Session 2010-11
Publications on the internet

To be published as HC 556-ii

House of COMMONS



Environment, Food and Rural Affairs Committee

Farming in the uplands

Wednesday 10 November 2010





Evidence heard in Public Questions 68 - 162



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Oral Evidence

Taken before the Environment, Food and Rural Affairs Committee

on Wednesday 10 November 2010

Members present:

Miss Anne McIntosh (Chair)

Tom Blenkinsop

Richard Drax

George Eustice

Mrs Mary Glindon

Neil Parish

Dan Rogerson

Amber Rudd


Memorandum submitted by the Tenant Farmers Association

Examination of Witnesses

Witnesses: George Dunn, Chief Executive, and Mike Keeble, Uplands Spokesman, Tenant Farmers Association, gave evidence.

Q68 Chair: I welcome you both most warmly. George and Mike, would you like to introduce yourselves formally for the record?

George Dunn: Thank you very much. My name is George Dunn; I am the Chief Executive of the Tenant Farmers Association. On my left is Mr Mike Keeble who, among other things, is a member of the association’s executive committee. He has special responsibility within our organisation to brief us and others on uplands issues. Mike has a wide range of experience not just as a farmer but as a journalist and various other projects in which he is involved.

Q69 Chair: This is the first time recently that the Committee has had the opportunity to look at upland and hill farming, so we are delighted you are here before us and are to about to share your thoughts with us. How would you define uplands for your purposes?

Mike Keeble: It is one of the most valuable, sustainable resources in this country capable of producing an awful lot of cheap solar-powered protein, but at the moment it is running down rather fast. That is how I would sum it up.

Q70 Chair: Do you think tenants get a fair deal in England as opposed to elsewhere in the European Union?

George Dunn: We have a unique landlord and tenant system in England and Wales. That system is very complex because we have a set of tenants who have security of tenure either for their lifetime or for future generations, but the more recent tenants are those who have been on farm business tenancies since 1995 where the average length of term is three and a half years. In terms of the cycle of land management in the uplands three and a half years is no time at all, so for a category of tenants, certainly the newer ones, we are concerned that in upland areas they get quite a raw deal.

Q71 Tom Blenkinsop: Are hill farmers subject to unique pressures compared with other grazing livestock enterprises?

George Dunn: The uplands are unique in a number of aspects: they are physically remote from the rest of the country; the climatic conditions are variable and quite extreme; they are economically remote and tend to be hard places from which to make a living; and the opportunities are very narrow in terms of what you can do with the land. As a farmer you really have only grazing livestock as your option in the uplands, so as compared with elsewhere in the country they present a unique set of issues that needs to be looked at specifically in relation to how agricultural policy should be developed.

Q72 Tom Blenkinsop: What would be the easy wins or gains to improve the situation for upland farmers?

George Dunn: As for easy wins, let us take the example of a scheme that is operating at the moment, Uplands ELS, that replaced the Hill Farm Allowance, which in turn replaced the Hill Livestock Compensatory Allowances. HLCAs provided an income per head of stock, HFA per area, and then the uplands entry level scheme was put in place as an add-on to the entry level scheme. When the uplands ELS was first mooted by Defra to replace the HFA we were very concerned about the impact upon the tenanted sector.

The reasons were twofold: first, to get into uplands ELS you needed to have at least five years’ security, or the willingness of your landlord to agree to your entry. Very often that willingness was not on the horizon, so you really needed to have five years’ security. When we talk about tenancies, as I said in answer to the Chairman’s question, on average they are of three and a half years’ duration, and it is very difficult to get into that scheme on that basis.

Secondly, we were aware that a lot of landlords already were in the entry level scheme itself and therefore the tenants of those landlords would be debarred from getting into uplands ELS. We said to Defra they needed to rethink the nature of the scheme. To be fair to the previous Secretary of State, he gave us a year to look at the issues. The Tenancy Reform Industry Group, of which the TFA is a member, looked at the issues and provided some reasonable guidance to Defra, but unfortunately from our perspective the Defra officials dug in their heels and said that they had the scheme, the Minister had already signed it off and they would run it the way it was.

We would ask for two things: first, the only people who should have access to uplands ELS or ELS as a standard are working farmers. Landlords have indirect management control by putting clauses in tenancy agreements that require tenants to do certain things that enable landlords to get the money. That is not an appropriate use of public funds from our perspective. Therefore, a very quick win for us would be a change of the rules on management control to ensure that any agri-environment money went to working farmers on the ground as opposed to landlords. Mike, would you agree with that?

