It is a real privilege to be here today to launch our Agricultural Transition Plan.
I’d like to begin by thanking the Oxford Farming Conference for hosting this event. Of course, we all look forward to the time to when we will have turned the corner of this pandemic and can return to meeting again properly, but for now let me start by taking this opportunity to thank all those of you who working in our food supply chain to keep the nation fed. The response of the sector has been phenomenal and has been a timely reminder of the critical importance of domestic food production to our food security as a nation.
My family have farmed in West Cornwall for six generations. The names of fields were passed from one generation to the next. Like all farmers, we knew our land and so I understand the responsibility that farmers feel to the hard work of previous generations and also their commitment to the future.
So as we contemplate the biggest change in agricultural policy in half a century, we need to design a policy that is not only right for those who are the custodians of our countryside today but which is also right for those who follow in their footsteps tomorrow. Those who we’ve yet to meet. Those perhaps who yearn to go into farming but cannot currently get access to land; the farm managers who want to set out on their own; maybe those who left the family farm twenty years ago but wish they could find a way to return.
So, today we are publishing further details of our approach to changing the way we reward and incentivise farmers.
We will remove the arbitrary area-based subsidies on land ownership or tenure and replace them with new payments and new incentives to reward farmers for farming more sustainably, creating space for nature on their land, enhancing animal welfare and delivering, of course, the other objectives set out in the Agriculture Act 2020.
We will remove the old style, top down rules and draconian penalties of the EU era starting with important changes next year that will substantially reduce guidance that farmers need to follow.
This of course is a moment of great change, where, for the first time in fifty years, we have a chance to do things differently. So, we should not waste that opportunity. We should think through from first principles what a coherent policy actually looks like, and then chart an orderly course towards it.
There is no doubt that the intensification of agriculture since the 1960s has taken its toll on wildlife and on nature. So, to address this, we need to rediscover some of the agronomic techniques that my Great Grandfather might have deployed, but then fuse these with the best precision technology and the best plant science available to us today.
The centre piece of our future policy will be made up of three component parts.
Firstly, the Sustainable Farming Incentive will pay farmers who are in receipt of BPS for actions that they take to manage their land in an environmentally sustainable way.
Secondly, the Local Nature Recovery will pay for actions that support local nature recovery and deliver local environmental priorities. This scheme will also encourage collaboration, helping farmers work together to improve their local environment.
Finally, Landscape Recovery will support the delivery of landscape and ecosystem recovery through long-term, land use change projects. They will help us to meet our targets; to plant 30,000 hectares of new woodland each year by 2025, to create and restore some of our peatlands, to protect 30% of land by 2030, to reach net zero by 2050.
We know that this marks a significant change and I’m also very conscious of the fact that for many farm enterprises, they are dependent on the area subsidy payments to generate a profit. And that without it some might assume they would not be profitable, but that is why we have created a seven-year transition period. We want this to be an evolution, not an overnight revolution. That means making year-on-year progressive reductions to the legacy direct payment scheme, while simultaneously making year-on-year increases to the money available to support the replacement.
Between 2021 and 2024, we will help farmers prepare to take part in our Environmental Land Management offer.
This will include expanding the Countryside Stewardship scheme and opening a new Sustainable Farming Incentive, which will be open to every farmer from 2022 onwards.
We will also continue to develop pilots for Environmental Land Management.
We will also increase the amount of funding available for environmental and animal welfare improvements in each year of the early transition, using funding released from Direct Payments as we move towards the roll out of the three components under Environmental Land Management, which will then take effect in full from 2024.
We recognise that there is a problem with poor profitability in agriculture, but the premise behind our new policy is to tackle the causes of that poor profitability, rather than masking it with a subsidy payment.
So our new financial incentives for sustainable farming and nature recovery will be set at a rate to incentivise widespread participation and will give consideration to natural capital principles so that in some areas we will go beyond the income foregone methodology of the past.
To support farmers in reducing their costs and improving their profitability, there will be new grants to invest in new equipment to reduce costs.
There will be exit schemes to help those who want to retire or leave the industry to do so with dignity, and there will be grants to create new opportunities and support for new entrants coming into the industry.
We will also provide grants for farmer-led Research and Development, and for the use of innovative new techniques led by farmers and growers.
I would like to say a bit more about what the early part of the transition is going to look like.
Next year, we will begin to reduce Direct Payments, improve how existing schemes and regulations operate, and offer grants to help farmers invest in environmental and productivity improvements.
Reductions in Direct Payments will begin at 5% for most farmers.
Enforcement will be more proportionate – with written communications rather than financial penalties and the approach taken to inspections will be overhauled.
We will continue our programme of tests and trials and start a new National Pilot for Environmental Land Management.
And our future agricultural policy will be designed with farmers, for farmers, so that it works in fields and on farms, not just on paper. I know that we haven’t always got it right in the past. I know that administrative processes have caused problems. I want farmers to trust our reforms. And we want to work with you all to get this right.
In 2022 and 2023, we will reduce spend on Direct Payments by around 15% in each of those years.
We will start to roll out some of the core elements of the Environmental Land Management. The Sustainable Farming Incentive will support sustainable approaches to farm husbandry that help the environment that might include, promoting integrated pest management, actions to improve soil health or catchment sensitive farming.
We will make more funding available within the legacy Countryside Stewardship Scheme. We will offer a slurry investment scheme, to help reduce pollution, take us close to net zero and help us leave the environment in a better state than we found it.
There will be standalone projects to support tree planting, peatland restoration and nature recovery.
We will be launching a new-industry-led R&D scheme to invest in innovation and to benefit farmers.
We will also, as I said, offer an exit support scheme – to help farmers who want to retire to do so with dignity and to help new entrants into the industry. We will be consulting further on these scheme designs in the new year.
We will begin rolling out of the full three components of our Environmental Land Management in late 2024. By the end of 2024, the legacy Basic Payment Scheme probably will have been reduced by about 50%.
We then intend delink Direct Payments, and the bureaucracy of the cross-compliance regime will be a thing of the past.
By 2027, we want to see a reformed agriculture sector. We want farmers to manage their whole business in a way that delivers profitable food production and the recovery of nature, combining the best modern technology with the rediscovery of the traditional art of good farm husbandry.
We want farmers to be able to access public money to help them tackle climate change and support the environment and animal welfare on the land they manage and to help their businesses become more productive and sustainable.
We want to support confidence in UK food internationally, prevent environmental harm and protect biosecurity and animal welfare.
In conclusion, rather than the prescriptive, top down rules of the EU era, we want to support the choices that farmers and land managers take on their holdings, and we will work with them to refine and develop the schemes we bring forward. If we all work together to get this right, then I believe a decade from now the rest of the world will be coming here to see how it’s done.
