House of Commons - Environment, Food and Rural Affairs

Select Committee on Environment, Food and Rural Affairs Seventh Report

3 DEFRA'S PROPOSALS

Defra's consultation and the implementation timetable

32. In the summer of 2007, Defra launched a consultation on the implementation of the Nitrates Directive in England. It published a partial Regulatory Impact Assessment in July and a consultation document in August. The consultation sought views on whether to increase NVZ coverage from 55% to 70% of England or whether to apply the Action Programme throughout England, and on the circumstances under which de-designation of NVZs should be possible. It also asked for comments on a number of changes to the current Action Programme, which we consider below, on the partial Regulatory Impact Assessment, on advice and support, and on anaerobic digestion.

33. The consultation period was due to end on 2 November 2007, but was extended to 13 December in the light of the Foot-and-Mouth and Bluetongue outbreaks. Defra received information from 609 respondents, three quarters of whom were farmers. A summary of the consultation responses was published in March 2008.

34. Defra had originally intended the Statutory Instrument introducing changes to NVZ coverage and the Action Programme to come into force on 6 April 2008, but had to revise this timetable in the light of the extension to the consultation period and the level of interest the issue generated. The Minister indicated in a Westminster Hall debate on 8 January 2008 that he was not committed to 6 April.[53] It its written evidence, Defra told us that the Statutory Instrument was not expected to come into force "until later in the Spring".[54] When we pressed the Minister on this point in the oral evidence session, he said that the changes would be implemented by the summer recess, which is due to start on 23 July 2008.[55] We recommend that Defra keep farmers apprised of the proposed implementation date for the changes to NVZ coverage and the Action Programme so that they know where they stand and can plan accordingly.

The extent of NVZ coverage

35. The consultation put forward two options in relation to NVZ coverage: Defra could continue to designate discrete NVZs, but increase the area covered from 55% to 70% of England, or it could apply the Action Programme across the whole of England.

36. Three of the 16 submissions we received came down firmly in favour of a whole-territory approach. The Salmon and Trout Association and the Royal Society for the Protection of Birds (RSPB) both believed that a whole-territory approach would create "a level playing field for all farmers"[56] and "would send a clear and simple message to everyone that this is a serious problem which requires attention now".[57] The Salmon and Trout Association also stated that a whole-territory approach would avoid any difficulties associated with identifying the correct land to designate, while the RSPB commented that such an approach would provide "significant benefits through ease of administration and enforcement for the Environment Agency."[58] It cited related Directives, such as the Water Framework Directive, and stated that a whole-territory approach would support compliance with their terms. Natural England also favoured 100% designation, stating that it considered "the science and methodology behind the proposed 70% designation to be imprecise".[59]

37. As we mentioned in paragraph 8, seven of the 15 member states at the time the Directive was agreed have decided that the advantages of 100% designation outweigh the disadvantages and have adopted the whole-territory approach. However, the majority of respondents to our inquiry, including the Environment Agency, were in favour of the continuation of discrete NVZs in England:

The Environment Agency agreed that the Water Framework Directive means that there will be a need to control nitrate pollution outside NVZs in some areas, but said that it was "working to identify the need for and scale of any wider measures to meet this gap between the two Directives".[61] The NFU commented that the level playing field argument "ignores the discontinuities which would occur at the Welsh and Scottish borders".[62] Scotland and Wales both have discrete NVZs, rather than a whole-territory approach.

38. Although the NFU supported a targeted approach to NVZ designation, it was critical of the identification methodology used in 2002, which it said "was based on both poor quality and inadequate data".[63] It cited the example of monitoring results for a block of boreholes being wrongly ascribed to sites 100 km distant from their true position. A supporting paper to Defra's consultation document explains the new method that was followed in 2006 to review the designation of NVZs.[64] It states that the Environment Agency has developed a revised way of identifying polluted waters, which it goes on to describe, along with setting out how land draining into those waters has been identified. The NFU commented that 6% of England that was previously designated "does not in fact meet the designation criteria under the improved methodology used for the current round of designations".[65]