Mike Keeble: To a degree I do. George is, quite rightly, accepting the status quo, but it is rather perverse if you realise that most of the uplands are tenanted mainly because of large shooting estates and landowners like the National Trust and the MoD. The ELS on the whole is really about the capital of the land; it is about improving the land, the walls and woods and making the shooting better. It is doing all those things; it is not doing anything for production. Yet it is production that the tenant has to be in. All the capital that he has involved in his business is in livestock; it is on four legs and the equipment that goes with it. Until we get back to something that accepts production on the hills and the uplands, we will still have problems. A lot of the environmental grants are all very well if you are an owner-occupier farmer because you are appreciating the capital of your property, but as a tenant you have two rents to pay annually. The agents ain’t being very kind about that at the moment because of what they think of land prices and that sort of thing. We must get back to focusing on production and not the land.

Q73 Tom Blenkinsop: Some landowners have been advised to consolidate smallholdings into larger enterprises. Would that be suitable or sustainable for tenant farmers?

George Dunn: From our perspective it would not be a "one size fits all" policy. Obviously, there will be circumstances where amalgamation of holdings makes sense for a number of reasons. What is behind your question is probably the Upper Yewdale case in Cumbria and the Beatrix Potter farms in which the National Trust were involved a few years ago. From my perspective as representative of the tenanted sector I could see that the National Trust took a pragmatic, sensible approach to amalgamating two units to make it more sustainable for the long term while protecting the farms in perpetuity. In other circumstances there are quite sizeable holdings where the landlords have taken the opportunity to take the capital out of the centre of those holdings, be it the buildings or the house, sell it or put it on a different basis and then look to amalgamate over a wider area. We would not necessarily be so keen on that because those are viable holdings that are being lost in the marketplace as opposed to taking quite smallholdings and making them more sensibly viable in themselves. It is not a "one size fits all" policy. We would accept it in some cases and not in others, but we need to look at them on their own merits.

Q74 Chair: To follow up what you said about the uplands entry level stewardship schemes, in your written evidence you say that 70% to 80% of farmers who receive the hill farming allowance have not been able to get into the ELS. Is that still the case?

George Dunn: We have been trying to get some figures just to understand where we are currently. We get slightly different stories from Natural England compared with Defra. I am slightly more inclined to believe Natural England’s rather than Defra’s figures. Natural England indicates to us that at the moment there are about 9,000 potential applicants. If you take out those who are in what we call legacy schemes-countryside stewardship and ESAs-and therefore not yet eligible to get into uplands ELS, about 9,000 individuals should be potentially eligible. The most recent figures I have seen for uptake is that 3,500 individuals are now in the scheme, so from the figures we have tried to concoct a little less than two-thirds would appear to be outside the scheme. I am quite happy to share with the Committee the email correspondence I have had, if it would help to explain it.

Q75 Chair: That would be helpful. You prefer the UELS to focus on food production and the active farmer. Is there scope within the existing CAP rules to allow that, and should there be scope for mediation where there are disagreements?

George Dunn: We would say there is absolutely scope. The European regulations do not use the phrase "management control" that Defra employs. The European regulations say that potential participants in agri-environment schemes should be those carrying on an agricultural activity or other land managers. We don’t believe that really means having two people on a single piece of land who are potentially eligible to get into the same scheme. We believe that within the European regulations there is scope for the Government to be able to say that "management control" means that the individuals are in day-to-day management control of the land, are making the decisions about the management of that land and are taking risk. Our concern is that landlords do not take risks, are not in day-to-day management control and simply passively manage through the tenancy agreement but are still able to access the scheme money. One of my quick wins is that I think there is scope to look at the issue of management control and point it more to those who are actively farming the land.

Chair: That is helpful.

Q76 Neil Parish: Talking still about agri-environment schemes and stocking rates in particular, I come from the South West where you need higher stocking rates than perhaps in Cumbria and so on. Would you be keen to see these being dealt with much more on a local basis? Do you feel that the agri-environment schemes at the moment are far too prescriptive on stocking rates?

Mike Keeble: You have opened a big can of worms, haven’t you?

Neil Parish: Yes, I know.

Mike Keeble: The first thing to say is that Single Farm Payment has supported an awful lot of farming that, frankly, should not be going on. In terms of how the environmental payments try to prescribe stocking rates, there is no doubt that the number of cattle and sheep going out of the dales and off the hills particularly in the North-I do not think it is quite the same in your part of the world-is increasing phenomenally and quickly. Once those cattle have walked they ain’t coming back, because that money will go into a bank account or somewhere. Nobody will invest back in stock. We have to keep such stock as is left there, and I believe that in order to do that we have to go back to some form of headage system. How you then relate that to a stocking rate that is effective within a differing landscape is quite a difficult thing to do, but I believe that if given the responsibility most farmers would take that on board and do it responsibly. They are only too aware that the spread of bracken, gorse and everything else will be controlled only by getting cattle in particular and possibly ponies back on to the hills. I am not against that, but I am not very keen on too many horses. Ponies can do a good job.

Q77 Neil Parish: I think suckler cows in particular on the hills are major problem, are they not?

Mike Keeble: Yes.

