The
Committee consisted of the following
Members:
Chairman:
Mr.
David
Wilshire
†
Eagle,
Angela
(Wallasey)
(Lab)
†
Gardiner,
Barry
(Parliamentary Under-Secretary of State for Environment, Food
and Rural
Affairs)
†
Gerrard,
Mr. Neil
(Walthamstow)
(Lab)
†
Goodman,
Helen
(Bishop Auckland)
(Lab)
Huhne,
Chris
(Eastleigh)
(LD)
†
Kirkbride,
Miss Julie
(Bromsgrove)
(Con)
†
Lancaster,
Mr. Mark
(North-East Milton Keynes)
(Con)
†
Marsden,
Mr. Gordon
(Blackpool, South)
(Lab)
Penrose,
John
(Weston-super-Mare)
(Con)
†
Prentice,
Mr. Gordon
(Pendle)
(Lab)
Pritchard,
Mark
(The Wrekin)
(Con)
†
Simon,
Mr. Siôn
(Birmingham, Erdington)
(Lab)
†
Tipping,
Paddy
(Sherwood)
(Lab)
Vaz,
Keith
(Leicester, East)
(Lab)
†
Watts,
Mr. Dave
(Lord Commissioner of Her Majesty's
Treasury)
†
Wiggin,
Bill
(Leominster)
(Con)
†
Williams,
Mr. Roger
(Brecon and Radnorshire)
(LD)
Emily
Commander, David Weir, Committee
Clerks
†
attended the Committee
Sixth
Delegated Legislation
Committee
Thursday 8
February
2007
[Mr.
David Wilshire
in the
Chair]
Common Agricultural Policy Single Payment and Support Schemes (Cross-compliance) (England) (Amendment) Regulations 2006
2.30
pm
Bill
Wiggin (Leominster) (Con): I beg to
move,
That the
Committee has considered the Common Agricultural Policy Single Payment
and Support Schemes (Cross-compliance) (England) (Amendment)
Regulations 2006 (S.I., 2006, No.
3254).
May I say what
a pleasure it is to serve under your chairmanship, Mr.
Wilshire? The amendments should simplify matters for farmers, not
complicate them. The regulations are already restrictive and
bureaucratic and, if anything, the amendments would do nothing but make
matters worse. With the statutory instrument, the Government had an
opportunity to reduce the number of forms that farmers had to fill in
and eliminate some of the complexities of the system. However, there is
nothing in the amendments to simplify cross-compliance or reduce its
bureaucracy.
Instead,
the amendments will give the state further powers to micro-manage our
farming industry and burden farmers with more red tape. It is
misleading to say that cross-compliance requirements just reflect
existing law. If a landowner breaks the new welfare of farmed animals
regulations and the state veterinary service prosecutes, the SVS will
have to convince the Crown Prosecution Service and then a court that
the farmer is guilty beyond reasonable doubt and that it is in the
public interest that he is
convicted.
Under
cross-compliance, the state veterinary service has to satisfy itself,
as an administrative exercise and without the evidence being tested,
that a requirement has been breached. If it does, a proportion of the
farmer’s single payment is withheld. There will therefore be a
temptation to enforce legislation through cross-compliance rather than
through the courts. State officials will now be able to remove anything
that they believe to be evidence of non-compliance, with no apparent
procedure for
appeal.
When the
Minister responds to the debate, perhaps he can let the Committee know
how farmers can lodge an appeal when they dispute the actions of state
officials. Can an authorised person come along without warning,
disagree with what the farmer is doing and remove various items? What
reasons can an authorised person give for doing so and who will check
the position? Under the amendment, an authorised person can
“remove anything”. That would include property and
animals. What would then become of them?
I am sure
that members of the Committee can picture an Environment Agency
inspector telling a farmer who has farmed a field since the 1950s that
he has prepared his seed bed in the wrong way and that it is too wet.
Let
us suppose that the old boy loses his temper, as a result of which the
spotty youth confiscates his tractor and harrow. The Minister must
explain what appeal process he has put in
place.
In
addition, the amendments would hand over more responsibility to the
Environment Agency. Farmers have complained previously that the
inspection regime of the Rural Payments Agency was
heavy-handedand bureaucratic. Last week in the other place,
speaking on behalf of the Government, Baroness Farrington of Ribbleton
confirmed that the statutory instrument transfers
responsibilities
“from
the RPA to the Environment Agency.”—[Official Report,
House of Lords, 1 February 2007; Vol. 689, c.
437.]
What possible assurances
can the Minister give us that, under the Environment Agency, the
inspection regime will be less heavy-handed and bureaucratic?
The Environment Agency will now
have the same statutory powers under the changes as the Secretary of
State to authorise people to act in matters relating to the
regulations, and relevant Council and Commission regulations. Will that
mean that the Secretary of State will no longer be responsible or
accountable for what happens? What qualifications, if any, will an
authorised person
need?
In the other
place, Baroness Farrington commented that there were
times
“where the RPA
cannot be trained in highly specialist
fields.”—[Official Report, House of Lords, 1
February 2007;Vol. 689, c.
436.]
The RPA currently carries
out the majority of inspections, but what guarantees can the Minister
give that, in future, inspectors acting on behalf of the RPA, the
Environment Agency, the state veterinary service, Natural England or,
indeed, any other delegated agency are sufficiently
trained?
Under the
regulations, the Government will be able to rely on Natural England to
carry out the spot checks for cross-compliance. However, the
regulations do not give the slightest suggestion of how many visits a
farmer can expect each year. I hope that the Minister will take the
opportunity to provide us with such information. Furthermore, given
that the Chancellor of the Exchequer and the Department for
Environment, Food and Rural Affairs are in the process of slashing
budgets, can the Minister confirm that extra resources will be
available for the extra responsibilities to be carried out by the
Environment Agency and Natural England or will they be
self-funding?