39. When we asked the NFU whether it was satisfied with the improved methodology, it said "not entirely", although it conceded that it was "a substantial improvement on the methodology last time".[66] The aspects of the methodology that the NFU described as "unfortunate" included "the decision to include the whole of a river catchment, including uplands which contribute very little nitrate".[67] It noted that the inclusion of uplands would have major financial implications for farmers, but would yield little benefit in terms of nitrate reduction since these parts of the river would already have low levels of nitrates.[68]

40. Defra told us:

The NFU stressed in supplementary evidence that it had "considerable reservations" about the methodology, which it made known to Defra at the time.[70] When we put the NFU's concerns about the designation of entire river catchments to the Minister and asked him whether he was looking to review the situation, he told us that the suggestion carried "commonsense" and agreed that "it is something that we will look at".[71]

41. Defra should avoid unnecessary regulation by continuing to designate specific NVZs, rather than adopting a whole-territory approach. However, in the light of continuing concerns about the decision to apply NVZ coverage to the whole of a river catchment, even if the upland part of the river has low nitrate levels, Defra should consider whether its designation methodology is as well-targeted as is practicable and publish a report as soon as possible on its conclusions about this matter.

42. Concerns over the designation methodology raise the issue of whether it should be possible to de-designate NVZs. Defra's consultation proposes an appeals mechanism whereby farmers whose land is in a newly-designated NVZ can challenge the decision if they can demonstrate that the land does not drain into polluted waters. Several of those who submitted evidence commented that there should be a mechanism whereby existing NVZs can be de-designated, if appropriate. Dairy UK stated: "A targeted approach also inherently justifies de-designation when the evidence no longer warrants the inclusion of an area within an NVZ."[72] Mr Philip Dunne, Member for Ludlow, commented: "If Ministers are considering expanding zones, they should also, under administrative law, consider the possibility of reducing a zone if the objective evidence supports such a reduction."[73]

43. In a Written Answer on 16 January 2008, the Minister said that he was "considering under what circumstances removal of land from within an existing Nitrate Vulnerable Zone may be possible in future".[74] The danger with a de-designation policy is, as Defra's consultation document noted, that areas may be subject to a "ping-pong" effect of de-designation and re-designation.[75] However, if NVZs have been mis-identified in the first place, it seems only fair that there is an opportunity to put this right. When we asked the Minister whether the appeals mechanism would be open to existing NVZs he said: "The ball is bouncing in that direction."[76] We recommend that NVZs that were designated under the 2002 methodology but would not qualify for designation under the new methodology should be de-designated, and that the appeals mechanism should be open to existing, as well as new, NVZs.

The proposed new Action Programme

LIMITING THE AMOUNT OF NITROGEN APPLIED TO THE LAND

Whole-farm limit for livestock manure

44. As we noted above, England has been applying a 250 kg N/ha limit to grassland, despite not having secured a derogation from the 170 kg N/ha limit set out in the Directive. Defra's consultation document proposes the introduction of a 170 kg N/ha limit and an application for a derogation from such a limit. This is readily explained by the "reality that you can only apply for a derogation from something which you have in place".[77] The latest European Commission report makes it clear that: "Appropriate designation of nitrate vulnerable zones and action programmes fully in conformity with the Nitrates Directive are prerequisites to any derogation."[78] Derogations are temporary and apply only for the duration of the Action Programme.

45. The Environment Agency told us:

When we asked the Minister whether he took a different view and why, he talked about the importance of providing flexibility.[80] However, as the Environment Agency implies, and as Defra itself acknowledged in answers to subsequent questions, any application for a derogation will need to be backed up by convincing evidence.[81] The Directive permits derogations from its specified limit only when this is justified by criteria such as long growing seasons, crops with a high nitrogen uptake, high net precipitation, or soils with an exceptionally high denitrification capacity. In addition, the derogation must not prejudice the achievement of the Directive's objectives.[82] In other words, as Defra put it: "The fundamental core of our case has to be that by granting the derogation no environmental damage will be caused."[83]

46. According to the NFU, the 170 kg N/ha limit would create problems for specialist dairy farmers because normal stocking rates often result in this limit being exceeded.[84] Dairy UK told us that a 170 kg N/ha limit "will affect about half of all dairy farmers in Nitrate Vulnerable Zones, some of them severely".[85] It explained that farmers who cannot meet the limit will have either to acquire more land or to reduce their stocking density, both of which will have cost impacts.