Q78 Neil Parish: Sheep do not always fulfil the same type of grazing?

Mike Keeble: That is right.

George Dunn: When the single payment scheme was introduced we were very concerned about the impact that would have on the uplands. Every suckler cow is losing a shedload of money on the hill. It was losing the suckler cow premium and the LFA supplement. Over the past five years of the single payment scheme we have lost a considerable number of cattle in the uplands because they simply lose money. We look very much to the return of a headage payment, of course with environmental criteria, that can put those employees, as one of our members in the North East describes them, back on the farms.

Q79 Neil Parish: Have you heard of a wonderful thing called Article 68 of the Common Agricultural Policy?

George Dunn: Yes. It is the washing machine into which you put money and it comes out slightly smaller, isn’t it?

Q80 Neil Parish: That is right, but it can also target types of grazing that can be linked to suckler cows.

George Dunn: Yes. We need to be very careful about thinking that Article 68 is the be all and end all. Certainly, the criteria within which Article 68 operates need careful thought before we allow any Government to run riot through that particular piece of legislation.

Q81 George Eustice: Obviously, your document 20:20 Vision for agriculture is quite critical of decoupling subsidies from production.

George Dunn: For the uplands, yes.

Q82 George Eustice: You have talked about a headage payment perhaps coming back in. You have also explained how the Government could interpret the existing EU schemes differently to favour the uplands, but when all of it is reformed in 2013 is there anything specific that you think ought to be included, and realistically could be at that moment, that would solve this problem?

George Dunn: Certainly, when you look at the next reform of the CAP already we are led to believe that the Commissioner is very keen to put support for LFAs back into Pillar 1 and for Pillar 1 to become, in his terms, greener. We wait to see what the Commission’s formal position is on that situation later this month. However, the fact that the LFAs potentially could come back into Pillar 1 and that the Commissioner is also referring throughout the document to support for active farmers, as opposed to those who passively own and manage land, gives us hope that the uplands will be given fairer treatment next time round. As Mike said, we are very keen to see some form of headage payment coming back for suckler cows and breeding ewes in upland areas to get mixed grazing back on to hill areas.

I was on a National Trust estate in the High Peak not so long ago where they are carrying out a wonderful heather regeneration project. All the animals have gone and yet they want animals to come back to graze it and manage it thereafter. My question was: where do those animals come from when they have gone off the hill-the heifers have gone-and the amount of money people will be losing? There was no answer to that question. We believe that you can unlock that only with a properly controlled headage payment scheme for breeding livestock in the uplands.

Q83 Dan Rogerson: When we spoke to the Commission for Rural Communities they talked about other methods of rewarding farmers in terms of public goods, which is something this country has not really developed; it has all been about agrienvironment schemes. What would be your response to exploring those kinds of options?

George Dunn: I think you need to define what you mean by "public goods", Mr Rogerson. Do you have a list of what you would include in that?

Q84 Dan Rogerson: It is more a matter of what the Commission meant by it. In past reports they have talked about unlocking the potential in the rural economy and looking for what might be called diversification, but all sorts of other things you can do to unlock potential in rural areas and how farmers can be rewarded for the good they do there and in the wider community and economy.

Mike Keeble: We had "public goods" explained to us at the Uplands Land Management Advisory Panel in Ergon House on Monday. To me, it seemed rather ridiculous that in a world that will run out of food almost certainly in the next 25, 30 years the most essential public good was not food. There were all sorts of other things which were influenced by a lot of ornithologists and others, but it seems to me that, unless we are to eat the birds, food should be at the top of the agenda on public goods and, following on from that, energy, water and all the other things. But we must concentrate on food production because at the moment the factory that makes it is being sold and is going away.

Q85 Dan Rogerson: Coming from Cornwall and representing Bodmin Moor and areas like that, I do not disagree with you, but I have heard experts say that what we need to do is plant lots more fruit trees in areas like that and get away from livestock.

Mike Keeble: That is all right; I am all for that.

Q86 Dan Rogerson: That is your initial answer. You have already made absolutely clear that you think a headage payment is the way to do it, but do you have any sympathy at all for the view that other things could be rewarded apart from just production and agri-environment?

Mike Keeble: I think the other explosive area in the uplands will be timber. You have a big link-up at the moment between Jenkinson Forest Products and Eddie Stobart, which I think will have a very big influence on the timber market. It is already doing that. I can see timber coming in, but we will not be growing for pulp and pit props but for energy and good, hard timber. I think we shall be looking at GM in trees and that sort of thing, which other countries are doing. I can certainly see forestry coming back below 1,200ft. I do not see why it should not come back and do a good job for all of us, but as we know it is a very slow turnover.

