Thank you. It’s good to be back here at Blenheim to celebrate the best of our countryside, from wildlife and farming to outdoor pursuits and food, in partnership with Countryfile.
It’s been a year since I stood here, shortly after the Brexit decision, making the case that we should seize the opportunity to think again about how and why we use public money to support our countryside. This is because, in all sorts of ways, the current EU subsidy system is broken. Despite reform ten years or more ago, which did something to arrest decline, the current system of support for agriculture has resulted overall in a dramatic decline in nature and species, soils and water.
How has the debate gone since then?
Some reasons to be cheerful
Looking back, there are many reasons to be cheerful, though until they can be certain of what the future might look like, it may not feel like that for farmers worrying about their livelihoods and communities whose viability depends on agriculture.
One very positive development is that there is – more loudly than for a long time – a proper public debate going on about the role of farming and farmers in their vital job of food production and creating and protecting the environment and landscapes the public value. Top billing on the Today programme, not just Farming Today, can’t do any harm.
It’s also good news that successive Defra Ministers – and now Mr Gove – have stuck to their commitment to produce a 25 Year Environment Plan to achieve the ambition of leaving the environment in a better place than we found it. And within that vision, we have to do the right thing for farming – with 70% of the land in the UK farmed in some way, for the sake of the future health and productivity of our countryside and our environment we can’t afford to get it wrong.
The 25 Year Plan is an opportunity to set out a clear ambition for both farming and the environment, which will provide a strong foundation for the government’s proposed Agriculture Bill. You can’t deal with one without the other.
Public payment for services
It is also encouraging that there is increasing consensus around the essential principles of any future vision for agriculture, with many of the bodies representing farmers and land managers, other conservation charities, environmental thinkers and individual farmers supporting the same ideas.
Two weeks ago, we heard Michael Gove echo the need for financial support for farming to be focused on public benefits and emphasise that support should go to land owners and managers who cultivate and protect the range of habitats which will benefit nature. He gave the example of planting trees – “a source of beauty and wonder” but also a carbon sink, a way to manage to flood risk and a habitat for precious species – which is effectively dis-incentivised by the current system of farm support under the CAP. The opportunity we now have to correct this, by better integrating agriculture and forestry, is another reason to be cheerful.
All these people are saying that – as far as public support is concerned – we should reward farmers who deliver the most public benefit; invest in science, new markets and technology; and crucially make sure public money only pays for the goods that the public values – thriving nature, beautiful landscapes and associated heritage – but for which other markets won’t pay.
And everyone is moving away from the idea that we should think of these as “subsidies”. They will be payments for services delivered – just like every other aspect of farming as a business.
We have also made progress in thinking about what those other – market-based – sources of income for farmers in a post-subsidy world might be. I’ll come back later to the debate that needs to be had about food and how farmers can be properly rewarded for this vital service.
We have been working with our partner organisation Green Alliance, for example, to think about new ways in which the private sector can support land management, tapping into new natural markets.
One such example is our ‘slow, clean water’ proposition, following on from our successful natural flood management project with farmers on the Holnicote Estate in Exmoor. Working with water companies, other businesses and leading landowners, we’re planning to turn our concept of a ‘natural infrastructure scheme’ into a workable proposition where groups of farmers working together would sell flood protection and clean water to water companies and public authorities downstream. We’ll be publishing a paper with Green Alliance shortly to set out how we can do this.
Business has just as great an interest as the public in clean water, healthy soils and well-managed carbon, and a motive for investing to ensure these are achieved in the most efficient way. Alongside their work with us on natural markets, Green Alliance have also been thinking about how this might work with the food industry Their proposals included introduction of new Natural Capital Allowances, to support investment by the food sector in environmental restoration, for example of soils. This would supplement – not replace – public payments to farmers and use public funding to leverage the private sector investment required to restore natural assets at the scale we need.
Underlying these kinds of payments for environmental services is the idea of Natural Capital Accounting – measuring the changes in the stock of natural assets like land, forests and rivers. It is very reassuring that the present Government is looking to Dieter Helm and the Natural Capital Committee for advice on how they might help define what good looks like and help measure the outcomes.
But it needs to be kept simple. Most people agree that some kind of “outcome-based” system of payment for public goods is needed, rather than a payment simply for owning a piece of land. But it needs to be flexible – for example to take account of the natural fluctuation in species or habitat. And farmers need to be central to the process.
