IMPACT
OF
THE
SCHEME
(a) Take-up
5. The Environmentally Sensitive Areas Scheme was
introduced in 1987. By the end of March 1996, total take up under
the Scheme covered 46 per cent of the eligible land across all
22 designated areas. However there were wide variations in take-up
between different Environmentally Sensitive Areas, ranging from
10 per cent on the Essex Coast to 94 per cent in West Penwith
in Cornwall. Twelve of the Environmentally Sensitive Areas had
take-up rates below 50 per cent, including four of the first ten
areas launched in 1987 and 1988.[2]
6. The Committee asked the Ministry why there had
been such a low rate of take up in some Areas and whether the
impact of the Scheme had been less than intended. The Ministry
said it was probably true that take up had been less than they
would have wished. They identified three constraints: participation
in the Scheme is wholly voluntary for farmers; European Union
regulations require that compensation for income foregone should
not be greater than a given level; and the environmental benefits
gained should give reasonable good value for money.[3]
7. The Ministry's evidence shows that the take-up
of agreements was much slower than predicted by the Ministry,
particularly in the Environmentally Sensitive Areas launched in
1993 and 1994. This was partly due to the unprecedented profitability
of farming in the early 1990s. Six Environmentally Sensitive Areas
were to have been launched in 1992 (Stage III) and a further six
in 1993 (Stage IV); in the event both were launched a year later
than planned. For Stage IV, Ministers decided that the timing
should be arranged so that initial payments were made in April
1995.[4]
8. When asked about the lack of provision to maintain
or enhance the conditions of marshes, ponds and woods, the Ministry
said they were introducing specific measures for the management
of such features. This involved more explicit guidance than was
given in the past.[5] On
low take up in river valley, coastal and wetland areas and the
threat to habitats there, the Ministry again cited the constraints
of value for money, limitation by income foregone and the voluntary
nature of the scheme. They did agree that it might be worth greater
concentration to see if they could encourage take-up in those
areas.[6] They confirmed
that habitat loss within an Environmentally Sensitive Area occurred
where there was low take-up.[7]
(b) Farmer motivation
9. There is a large spread of Scheme payment rates
varying from more than 20 per cent higher than the income foregone
level, down to more than 20 per cent lower. The Ministry said
they apply a complete range of considerations in setting payment
levels; they took a view on income foregone and environmental
benefits, as well as the ease with which farmers were attracted
to the Scheme.[8] Variations
between calculations of income foregone and payment levels changed
in line with farming incomes. Revisions to the level of payments
took place every two years.[9]
The Ministry assured the Committee that calculations of income
foregone are based on the most obvious alternative to environmentally
friendly practice in the area examined.[10]
10. The Committee were surprised by the number of
farmers who were willing to participate in the Scheme and to receive
levels of payments which were below that which the Ministry calculated
as the income foregone.[11]
The Ministry thought this might be due to farmers taking a long
term view of the benefits of the Scheme. While a survey had identified
the level of payments as the main consideration, it was not the
only factor.[12] In their
experience, the best incentive was where neighbours had taken
up the Scheme; as a result other farmers in that area were also
likely to participate.[13]
11. In the light of these factors, the Committee
asked about the steps taken by the Ministry to research the motivation
of farmers,[14] to build
up experience in how to create incentives and to carry out sensitivity
analysis.[15] The Ministry's
evidence from a survey in 1996 was that farmers were motivated
by both monetary and non-monetary considerations.[16]
The Ministry would want to look again at the non financial incentives
in due course, but would not want to repeat their socio-economic
survey too readily. The change in farm incomes meant that significant
reductions in payment levels might be required over the coming
years and might swamp the impact of other factors.[17]
However the Ministry said that, with reductions in farm incomes,
if farmers were motivated solely by financial matters, the rate
of take up might be expected to increase significantly; but this
would be counteracted by the reductions in levels of payment.[18]
(c) Scheme Effectiveness
12. Performance measures for the Scheme were not
introduced until seven years after it began and some of them can
be measured only partially because the criteria are too imprecise,
for example by referring to a target of "no increase in the
risk of damage" or to percentages rather than actual numbers.
The Comptroller and Auditor General recommended that each indicator
should include the criteria for evaluating success, should be
capable of measurement, and should clearly reflect what is needed
to achieve defined levels of environmental benefit.[19]
13. The Committee asked why there had been delay
in setting performance measures and what was being done to determine
the impact of the Scheme more precisely. The Ministry said that
environmental monitoring had been in place since the beginning.
