Examination of Witnesses (Questions 1
- 19)
WEDNESDAY 5 MARCH 2008
MR PETER
KENDALL, MR
ANDREW CLARK
AND MR
MICHAEL PAYNE
Q1 Chairman: This is a short, focused
inquiry on the implementation of the Nitrates Directive in England.
We have two evidence sessions this afternoon, one in just a second
or two involving the National Farmers' Union, followed by Phil
Woolas, the Minister from Defra. Can I formally welcome Peter
Kendall, the President of the National Farmers' Union, Andrew
Clark, the Head of Policy Services, and Mr Michael Payne, who
is a consultant. In a way, Peter, we do not really need to hear
from you because you very kindly produced a press-release in which
all your evidence is very neatly written down, and we have just
obtained a copy which tells me you are about to confront us about
NVZ proposals. Considering they are not our proposals, we are
really looking forward to being confronted. I think that really
concludes the evidence session from the NFU. Thank you very much
indeed. But I think you may just want to possibly go a little
bit beyond the synopsis in the press-release. This issue has got
a lot of history behind it and it has been chugging away in the
background of farming for a long period of time. The United Kingdom
took a particular interpretation of the original Directive, which
now, effectively, comes under some degree of challenge by virtue
of the Commission's wish to see, not just in the United Kingdom
but in other Member States, the Directive, as they see it, properly
enforced and, as a result of that, Defra have come up with some
proposals with which I know you want to take issue, and also some
of the justification for the proposals that have come forward;
so I think it might be helpful if you could give us two or three
minutes of the background of where the NFU is coming from in terms
of this particular matter before we ask you a number of specific
questions.
Mr Kendall: Thank you very much
indeed, Chairman. I appreciate the opportunity to come and talk
to the Committee. The fact that you take an interest in these
matters is very important to the agricultural industry, particularly
reflecting on the work that you have done and the report that
you published last week on the TB issue, the fact that you go
and visit the farms, and what have you, and the issue actually
with the NVZ implementation, the Action Plan and Directive, which
again will have really quite profound impacts. It is a complicated
area, seeing how this impacts on farmers is important, so a big
thank you for picking this up and taking a look at it. One of
the indications of how complicated this is is the reason we do
have Mike Payne, a consultant who works for the NFU on this, and
I have got Andrew Clark with me as well because there are detailed
aspects that we need to convey. What I would like to start by
saying is that nutrients are becoming increasingly valuable to
farming. The price shocks we have seen in commodity prices have
been more than mirrored by the cost of nutrients, fertiliser inputs
into farming, over the last few months. Actually they are a really
important resource which we want, as an industry, to make more
use of to make sure we keep them in the right place and get the
maximum benefit in our production cycles as an industry. What
I think is very serious about the implementation of the Nitrates
Directive is that it actually impacts on every single sector:
Defra's proposals as they stand impact on the cattle sector through
slurries and manures, pigs and poultry, through how they export
and how they move on their manures, and the arable and horticultural
sectors because of proposals on cover crops. I think, for the
first time, we are seeing an implementation that moves on from
the previous application of the Nitrates Directive to one that
is going to have an impact on absolutely everybody. Where we are
very concerned is that as it stands this proposal is costly, it
is over-prescriptive and it is disproportionate. In fact, the
recommendations are, we believe, a classic example of old-fashioned
regulation rather than a modern cost-benefit and proportionate
approach to implementation. In stark contrast, although we worry
as an industry about the Water Framework Directive, the Water
Framework Directive says, "Is this a proportionate regulation?
What are the costs and benefits?", and if the benefits are
outweighed significantly by the problems it causes to society
as a whole or the industry, then there are assessments made of
that and it is moved on. We think it is absolutely the wrong sort
of regulation being handled in the wrong way. I would also like
to say that, in the context of what has actually been going on
on farms, this is not so much necessarily because of the high
prices that it is being used better but the amount of nutrients
that have been employed by farming, for a whole host of reasons.
We have seen increasing yields at a time when we have seen less
fertiliser used—in effect a 40% reduction on fertiliser
usage since 1987—and where we have seen some key measurements,
and Mike is a real expert on this. When you look at some very
large catchment areas, for example the Trent, we have seen a 20%
reduction already. This is associated with reduced nitrogen and
fertiliser usage, but also a significant reduction in the amount
of livestock on farms at this moment in time. We actually see
the industry going in the right direction, but we have a directive
that stems from 1991 that is forcing disproportionate, costly
changes that Defra, I think, are imposing in a heavy-handed way.
Q2 Chairman: Perhaps that would be
a good point to ask the detailed question about what your assessment
is of the current Action Programme and the impact it is having
on farmers. You have mentioned a number of sectors. Perhaps you
might comment sector by sector as to what they think about it
and perhaps give us an indication, in terms of the proposals which
the Government are consulting about, as to what the financial
impact would be on farming?
