likely, European regulations. EMBARGOED ADVANCE COPY: Not to be published in full, or part, in any form before 00.01am GMT Wednesday 16 February 2011 Q172 Chair: Which aspects does income forgone include? I understand in other European countries you can have opportunities granted within the income forgone. Mr Paice: Opportunities? Chair: Yes, opportunity costs. Mr Paice: Opportunity costs, yes. Certainly extra costs involved can be incorporated. The methodology of calculating income forgone is quite challenging. Maybe Dan can add a little bit to this in a second, with your consent, but the fundamental point is that, because the economics of upland farming are pretty thin anyway, the income forgone tends to be very thin. Indeed, some calculations have actually shown the reverse because, if the farmer, as some do, is making
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