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2020 farm vision: What should farm support look like in the future?

If you could start with a blank sheet of paper, what sort of agricultural support policy would you put in place from 2020? With our future in the EU about to be decided we putting this question to the experts.
How should we support farmers and land managers in the future?
How should we support farmers and land managers in the future?
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We want your opinions - join in the #brexit debate by having your say!

We ask the experts on their #Brexit opinions - we need to know what the future of farming will look like...

 

We ask the experts...

Farmers Guardian/FG Insight has asked experts from the world of politics, farming and the environment to tell us, if they were in sole charge, what sort of farm support policy they would put in place from 2020.

 

We publishing the first blueprints here, with more to come over the next few weeks - and we hope to provide food for thought, discussion and debate in the process.

 

  • In fact we’d like you to join the conversation by commenting on the articles online or via Twitter and Facebook.

What should farm support look like from 2020?

 

The current version of the Common Agricultural Policy (CAP), while indisputably providing vital financial support to farmers and rural communities, has few supporters in its present form.

 

Described as a ‘dog’s breakfast’ when initially proposed, it has been universally lambasted for being overly bureaucratic for both farmers and administrators across the EU, while failing to deliver all it could for farmers, the environment and taxpayers.

 

The EU Referendum debate has shone a light on this, raising the tantalising question of, Brexit or no Brexit, how we could create something better with the £3 billion fund the UK currently receives each year from the CAP.

 

Whatever the outcome on June 23, a new farm support policy will need to be put in place from 2020 - whether in the form of a reformed EU CAP or a new UK Agricultural Policy (or, in reality four national policies).

 

 

So, how could we make it better?

We asked the exports, if they had a completely blank sheet to start with, what sort of farm 2020 farm policy would they put in place?

 

  • With Brexit in mind, should it be a UK policy or an EU one?
  • What should the budget be - UK farmers currently receive approximately £3 billion a year under the CAP?
  • What should the priorities be?
  • Does the current two-pillar structure work?
  • Most importantly, what new policies should we put in place?
  • And how would we keep a check on value for money?

 

 

Already some common themes are emerging, with only one contributor Farming Minister George Eustice retaining any element of direct payments.

 

Our experts generally believe capital grants offer better value than direct payments and want to see a greater emphasis on rewarding farmers for delivering public goods.

 

Click on the individuals below to see their full answers

Sir Jim Paice, Former Farming Minister

 Sir Jim Paice, Former Farming Minister
  • Former Farming Minister Sir Jim Paice - Sir Jim wants to see a shift from Basic Payments towards capital funds for specific projects and funding for natural capital.

UK or EU policy?

As a believer in Remain, I would like to see the CAP evolve this way but, even if outside the EU, our own policy should develop accordingly.

 

Under devolution, the Scottish, Welsh and Northern Irish Governments should set their own policy and budgets from within their own resources.

The budget

Within the CAP, the overall budget at EU level should be reduced and the allocations reformed to remove any historic element and base it entirely on agricultural area.

 

If outside the EU, then it would be up to the devolved governments within the UK but in England the budget should remain at the present level.

Priorities and objectives

The English policy, or CAP if in, should move from the current system of a basic payment towards one which provides capital funds for specific purposes and revenue funding for natural capital.

Policies

Capital fund: There should be a fund for capital investment to improve the viability and competitiveness of farm units but the criteria must be strict and the investment clearly sown to produce a long term return.

 

Half of the funding should be an interest free loan which would ensure that that applicant had confidence in a return on the investment.

 

The type of project should not be restricted as long as it was clearly aimed at the long term interests of the business.

 

Natural capital: The largest part of the funding should be allocated to a scheme based on payments for existing and improving natural capital.

 

Such a scheme would cover maintenance of environmental, landscape and archaeological features, wildlife populations, water quality, water retention, carbon retention etc.

 

It would be an annual payment to reflect the natural capital of the farm and have an element designed to stimulate increasing that capital.

 

It would be especially valuable for the hills and uplands and other marginal areas where they currently get no reward for massive natural capital and public good such as water retention to prevent flood risk and carbon retention.

 

Voluntary insurance: The third part of support would be a voluntary insurance based system against market failure.