George Dunn: But my point about the headage payments was not just about them being direct income support. We see those payments very much as being used to deliver some of the agri-environment outcomes we have been trying to get through the back door by removing the livestock, which we have not greatly achieved. As Mike will attest, the amount of bracken up the hills in the North is considerable when we remove that livestock. First, we want direct income support because of the profitability of farming in the uplands, but, secondly, we want that direct income support to do other things for you in terms of environmental management. It is only when you have profitable businesses that they can then invest in walls, watercourses and everything else that you want to do in that area. Rather than have a very prescriptive approach we need an outcome-based approach that you can tailor to each individual circumstance.

Q87 Chair: Defra said that when we had headage payments there was over-grazing. How do you propose getting over that problem?

George Dunn: I have always thought the issue of over-grazing was overstated. If you look at the cases-I do not have the figures to hand-where individuals were taken to task under the regulations for over-grazing, they were vanishingly small. There was a handful of very high profile situations where over-grazing was taking place, but it was not the widespread issue we were all led to believe when the schemes changed. We need to have an eye to ensure we do not create over-grazing, and we are absolutely up for that, but I think Mike would agree that there was not a great deal of over-grazing, particularly in the northern uplands.

Mike Keeble: Certainly in the North there was not, but it was different in parts of Wales. There was some very bad over-grazing, but, generally speaking, I think it was an overstated word played on by people for other reasons.

Q88 George Eustice: One of the other things the CRC recommended was that the development of markets for carbon and water might be one way forward. How do you see this benefiting tenant farmers?

George Dunn: We don’t. We tend to think that those issues are matters for landlords. If you look at any reasonably standard tenancy, things like soil, trees and watercourses would be exempted from it and reserved for the landlord’s use, so I am afraid we would tend to see that being more a landlord or owner-occupier than tenant farmer issue.

Q89 Richard Drax: Do you think there is too great an emphasis on diversification, which we hear about so often nowadays? So often you are told to do these things and when you try to do it you are stopped from doing it. I take your point about landlords who should probably be taking forward these big projects, but as far as tenant farmers are concerned, in reality there is not an awful lot of scope to diversify on a hill farm, is there?

George Dunn: As I said in an earlier answer, the first point is that the number of opportunities you have are much smaller in comparison with farming activities elsewhere in the country. The second point, as you rightly say, is that on a tenanted holding normally there will be two restrictions in the tenancy agreement: one is to use the holding for agricultural purposes only; the other is not to add to or remove any fixed equipment that is on the holding without the landlord’s consent. Those two clauses together make it very difficult in the broad range of circumstances for tenant farmers to make use of diversification opportunities. Of course, there are enlightened landlords who will give consent for diversification and a deal will be done in relation to the rent or a sharing of the profitability of that business to ensure that both the landlord and tenant are remunerated, but if the landlord wants to be difficult he will be, normally aided and abetted by agents and solicitors along the way, because of the nature of that relationship.

Q90 Amber Rudd: Can we look at the issue of succession and tenant upland farmers? Do you take the view that the Government should be involved in any way in trying to ensure that?

George Dunn: Mike has a whole raft of issues to talk about in relation to training where I think Government could have a role to play to encourage new entrants and bring in new people and thinking into the hill areas, but in terms of succession on existing holdings probably there is not a major role for Government other than in assisting to ensure that people are well advised on succession arrangements.

I have just spent a week going round the country talking to members of the Tenant Farmers Association about a range of issues, many of which are to do with succession. There are people sitting on three-generational tenancies who do not have a clue about how they go about the procedures for succession, despite the fact they are in prime positions to be able to succeed. There is a role to be played in ensuring that hill areas get access to that good advice and information. If Defra can assist in that, that will be great, but there is the wider issue about ensuring we develop the right skills base and opportunities for new entrants in the uplands which Mike will address.

Mike Keeble: As you have all gathered from the discussions you have held, the uplands give rise to a huge range of problems, not least deeply imbedded traditions in genetics, lifestyle, type of holding and everything else. I have been going through this since 2001. I worked for Donald Curry for quite a long time until the Red Meat Industry Forum stopped. I was involved with Northumberland farm college and then became involved with Harper Adams where I was a student many years ago.

I can announce to the Committee today-I assure you that you are the first people to hear it because I received the phone call only this morning-that Harper Adams, in conjunction with Askham Bryan, Bishop Burton and Myerscough certainly, will set up, with help from me, a completely new concept for training in the uplands. It will be based around the REEDNet system. You can Google it or I can get Charles Cowap of Harper Adams to circulate the details of the REEDNet to the Committee. It is about linking the food chain from production right through to the retail point.

Taking that as the starting point, we shall be looking for graduates coming out of the various colleges to whom we have been able to explain the huge potential in the uplands. The Government have to give us the power to give them that enthusiasm, but we need them. We also need to do some basic research; it does not need research centres any more. We can do it on farm with graduates; we can bring them on and they can go through a farmer-designed, bottom-up course that will allow them to take a further qualification should they wish. It will be all-embracing. We will get George to talk about succession; we will get the fertilizer industries to come and talk about the improvement of pasture and that sort of thing; we will be looking at genetics.