When
carrying out inspections, does the Minister think that it may be more
convenient for the inspectors to give farmers warning of their
inspection? I ask that because, when on-the-spot inspections are
carried out, farmers can end up wasting their time and that of the
inspectors by rounding up animals for checks and preparing equipment.
Gathering large numbers of cattle to check ear-tag numbers is both hard
work and dangerous. A young steer can turn in an adult cattle race, and
being hit by an angry bullock can be fatal. Does the Minister consider
that it is reasonable to ensure that that type of risk is kept to a
minimum?
Moreover, the
farmer may not have the staff present at a particular moment to be
helpful. Would it not be more practical for all concerned if notice was
given at least for the first time that an inspection is carried out, or
when the farmer has a good compliance record?
The Minister
may also be aware that farmers have deep concerns about the way in
which cross-compliance is enforced. Conservative Members, along with
the farming community, would argue that it would be more beneficial for
inspectors to make greater use of informal warning letters rather than
to rush straight in to take penalising measures, so as to allow farmers
the time and opportunity to rectify any infringements. Does the
Minister agree that penalising the farmer of a herd of 200 animals for
a single ear-tag non-compliance offence, when his other records are in
order, would be unfair and disproportionate? No one here would dispute
the need to punish those who deliberately and regularly flout the
rules, but suspected minor breaches should be dealt with in a
practical, common-sense manner, and not by excessive bureaucracy and
punishment.
Non-compliance will generate a
penalty of 1 per cent., which means that a missing ear tag will carry a
different fine according to the size of the farm. That is unusual, and
it strikes me as being unfair. Every time a cattle tag is deemed
missing, the UK has another black mark against its name and record,
which will lead to a requirement for another 50 per cent. increase in
the number of inspections to be carried out. It will also mean that any
fine will be different. A secondary tag would potentially be in use. It
would be much more sensible that, for whatever failure of compliance
takes place, the fine accords to the crime rather than to the size of a
farm.
A 1 per cent.
penalty for a 1,000 acre farm would be considerably greater than that
for a 50 acre farm, because the single farm payment would be different.
We need to look at the way in which the Irish allow for minor and
inadvertent infringements. This is perhaps one of the most important
questions: who will get to keep the money when a farmer is penalised?
Will it go to the European Union or into the clunking fist of the
Chancellor? We need to know.
Another
example of the bureaucratic growth visible in the regulations relates
to the soil protection review, which provides farmers with yet more
forms to fill in. The regulatory impact assessment for those
regulations, prepared in 2005, stated:
“The Soil Protection
Review (SPR) is part of an evolutionary approach to soil management
that was agreed with Ministers in 2004 and incorporated within the 2004
RIA. It builds on existing soil management standards. This standard is
designed to allow farmers to use their own expertise in identifying
appropriate soil protection measures, and is more efficient, less
restrictive and less burdensome than setting blanket or prescriptive
rules”.
That sounds
tremendous and helpful, so well done. However, under the regulations,
the Secretary of State will be able to give farmers written directions
on how to manage their soil. Will the Minister tell us what kind of
advice will be given to farmers, and the basis on which their soils
will be classified as poorly managed?
A farmer who
has completed a review on or before1 September 2006 must now
keep that review available for inspection, so there are not only forms
to fill in but they must be filed as well. The modern farmer needs to
be a genius, not only at farming, but as an office keeper, secretary,
and farm guide, so that he can show yet more inspectors around as they
come along. The measure is another example of the intense
micro-management that the Government are imposing on farmers. DEFRA
seems to be more concerned with creating more boxes
for farmers to tick; producing more procedures to hold them back; and
fabricating ever-increasing volumes of paperwork and forms for them to
fill in morning, noon and
night.
Angela
Eagle (Wallasey) (Lab): Does the hon. Gentleman not agree
that there has to be some reasonable form of control over an industry
that claims £3 billion of public subsidy, which is more than all
the other industries in the country put
together?
Bill
Wiggin:
I think that the hon. Lady will find that the
figure is £1.6 billion, but her point is no less valid. Of
course there has to be proper control, but there is a difference
between control and micro-management. What we saw—I quoted from
it quite helpfully—were the good intentions with which the soil
protection review started in 2004. However, the idea that the Secretary
of State will write to farmers, giving them written directions on how
to manage their soil, strikes me as an exact example of how
micro-management goes too far. We need to tag our cattle so that we can
have accountability, and we need to make sure that the food is safe as
it goes through the food chain, but knocking 1 per cent. off
somebody’s income because a cow has pulled its ear tag out, as
they do frequently and can do during the course of the inspection,
strikes me as overly prescriptive. I hope that that helps the hon.
Lady.
Angela
Eagle:
The hon. Gentleman was complaining about farmers
having to file. It seems entirely appropriate in the system of subsidy
that there should be a filing cabinet in the odd
farm.
Bill
Wiggin:
There is a difference between filing one’s
records and having to show them as part of the procedure. I am not sure
that the hon. Lady has read the cross-compliance handbook. It is 140
pages long; it is quite hard to find; and I am sorry that it is not on
the table for her to look at today. One of the most extraordinary parts
is the requirement to keep records. It does not say for how long, but
it says that a 1 per cent. fine will be levied on farmers who do not
show the correct form that they filled out and filed away during a spot
check.
I think that
the hon. Lady would agree that if one of her constituents wanted to see
her records, that would be absolutely fine. I am sure that she would
have them in her constituency office. However, the fact that she needed
to show them on the day the constituent turned up and would lose 1 per
cent. of her income if she could not find the file would strike her, as
it does me, as unnecessarily bureaucratic. Of course, farmers should
file and be able to produce those documents, but the fact that they are
going to be penalised 1 per cent., which is not a fixed amount, if they
cannot find the particular file is draconian. I am sure that she agrees
with me. If she does not, I will give way at any time during the rest
of my speech.