 

A farmer would choose whether to join or use the futures markets or take the risk.

 

There would be a premium paid in good years when the market is above an agreed price and a payment made in years when the market collapsed below a floor price.

 

Initially the government would have to set up the scheme and advance funding for it. Whilst for many larger farmers the futures markets do this anyway they are less accessible for smaller producers and do not exist for some commodities, for example milk.

 

Other farm-related funding: Funding for research and development and disease control etc should continue in its current form at least for the time being whilst the above policies developed.

 

The key point of the above proposals is that all are voluntary. If a farmer does not wish to be involved and avoid the paperwork he/she can choose not to.

There would not be a direct payments system. All current payments and the two-pillar structure would disappear and be replaced by this system.

Ensuring value-for-money

The value for money point on capital is achieved by requiring some of it to be repaid thus forcing the applicant to ensure it produces a return.

 

The natural capital payments would be based on an annual assessment of the farm where improvements are made such as for wildlife populations and a permanent assessment of its permanent features.

 

Using this system the farmer would be paid according to the value to society of his farms features derived from work already done by Defra.

George Eustice, Farming Minister

 George Eustice, Farming Minister
  • George Eustice, Farming Minister: Mr Eustice believes funding under a UK Agricultural Policy would be at least sustained at current levels, with new elements added in and the removal of the ’indefensible’ cross compliance system.

UK or EU policy?

I believe the UK is better off leaving the EU and that a British Agricultural should replace the Common Agricultural Policy (CAP).

A vote to leave would mean for the first time in over forty years, Ministers would have the power to change things and farmers will be given a say in shaping their future.

A UK agricultural policy will not be dumped on everyone from on high like the CAP. We will work with farming organisations to develop good policy.

The budget

The UK government will continue to give farmers and the environment as much support - or perhaps even more - as they get now.

The Prime Minister has made that clear and I agree with him.

After all, non-EU countries like Switzerland and Norway actually give more support to their farmers than we do.

In the scheme of things, the amount of money spent on our countryside and wildlife is very modest when compared with spending on other departments. But we could spend our money more effectively if we had control.

How would the budget be shared within the UK?

The UK government would have control over the budget and decide allocations based on a fair formula.

But there would be considerable latitude for the Devolved Administrations to design their own agriculture policy so that it suited their own needs under the devolution settlement.

Priorities and objectives

I think there should be three key objectives to a future agriculture policy:

 

  • Promoting profitable food production
  • Safeguarding the environment while promoting habitats
  • Improving animal welfare.

 

Policies

 

We would remove the artificial distinction between Pillar One and Pillar Two in the CAP but instead deliver our three objectives through the following four overarching themes:

 

Area payments: We would retain an element of area payments, initially at similar levels to the CAP but we would aim to end the chaos of an annual application process and the excessive bureaucracy and administration that is inherent in EU schemes.

I am interested in exploring a new farm area payment which automatically rewards any farmer who signs up to privately operated, UKAS-accredited schemes that promote basic measures to deliver environmentally sensitive farming.

 

These could be run by The Rivers Trusts, LEAF or others and would automatically reward farmers without the need for complicated application forms and without the need for RPA inspections.

 

Insurance schemes: Alongside area payments, we would explore the potential to develop government backed insurance schemes like they have in Canada and futures markets like they have in the US to help mitigate risk and give farmers the confidence to invest in their future.

 

Farming has always been a risky business because of the weather and price volatility. Farmers want to earn their profit from the market but they need a helping hand when things go wrong.

 

A future UK agriculture policy would offer that security and confidence.

 

Science and technology: We must invest more in science and technology if we want our farms to make the next step forward.

New genetic breeding techniques such as gene editing could reduce our reliance on pesticides so we should support their development and put in place a new UK regulatory regime based on evidence and science, rather than the politics of the EU.

 

Stewardship Scheme: To promote improved wildlife habitats and higher animal welfare standards, we would put in place a scheme similar to the environmental stewardship scheme we have now but we would make it simpler and broaden the remit of schemes to include measures that improve animal welfare.

 

We are reaching the limits of what can be achieved for animal welfare through regulation in a competitive global market.

 

However, we can reward farmers for adopting animal welfare systems of production.