47. The limit Defra suggests applying for in its consultation document is 250 kg N/ha. Beyond the fact that this is the limit currently being operated on grassland in England, the rationale for alighting on this figure appears almost as unclear as the rationale for the Commission alighting on a baseline figure of 170 kg N/ha. However, a 250 kg N/ha limit would certainly be in line with the derogations that the Commission has already granted. Limits of between 230 kg N/ha and 250 kg N/ha currently apply, under specified circumstances, in Denmark, the Netherlands, Austria, Germany, Ireland, Northern Ireland and Belgium. Cattle farms are specifically mentioned in some of the derogations. In supplementary evidence, Defra told us: "The derogation limit we seek will be determined by the evidence we are able to put forward which may or may not support a 250 limit."[86]

48. Defra should implement the 170 kg N/ha limit to bring England into compliance with the Directive, but, given the difficulties such a limit will cause some dairy farmers, it should apply for a derogation to enable a higher limit to be operated where this is justified by the evidence. The derogation application should be made as swiftly as possible so that, if it is granted, any gap between implementation of the 170 kg N/ha limit and the return to a higher limit is kept to a minimum.

Crop requirement limitation

49. Under the current Action Programme, nitrogen fertiliser must not be applied to any land in excess of the crop requirement. Defra's consultation proposes to require farmers to undertake the following mandatory steps when planning their nitrogen fertiliser applications:

assess the soil nitrogen supply, the nitrogen requirement of the crop, and the nitrogen supplied to the crop from applications of organic manures, and
calculate the need for manufactured fertiliser nitrogen by deducting the contribution from organic manures from the nitrogen requirement of the crop.[87]

The calculation procedure is summarised as follows: "Crop requirement (Nmax) > supply from organic manure (Total manure N x manure N efficiency) + supply from manufactured fertiliser."[88] Defra's consultation document defines Nmax as "the maximum nitrogen application rate that can be applied to a particular crop" and states that farmers will have to use standard reference figures to calculate the Nmax for the main arable crops and grass.[89]

50. These measures appear relatively uncontroversial. Mr Payne, a consultant to the NFU, told us:

The Environment Agency expressed concern "that using NMax may lead to over-application of nitrogen" and stated that "Defra needs to provide greater clarity on the difference between NMax and the nitrogen requirement of the crop."[91] We recommend that Defra proceed with the crop requirement limitation proposals, subject to providing clarification on the difference between Nmax and the nitrogen requirement of the crop, as requested by the Environment Agency.

CONTROLLING WHERE AND HOW NITROGEN IS APPLIED

51. The current Action Programme prohibits farmers from spreading manufactured fertiliser or organic manure in locations, or in a manner, that "will cause either nitrogen-enriched surface run-off to enter, or nitrogen compounds to directly contaminate, surface waters."[92] The Action Programme for Nitrate Vulnerable Zones (England and Wales) Regulations 1998 state that organic manure shall not be applied to land less than 10 metres from surface water, that nitrogen fertiliser must not be applied to steeply sloping fields and that, where it is used, it must be applied as accurately and uniformly as possible.

52. Defra's consultation document fleshes out these measures and proposes several additional specific requirements. For example, a steep slope is defined as "an incline greater than 12 degrees" and there is a prohibition on the use of "high trajectory, high pressure techniques for making applications of organic manures".[93]

53. In general, those who submitted evidence seemed to find the proposed changes acceptable. When we asked the NFU whether it thought that there were any elements of the proposed new Action Programme that were justifiable, it told us that "making sure that you are spreading your nitrogen accurately is an appropriate measure and keeping up with modern techniques as developments take place."[94] The Environment Agency was concerned that some of the terms were not adequately defined and stated that, rather than referring to "high trajectory" and "high pressure" it would be clearer to say: "no rain guns, no splash plates greater than 'x' degrees or that the pressure must be less than 'y'."[95] We recommend that Defra proceed with its proposals on controlling where and how nitrogen should be applied, although it should clarify the meaning of some of the terms it uses in its consultation document, such as "high trajectory" and "high pressure".