The
2007 cross-compliance handbook for England has been issued in three
separate tranches and totals a mammoth 140 pages. How did those 140
pages balloon from the mere 13 lines regarding good agricultural and
environmental conditions specified in the appropriate European
regulations? The 2007 handbook will not be enough, as it states
that
“plans are now
being made for a full 2008 manual, including a new design and
foreword”.
I am sure
that that will gladden the hon. Lady’s heart. Will that handbook
be larger or smaller than in 2007? Will the regulations be amended
again when the 2008 handbook is produced? One cannot help but feel that
farmers should be producing our food rather than continually filling in
forms and reading through and implementing endless and intrusive
regulatory changes imposed by the
Government.
The other
place’s Merits of Statutory Instruments Committee
suggested:
“The
House may wish to seek assurances from the Government that the
arrangements for cross-compliance in agriculture are being kept under
review, and that efforts are being made to purge them of undue
complexity”.
However,
with the regulations before us, the cross-compliance arrangements
become more complicated, more restrictive and more intrusive, and a
one-way street. While we are here debating this extraordinary document,
19,000 single farm payment claimants still have disputed claims.
Another £15 million has been taken back in 45,551 penalties from
a further 19,673 farmers. That is a tidy sum, and we deserve to know
where the money went. That income is adding to the paperwork, and it is
critical that the Minister confirms that the new team of empowered
Environment Agency and Natural England inspectors will not collect more
than the £15 million in penalties from our hard-pressed farmers
this
year.
2.45
pm
Mr.
Roger Williams (Brecon and Radnorshire) (LD): Thank you,
Mr. Wilshire. It is always a great pleasure to serve under
your chairmanship. Some of the amendments are relatively minor,
although one or two relating to the power of appropriate people to
enter land are a bit draconian.. However, my main complaint is that the
regulations add to an already excessive list of requirements that
businesses must accommodate. They are additional, and we would like
them to be
reduced.
The hon.
Member for Leominster referred to the 147-page cross-compliance
handbook but not the four single payment brochures, which come to 126
pages. Then there is the cross-compliance guidance for management of
habitats and landscape features, which my noble Friend Lord Greaves
called
“a very good
document in many ways”.—[Official Report, House of
Lords, 1 February 2007; Vol. 454, c.
427.]
It has
51 pages. There is also the cross-compliance guidance for soil
management, which has 40 pages. After that comes the “Set-aside
Handbook and Guidance for England, 2006”, which comes to 44
pages, plus another 10 pages for the new set-aside supplement, which
comes as a little extra. All in all, that is 500 pages for businesses,
many of them single-person businesses, to wade through in order to get
some idea how they should be managing their land before they set out to
produce anything.
It is that
sheer volume and burden of paper that so many people find difficult to
accommodate. When people are inspected against those 500 pages, it is
hardly surprising that sometimes they have not managed to achieve a
perfect resolution of the matters concerned. My noble Friend made the
point in the other place that some of the documents should be available
to farmers on the internet, and that their production and printing
itself causes the destruction of a lot of habitat. The question that he
asked and that I ask today is whether, if we must have so much
information, it can be made available in a more sustainable and
environmentally friendly
form.
I asked the
Minister how many cross-compliance inspections were undertaken in the
2005 application year. He
replied:
“For
the 2005 scheme year, 243 full cross-compliance inspections were
carried out in England. Of these RPA have applied a financial penalty
to 91 Single Payment Scheme (SPS)
claimants.
In one
case, the full SPS claim was rejected for failing to allow a
cross-compliance inspection to take place on the
holding.”—[Official Report, 28 November 2006; Vol.
453, c.
494W.]
I am
not complaining about that. If somebody enters the scheme, they must
make their facilities available. The question is whether they must make
them available immediately or whether notice should be given of an
inspection. The hon. Member for Leominster made a good point about
health and safety. Gathering animals together at short notice is not
very helpful in that
respect.
The Minister
also replied to me when I asked him whether there was a required
minimum number of inspections for any member state. He
replied:
“European
Commission guidance on the percentage of SPS applications which require
cross-compliance checks is set out in Article 44 paragraph 1 of
Commission Regulation (EC) 796/2004 which
states:
‘The
competent control authority shall, with regard to the requirements or
standards for which it is responsible, carry out checks on at least 1
per cent. of all farmers submitting aid
applications.’”—[Official Report, 12
December 2006; Vol. 454,c.
953W.]
It seems to me that
England has fallen below EU requirements in this matter. It appears
that it should have carried out 1,200 inspections and has in fact
carried out only 243. Does the Minister believe that DEFRA will suffer
financial penalties from the European Union, and will that result in
further cuts to the DEFRA budget and a further lack of finance for
other organisations for which it has
responsibility?
The
other issue is that the 91 penalties amounted to £555,230, which
means that the average penalty was more than £4,000. That seems
quite a high figure for penalties incurred by what are relatively small
businesses. Are the penalties proportionate, given the problems that
farmers are having with cross-compliance issues? This was the first
year that they had to comply with the scheme and with cross-compliance,
and there should have been a little more understanding of the problems
and burdens that they were
experiencing.
I
have already dealt with on-the-spot inspection and health and safety,
but are the inspections random, or are they directed at businesses
that, in the Department’s experience, do not comply with
regulations? Businesses that comply with regulations should be subject
to a lighter touch and a lighter burden, and their efforts to comply
should be rewarded.
In
the next two years, we will come to what is known as the “health
check” on the common agricultural policy. I urge the Minister to
ensure that regulation is kept to a minimum. I do not disagree with
cross-compliance—it is a good system that requires agriculture
to become sustainable and environmentally friendly—but surely
there is a balance to be struck in what is required and the way that it
is expressed to farmers. I hope that the Minister will take the
opportunity that the health check offers to consider that and to ensure
that other member states have the same burdens imposed on them, and
that they comply in the same
way.