Regulation and ensuring value-for-money

The EU’s cross compliance penalty regime is an indefensible system of rough justice which must be scrapped.

It results in farmers receiving huge fines for the most trivial of errors and creates a spirit crushing culture where farmers who are doing their best end up having their money automatically docked as a result of clunky EU regulations without so much as a hearing before a court.

 

If we vote to leave the EU we can bring clarity and consistency to enforcement.

 

We would establish a clear distinction between regulatory requirements which should be a matter for the courts and payments to farmers for the environmental and other benefits they provide.

 

There would be no more automatic fines. In future, agencies like the RPA or Environment Agency would have to take farmers to court and bring a prosecution for serious breaches and there would be far greater use of warnings and improvement notices.

 

George Dunn, TFA chief executive

George Dunn, TFA chief executive
  • George Dunn, Tenant Farmers Association chief executive: Mr. Dunn would replace the direct payment system with a new policy providing capital grants for farms, agri-environment payments and support for research and development.

UK or EU policy?

We have set out thoughts for a new support policy for both scenarios – Brexit and Bremain.

The budget

We would maintain the current budget of £3 billion allocated to agricultural support.

Priorities and objectives

The fundamental justification for any agricultural policy which supports primary producers should be to correct apparent market failures.

 

These include:

 

  • The decreasing proportion of income spent on food as the nation becomes more prosperous
  • The imbalance of power in the food supply chain where producers are not treated by the large processors and retailers.
  • The short-term approach to food security
  • The difficulty of factoring in increased animal welfare and environmental benefits into the pricing structure for food
  • The general lack of awareness amongst consumers about the differences in quality of the products which they are purchasing when comparing UK sourced and internationally sourced products.

 

The policy objectives of a new policy should therefore be:

 

  • Correct for market failures
  • Reduce reliance upon imported, temperate produce to enhance food security
  • High standards of food safety applied equally to domestically produced and imported
  • products
  • Equality of other production standards between imported and domestically produced food
  • Assistance towards reasonable standards of living for farmers.
  • Enhancement of the economic productivity of agriculture and assistance with input and output price volatility.
  • Efficient delivery of public goods in the form of landscape management, biodiversity enhancement and public access.

Policies

In a Brexit scenario we would fundamentally change the way farmers are supported, replacing the current direct payment and rural development systems with the following:

 

Agri-environment scheme: £1 billion to a new agri-environment scheme which sets out a menu of costed options that farmers can choose from to deliver on their farms.

 

These would be judged on the basis of outcomes, as opposed to the means of achieving the outcomes, to include specific options for hill and upland farmers focusing on ruminant livestock production.

 

Farm Business Development Scheme: £1 billion to a new Farm Business Development Scheme to provide an annual grant of up to £25,000 per farm per year to assist with the implementation of approved five-year plans for farm development.

 

This would cover investment in, for example, fixed equipment, cost reduction initiatives, processing capacity, diversification, marketing, cooperative schemes, producer organisations.

 

Research and development: £1 billion to near market research and development, promotion, market development, brand development and other supply chain initiatives.

 

Other policy priorities post-Brexit would include:

 

  • Providing the Groceries Code Adjudicator with wider and deeper powers to investigate malpractice within the groceries supply chain.
  • Requiring public food procurement policies to favour British produced food
  • Requiring all food sold in the UK is subject to meet Red Tractor Standards
  • Mandatory country of origin labelling on all food sold through major retailers
  • Negotiation of access agreements for UK farm products into EU markets
  • Responding robustly against tariffs levied by the EU on exports of farm products from the UK.
  • An assurance that free or favourable market access to the UK food market will not be used to lever favourable trade deals in other areas such as financial services
  • Developing a new framework for ensuring the sustainable development of upland areas by refocusing support on ruminant livestock production as the foundation of sustainable upland management
  • Domestic promotion of the high environmental, animal welfare and food safety standards of British food in comparison to imported products to displace those imports with domestically produced food.