Therefore, Harper Adams are on the ball. They have raised the flag here and now. Charles Cowap gave me permission to say that to you today. He can follow that up with you at a later date. Provided we get Government backing, that is up, alive and going. REEDNet is putting in the base capital. I believe we can raise sponsorship, but it would be lovely to think that Defra could also put some money behind it.

Q91 Amber Rudd: That is very encouraging news; thank you for sharing it with us. Can you also say something about the availability of the tenancies themselves apart from the actual training on which obviously you have a handle?

George Dunn: I am afraid that the opportunities to farm are few and far between. The two obstacles that new entrants come up against time and again are, first, their calibre, which Mike is addressing with Harper Adams through this scheme, and, secondly, the opportunities that become available. Unfortunately, in today’s marketplace we are in a situation where the number of tenancies, not just in the uplands but anywhere in the country, become fewer and fewer. More and more people are chasing those tenancies. It is a big concern for us that the Agricultural Tenancies Act 1995, which introduced farm business tenancies and was meant to create a burgeoning market in tenancies, after being in operation for 15 years, has not provided the opportunities we all thought we would get.

Q92 Amber Rudd: What do you think we can do to address that?

George Dunn: I think the issues go wider than this inquiry in terms of encouraging opportunities for tenancies. We have made some suggestions within our report 20:20 Vision-we can provide a full copy of it if it helps-about the taxation environment in which decisions are made, looking at how we use things like inheritance tax reliefs intelligently to encourage more beneficial lettings in the marketplace.

Mike Keeble: If I may add a rider, it is important to remember that if you take a 300-acre all-grass farm in somewhere like Wensleydale, Swaledale, Teesdale or wherever it may be, the working capital required to make a reasonable living, not an expanding business, is about £800 an acre. It is all very well to ask whether tenancies are available. The fact is that if you are offered a tenancy of a 300-acre farm you have to be able to come up with about £250,000. Very few young people have the ability to get that money. However, if we can enthuse the industry we will see bigger and bigger units that will offer very well-paid jobs for highly qualified people.

Q93 George Eustice: Given that there is a problem of succession within families-for example, the son says there is no future in it and he cannot make a living from it-why is there a shortage of tenancies? Is there just a huge consolidation going on?

George Dunn: I do not think the situation is as stark as you suggest. There are individuals who say they have had enough. They have seen how hard mum and dad work and they do not want to take on the tenancy. But in my 14 years with the TFA I have found an increasing number of young members of families who say they think they can make a go of it and have some good ideas of how to do it and how to get back on to the farm to make it a viable business. Quite a lot of my job is about talking to people of my age and younger who now look at the possibility of getting the succession tenancy on their mother’s or father’s holding. Therefore, with respect the comment you make was one from a few years ago. From our perspective there is now a greater desire to do it.

Q94 George Eustice: Do you know approximately what percentage take on the tenancy?

George Dunn: I do not think those figures are publicly available, but we can do our best to see what we can find.

Q95 Neil Parish: Perhaps I can quiz you a bit on the farm business tenancy? On the face of it, it should create a lot more flexibility. If you have three-generational-type tenancies they might work for the people who have them but there is nobody else who can break into them. Also, if you have a farm will you necessarily let it for three generations? Will you not let it on a farm business tenancy? I do not see why you are so against what is happening with farm business tenancies.

George Dunn: What I would say, Mr Parish, is that we have gone from one corner solution to another corner solution. We do not advocate a situation whereby landlords have to let holdings for three generations. We are where we are with three-generational tenancies and my members who have them are very glad of them and will use them to their full advantage. Nor do we ask for lifetime tenancies. Again, we also have members who are glad of those.

When farm business tenancies were introduced the idea was that the market was seeing a downward trend in terms of new lettings and wanted to improve that. We have seen more land come on to the market. It has been fairly stagnant probably for the past five years or so, but the average length of term on those holdings has remained doggedly static at about three and a half to four years. From our perspective that is not sufficient to give anybody a good start. There is a subset of statistics that shows that if there is a house and buildings the average length of term is about 10 years, but we do not know where the break clauses fall in those agreements. What we have been arguing for in 20:20 Vision is the concept of landlords being encouraged to let for a period of at least 10 years, which we think gives an individual a reasonable chance of making a little bit of money and moving on to the next thing.

The other problem is that county council smallholdings have always been the place where individuals cut their teeth in farming and moved into the private sector, but there is now a dwindling number of such smallholdings, and getting people into starter farms is much more difficult. Further, the gap between the county farms sector and the wider agricultural scene has become wider because of the amalgamations and capital requirements that Mike has been talking about. The other problem is that if all you are offered in the private sector is a five- or six-year FBT, and you are coming off a tenancy where you may have 15 or 20 years, is that a progression?