I would like the
Minister’s opinion on a particular issue. On over-grazing and
suitable supplementary feeds, the regulations
state:
“The
Secretary of State may give a farmer written directions concerning the
management of land which is, in his opinion, subject
to...overgrazing.”
That
seems a hugely subjective decision to take. It would be helpful if some
criteria were included to give farmers some idea about what
over-grazing is and how the Secretary of State will decide, so that
they could alter their management to make compliance easier and not be
liable to penalties. The same applies to unsuitable supplementary
feeding
methods.
Bill
Wiggin:
The hon. Gentleman will be aware that one of the
phenomena of modern farming is that people from the Ministry, the
Environment Agency or Natural England may turn up and measure the width
of the set-aside. If it is not exactly 2 m—let us say that it is
1.9 m—a penalty would be issued. Obviously, on a 20,000-acre
farm, that would involve a huge amount of money. On a tiny holding such
as mine, it is of no
consequence.
Does
the hon. Gentleman understand my fear about the Government measuring
the length of grass to discern whether over-grazing has taken place?
That is something that we do not want them to do. If they could
understand that the regulations, by their nature, will bring about such
absurdities, they could row back in some way so that we could have
environmental benefits without absurd measuring, and everybody would
win.
Mr.
Williams:
The only thing that I would say about the
margins on arable fields is that one can actually measure
them—they can take an objective view as to whether the farmer is
complying. In the case of over-grazing, the regulations refer to the
Secretary of State’s opinion. That is the key issue. That seems
highly subjective, and more guidance would be
helpful.
I urge the
Minister to take the opportunity over the next few years, when the CAP
is considered again, to take on board my comments and those of the hon.
Member for Leominster about the sheer volume of the regulations and to
ensure that British farmers do not suffer a different, exaggerated
burden from other farmers in other EU
nations.
2.56
pm
The
Parliamentary Under-Secretary of State for Environment, Food and Rural
Affairs (Barry Gardiner):
It is a great pleasure to serve
under your chairmanship, Mr. Wilshire. It is the first time
that I have had that privilege. I look forward, in so far as I am able,
to responding to the Opposition’s questions.
This amending statutory
instrument does not, contrary to what the hon. Member for Leominster
said, introduce any new standards. Its key functions are restricted in
the following ways. First, it relates to establishing inspection and
enforcement arrangements for animal health and welfare statutory
management requirements, which we are required to include within
cross-compliance from 1 January this year. There is a significant risk
attached if we do not enforce those standards. Secondly, it involves
making changes to inspection and enforcement arrangements for existing
standards to deliver more efficient and better-targeted checks and
controls. I understood that he was asking for that, not pleading
against it.
Thirdly, the
statutory instrument clarifies cross-compliance requirements to provide
for unusual circumstances and to give some small additional flexibility
to farmers, specifically in connection with soil management
requirements from 2007 onwards. I had thought that the hon. Gentleman
was asking for that, too, not praying against it. The statutory
instrument introduces that greater degree of flexibility. Fourthly, the
statutory instrument reflects changes resulting from newly implemented
domestic legislation—for example, so that farmers do not have to
meet two different standards as a result of recent changes to the law
on sites of special scientific interest and as a result of the
establishment of Natural
England.
Let me
reassure the hon. Gentleman and, through him, anyone with a wider
stakeholding interest in such matters, that the full intention of the
regulations is to make life simpler, not more difficult.
Cross-compliance is an EU requirement that all Parliaments must meet to
qualify for their single payment. That point was ably made by my hon.
Friend the Member for Wallasey. Compliance receives, as the hon. Member
for Leominster said, £1.6 billion of public funds. The hon.
Member for Brecon and Radnorshire rightly accepted that inspections
should take place and should be conducted properly and fairly, because
this is about accounting for public
money.
Most
cross-compliance is existing law or good farming practice—a
requirement for farmers entering into agri-environment schemes under
the previous rural development regulation. There are two elements with
which farmers comply. The first is the statutory management
requirements, comprising obligations under a number of articles from 19
new directives and regulations that are, I stress, applicable to all
farmers throughout the EU. Those measures are set by the EU and are all
existing legal requirements that have been subject to a rolling
introduction from 2005, culminating in the introduction of the final
three SMRs in 2007. The animal welfare SMRs—16 to 18—for
which this statutory instrument appoints the state veterinary service
as a competent control authority, cover the welfare of all farm animals
and include specific requirements for calves and
pigs.
The
second element is good agricultural and environmental conditioning,
which relates to the protection and maintenance of soils, habitats and
landscape features, which member states have limited discretion in
setting. Again, however, the majority reflect existing requirements.
The regulations do not introduce additional good agricultural and
environmental condition requirements, but clarify when new claimants,
or those taking on additional land, need to complete a soil protection
review, implement it and update it. They also clarify the existing
provision for the Secretary of State to give farmers specific guidance
and to allow him to give directions where soils are particularly badly
managed. We intend that the guidance will be geared to help farmers to
understand and deal with problems, especially in cases where it might
otherwise be difficult for them to do so unless they possess a high
level of soils expertise. I stress that the direction will be used only
where soils are particularly badly managed and normally when a farmer
has not taken proper account of the Secretary of State’s
guidance in the first place.
The
intention is to improve the management of soil, which is a vital asset
for farmers and for society as a whole. It is the essential growing
medium for our food, it helps to clean the water we drink and the air
that we breathe, and it contains large hidden reservoirs of
biodiversity. Poor management of soil can result in erosion, compaction
and loss of soil organic matter. Estimates have suggested that those
problems can lead to combined costs of up to £305 million a year
to society, through damage to soil structure and fertility and to water
courses, increased levels of flooding and, of course, loss of carbon to
the atmosphere.