 

Priorities for an EU policy

If the UK remains part of the EU, the priorities should be:

 

  • Introduce a proper definition of active farmer for Pillar I and II payments which looks at who is in occupation, who is taking the entrepreneurial risk and who is in day to day management control.
  • Abolish dual use that allows landlords to claim for agri-environment schemes.
  • Cap Pillar I payments at €150,000 per annum.
  • Reform Pillar II schemes so that they are more outcome focused and provide an element of incentive to applicants rather than just income forgone.

Paul Temple

Paul Temple
  • Paul Temple, AHDB Cereals chairman and former NFU vice president and chairman of COPA COGECA Cereals & Oilseeds but writing as an individual, wants an EU policy that promotes competitive farm businesses and rewards good environmental practice.

UK or EU policy?

My views to shape an entirely new policy would be on an EU basis but if it came to it could be applied on a UK basis.

 

I am firmly of the belief that it is not just mine, but my children’s future, that should be as part of the EU, not struggling with insularity.

 

Every element of my commercial business, both output and input, depends on EU trade.

Budget

The agriculture budget would remain unchanged, certainly not increased but the Rural Development budget should be bought into line with comparable EU member states.

 

Priorities and objectives

Agriculture has to be firstly shaped in a way that makes it globally competitive and can manage risk. In addition sustainability will become increasingly important, firstly through water management and secondly through energy and other raw materials consumed.

 

Former EU Agriculture Commissioner Dacian Ciolos’ current reform failed to build on the good work of his two predecessors, Franz Fischler and Mariann Fisher Boel.

 

The objective should have been to build on the market-based approach and to look to manage business risk and invest in long term farming sustainability.

 

Farming is a people industry - demographics makes attracting talented young people in difficult as they will have all kinds of possibilities to use their talents, agriculture has to have the ambition to offer them a real future with an incredible range of opportunities.

 

We will continue to also employ more technology, requiring a higher level of skill base. Unit size will continue increase requiring greater management capability. Capital employment and ownership structure will change.

 

If we put those that work in agriculture first, we know they will require competitive earnings and some means of work life balance.

 

On this basis I would propose that a business should look to effectively engage at least four full time working equivalents, either as a stand alone business or individuals working together within a partnership, co-op or producer organisation.

 

Policies

These drivers would make it more sensible to move away from the current area payment system.

 

Capital projects: We need to focus payments in good long term capital projects that deliver against the above criteria.

 

Investment in capital projects will deliver long term production and sustainability, particularly, drainage and water reservoirs and the public will benefit as a result.

 

I would encourage more favourable treatment of young people, allowing provision for borrowing and allowing capital grants to be put against their name as a capital holding in a business.

 

For example, when a young person coming into a dairy business identifies a long term capital project, such as waste storage or housing, they could trigger a capital grant against their name.

 

This would allow a properly structured working capital position in the business from the beginning and, in time, will help with future lending or partner buy outs.

 

It would particularly be of help to new entrants wanting to come into a business. It would drive formal business arrangements lacking in most farming situations.

 

Environmental reward: The other main area is environmental reward for farming practice that cannot sit in the market place or for which there is no reward.

 

In a lowland situation this could for example be Conservation Agriculture - No Till drilling, this has been identified as an effective way to cut the cost of production, improve the soil health and put carbon back in the ground.

 

Supporting the transition years on an area base provides environmental benefit in the most featureless arable areas.

 

On a mixed lowland grass farm support would be targeted at maintenance of low input grass farming to ensure numerous small grass areas are grazed rather than abandoned or managed like lawns.

 

Hill farm support: Hill farms in LFAs would remain supported but all current rigid environmental schemes would be abandoned as effectively all farms in these areas have environmental value and more so in 20 years’ time.

 

Each farm would have its own targets and suitable support and, rather than have one high pressure date a year, each farm would have its own trigger date.

 

This would smooth out pressure on those providing support in a way that would show more partnership and provide more designed and regionally specific benefit.

 

In summary

 

These proposals of support effectively cover long term food production and the environmental concerns that the market cannot service.

 

The policy would reward farming activity and investment and not simply holding land.

 

The ambition is to create far more professional and sustainable farming business’s that make it easier for farmers and workings to come in and out of the Industry.

 

It would allow the Industry to manage risk and look to its own future rather than Government.