Neil Parish: It does not encourage you to do that.

George Dunn: Or is that a backward step? We need to have a fundamental look again at the farming ladder-there is a section in 20:20 Vision about that-to try to improve farm business tenancies, not abolish them, and make them more fit for purpose.

Q96 Chair: In their recommendations, the Commission for Rural Communities suggested that all the farm lead bodies like yourself and CLA should work together with the Government to develop proposals and facilitate the succession of upland farms and new entrants.

George Dunn: Yes.

Q97 Chair: Has that happened yet?

George Dunn: Not as far as I am aware, but, as we said in our written evidence to you, we are up for that. I mentioned earlier the Tenancy Reform Industry Group that Defra sponsors and upon which the NFU, TFA and CLA sit, among other bodies. That would seem to be the most reasonable place for Defra to engage with us on those issues, but it has not yet reached our agenda.

Chair: Thank you very much. We are very grateful to you.

Memoranda submitted by the National Farmers Union

and the Country Land and Business Association

Examination of Witnesses

Witnesses: Dr Andrew Clark, Head of Policy, NFU, Will Cockbain, Uplands Spokesman, NFU, William Worsley, President, CLA, and Professor Allan Buckwell, Director of Policy, CLA, gave evidence.

Q98 Chair: Good afternoon, gentlemen. I welcome everybody, particularly William Worsley, who is a constituent. We are delighted to see you here this afternoon. Perhaps I may invite William to introduce his colleague, and the other William to introduce himself and his colleague.

William Worsley: I am William Worsley, President of the CLA. I am a farmer and landowner from North Yorkshire. With me is Professor Allan Buckwell, Policy Director of the CLA.

Will Cockbain: I am Will Cockbain; I am a Lake District hill farmer. The family has farmed in the Lake District for 300 years, so it is fairly indigenous. I have been the NFU’s National Uplands spokesman for six years. I have with me Andrew Clark, who is Head of Policy Services and a senior member of NFU staff working on uplands. I would just like to say how much we welcome the opportunity to have a more coherent approach which recognises food production and the marketplace as well as environmental management in the uplands.

Q99 Chair: If I may turn to NFU and CLA in turn, are we hampered by the fact that there is no definition of uplands? How would each of you define "uplands"?

Dr Clark: I think there is a reasonably good definition of "uplands", certainly the uplands that we recognise in an agricultural sense, in the form of the less favoured areas. There is of course an issue about the long-term future of that designation, which is something we may return to later in the evidence session. I am concerned about the reclassification exercise in which the European Commission is currently entrenched.

William Worsley: I think we would agree with that.

Q100 Chair: Are you convinced that the Government will come forward with a sustainable hill farming policy?

Will Cockbain: Yes, of course we are! As I said at the start, we think that a more coherent farming policy that recognises food production, the marketplace and that farmers have to be responsive to that marketplace as well as deliver environmental management is definitely needed. In my NFU role I come across the agri-environmental side quite a lot in Defra and the Government. I also worked as a sustainable food and farming chair with Sir Don Curry, which took me into another area of Defra. I have to say that the gap between the two was quite large. We are being told we have to be more market-responsive and competitive in the marketplace, so that side of it needs to be more closely aligned with the agri-environment, environmental management side and public good side, so a policy that recognises both of them equally and does not set one against the other-so that there is no contradiction-is very much needed and would be welcomed by the industry.

William Worsley: We agree. We feel that the uplands are extremely important to society because their active management provides many vital goods. We have talked about food and food production, but there are also wood products, cultural landscape, natural resource protection, biodiversity, carbon etc, as well as leisure and tourism. We see this as very important. We also agree strongly with the broad thrust of the CRC report.

Q101 Dan Rogerson: You agree with the thrust of the report. Both organisations, however, have reacted positively to the decision to disband the CRC and take back in-house some of these sorts of functions. Looking at the report and taking forward those issues, do you think Defra has the influence in Whitehall to be able to do that job?

Dr Clark: We support the principle of moving policy back into Defra and Government taking ownership of setting a policy direction. We very much hope that Defra will produce a clear policy statement on the importance of uplands along the lines we have just set out. There are two risks to the abandonment of the CRC approach and taking it all in-house. One is: how will they listen? Who is listening to local farming communities and other local communities? CRC did a good job of listening. We make no bones about that. You cannot just make policy from Whitehall; you need to listen as part of that.

The other issue is that if Defra takes ownership, which we understand they are doing, they have to be influential within Whitehall. The uplands are not led just from Nobel House; they have to be led from CLG, DECC, the Home Office and also that MoD, which has important landholdings. All these different groups need to be brought together, so we depend on the champion being able to influence all of those policy levers.