Although the
hon. Member for Leominster was quite good humoured and jovial in his
remarks about plooky youths—or spotty teenagers, as I think he
called them—and flooded fields, I hope that he appreciates that
the problem has serious implications because it costs up
to£305 million a year if we get it
wrong.
Bill
Wiggin:
What assurances can the Minister give us that the
people doing the inspections will have a better understanding than the
farmer
himself?
Barry
Gardiner:
I shall happily respond to that in due course.
In fact, I hope that I will take account of all the questions about the
quality of the standards and procedures in which the inspections will
take place a little later.
It has been
asked why we introduced a soil protection review. It is a requirement
that must be implemented on the ground from 1 January of this year
following completion of the plan last September. It will help farmers
to think about the management of their soils and, where necessary, to
improve that management. The SPR is a template that provides a simple
and easy tick-box method of analysing and recording. It necessarily has
to offer a wide range of options to reflect the varied farming
environments in England. It is designed to meet the needs of all farms,
and so not all the sections will be relevant to all farms.
The SPR was
developed after consultation with the industry to minimise the work
involved and farmers need only complete those sections that are
relevant to their holdings. It is backed by detailed guidance on good
husbandry. Where necessary, the guidance and directions will be
provided by Natural England on behalf of the Secretary of State and in
accordance with the cross-compliance guidance on soil management. I
hope that that goes some way towards addressing the remarks made by the
hon. Member for Brecon and Radnorshire about the potentially subjective
nature of the advice that will be given. A service level agreement
between the RPA and Natural England has been put in
place to ensure that the processes involved in providing guidance will
run smoothly and that relevant information is exchanged in a timely
manner.
On inspection
arrangements, inspections do not just happen when someone turns up at
the farm gate;48 hours’ notice is given. Inspections
are planned to allow farmers to gather their animals together. The idea
was put forward that somehow the first a farmer will hears about an
inspection is when someone turns up and knocks on his door, but that is
not the case. There is a 48-hour notice period so that the relevant
material and documents can be assembled, as well as the
animals.
Concerns
have been raised about the changes to inspections and the additional
competent control authorities. The statutory instrument redefines
“authorised persons” to include Environment Agency
inspectors. However, the EA has been undertaking inspections of three
of the SMRs—ground water, sewage sludge and nitrate vulnerable
zones—as an RPA-delegated agent since cross-compliance began in
2005. The EA will now be a competent control authority in its own
right, allowing it to integrate inspections with its own domestic
programme, leading to efficiency savings and focusing inspections on
high-risk locations.
Additions are also made to the
list of inspectors’ powers to provide for the enforcement of the
new animal welfare statutory management requirements. Powers for
inspectors under cross-compliance replicate those under animal welfare
legislation. That is necessary so that state veterinary service
inspectors can use those powers for a different purpose—for
cross-compliance—and where necessary, so that reductions can
accordingly be made to SPS payments.
Much has been
made of the complexity of standards introduced previously, but I stress
that that is not a result of this statutory instrument. Although I have
said that many standards are existing law, the requirements are
reasonable. They are baseline standards, and are no more than
common-sense farming practices. Indeed, some organisations promoting
responsible farming have been advocating many of those standards for a
number of years. In comparison with some insurance schemes, they are
quite light touch. For example, some private sector insurance schemes
have many more standards—150-plus in the red tractor
horticultural scheme alone.
It is worth noting that the SI
also introduces new flexibilities, such as that concerning the
post-harvest management of land and removing the requirement to retain
soil management guidance. That reduces the burden on farmers without
negating any of the environmental gains of
cross-compliance.
Bill
Wiggin:
Does the Minister accept that the difference
between the red tractor scheme and this statutory instrument is that if
a farmer does not qualify because he does not fulfil the criteria,
nobody takes his money away? That is the fundamental difference: this
scheme is backed by penalties and will cost farmers at least 1 per
cent.—up to 4 per cent.—of their single farm payment. Of
course, the farm assurance schemes can be stringent and tough, and it
is right that they should be. We have nothing but praise and admiration
for the assurance schemes, but this is not an assurance scheme; it is a
penalty scheme, which is why it is so fundamentally
different.
Barry
Gardiner:
I must disagree. Assurance schemes are
intrinsically linked to income in that many or most of them are run by
those to whom farmers wish to sell their produce, and to whose scheme
they have to comply in order to get any income whatever. The hon.
Gentleman seems repeatedly to be making the mistake of thinking that
the farmer’s income is the single payment, but that is one small
element of his income. I am sure he would accept that the assurance
schemes are there to guarantee that the farmer can sell his produce in
the marketplace to which he wants to sell it. Not complying with them
has an equal financial penalty, in exactly the same way as the single
payment scheme at present.
Bill
Wiggin:
There is a fundamental mismatch between the two
schemes, and it is essential that we are clear on this. If a farmer
subscribes to any of the assurance schemes, it is a scheme that he
wants to be a part of, and he foresees the criteria and fulfils them.
If he does not, he does not qualify for being part of that assurance
scheme. The SI is altogether different. Instead of the inspectors
qualifying the farmer to continue to be part of the single farm payment
scheme, this scheme inflicts a penalty on those who subscribe to it. It
is a negative scheme. The Minister laughs, but that is true. It is not
even a particularly equitable negative penalty scheme, because if a
farmer fails to comply, the size of the penalty depends on the size of
his holding. Now—
The
Chairman:
Order. The intervention is becoming a
speech.
Barry
Gardiner:
Thank you, Mr. Wilshire, for keeping
us in order.