COVER CROPS

54. Defra's consultation document proposes a requirement to sow cover crops[96] "where ground would otherwise be left bare over winter, except in the case of crops harvested after 1 September (e.g. sugar beet)".[97] The cover crops measure attracted considerable criticism in the responses to Defra's consultation. Some 335 of the 609 respondents mentioned cover crops, making it the single most common issue for comment, and 78% were against the inclusion of the measure in the Action Programme.

55. Cover crops also attracted significant attention in the responses to our inquiry. The Environment Agency was generally supportive of their inclusion in the Action Programme, stating that "scientific studies show that cover crops are effective at taking up nitrate that would otherwise be lost to the environment."[98] The Salmon and Trout Association was also in favour of the use of cover crops. However, most respondents were against the proposal.

56. One obvious cause for concern was that the Nitrates Directive does not require cover crops to be included in the Action Programme, making it possible for Mr Philip Dunne, Member for Ludlow, to argue that the measure "bears all the hallmarks of Whitehall gold-plating".[99] The consultation document justifies the inclusion of cover crops on the grounds that "the evidence indicates that they are a cost-effective measure for tackling diffuse water pollution".[100] Defra's partial Regulatory Impact Assessment estimates that the cover crops requirement would result in a reduction in nitrates of between 4 and 7%, meaning that it would be the most effective measure in the Action Programme.[101] However, the NFU questioned the basis on which this estimate was made, commenting that the evidence cited in support of the proposal derived from the Nitrate Sensitive Areas scheme[102] and that soils involved in that scheme were "principally sandy and shallow soils".[103] The NFU's response to Defra's consultation stated: "Such soils are not representative of soil types in NVZs throughout England and it is not valid to extrapolate the evidence […] to the rest of England."[104]

57. The NFU also raised concerns about the practical implications of sowing cover crops. Its president, Mr Kendall, told us that "on heavy soils you do plough the land early because the weather breaks it down […] Ploughing a shallow or a light soil in January is feasible, but with my heavy Bedfordshire clay you are going to get stuck".[105]

58. Natural England and the Royal Society for the Protection of Birds (RSPB) were both against the cover crops proposal because of concerns over loss of habitat. The RSPB commented that legislating against over-winter stubble would expose Defra to accusations of poor environmental leadership:

106

It suggested "a risk based approach whereby the requirement for cover crops applies only to bare soils or to maize stubbles (a crop with high erosion risk)".[107] The NFU commented on the conflict between the cover crop proposal and Entry Level Stewardship agreements to maintain over-winter stubble.[108] It also noted that "you might well end up having to use extra herbicides to kill off […] green cover".[109]

59. Defra told us that, in the light of the response it had received, it was "considering re-visiting" the cover crops proposal.[110] We urge Defra to leave the universal use of cover crops out of the Action Programme. Cover crops are not required under the Directive, would have a negative impact on biodiversity, and are not suitable for all soil types. However, given that there is evidence to suggest that cover crops have benefits in specific circumstances, we recommend that Defra evaluate an alternative method of encouraging their uptake in targeted areas.

CONTROLLING WHEN NITROGEN IS APPLIED

Closed periods for manufactured fertiliser

60. Defra does not propose to change the periods during which farmers are prohibited from applying manufactured fertiliser to their land. Under the new Action Programme, the closed periods would remain 15 September to 31 January for grassland, and 1 September to 31 January for arable land.

