Source · Select Committees · Environment, Food and Rural Affairs Committee
Recommendation 2
2
Paragraph: 21
Considerable uncertainty remains about how the 7-year agricultural transition will affect English farming.
Recommendation
Considerable uncertainty remains about how the 7-year agricultural transition will affect English farming. As direct payments are withdrawn, there is a risk that farmers will resort to less environmentally sustainable methods to make up for lost income, leave the sector or go out of business entirely. We are concerned that Defra has not published a comprehensive assessment of the impacts of its policy, and the Secretary of State himself acknowledged to us that we know who will lose money but not how many will take up the new schemes. The Secretary of State also told us that land rents “might” adjust downwards, but has not adequately demonstrated this. The Department needs to make a detailed and comprehensive assessment of the economic and environmental impacts of removing direct payments. Defra should publish an impact assessment, covering plausible scenarios, detailing how the transition from direct payments to ELM will impact the viability of farm businesses, broken down by sector and by region. Defra should also detail the anticipated environmental impacts if the delivery and uptake of ELM falls short of its ambitions, for instance, if farmers decide that it makes more financial sense to intensify production than to enter into ELM.
Paragraph Reference:
21
Government Response
Acknowledged
HM Government
Acknowledged
In 2018 and 2019 we published information on the removal of Direct Payments and the evidence that underpinned the changes we were making. Each year we also publish updated data on farming income. The Agricultural Transition Plan sets out our plans for this Parliament on the phasing out of Direct Payments and provides farmers with information about our intended policies. We published this so that farmers can have time to adapt and plan ahead. We are not planning to change the profile of Direct Payments reductions and suggesting otherwise would create unnecessary and unhelpful uncertainty. As funds reduce through Direct Payments, farmers will have greater opportunities to be rewarded for delivering public goods and improving their productivity through the new schemes we are now opening. The Government regularly reviews the economic factors affecting farmers. We are closely monitoring trends in farm income and productivity, as well as take-up of agri-environment and other schemes, as part of our programme of monitoring, learning and evaluation. We will use the findings to inform policy and delivery throughout the agricultural transition. We also routinely review and stress-test our own plans and assumptions about how our schemes will roll out. These reviews are supported by extensive engagement with farmers, delivery partners and land managers so we can understand the situation on the ground. We have learned from previous reforms and are extensively piloting our schemes so that they are built in a way that will work for farmers and we can test, learn and adapt at a small scale. Throughout the development of the environmental land management schemes, we will continue to assess a wide range of direct impacts, including farm incomes and the expected impacts that our policies will have on improving the natural environment.