Let me
make the position absolutely clear. The hon. Gentleman says that we
have to take account of the fact that assurance schemes are something
that farmers wilfully enter into. It may have escaped his attention
that it is exactly the same with the single payment scheme. A farmer
does not have to come into the SPS if he does not want to. He comes
into it in the full knowledge that there are benefits if he does, in
exactly the same way as he goes into an assurance scheme. The
difference with an assurance scheme, as the hon. Gentleman rightly
points out, is that if somebody comes along and finds that a farmer is
not up to scratch, it is not just 1 per cent. of his income that is in
danger of disappearing—it could be the lot because he would not
be compliant with the requirements of that scheme and would not be able
to sell his produce into the market that he had anticipated for it.
When it comes to voluntarism, the hon. Gentleman really must understand
what is going
on.
Questions were
raised about whether the inspections were risk-based or not. Farmers
are selected for inspection according to risk criteria. However, there
is a random element, too, in order to achieve genuine random checking.
That comprises about 20 per cent. of the inspection. The hon. Member
for Brecon and Radnorshire was right to say that this should be on a
risk basis and that those whom the inspectors have reason to believe
were not complying on previous occasions, or who for some other reason
might be prone to failure, receive a proportionately greater number of
checks. That is only right.
I want to
nail the common misapprehension that was doing the rounds about a
single missing ear tag on an animal resulting in an automatic
non-compliance. I stress that missing ear tags do not count as a breach
of cross-compliance until 28 days after they have been identified as
missing. That gives a very adequate threshold for farmers to replace
missing ear tags before they trigger non-compliance. I have no doubt
the hon. Member for Leominster has heard some of these myths. On
occasion, he should dig into them a little more closely to find out the
facts.
Bill
Wiggin:
Does the Minister believe that it is the case that
in 2005 close to 50 per cent. of cattle-keepers were in breach of the
cattle identification stipulations in SMR 7 and 8 on cattle
identification?
Barry
Gardiner:
I have no reason to dispute the hon.
Gentleman’s figures, but I notice that he did not wish to
dispute mine. There are 28 days for a farmer to replace a missing ear
tag on one of his stock before a penalty for non-compliance falls into
place. That is the issue that we are discussing; not how many farmers
did not then comply with those regulations.
Much has been made about the
number of pages in the handbook. We can all have fun with
statisticsin that way. There are only about 74 pages of
requirements, of which the majority refer to the statutory management
requirements. That is existing law. It seems that whenever we set out
requirements in full, we are criticised for so doing, but had we left
them in disparate pamphlets, pages, Bills and so forth, we would
equally be accused of presenting farmers with a panoply of confusing
documents from different sources which it would be impossible to find
one’s way through. The 74 pages are the requirements collected
together, in one place. It is a responsible means of saving farmers
from having to refer to a wide variety of legal texts and
publications.
I wish
to impress on the Committee that that has been greatly welcomed by
farmers. They have told us that it is a helpful mechanism. In a recent
survey, 75 per cent. of farmers said that their knowledge of
cross-compliance had improved in 2006 and 70 per cent. found the
cross-compliance handbook itself useful. Therefore, while it is always
amusing in Committee to bat these things around, the fact that it has
been gathered together in one place as an easy reference guide for
farmers is helpful, is recognised as such by farmers and, in their own
estimation, has improved their understanding.
There were further questions
about the money, who keeps the penalties and when they are applied.
Some75 per cent. goes to the EU and the Commission and only 25
per cent. to the Treasury. I think that 1,200 farmers, which is 1 per
cent. of farmers, are inspected per year—except, perhaps, in
respect of cattle—but if that should prove inaccurate, I will
obviously write to the Committee to clarify
it.
Mr.
Williams:
The last thing I want to do is
incite him to have more inspections but it does seem to me that if
DEFRA failed to meet the target then, through no fault of the farming
community, inspections are going to increase because the Department
will be penalised by the European Union, even so far as disallowance
and more financial penalties are concerned.
Barry
Gardiner:
I understand exactly what the hon. Gentleman is
saying and might refer to that in my later
remarks.
Bill
Wiggin:
Of the £15 million that was taken back in
the 25,500 penalties from the 19,673 farmers this year, is the hon.
Gentleman saying that the 25 per cent. retained by the Treasury does
not go to DEFRA, that farmers do not see it recycled in some other
form, but that it goes straight to the
Treasury?
Barry
Gardiner:
I shall certainly write to the hon. Gentleman
letting him know precisely where all these funds end up. My information
is that 75 per cent. goes to the Commission and 25 per cent. goes to
the Treasury, but if that should prove inaccurate in any way, I will
write to him and correct
that.
I turn now to
the Committee’s concerns about failures in inspections. In the
light of a range of scaremongering reports and often baseless
estimates, I am pleased to reassure hon. Members that the
cross-compliance inspections show that the majority of farmers are
meeting virtually all of the standards. Based on the 2005
cross-compliance inspection figures, and excluding animal
identification and movement requirements, less than 15 per cent. had
any breaches. The very large majority of these failures are minor and
result only in a warning letter or a 1 per cent. deduction.
It is important to stress that
this is not a scheme that has a Procrustean approach to the application
of penalty; it is one in which there is flexibility if these are deemed
to be minor breaches, between 1 and 3 per cent. For more serious
infractions, particularly if they are intentional, that figure would go
from 20 to 100 per cent. Therefore, it would be wrong to present this
as a very firm, unbending and inflexible imposition of penalties. It
certainly is not. Many warning letters are given out and many penalties
reduced to the 1 per cent.
level.
Even with the
inclusion of the 2005 animal identification and movement failures,
non-compliance has resulted in deductions of less than 0.035 per cent.
of the single payment, which is a tiny fraction of the £1.6
billion paid. Payment deductions are largely the result of cattle
identification non-compliances, which have been a continuing concern
for many years and existed prior to the introduction of
cross-compliance.
Bill
Wiggin:
I may have missed what the Minister said, and I
would be grateful for clarification. Did he just say that the tiny
percentage that he read out was the amount of money penalised and that
the majority of it came from cattle identification
failures?