61. The current Action Programme allows farmers to override the closed period if there is an agronomic justification for doing so. The new Action Programme would tighten this provision by listing which crops have an agronomic nitrogen requirement during the closed period, although it would also permit applications during the closed period on a case-by-case basis, "provided written advice is obtained from a FACTS [Fertiliser Advisers Certification and Training Scheme] qualified adviser".[111] Defra also proposes to prohibit farmers from applying fertiliser to their land when heavy rain is forecast within 48 hours.

62. Perhaps unsurprisingly, given the minimal nature of the changes, this section of the Action Programme attracted little comment in the evidence, although the Environment Agency suggested that Defra should consider extending the closed periods to reduce leaching to surface waters.[112] The NFU's response to Defra's consultation makes the common-sense point there would be "serious difficulties in framing a practical or enforceable rule to prohibit the application of fertiliser when heavy rain is forecast within 48 hours".[113] Defra should reconsider the practicality of the prohibition on applying nitrogen fertiliser if heavy rain is forecast within 48 hours. However, it should liaise with the Met Office to evaluate the practicality of having incorporated into the weather forecasts that are provided to the farming media information to guide farmers on the optimum periods when it would be safe to apply fertilisers.

Closed periods for organic manure

63. The current Action Programme prohibits the application of organic manure to sandy or shallow soil between 1 September and 1 November for grassland or land to be sown with an autumn sown crop, and between 1 August and 1 November in all other cases. The new Action Programme would apply closed periods to all soil types, not just sandy and shallow soils:

Average Annual Rainfall (mm per year)	Grassland		Arable land
	Sandy and shallow soils	All other soils	Sandy and shallow soils	All other soils
Up to 1050	1 Sep to 15 Dec	15 Oct to 15 Jan	1 Aug to 31 Dec	1 Oct to 15 Jan
Over 1050	1 Sep to 31 Dec	1 Oct to 31 Jan	1 Aug to 15 Jan	15 Sept to 31 Jan

Source: Defra's Consultation on implementation of the Nitrates Directive in England, p 25

64. Defra's partial Regulatory Impact Assessment estimates that the changes to the closed periods for organic manure will result in changes to nitrate levels of between 0.5 and 1%.[114] The National Pig Association commented that the benefits were "very small in comparison to the costs", which it states are estimated to be at least £40 million for the pig sector.[115] The costs arise from the requirement for increased storage capacity. The NFU also considered the cost of the closed periods for organic manure to be "high" and the effectiveness of the measure to be "very low".[116] Natural England expressed concern about the potential 0.2 to 2% increase in ammonia emissions as a result of the proposed new closed periods.[117] Defra's submission stated that these figures were "likely to be an overestimate".[118] When the Minister discussed the closed periods for organic manure, he spoke of what would happen "if they were to be gone ahead with", adding, "we have not made our minds up yet". He assured us: "The cost/benefit […] in terms of the reduction of nitrogen is at the forefront of my mind."[119]

65. Several submissions called for more flexibility in relation to closed periods. The Association of Chief Estates Surveyors and Property Managers in Local Government (ACES) stated that some areas, such as Cornwall, can achieve 12-month growing seasons "and would therefore require the ability to spread throughout".[120] Dairy UK called for farmers to be able to apply slurry during December and January if conditions were suitable, stating that this would "avoid the risk of a national slurry spreading day (or days) and allow farmers to use periods of drier weather within the closed period when the risk of soil damage would be lower."[121] The Tenant Farmers Association commented on the need for flexibility in relation to the early part of the closed period "as relatively warm, dry autumns […] would provide the right circumstances to allow spreading of organic manures without the risk of leaching".[122] The Meat and Livestock Commission also wanted a flexible, risk-based approach.[123]

66. We welcome Defra's open-minded approach to the closed periods for the spreading of organic manure and recommend that it publish a short cost-benefit analysis of its proposals to establish whether the new closed periods would be disproportionately costly to the farming industry. If Defra decides to proceed with the changes to the closed periods, it should get the best possible advice on the potential for building flexibility into the requirements.