William Worsley: Andrew has said a lot of what of what I would say. We were not lobbying for the abolition of the CRC. However, we have accepted that it has gone and everything else. It is vital that its function-the economic and community view and the rural-proofing-takes place and is not lost. We see a strengthened Defra policy unit is a way to do that. However, it is not just Defra that is involved with the uplands; it is far broader than that; it is cross-departmental, and that is where it could fall flat. We are slightly concerned about the loss of a rural champion as such. We would like to see a Minister with specific responsibility for the uplands as somebody to champion and co-ordinate. One of the really important points is coordination among Government Departments and agencies and in so many things that does not happen.

Chair: I think they recommended a Minister of Cabinet rank to act as coordinator, did they not?

Q102 George Eustice: One thing Defra said in their evidence to us was that it was less an issue about the viability of upland farms per se and much more about just the economics of upland or lowland livestock grazing. Would you share that analysis?

William Worsley: I think livestock farming in the uplands is the bedrock. However, it is not that alone. If you go to different parts of the country there are different opportunities. If you farm in the Lake District there are tourism opportunities; if you farm in other parts of the world there may be environmental or renewables opportunities. There are things other than the importance of pure production farming. One thing that causes us concern is the high dependence that upland farms have on public support, which is under threat.

Will Cockbain: What makes hill farming special, and is it just about hill farming? It is intrinsically linked to the lowland livestock system. It provides sheep that go down into the lowlands for production, but because it is at the end of the chain it is very vulnerable to prices. When the marketplace is down the lowland livestock producer can pass on some of his costs to the upland guy and the latter has nowhere to pass that on. He is also very restricted in the choices he can make in the uplands. It is pretty much beef and sheep farming, but-and this is really important-that system underpins just about all the environmental management in the uplands. If you look at the Lake District, Peak District or Dartmoor, huge tourist revenue is generated from that landscape and its maintenance, so I would argue that, as a percentage of the tax take, what is reinvested into the uplands represents pretty good value for money.

William mentioned other opportunities, for example trees. We believe they are also there, but at the moment we do not see a market mechanism for quite a lot of it and there is still more work to be done on it. As to who benefits from it, again there needs to be more work done.

Q103 George Eustice: Is the difference that at the end of the chain it is still livestock farming whether it is upland or lowland?

Will Cockbain: I have two sons at home who farm. One of them does a lot of stone-wall contracting, so he does quite a lot of maintenance. He could be termed as part and parcel of the maintenance of the Lake District. The other one also does some contracting. They see themselves as farmers and everything they do is farm-related, and it is on the back of that farming first that you get everything else; it is on the back of farming that you get environmental delivery. If you try to do it the other way round it will not work. Recently, I spoke to one of the National Trust’s land managers. He admitted that they had tried putting tenants in place who said all the right things about improving biodiversity and doing this and the other, but in practical terms they did not work because they did not know how to manage a flock of sheep; they did not understand animal husbandry and there were animal health and welfare issues. You have to recognise that it is profitable farming that is the start and everything else is on the back of that.

Q104 George Eustice: What I am trying to get at specifically is: is it harder in the uplands than in the lowlands?

Will Cockbain: It is harder because you are restricted in your choice; you are in a much harsher environment in terms of soil productivity and fertility.

Professor Buckwell: The evidence is that livestock grazing activity is pretty unprofitable wherever it is, but in the uplands that is all you can do. In the lowlands sometimes you have other options. To take even the past seven or eight years’ data on farm management accounts in upland and lowland grazing, the uplands come out quite a lot worse in a few years but not always, because lowland grazing is not a brilliant thing to do either. But the point is that, as Will said, there is nothing else to do in the uplands and then we have to move on to the wider agenda about other goods and services that the uplands might be able to supply. That is the potential the CRC talk about. It seems to me that is the clue to how we unlock that potential.

Q105 George Eustice: But they did concede it was much harder for the uplands to diversify as a general rule?

Professor Buckwell: Yes.

Q106 George Eustice: Some of them do so successfully?

Professor Buckwell: Within agriculture, absolutely; you cannot go into arable.

Will Cockbain: There are two sides to diversification. Certain upland areas have the potential to diversify to tourism, but from a farming perspective you are pretty much stuck with grazing, predominantly beef and sheep. To put a question, if you had the same flexibility in the uplands whereby I could just plant a field of whatever that would dramatically change the environment in six months, what effect would it have on areas like the Lake District, Peak District, national parks and Dartmoor? That limited choice is part of that environment.

Dr Clark: It is not just the physically limited choices; it is also what is allowed and what is culturally as well as environmentally acceptable.

Q107 Neil Parish: You are absolutely right when you talk about the sheep industry. The breeding stock is in the uplands. As they get older they come down into the lowlands and what have you, and that is essential. How much can we recognise that when managing the uplands? Do you believe that should have greater recognition by CAP?

Will Cockbain: Certainly it should be recognised. It was recognised quite a lot perhaps 20 years ago; perhaps it has not been as much in the past 10, 15 years. It should be recognised because a lot of jobs in that process are dependent on that from the lowland livestock sector right through to hauliers and vets. There is quite a lot of economic benefit from that interaction in the hills.