At Malham Tarn in the Yorkshire Dales we’re working closely with a group of our tenant farmers to trial our own ‘payments for outcomes’ scheme, to see how this could work in practice. It’s not just aimed at paying for single, specialised habitats, but at whole farm outcomes. This outcomes-based approach and move to low input farming system will help create a more varied vegetation structure and vegetation types, boosting habitat diversity and condition but which could also contribute to natural flood management, enhance carbon storage in peat and trees and protection of archaeological and landscapes features. We’ve already taken Defra and Treasury staff to have a look and we’ll be sharing what we’ve learned more widely in due course.
There is also a consensus that the future of farming is about much more than production. It’s intimately bound up with the culture and heritage in which production takes place, particularly through a period of inevitable change, whether that comes about as a result of climate change, world markets or the nature of public support. And the uplands will be particularly vulnerable to those changes.
We will need to find ways in which to support the best of that culture – whether in the Lake District or rural Wales – while facilitating the change that will be needed.
A local approach
And another reason to be cheerful is the general acceptance that any new system needs to be much more sensitive to regional and local difference. As a veteran of many Public Accounts Committee appearances, I am under no illusion that neither the Treasury nor Parliament will hand out billions of pounds of public money without requiring very clear overarching frameworks and clear accountability.
But within those frameworks, most people – including Government – are saying that there should be regional or catchment based approach to planning for the environment and paying farmers for their part in it. Decision-making can be much more democratic, involving all the players – farmers, environmental agencies, business and communities. That would also be a much more responsive structure to meet the very varied cultural, environmental and economic needs of each area.
REASONS TO BE LESS CHEERFUL
This is all good news. But there are still a number of areas to worry about, and lots more work to do, and the clock is ticking.
Particularly concerning is the lack of clarity around the transition period. That’s a term much in the news at the moment, but in this case I mean it very specifically in relation to the move from the current Common Agricultural Policy – or CAP – to the new world.
Level of public support
The government has made an initial commitment to retain the current EU farm policy framework until 2020 and maintain the current £3bn level of support until 2022. But we and the other environmental charities are clear that £3bn a year still will be needed into the foreseeable future, if we are to repair the historic damage, and do what we need to do to adapt to climate change, and restore soil and water quality, habitats, species, natural flood protection and damaged landscapes.
The Government’s own estimate in 2009 was that anything between £1bn and 3bn would be needed to do the job, and things have got worse since then. We along with RSPB and the Wildlife Trusts – will be producing an updated figure next month.
We need also clarity now about how the transition to any new arrangements will work and the money that will be available. Because the longer we wait, the more we risk losing all the gains we have made over the last decade – and creating a further decade of damaging uncertainty for our countryside.
We have already seen examples of short-term decision-making, where farmers – in response to uncertainty about the future and income – have chosen not to re-enter stewardship or have ploughed up pasture created with support from stewardship schemes back into arable to shore-up their immediate revenue streams. Very understandable, but heart-breaking.
Taking action now
And we don’t have to wait until after 2020 to move in the right direction. By acting as soon as we leave the EU in 2019, Government could provide a strong and tangible signal of direction of travel post-CAP. I know that Defra recently turned its face against the idea, but once we have left the EU in March 2019 we could transfer more of the £3bn CAP budget from Pillar 1 (which is paid on the basis of hectares owned) into Pillar 2, currently only £600m a year, which pays farmers to produce the additional environmental goods of all kinds that we desperately need. £800m on top of the current £600m more seems like a good figure to be getting on with.
And we also need a national discussion about food. In one sense, this isn’t the National Trust’s business – we are not a food charity – but the issue is central to any vision for the future of agriculture.
As some of the recent commentary on possible trade deals has demonstrated, as a nation we still seem to be in a muddle about what we want from our food production, and the many trade-offs that need to be made, whether that’s price, animal welfare or costs to the environment (hidden or explicit).
For example, too often debates about food security – which will continue to rely on good, open trade deals – are confused with ideas of domestic self-sufficiency or ‘food sovereignty’, whether and why we need to become more self-sufficient and indeed whether it is achievable at all within global legal frameworks.
And the academics are still at odds about the most important drivers of the cost of food to the consumer – tariffs? World demand? Supermarket policy? Do we want to focus on quantity or quality? Where do we think our natural advantage lies? And – crucially – what do the public want?