PROVISIONS FOR THE STORAGE OF LIVESTOCK MANURE

67. The Nitrates Directive states that storage capacity for livestock manure "must exceed that required for storage throughout the longest period during which land application in the vulnerable zone is prohibited", but it does not specify by how much.[124] The guidelines for the current Action Programme state: "The storage capacity available for those animal manures which cannot be applied during the autumn closed periods must be sufficient to cover these periods unless other environmentally acceptable means of disposal are available."[125]

68. Under the new Action Programme, farmers would have to provide 26 weeks' storage capacity for pig slurry and poultry manure and 22 weeks' storage capacity for all other slurry, regardless of the closed period. The NFU stated that Defra should "not impose storage requirements unrelated to closed periods".[126] Dairy UK commented:

127

69. Defra stressed that it had developed a methodology that would mean it could say to farmers: "You will only be asked to store what you actually need to store."[128] It commented that this methodology "may not have been fully taken on board".[129] The methodology in question is set out on page 26 of the consultation document.[130] It involves calculating the volume of excreta produced over the 22 or 26-week period, using standard excreta volumes, and the volume of water collected and stored during this period. The sum of these two amounts represents the capacity required. Deductions are permitted for the volume of manure exported off the farm, the volume of solids separated from the slurry and the amount of poultry litter that is stored in an appropriately located temporary field heap.

70. We agree with Defra that the storage calculation methodology is important in that it enables farmers to work out 22 or 26 weeks' capacity according to the circumstances on their own farms. Defra must address its own criticism: namely, that the calculation methodology may not have been fully taken on board by farmers. It must outline the information programme it proposes to adopt to deal with this issue. However, Defra may be over-stating its case when it claims that the methodology means that farmers will have to store only what they need to store. The methodology does not alter the fixed 22 or 26-week limit. In this respect, it does not answer the objection raised by Dairy UK: a dairy farmer with a three-month closed period would still be required to provide five months' storage.

71. Defra noted that "many other Member States have got much longer storage requirements than we have."[131] Germany, for example, has a storage requirement of six months and France has storage requirements of between four and six months.[132] However, it is not the length of the storage periods Defra proposes, but the absence of any direct correlation between storage periods and closed periods that is the principal cause for concern and that will seem "quite illogical to many farmers."[133] We recommend that Defra recognise farmers' concerns about the relationship between the storage capacity requirements and the length of the closed periods. Defra should re-evaluate and publish the evidence for relating storage requirements to a fixed period of 22 or 26 weeks, rather than the closed periods that apply on individual farms. Consideration should be given to relating storage requirements directly to the closed periods that apply on individual farms.

72. Both the Environment Agency's submission and the NFU's response to Defra's consultation questioned the rationale behind the different requirements for pig slurry and poultry manure, compared with other slurries. Defra told us that more "out-grazing" of cattle meant that there was "less manure collected and needing storage", and that cattle were "more usually on grassland where there are more opportunities for spreading manure".[134] The NFU said that it had "found no evidence suggesting that pig and poultry manures are significantly more likely to cause nitrate leaching" and commented that pig and poultry producers would be unfairly penalised by the six-month storage requirement.[135] The Environment Agency could see "no justification" for the difference.[136] In the light of criticism from both the NFU and the Environment Agency, we urge Defra to reconsider the necessity for the longer storage times it proposes for pig slurry and poultry manure.

73. The implementation timetable for the storage requirements is another concern. Defra proposes to give farmers two years to comply with the new storage regulations, but the NFU stated that farmers will need four years. An NFU briefing paper, discussing the two-year timetable for the storage measures, commented:

this timetable is far too ambitious

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ACES, Dairy UK and the Meat and Livestock Commission also supported a four-year timetable, while the Tenant Farmers Association and the National Pig Association called for five years.

74. Defra said that it proposed a two-year timetable "so that we would have some time for it [the measure] to be in place to be reviewed in four years' time".[138] This is a sensible point taken in isolation, but, in the light of the practicalities, there is some doubt about whether the storage facilities could actually be in place within two years. The Minister admitted that he had "seen some examples in correspondence that have been sent to me by Members of Parliament of planning permission delays".[139] Given the need to arrange finance, obtain planning permission, and commission and construct slurry stores, two years is an unrealistically short time in which to expect farmers to comply with the new storage measures. We recommend that they be given four years.