 

 

Abi Burns, head of land use policy, RSPB

Abi Burns, head of land use policy, RSPB
  • Abi Burns, RSPB's head of land use policy: Abi wants to see farm support radically altered to provide much greater reward for environmental services farmers can provide while doing more to improve farm incomes.

UK or EU policy?

We know nature does not respect national boundaries.

 

Regardless of whether the policy is UK or EU, global or local, the most important thing is that it has a clear focus on providing benefits for society that the market doesn’t pay for, and is capable of meeting the big challenges we face like climate change and wildlife loss.

The budget

Whatever the budget, the most important thing is that all taxpayers’ money is spent effectively, and focused on important services that farming can provide like helping restore wildlife and clean rivers.

 

It is clear to many that the current CAP represents an inefficient use of public resources, and persevering with the status quo will become politically and financially untenable.

 

UK and EU budgets are under immense pressure, and it is vital that agricultural policy provides better value for money now, if there is to be a policy in 2021.

Priorities

We need a policy framework that is good for nature and society, and fair to farmers.

 

The current CAP largely fails on these points, and often lets down those farmers who do most for the environment, particularly those in marginal farming systems who are most economically vulnerable.

 

Any future policy – irrespective of its geographic scope – should look radically different to the current CAP.

 

The RSPB has always felt that any public money should be focused on delivering public goods, such as the conservation of wildlife and protecting and enhancing the natural environment.

 

Farmland covers over 75 per cent of the UK, and farmers are therefore in a unique position to lead on restoring nature and we know that many care passionately about this role.

 

There is an increasing weight of evidence that nature can provide real benefits to farmers.

 

In the future, a much higher proportion of the budget should be targeted towards:

 

  • The conservation of species
  • Restoration and creation of habitats
  • Steps to improve water quality and natural flood risk management

 

This should be set within a broader policy framework that works much harder to improve the return farmers receive from the market and increases transparency about where money goes in the supply chain, reducing the need for subsidy.

 

This would be fairer to farmers, and a much better use of public money.

 

Instead of a continued focus on subsidy, a future policy must address the underlying market dysfunction that means many farmers can’t secure a fair return, whilst public money should be focused on the environmental challenges we face now and over the coming decades.

 

We believe there needs to be a new sense of direction in food and farming policy focusing on combined solutions to different but connected problems.

 

That is why we are working with others to widen the debate about agriculture policy and make the case that this issue is of central importance to people’s lives and their wellbeing (see, for example, here and here).

Policies

Although there are some redeeming features, and agri-environment schemes are a lifeline for many species in trouble, the CAP as a whole is a complexand ineffective policy that delivers poor value for money whilst failing too many farmers.

 

The shape of future farming policy – whether UK or EU - must better reward farmers and land managers for the environmental and cultural services that they provide for society.

 

The pressure for reform created over the years means that elements of the CAP do deliver benefits for progressive farmers and the environment.

 

Notably, some very successful agri-environment schemes have allowed farmers to play a key role in saving rare species and protecting threatened habitats.

 

We will continue to press for reform that builds on this progress, and the design of any future policy should be centred around the successes secured to date.

Ensuring value-for-money

Whatever a future policy looks like, we need to make sure that we give enough attention to its successful implementation.

 

The launch of the new CAP across the UK has been dogged by implementation issues, and the focus of UK administrations on cutting costs often comes at the expense of both customer service and genuine value for money.

 

There has been too much focus on distributing the money in the cheapest way possible, without giving proper consideration to what that money is actually buying for society.

 

The success of a future policy focused on results would therefore need a shift in mindset to one that is equally focused on how to implement it in a way that maximises those benefits.

 

This will mean expert advice in support of land management schemes, and well-funded research programmes aimed at improving the sustainability of farming whilst striving for continuous improvements to the shape and delivery of the policy.

 

A focus on results also entails a more knowledge-led, less process-obsessed approach to auditing environmental management.

 

Final thoughts

Whatever comes next, we need to make sure that it allows farmers the space to make a meaningful contribution toward restoring wildlife and improving the overall sustainability of the sector.

 

In 2015 we, alongside our partners in Wildlife and Countryside Link in England, set out our vision for Farming Fit for the Future.

 

We need a bold and forward looking approach to agriculture policy so the future is bright for nature and environmentally- friendly farmers.

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