Barry
Gardiner:
No, I did not say that. I separately gave the
percentage figure of deductions from the£1.6
billion—0.035 per cent.—and said that the largest
proportion of non-compliances related to cattle
identification.
The
issue of hedgerows is constantly raised. The protection zone along
hedges and watercourses helps to safeguard those sensitive habitats
from damage caused by cultivation, fertilisers and pesticide drift. The
regulations offer a wide variety of benefits, including to
water quality, biodiversity, the reduction of soil erosion and the
protection of landscape features. They provide, for example, nest sites
and food for a range of species in their habitat and protect important
landscape features from direct damage such as ploughing. They also
prevent the excessive trimming back of hedges. It is estimated that 70
per cent. of biodiversity in English farmland is found in such
uncropped areas on the edge of fields. The costs of establishment and
lost income are comparatively low and the gains in biodiversity
tremendously high.
DEFRA has
established considerable scope for derogations for justifiable
agronomic and environmental reasons, including exemptions for small
fields of2 hectares or less. The hon. Member for Leominster
asked whether it would make a difference if a zone were only 1.9 m
rather than 2 m wide. Given that thatis where 70 per cent. of
the biodiversity lies, andbecause of the risk of
contamination, it is significant that cross-compliance should mean
exactly what is set
out.
Bill
Wiggin:
I do not dispute the Minister’s fundamental
point. I cited the example of a huge, 20,000 acre farm incurring a 1
per cent. penalty. That penalty would be a large sum, possibly more
than the tractor driver who made the mistake was being paid. Yet if the
same mistake were made on a very small holding such as mine, the
penalty would be of no consequence at all. Can he think of any other
matter on which a penalty is so disproportionate for the same
mistake?
Barry
Gardiner:
The answer is that it is not. The point is
surely that the farmer is paid for environmental benefit. The benefit
on an extremely large farm with lots of hedgerow is proportionately
greater than that for a farmer on a small farm. Therefore, if the
hedgerows are at 1.5 m on the large farm, a quarter of that benefit is
being lost, just as it would be on a small farm. The farmer is being
paid for the benefit; therefore, the penalty is a percentage deduction
on what he is being paid for that greater benefit. It seems
tremendously logical for that to be the case.
An issue that has recurred in
our discussions is why rules differ between set-aside and
cross-compliance. We have ensured that cross-compliance and set-aside
conditions are closely aligned; in the few circumstances where they
overlap, the cross-compliance legislation sets out which takes
precedence. Though set-aside conditions generally over-ride
cross-compliance, it needs to be borne in mind that the two measures,
while complementary, were conceived at different times, for different
purposes, and to address different issues, cross-compliance having both
an agricultural and environmental remit, while set-aside focused on
production control.
DEFRA’s position is that
the EU should dispense with set-aside as soon as possible. There are
indications that this view will prevail in Europe. Should set-aside
continue in the long term, we will look to furtheralign these
requirements with cross-compliance, which would require widespread
consultation within the farming industry and with other stakeholders.
Initial consultations with the industry have shown little appetite for
that exercise, with the National Farmers
Union and others regarding it as being an insufficient problem to
warrant the work involved over theshort period when set-aside
is expected to remain in force.
Finally, were
this statutory instrument not to be in place then the flexibilities and
clarifications that it introduces will be lost. Most importantly, the
UK would be at serious risk of disallowance of EC funds for not having
appropriate mechanisms in place to administer and enforce the new 2007
animal welfare statutory management requirements, which are mandatory
for the single payment scheme. On that basis, I urge the Committee to
ensure that the regulations pass into statute as early as
possible.
3.27
pm
Bill
Wiggin:
I am grateful to the Minister for his responses
and for the answers that he gave to some questions. The hon. Member for
Brecon and Radnorshire made the case clearly by totting up the number
of pages to somewhere near 500. I have yet to meet a farmer who said,
“You know, the reason I wanted to be a farmer was to spend all
of my time in the office, reading pages about
cross-complianceand filling out forms.” It is a great
shame that, despite the Government’s good intentions, this is
the end result.
We
have had to find out why this is such an important statutory
instrument. Unfortunately, its value is very much lost. A clarifying
and simplifying statutory instrument would have been useful, but
instead we have layers on top of rules that were already there. There
is a fundamental misunderstanding in the Government about the
difference between assurance schemes and the single farm payment. There
is little that I can do to help the Minister—he has huge numbers
of civil servants who will explain the difference for him. I hope he
will go away and try to understand why people need to be part of the
single farm payment scheme for the capital value oftheir
holdings, whereas they may or may not wish to be part of the farm
assurance scheme. There aremore significant differences when
it comes to the penalties.
There is real unhappiness among
the farming community. That is not because farmers do not want to look
after the soil, or do not want to comply, or because they have bad
intentions in any way. There is unhappiness because most people want to
farm, rather than spend their time making sure that they have ticked
all the boxes. I am sure that the Minister goes to the countryside from
time to time to see how it is. If so, he will understand that a farmer
has the best subjective view of the soil. I initially referred to the
principles that were laid down in 2004. Unfortunately, I do not think
that the statutory instrument covers
them.
Barry
Gardiner:
I recall that in this part of my remarks, I gave
way to the hon. Gentleman becausehe wished to assure me that
he understood that up to £305 million per annum was lost
precisely because of the subjective opinion of the farmer as to how to
manage the soil. That is precisely why these regulations are being put
in place—to remedy and to ensure that we do not sustain that
loss, to our farming, our farms or UK society as a
whole.
Bill
Wiggin:
I must, of course, accept the Minister’s
figures. I am not sure that the way he has put it andthe way
that the statutory instrument deals with the problem will save us that
money—far from it. The complexity may make the matter worse.