Anaerobic digestion

75. Anaerobic digestion involves the bacterial fermentation of organic material under controlled conditions in a closed digester to produce biogas, which can be used for electricity and heat generation. The other main product of anaerobic digestion is an odour-free digestate, which can be used as a fertiliser.[140] Defra's consultation document states:

141

Defra told us about the measures the Government is taking to stimulate markets for anaerobic digestion, such as the announcement on 10 January 2008 that anaerobic digestion will receive additional support in the form of two Renewable Obligation Certificates per MWh.[142] On 9 April 2008, Defra announced a £4 million fund to support the installation of biomass-fuelled heating and combined heat and power projects, including anaerobic digesters.[143]

76. As a source of renewable energy and a way of reducing greenhouse gas emissions, anaerobic digestion is to be welcomed, but it is not immediately apparent how it could help farmers to comply with the Action Programme. Defra's consultation document does not make this clear and anaerobic digestion is not mentioned specifically in the draft regulations for the proposed new Action Programme. The Environment Agency said that it supported the uptake of anaerobic digestion and its wider environmental benefits, but expressed the view that "within the strict context of the Nitrates Directive and the Action Programme rules anaerobic digestors will not directly benefit farmers".[144]

77. Defra's answer to our question about whether anaerobic digesters could count towards the storage requirements under the Action Programme was a less than ringing endorsement of this concept:

145

Even were the value of anaerobic digestion in the context of the Action Programme to be made clearer, there would still be important considerations to be borne in mind. The NFU commented that anaerobic digestion plants "are expensive and also take longer to plan and build than slurry storage". It stated that they would not be feasible within Defra's two-year implementation timetable and possibly not within a four-year timetable. The NFU also noted that forcing farmers to spend heavily on slurry storage now may reduce the likelihood of their taking up anaerobic digestion in the future.[146]

78. We welcome Defra's commitment to anaerobic digestion, but we caution against portraying it as something that will help farmers to comply with the Action Programme until such time as it can be demonstrated precisely how it is helpful in this context. We recommend that Defra prioritise its consideration of the role anaerobic digestion could play in helping farmers to manage the storage of manure under the Action Programme and make its conclusions public before the statutory instrument implementing the changes comes into force, so that farmers can make an informed decision.

Financial support and advice

79. Defra estimates the overall cost to the agriculture sector from its proposed revisions to the Action Programme to be "between £35.5-£80.8 million and £52.8-£105.9 million (the lower range taking account of savings from mitigation measures)".[147] The most costly provisions are the whole-farm nitrogen loading limit of 170 kg N/ha—because farmers may have to purchase or rent additional land and/or reduce livestock numbers—and the slurry storage capacity requirements. An estimate from the British Pig Executive put the capital cost of complying with the storage requirements at £30,000 for the average pig farm.[148] Promar International, carrying out research for Dairy UK, estimated the capital cost to be £40,000 for the average dairy farm.[149] However, the NFU commented that in the light of its research into the amount of existing storage dairy farmers possessed, this figure should be adjusted to £55,000.[150] The Environment Agency told us: "Provision of financial assistance, at an appropriate level, to offset capital costs would be the single biggest thing that would help farmers comply with the revised measures."[151]

80. Several submissions noted that grant aid was available in other member states and even in other parts of the UK. Northern Ireland, for example, offers 60% grant aid.[152] In the past, farmers in NVZs in England could apply for financial assistance for constructing slurry storage facilities under the Farm Waste Grants Scheme. The scheme was introduced in 1996, when the first NVZs were designated, and expanded in 2002, when NVZ designation was increased. It ended on 31 March 2006.

81. Defra told us that it does not intend to establish a new capital grant scheme to help with the cost of constructing slurry storage facilities "because past experience has shown that this can lead […] to increased supply prices and merely postpone the impact of market forces".[153] Given that Defra needs to make substantial cuts over the next three years to address the shortfall in its budget, it is unlikely that it could afford to introduce such a scheme, even if it were minded to do so.