The 25 year Plan and Agriculture Bill give government, farmers, land managers, retailers and the public an opportunity to have this discussion. At the end of it, we need to create a situation in which sustainable and forward-looking farm businesses can thrive and deliver what the nation and the public want, within a framework of protection and restoration of all aspects of our precious natural environment.
The role of good regulation
A key part of that framework is currently provided by regulation, also a hot topic this week. In fact, politicians from all parties, environmental organisations and business have all supported the argument that the framework of environmental regulation that has been developed within the EU, including the overarching principles such as precaution and the polluter pays – should be transferred lock, stock and barrel in the post-Brexit world.
That is not to say that there are no improvements to be made to the current framework, but successive attempts to deregulate (I can’t remember how many red-tape taskforces I’ve seen come and go) show that most of those involved, including the public, recognise that current standards involved are reasonable and that you need a transparent and even-handed regulatory framework is one in which businesses – including farms – can thrive and the public will have confidence. You don’t hear many calls from the public to deregulate – whether on food safety standards or environmental protection. Business wants a level-playing field, not a free-for-all. So good environmental regulation will need to go hand-in-hand with any new system of incentives for environmental outcomes. The key thing is clarity and well-handled enforcement, sensitive to local needs.
How to measure success
Finally, we need agreement on how to set our ambitions for nature and the environment. In his recent speech, the Secretary of State talked about the need to include measurable goals in the 25 year plan and we fully support this. One idea would be to chunk up our long term ambitions into five year nature or natural asset budgets, flexible to local needs and circumstances, as we do Carbon Budgets under the Climate Change Act.
What farms of the future might look like
Anyone who is a farmer now, and people thinking of it as a future career, must find the agenda daunting. Because of all the many things that skilled and caring management of the countryside can offer the nation, the expectations will be high. Food production, soil improvement, flood management, heritage protection, beauty of landscape – so many things that the nation wants from what are essentially a small and medium enterprises (or ‘SMEs’), with all the human and economic challenges involved in running any business.
And this is where Government and its resources have a strong role to play – funding the advice, training and capital investment schemes that will help our farmers gain the skills and confidence to become managers of rural SMEs. These will trade on all the natural and cultural assets that our wonderful countryside embodies.
The good news – again – is that there are many already reassuring examples of what this can look like. One of our neighbours in the Yorkshire Dales, farmer Chris Clarke at Nethergill, is one of those leading the way, trying a different financial model which also drives great conservation gains.
Chris has reduced his livestock numbers to cut costs on his 400-acre holding at Nethergill and to make the farm more profitable. He cares deeply for his land and the deep peat covering the upper reaches, so grazes sensitively to protect this and allow the establishment of some 18,000 new trees, developing new native woodland areas and delivering great wildlife benefit. He and his wife Fi are passionate about the wildlife and habitats he’s breathed new life into over the last 10 years, from the curlews wheeling overhead to the otters in the beck.
But his second passion and expertise is in making farming work pay. His recipe is simple: know your balance sheet, understand your cash flows, go for high margins not high volumes; avoid all unnecessary costs. And he has revealed that small numbers of farm animals, with value added to their production at every turn, is where the margins start to look attractive. He takes frugality in managing input costs for his livestock to a new level. His native shorthorn cattle and sheep largely look after themselves, and the land supports only what it has the capacity to manage, all year round.In partnership with a local butcher and chef, Chris and Fi have created ready-meals which sell locally and to the guests they welcome to their self-catering accommodation, which achieves 75% occupancy with an increasing numbers of walkers visiting the area. Passing trade visits a ‘nature barn’ with simple honesty food and drink available, which adds a further £4k to the annual revenue pot. Visitors and providing for their needs are now the majority component in his annual financial picture.
As Chris proves, this different route is possible. But we will need some brave advocacy and hard numbers to make the arguments and win the case. Government can provide this leadership and sense of direction now.
Someone once told me that you need two things to achieve your ambitions – stamina and optimism. The government’s ambition is for this generation to leave the environment in a better state than it found it. And we are within touching distance of a vision for the future of farming that sees thriving businesses successfully meeting the needs of [the nation] into the 21st century and beyond.
I believe that there are grounds for optimism that we can achieve both. And I can assure you that the National Trust has the stamina to play its part.