Looking at my notes, I see he said that if we took the rules and boiled
them down, there were only 74 pages of requirements. I find that quite
staggering. Obviously one has to bear in mind the fact that the
Government have driven agriculture towards this. It is a great
shame.
The Minister
also tried to clarify the situation on ear tags. What he did not go on
to say, when I challenged him with an intervention, was that because of
the cattle movement regime and the ear tag problem Britain has had to
increase the number of inspections by a further 433. At every stage,
any infringement has repercussions for the countryside. It is simply
wrong to say that ear tags are not part of the
problem.
I loved the
bit where the Minister said that this was welcomed by farmers. I have
yet to meet one farmer who welcomed cross-compliance issues. Instead, I
have found a genuine fear and sense of isolation among my constituents.
They want to do the right thing but let us not forget that they have to
go through 74 pages to make sure that they get it right. If they do
not, they lose a significant proportion of their income. The Minister
says, “No, no, that is not how it works.” I would ask him
to look at EBLEX’s figures on cattle and sheep. He will see that
the subsidy element of a farmer’s income is the difference that
allows them to go on
farming.
Barry
Gardiner:
Would the hon. Gentleman care to say what the
figures say is the percentage of a farmer’s
income?
Bill
Wiggin:
The figures from EBLEX show the margins on cattle
and sheep. They do not say exactly what percentage of the
farmer’s income the value of each cow or sheep makes up. That
would obviously depend on the individual farmer. What the figures do
show is that without the subsidy the beef farmer or shepherd would be
losing money. I hope that helps the Minister. If he read his own
Department’s paperwork, it would help the Committee, although I
understand that, with at least 500 pages, that is very difficult for
him to do.
I was most
alarmed to find that 25 per cent. of the penalties went to the
Treasury. At a time when DEFRA has been in all sorts of budgetary
difficulties—let me be no harsher than that—we find that
approximately £4 million, according to my poor mathematics, go
to the Treasury. That money would have made a big difference to British
Waterways, the state veterinary service and various other agencies,
which have had to look at their budgets
recently.
The Minister
talked about warning letters. I was delighted to hear that the
Department was issuing warning letters as a first choice. I would like
to encourage him to ensure that it proceeds in that way. One of the
more insidious parts of today’s procedure is that people who
have a penalty of sorts do not necessarily get told about it on the day
by the inspector. If the Minister takes something away from the
statutory instrument, I hope it will be that inspectors who find a
fault should tell the farmer there and then,
so that the farmer knows what is wrong, rather than find later that he
has been penalised.
I brought a
case to the attention of the Minister’s noble Friend Lord
Rooker. One of my constituents found that he had lost a significant
amount of his single farm payment but, to this day, has no idea why
because he was told by the inspector that his farm was fully compliant.
There are difficulties there and I think it would be helpful if the
Minister continued to presshis Department to ensure that
people are told on the
spot.
The Minister
talked a bit about hedgerows. Again, I do not think that he fully
understood our position, so perhaps I could clarify it. In order for a
failure of compliance to take place, the measurement must be2
m from the centre of the hedge. I am sure that I have got that right.
We understand that the payment is for compliance. He said that the
proportionality was right, but I suggest that if 1 per cent. of the
farm was out of kilter, that should be the size of the penalty, but
that is not how it works. One mistake causes a 1 per cent. penalty,
irrespective of the size of the mistake. It does not have to be every
field on a huge farm that does not comply—one field will be
enough. The proportionality is therefore out of
kilter.
Barry
Gardiner:
Will the hon. Gentleman give way so that I can
correct him?
Bill
Wiggin:
The Minister looks like he has had some help, but
I am happy to listen.
Barry
Gardiner:
What the hon. Gentleman said is
unfortunately—well, fortunately—not the case. It is not
the case that a single instance of non-compliance would automatically
trigger a penalty. In fact, a sample of fields is taken and thresholds
are used to determine the penalty, and the margin normally has to be
less than 1.5 m before any financial penalty is triggered. The RPA also
measures the lengths—trivial distances will be ignored, as in
the corner of fields. The penalty is proportionate and is not simply
applied if one point of umpteen miles worth of hedgerow falls below the
2 m margin. That would not trigger the penalty. Common sense and
proportionality are applied.
Bill
Wiggin:
I am grateful to the Minister for that
intervention because people who read the report of this he debate will
now know what the Government intend.
If people find that what happens is not what the Government intended,
they will be able to refer to that intervention. The complaints that I
have heard do not conform to the situation he outlined. However, I am
grateful that we have had the matter clarified.
We have not
had a satisfactory set of answers from the Minister about the
complexity of the measures, but that is not because of his ill
intentions. The issue is too difficult for the regulations to address.
I am sorry that he does not agree with me. I am therefore obliged to
vote against the regulations, although we have had a full and helpful
discussion, to register my disapproval and that of the Conservative
party about the depth of Government intervention in farming. I want
farmers freed up from the burden of red tape—to have
even74 pages, rather than 500, is unhelpful. I want to make
sure that we have proper accountability, but I do not think the
regulations go the right way about it. Looking around me, I see it is
unlikely that I will win this afternoon, but for the sake of the
farmers it is important that we put on the record our unhappiness with
the nature of the intervention in British
agriculture.
The
Chairman:
Before I put the question—the rules
prevent me from saying anything after a Division—I wish to say
that I hope everybody has a safe journey back to their constituencies
on an afternoon and evening such as this.
Question
put:—
The
Committee divided: Ayes 7, Noes
3.
Division
No.
1
]
Question
accordingly agreed to.
Resolved,
That
the Committee has considered the Common Agricultural Policy Single
Payment and Support Schemes (Cross-compliance) (England) (Amendment)
Regulations 2006 (S.I. 2006, No. 3254).
Committee
rose at twenty minutes to Four
o’clock.