However, as this was a completely new scheme, in some cases the
information was limited and it was very difficult to draw up meaningful
indicators until the Ministry considered they had sufficient experience
and knowledge. The performance indicators when first set were
pioneering and ambitious. In the event some of them were very
difficult to measure properly. The Ministry were now developing
new performance indicators in line with the recommendations in
the Comptroller and Auditor General's report.[20]
When pressed on specific examples, the Ministry said that they
would be monitoring chalk grassland measures; and on dry stone
walls would be setting clearer numerical targets in terms of length
as opposed to a percentage.[21]
(d) Arable farming
14. The Committee asked the Ministry why there were
certain omissions in the Scheme, such as little or no provision
to encourage environmentally friendly arable farming, for example
by reducing the use of fertilisers and pesticides.[22]
The Ministry did not see encouraging the reduced use of fertilisers
and pesticides within the Scheme as a particularly useful contribution,
given that there was already an organic scheme. However, the Ministry
had created special arable agreements in two Environmentally Sensitive
Areas to encourage the provision of stubble over winter which
attracted birds. They had also just launched an Arable Stewardship
Scheme.[23]
15. The level of payments under the Arable Area Payments
Scheme dwarfs that available for Environmentally Sensitive Areas.[24]
In light of this, the Committee asked the Ministry if the Scheme
had in fact had a dramatic effect on environmental protection
and conservation. The Ministry said that it was widely regarded
as a landmark, a view shared by environmental organisations, and
that it had contributed substantially towards protecting areas
under threat from intensive farming methods. However, it had been
very much more successful in livestock areas than in arable farming
areas. The Scheme would be a very expensive one if it were to
achieve a lot in the latter area.[25]
16. When pressed further on progress since 1987,
the Ministry agreed that it was very difficult for the Environmentally
Sensitive Areas Scheme to compete against what had been unprecedented
prospects for arable farming. The Comptroller and Auditor General's
report came at the end of three years of unprecedented prosperity
for British farming, probably since the Napoleonic Wars. The situation
now might very well be different. The Committee asked the Ministry
if there were any way to reduce arable payments during good times
and increase them in bad ones. The Ministry told us that the Government's
position is that arable area payments should be cut significantly
and ultimately abolished.[26]
(e) Conclusions
17. The Committee are concerned that the impact of
the Scheme has not been as great as it might have been as measured
by levels of take-up. We recognise the voluntary nature of the
Scheme and of course public money should never be spent unnecessarily.
However, it seemed to the Committee that the Ministry might have
been more proactive in marketing the Scheme to farmers where take
up has been low, for example in river valley, coastal and wetland
areas.
18. It is surprising that the Ministry did not have
plans to update their research about what motivates farmers to
participate in the Scheme and why take up remains poor. Given
the continuing emphasis on environmentally friendly practices
in agriculture, a better understanding on these issues is important
to the Ministry. We note that they have undertaken opinion surveys;
but they need to consolidate this work by identifying those incentives
shown to be successful in encouraging farmers to join in the Scheme
while at the same time representing good value for money.
19. We are dismayed that, ten years after the start
of the Scheme, the Ministry have still not developed an adequate
set of measurable targets for judging the success of the Scheme.
Environmental monitoring has been in place but this is no substitute
for performance criteria of the kind being introduced for chalk
grassland and dry stone walls to produce evidence of the maintenance
or enhancement of these features. We urge the Ministry to give
greater concentration to developing similar ways of measuring
the achievement of targets and impact of the Scheme.
20. We note that the Ministry have made provision
for environmentally friendly arable farming in two Environmentally
Sensitive Areas. The Committee look to the Ministry to review
the results of these provisions with a view to extending them
into other Scheme Areas where there is arable farming, in order
to increase take-up and environmental benefits.
2 C&AG's report (HC 120 of Session 1997-98), para
2.11 Back
3
Qs 1, 44, 47-48 Back
4
Evidence, Appendix 1, p20, paras 23-28 Back
5
Q 2 Back
6
Qs 4-5 Back
7
Q 53 Back
8
Q 89 Back
9
Qs 91, 124 Back
10 Q
125 Back
11 C&AG's
report (HC 120 of Session 1997-98), paras 97-98, Figure 26 Back
12 Qs
62, 64 Back
13 Q
93 Back
14 Q
63 Back
15 Qs
93, 96-97 Back
16 Qs
54, 63 Back
17 Qs
97-98 Back
18 Q131 Back
19 C&AG's
report (HC 120 of Session 1997-98), paras 3.19-3.23 Back
20 Qs
9-11, 57 Back
21 Qs
10-11 Back
22
C&AG's report (HC 120 of Session 1997-98, paras 2.6-2.7 Back
23
Qs 2-3 Back
24
C&AG's report (HC 120 of Session 1997-98), para 1.6 and Figure
5 Back
25
Q 44 Back
26
Qs 45-46 Back
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