My Lords, I declare my farming interests, as set out in the register. As the matters in these two instruments are closely related, I hope that it would be helpful to your Lordships to consider them together. Made using powers under the Agriculture Act 2020, they implement important aspects of our new agricultural policy, set out in the agricultural transition plan published in November 2020. Both instruments apply only to England.
I turn first to the Direct Payments to Farmers (Reductions and Simplifications) (England) (Amendment) Regulations 2021, which sets reductions that will be applied to direct payments made to farmers for the 2021 claim year. The Government are committed to phasing out direct payments that are poorly targeted and offer poor value for money. This will be done over a seven-year agricultural transition period, and it will free up money to fund a new system of paying farmers and land managers for delivering public goods. This includes paying farmers to improve the environment, improve animal health and welfare, and reduce carbon emissions. All funding released from these reductions will be reinvested into new schemes in this Parliament. Help will be offered to those who need it to plan and manage their businesses through the transition.
The reductions will be applied in a fair way, with higher reductions initially applied to amounts in higher payment bands. The reductions for the 2021 scheme are modest, at 5% for around 80% of farmers. This is within the margin of the currency rate changes often experienced in previous regimes. We first published these reductions in 2018, so farmers have had time to prepare.
The Government are on track to introduce new schemes this year, while continuing to fund new and existing countryside stewardship agreements. From this year, farmers will be able to apply for grants under the farming investment fund to help them invest in equipment and technology and boost their productivity. This year, we will also begin the sustainable farming incentive, the first of our pilots under the environmental land management national pilot scheme. Payments to
the first pilot participants will be made before the end of the year, before the scheme is rolled out more widely from 2022. These will be funded from the reductions to direct payments. The instrument also makes minor amendments to reflect the fact that direct payments will be calculated in sterling rather than euros from the 2021 claim year onwards.
The instrument also amends the direct payments rules to remove the euro thresholds below which the Rural Payments Agency does not need to recover overpayments or payment entitlements, or charge interest. When deciding whether recoveries should be made, the Rural Payments Agency will apply the principles in the Treasury’s Managing Public Money guidance.
Finally, this instrument makes two consequential amendments which were not covered in the Direct Payments to Farmers and Cross-Compliance (Simplifications) (England) (Amendment) Regulations 2020. It removes a redundant cross-reference relating to the greening rules which were removed by that previous instrument. It also changes a percentage figure used to calculate young farmer payments, ensuring the value of these payments will not be affected by the removal of the greening payment.
The Agriculture (Financial Assistance) Regulations 2021 put in place financial data publication and enforcement and monitoring requirements for four financial assistance schemes: Countryside Stewardship, the Farming Investment Fund, the environmental land management national pilot scheme, and the tree health pilot. All these schemes are established under the Agriculture Act 2020. The environmental land management pilot scheme will comprise three schemes, the first being the sustainable farming incentive.
This instrument will provide a critical opportunity to test, refine and develop environmental land management and tree health schemes in pilot form, ahead of their full launch. Countryside Stewardship will be a simplified version of the EU countryside stewardship and environmental stewardship schemes, and a further iteration of the domestic scheme, which opened for applications in 2020 and 2021. I say for the sake of clarity that this instrument provides for rules applying to schemes opened under domestic legislation, while earlier countryside stewardship and environmental stewardship agreements remain subject to enforcement and monitoring under CAP rules. The Farming Investment Fund will provide grants to farmers, foresters and growers so they can invest in equipment, technology and infrastructure to help their businesses prosper while improving resource efficiency and enhancing the environment.
This instrument will require information about financial assistance given under these schemes to be published, consistent with the Government’s commitment to transparency in the use of public funds. Information published will include the total or aggregated payment received by a beneficiary for each scheme they are in and a description of activities financed by the payment, and could enable public analysis; for example, university research. Publication of personal data will not be required for payments below a de minimis level or in respect of payments made under the tree health pilot, where, instead, aggregated data will be published.
In terms of checks, enforcement and monitoring, this instrument provides for a flexible and proportionate framework ensuring that the purposes of schemes are delivered. Provisions include checking eligibility criteria at application stage and monitoring compliance with individual grant agreements and scheme conditions. A range of enforcement options are available under the instrument in the event of a breach, including withholding of payments, recovering payments previously awarded and prohibiting a person from receiving payments under any scheme for up to two years, thereby ensuring that public funds are properly expended, suitably protected against fraud and provide value for money.
The instrument provides powers of entry and inspection to enforce compliance with scheme agreements; for example, to check or inspect land, livestock, crops, plants or machinery and to verify compliance of conditions and review any activities carried out under the schemes. A formal complaints and appeals process is available if agreement holders are aggrieved by certain decisions taken by the department.
These instruments implement provisions in the Agriculture Act 2020. They begin the move from the inefficient direct payments model of the CAP and provide an important framework allowing new financial assistance schemes to operate effectively in line with the agricultural transition plan. I beg to move.
4.45 pm