Mr Kendall: I will hand over to
Andrew, if I can, for the specific comment, but if I can pick
one example up, and I think it is a very really good example,
on the closed periods of applying slurry and the amount of storage
you then require. Devon County Council have, I think, 55 dairy
farms. The estimate they currently put forward on the Action Plan
as it stands would be an expenditure of £3.2 million, and
that is a county council that says it has got no money to do it.
They have got two years, as the rules stand, to make those changes.
That is 3.2 million on 55 dairy farms in Devon.
Q3 Chairman: Those are county council
farms.
Mr Kendall: They are county council
farms. The implications for the wider industry tell you the sort
of ramifications and impacts that can have. Andrew.
Mr Clark: Just giving a context
for that, looking at last year's capital expenditure across all
of the county council smallholding estate, we are looking about
a £9 million expenditure; so you can see that in one county
a third of the expenditure might be necessary to meet the slurry
storage costs that we are looking at. This is not something that
just impacts on individual farms, it impacts on local authorities,
on other institutional landlords, potentially setting up tension
between tenants and landlord. We looked at the dairy sector, for
an example, to answer your question, Chairman. We estimate there
are about 5,000 dairy farms which are going to need some work
to their slurry stores. About 70% of slurry stores are over 10
years old, about 70% of the dairy farms are found within NVZ,
and so we estimate about 5,000 slurry stores are going to need
work. Each one of those is going to have to maybe seek planning
permission, they will need to put in place finance, they will
need to get the constructors to go and put together those slurry
stores. There are real practical difficulties in terms of that.
That is one practical example.
Q4 Miss McIntosh: These slurry stores
already exist, so you are not requiring new slurry stores, you
are requiring an update of the existing slurry stores?
Mr Clark: Mike might want to come
in here, but my understanding is, at the present moment, because
the closed period only applies to shallow and sandy soils under
the Action Programme, not every farm has a substantial slurry
store. In fact, we looked at the north-west. We carried out a
survey of 100 dairy farms in the north-west region. We found that
the 100 farms we surveyed had 36% of the necessary storage. So
that indicated that some had storage, but not as much as required
by this new Action Programme. Only 43% of them could meet the
whole farm limit in terms of 170kg/ha of nitrate loading per year;
so we can see real practical difficulties for the dairy farms.
About 60% of the dairy herd are stocked on farms at a rate above
the maximum established by this new Action Programme.
Q5 David Taylor: You have got real
problems in actually costing out the capital requirements for
slurry storage. In the brief that was supplied at the end of last
year, which was unfailingly accurate and helpful in most ways,
there was reference to capital costs that may only be in excess
of £50,000, but I went to quite a packed meeting of farmers
on the Leicestershire/Derbyshire border, three-quarters of them
in my own patch, and one said he had a 250-head herd and the consultants
had come up with a figure well in excess of £50,000. So these
are pretty tentative figure, are they not?
Mr Kendall: I think the total
figure of £240 million has been estimated by Defra for the
industry for maybe a benefit of a half to 1% reduction of nitrate
in water. This is why we are concerned about this whole directive
not looking at the cost benefit, because of the time period we
have got to address it.
Mr Clark: And, of course, any
average covers a huge range of extremes, and so the point has
been made or implied that some farms may be able to just simply
extend an existing store which is just under the requirement,
but the indications from our north-west dairy study indicate that
in actual fact there is going to be a substantial amount of building
required to meet this new requirement and a substantial amount
of cost.
Q6 David Lepper: Could I ask you
about the timescale as well. Have you looked at, for instance,
the average length of time that it takes to process a planning
permission in the various areas that are most likely to be affected?
Do they vary greatly? Could most farmers keep within what is now
suggested as the time for complying with the new requirements?
Mr Clark: We think it is extremely
unlikely that farms will be able to get to the standard required
within two years, and that is why we asked in our submission to
Defra for a four-year working period. The sorts of things that
will need to be in place are the finance. So using Devon County
Council as an example—you are at the end of a financial
year now—they will have to bid for extra resources and that
is a year-long process. Then they have got to get the planning
permissions, they have got to find the necessary contractors to
do that work and source the materials, and we all know builders
are difficult to get to do an estimate let alone construct the
work. We think it is totally impractical to see the scale of building
that will be required in that timescale. We just cannot see that
happening.
Q7 Dr Strang: Can I ask a quick question
while we are on this. The issue is whether in fact the measures
that are being prescribed are actually going to result in a reduction
in managing the content of the water. You mentioned the Trent.
You said there was a reduction in the Trent, and you attributed
that to the reduced use of nitrogen by the farmers over the last
number of years. Can we be sure that is cause and effect?
Mr Payne: We cannot be entirely
sure. We know that water companies have also been required to
reduce their emissions from major sewage works, although minor
sewage works are not affected, but if you were to say that the
whole of that reduction was from the water industry, it would
mean they were emitting almost no nitrate at all, and I do not
think that is a plausible situation. The Trent has quite a large
rural catchment as well as a number of major towns, and I think
it is inconceivable that none of that reduction was coming from
agriculture.
