Annex 2
English Land Management Contracts
". . . Agricultural multifunctionality
is a reality in any well-managed agricultural enterprise: such
an enterprise contributes simultaneously to agricultural production
and to the protection and renewal of natural resources, to balanced
land use and to employment. It is a vision of agriculture in which
the environment, animal welfare and product identification are
no longer perceived as burdens on farming, but as advantages enabling
value to be added to farm produce in national, Community and world
markets . . ."
Jean Glavany, Minister
of Agriculture and Fisheries, January 1999
Introduction
Multifunctionality has become the agricultural
industry's new buzzword, but has, in fact, been a reality in well-managed
agricultural enterprises for much longer. A multifunctional enterprise
contributes simultaneously to the economic, social and environmental
viability of rural Britain. It is a vision of agriculture that
recognises the positive externalities of farming; the non-marketable
by-products that are so valued by society.
In the wake of the recent and devastating foot-and-mouth
disease epidemic, not to mention a host of other disasters in
the industry, the Countryside Alliance welcomed the opportunity
to respond to a review of food and farming and its future. Within
our report we advocated the use of Land Management Contracts (LMCs)
as a mechanism with which to achieve "multifunctional"
systems of production. This paper provides further detail and
practical recommendations that may be of use.
Background
The LMC system (based on the experiences of
the French) enable farmers to implement systems of production
that are for social benefit but which cannot be fully paid for
by the market and require financial input from society in recognition
of the commitments entered into.
The Producers:
— All managers of agricultural holdings
have the option of signing an individual, five year contract with
their local Rural Economic Development and Support Agency (REDSA)—see
below. Preference is given to medium-sized holding whose initiatives
are collective in scope; adding value to products, especially
with quality labels, protection of natural resources and the environment,
water quality, landscape management, rural development and so
on.
— Farmers still focus on their core
activity of food production, but they also meet social expectations
on employment, food quality, food safety, environmental protection
and balanced regional development.
— Farmers complete a sustainable development
project encompassing business development, environmental protection
and social benefit. Each contract is based on an overall assessment
of the farm within a local context and the Government is committed
to helping the initiative financially for a period of at least
five years.
— Within this framework, LMC's enable
farmers to innovate—seeking new markets niches, working
with others to promote a product, or finding new ways of preserving
existing jobs or creating new ones.
Rural Economic Development and Support Agency
(REDSA):
— Each local REDSA draws up a standard
contract but tailored to a specific geographical area and meeting
local needs and conditions. The contract would comprise of a coherent
set of standardised measures reflecting these. A standard measure
is an action or set of actions aimed at achieving the contact's
objectives. These actions would be reflected in the contractual
requirements of each farmer.
Administration of LMC's
The Countryside Alliance, in a separate paper,
has outlined the need for the "evolution" of DEFRA and
the delivery of rural policy. This is fundamental to the LMC approach.
A single Rural Economic Development and Support
Agency (REDSA) would be responsible for the provision of LMC's.
It would act as an interface with other regulatory agencies and
provide a flexible service that can respond to radical changes
in policy (still firmly in the hands of DEFRA). This simplification
process would ensure a shift in policy from production and price
support to fixed investments in a wide range of rural economic
activities. It would also enable rural products, for which there
is not a competitive market, to be purchased.
Individual officers of REDSA would interact
(in a holistic way) with a rural business to administer all submissions
for assistance, receipt of payments, and interaction with appropriate
regulatory bodies. Teams of officers on a regional basis will
deal with institutions or communities and will deliver the same
support as officers assigned to businesses.
The new payments agency established by DEFRA
will be separate from the local and regional structure of REDSA
for audit and fraud avoidance purposes, but its national director
would report to the chief executive of REDSA.
Financing of the LMC's
Experience in France has shown that, on average,
a single LMC costs around £13,000 over five years (FRF 135,000).
Under the England Rural Development Plan, LMC's would be partly
funded by the EU Rural Development Regulation (through a revised
England Rural Development Plan). Additional funding would be provided
through an increase in modulation payments (gradually increased
from 2.5 per cent to 20 per cent over six years) and the associated
match funding from the UK Treasury. The Countryside Alliance has
provided another paper to detail how this should be achieved with
minimal impact on individual farm budgets.
Other types of financial support can be added,
eg from public bodies, and should be defined in each individual
contract.
This funding should provide for two types of
payment:
(i) Investments or costs entailed by socio-economic,
environmental and land use factors—subject to a maximum
of around £10,000 over the term of the contract.
(ii) Agricultural and environmental commitments
requiring improvement or maintenance of "defined" practices.
The total amount of this payment is adjusted to the size of the
holding, applying a sliding scale favouring small to medium-sized
farms. These payments also favour projects providing for net creation
of jobs or organised in a collective, co-ordinated manner.
Training
LMC's often require a diverse range of skills,
sometimes new to farmers. For this reason, contract design and
application may sometimes include a vocational training component.
Key Recommendations
— The use of Land Management Contracts
as a tool to enable farmers and rural businesses to implement
production systems which are for social benefit but which cannot
be fully paid for by the market.
— Administration of these contracts
relies upon a massive simplification and re-organisation of the
Department for Environment, Food and Rural Affairs, including
the creation of a single Rural Economic Development and Support
Agency (REDSA).
— An increase in modulation from the
3-5 per cent currently enforced to 20 per cent over a period of
six years.
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