82. Defra also cited the polluter pays principle as an "important point".[154] The NFU commented that, under that principle, "the costs of pollution are internalized and passed through into the price of goods and services" but argued that this would not work in an agricultural context because "it is widely accepted that agriculture is a price taker rather than a price maker on account of the structure of the industry".[155]

83. The proposed new Action Programme places a considerable financial burden on livestock and dairy farmers at a time when their ability to absorb these costs is questionable, given high feed prices and the phasing out of the Agricultural Buildings Allowance. We regret that Defra is not in a position to provide the kind of financial support offered under the Farm Waste Grants Scheme and recommend that it make representations to the Treasury on the need for financial support in the form of enhanced tax allowances for the construction of slurry storage facilities.

84. Defra told us that it has planned "an extensive programme of advice and guidance" to ensure that farmers are aware of their obligations under the proposed new Action Programme.[156] Both the Environment Agency and the NFU commented on the importance of the written guidance being simple and concise.[157] The NFU supported the use of workshops and seminars, and also suggested that Defra should provide a "confidential one-to-one free advice service, particularly for severely impacted businesses".[158] Dairy UK cited the Catchment Sensitive Farming initiative as an example of an effective way of communicating with farmers. Under the initiative, 40 catchments across England have been identified as priority areas for action to reduce water pollution from agriculture and improve farm practices. Advisers work on a one-to-one basis with farmers and also lead workshops and farm demonstrations. The initiative was initially intended to run from 2006 to 2008. In February 2008, Defra announced that it will "continue to support farmers on catchment sensitive farming" for a further three years.[159] Dairy UK stated: "It is important that this programme is retained and the network of advisors under this programme is built on to provide advice and guidance to farmers caught within NVZs."[160] We urge Defra to adopt a pro-active approach to explaining the changes to the Action Programme by circulating written guidance that is as simple and concise as possible, providing workshops and seminars, and offering farmers the chance to obtain one-to-one advice. It should also provide an online advice service for farmers affected by the changes.

Record keeping

85. The current Action Programme requires farmers to keep records that include the following information:

the area of the farm;

the quantity, nitrogen content and date of application of any chemical fertiliser;

the quantity, type and date of application of any organic manure;

the type of crop and the date it was sown;

the number and type of livestock kept on the farm and the length of time they were kept there, and

the quantity of livestock manure moved off the farm, the date it was moved and the name and address of the recipient.

86. Defra's consultation document sets out several additional record-keeping requirements, most of which relate to the proposed new Action Programme provisions. For example, farmers would have to keep a record of the storage capacity calculation. The Tenant Farmers Association said that it was "greatly concerned about the capacity on farms to deal with the amount of bureaucracy that will be involved in recording all that is required under the new regulations".[161] The NFU stated that a major reduction in proposed bureaucracy was needed.[162] Mr Philip Dunne, Member for Ludlow, commented that the record-keeping regime "takes red tape to new dimensions" and argued that farmers should not be "tied up in keeping essentially pointless records".[163]

87. We agree that farmers should not have to keep pointless records. However, we also accept the Environment Agency's point about the importance of record keeping in assessing compliance and its assertion that good record keeping is "an essential part of running an efficient business and can only be in the interests of the farmer".[164] Adequate records should be kept to enable the Environment Agency to assess whether the provisions in the final version of the Action Programme are being complied with. However, the record-keeping requirements should be as straightforward as possible to avoid placing an unnecessary burden on farmers. They should comply with best practice, as set out by the Better Regulation Executive in its five principles of good regulation, which state that any regulation should be transparent, accountable, proportionate, consistent and targeted.

53 HC Deb, 8 January 2008, col 47WH Back

54 Ev 13 Back

55 Qq 76-81 Back

56 Ev 36 Back

57 Ibid. Back

58 Ev 38 Back

59 Ev 42 Back

60 Ev 60 Back

61 Ibid. Back

62 Ev 3 Back

63 Ev 2 Back

64 Supporting document G1 Back