Q8 Dr Strang: Are you confident that
the measures that the Commission are insisting on do have the
effect and, over time, are bound to have the effect of reducing
the nitrate concentration in surface water?
Mr Payne: They would have some
beneficial effects, but I think the burden of what we are saying
is that improvements which the industry is making independently
of NVZs, regardless of whether there are NVZs, are already having
quite a substantial effect and probably more effect than the current
Action Programme.
Mr Clark: Let me interject there,
because I think this is the crucial point we want to make and
we have made to the Minister directly. The type of Action Programme
requirements of the Nitrates Directive, reflecting the fact that
it is old-fashioned, are weighing down on those areas in an unnecessarily
costly way, with a tiny impact in terms of nitrate benefit. There
are other practices that agriculture is currently applying which
are far more cost-effective than the proposals that are being
put forward now.
Q9 Mr Drew: Is the introduction of
new building a landlord or tenant responsibility and, given the
sensitivity of rents at the moment, how are negotiations going?
I am interested, as you know, in county farm estates, because
they are going to be fairly cash-strapped and I imagine there
are not many tenants who are going to take on this responsibility
very willingly.
Mr Kendall: It does depend on
the type of tenancies. Usually in the county council the buildings
would be the landlord's obligation. As you said, quite rightly,
a lot of these tenancies are up for review on the back of some
sectors having better prices currently, so there is that challenge,
but also, for tenants to make those investments where it is their
responsibility, real concern about the long-term future and, therefore,
whether you make those investments, but it does depend on whether
your tenancy states the buildings are your obligation or whether
they are the landlord's obligation.
Q10 Chairman: Can I be clear, because
the conversation has ranged from the impact of the revised Action
Plan in terms of the extra capital investment that farming would
have to put in, and you said that the original plan was quite
old-fashioned—obviously, for something that was framed in
1991, by definition, that must be the case—but do you accept
that any parts of the new Action Plan are justifiable?
Mr Payne: I think the requirement
to stick to the crop nitrogen limit, or what is needed for the
individual crop, must be a sound and responsible thing for the
industry to do, which many farmers would already be doing. I do
not think there would be any argument that that is a sensible
and cost-effective measure to take. Similarly, making sure that
you are spreading your nitrogen accurately is an appropriate measure
and keeping up with modern techniques as developments take place.
Those sort of measures we think are effective and a reasonable
part of good farming practice, but some of the prescribed measures
relating to manure management, I think, may originally have been
devised with other Member States in mind and problems in mind
which are not prevalent in the UK and, clearly, from Defra's own
consultation document, very poorly cost-effective in our circumstances.
Q11 David Taylor: Can we return to
the pre-existing trends in nitrate levels in surface waters, which
you have provided some research and figures on. I referred a moment
or two ago, Chairman, to the meeting with farmers on the Derbyshire/Leicestershire
border where the Trent is, indeed, the county boundary. It is
quite a long length and, as one of you said, it is a pretty rural
area, not an industrial area. What other rivers did you study
and how many, if any, showed a significant downward trend over
a 15-year period? Finally, is there an element where you are able
to identify artificial nitrate levels, the source of the nitrate,
if you like, rather than organic sources? Mr Payne.
Mr Payne: Taking the last question
first, no, you cannot differentiate nitrate by source, you could
only look at it by associated compounds, but nitrate itself is
the same whatever source it comes from.
Q12 David Taylor: Which nitrate in
particular?
Mr Clark: Nitrate from fertiliser,
is it not?
Q13 David Taylor: Okay, so you cannot
always tell.
Mr Payne: You cannot tell whether
it is nitrate from fertiliser or nitrate from sewage.
Q14 David Taylor: There are no other
traces to help source it?
Mr Payne: Not within the nitrate
molecule itself, no. We have looked at probably 30 or 40 rivers
throughout the 15-year period that you have referred to. We have
found a variety of trends.
Q15 David Taylor: Some upwards?
Mr Payne: Some upwards.
Q16 David Taylor: In urban settings
or what type of setting?
Mr Payne: Some urban settings.
It is not that easy, without having time to conduct a proper research
study, to pick the bones out of it, but there are some general
conclusions that we can reach. What we have noticed is that within
the Midlands almost all the major rivers have significant downward
trends: the Thames, the Trent, the Warwickshire Avon, the Weaver
in Cheshire, for example, all those sort of rivers. In other parts
of the country—
Q17 David Taylor: The South Midlands
as well, I suppose?
Mr Payne: Yes.
Q18 David Taylor: What is conventionally
called the South Midlands.
Mr Payne: Indeed. In other areas,
though, the position is much more mixed. Some rivers, for example,
are fed predominantly by ground water. Ground water takes a long
time to percolate through, so you do notice that ground water
fed rivers do tend to be still on an upward trend—I say
still because we would anticipate that the things which are changing
now in some of the surface fed rivers I have referred to—
Q19 David Taylor: I am sorry to interrupt,
long percolation times measured in years?
Mr Payne: Decades.
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