Dr Clark: One nuance I want to pick up is that in the hills we have a way of farming that maximises what little potential there is for food production, and increasingly we have to look at every opportunity for making the best use of that land. We think there is a unique way of farming that land that produces food and a cultural landscape. The food bit has fallen off the agenda; it has now come back again. Let’s not forget it but think what we can do to invest in that bit.

Q108 George Eustice: In earlier evidence from the TFA mention was made of the scope to consolidate some of the smaller holdings into more viable units. Do you have a view on whether there is further to go in that process?

Will Cockbain: I think that will tend to be area specific. Some areas have more of what you might term viable sized units. You can go to other areas where there is a cluster of very small farms and you will see amalgamation. A few years ago in the Lake District there was a furore when the National Trust amalgamated what was seen as an iconic farm. But the furore was not really about the amalgamation; it was the choice of that farm. I think that in hindsight everybody agrees that what should have happened three or four years previously, is that smaller farms around that iconic farm should have been merged with that one rather than break up the one that was seen to be probably viable. I think it is inevitable that there will be some amalgamation. Some farms will get bigger; equally, some farms may well get smaller, and there are part-time holdings.

William Worsley: Consolidation has been happening since the dawn of time and will continue. There is some way to go. With machinery development and the like it is bound to happen and it makes sense. However, it is not the sole answer. You can have both large and small units. The opportunity of diversification, where you have it, can enable a smaller unit to be viable and to survive, whereas where perhaps you do not have the opportunities of diversification you need a larger land area. Consolidation is part of our times; units tend to become bigger, and all the more so on lowland farms, but it is not the sole answer. Small units can be viable and work perfectly well.

Q109 Chair: In European terms are hill farms still larger units or average for the rest of the EU?

Professor Buckwell: There are truly enormous units in the uplands of the British Isles and also in other parts of Europe. If you have a very low margin business and do not have a lot of that business you will not earn much of a living. Look at the income figures. If you have average incomes of £10,000, £12,000 per holding you cannot expect that sort of unit to survive, so it must diversify, become larger or find some other source of revenue, but it cannot stay still.

Q110 Mrs Glindon: Perhaps I may turn to a planning issue. Do you think that Community Right to Build will improve or worsen the situation regarding affordable housing in the uplands?

William Worsley: I think it will help, but I do not think it is the sole answer. We are sceptical about 90% support. The planning system is in a pretty good mess. One of the ways of looking at the uplands is to consider the planning system and what can be done to enable that. I think affordable housing in the uplands, particularly in areas of national parks, is extremely important. The home on the farm concept that has been brought forward is a starter. However, my concern is that the cost of converting redundant buildings to provide affordable housing is too great. You have to look at appropriately designed new build housing. I am talking here about the importance of design. If you build in the local vernacular to an appropriate style and design it can fit in very well to our uplands where landscape is often very important. I think that planning needs to create opportunities in the uplands, in exactly the same way as in rural lowland Britain, to enable farmers and upland land managers to diversify in an appropriate way with appropriately designed buildings.

Will Cockbain: I agree with everything William has said. When it comes to planning, greater flexibility is required, but we need a system that actively encourages generation overlap. There are lots of benefits from generation overlap not just to do with farming. Quite often a young man might leave school and work part-time perhaps on his father’s farm for a couple of days a week and help out on one or two other farms. When that guy reaches 22, 23 or 24 and decides to get married he cannot afford to live in the area. Off he goes and takes with him his rural skills.

If there was a system in place that gave reasonable security to young men or women that they would be allowed to build or convert a house or whatever within the parameters of the farmstead, and so would be allowed to live in the area in which they were born and brought up, they would start to think how else to generate some income. If they are allowed to live there they need to earn more money. Therefore, you start to foster entrepreneurial skills.

Where you have a farm that is one labour unit on the farming side, that farm will function much better in every way possible when there are two people on it because it gives them time off; it means they can look at other interests or aspects of the business to diversify. There are also lots of social benefits. You have farmers and their wives in their sixties or seventies who are approaching the time when they may need some sort of assistance. Where you have encouraged generation overlap they will look after themselves; they become a little community, and that takes a great burden off the state. You have a younger person who can nip to the shops if someone is not well. There is a whole range of social benefits.

When speaking to Tim Farron years ago I used to say you could not refer to farmsteads as greenfield sites, nor perhaps should you refer to them as brownfield sites; they should be called beigefield sites. You already have a cluster of buildings; from a visual aspect it is already there. What you need is a mindset that instead of needing an incredibly good reason to be allowed to do anything there, the planning authorities need an incredibly good reason for not allowing them to do something. You would then be surprised what would happen. It would strengthen the businesses in all sorts of ways and help socially and in terms of welfare; people would look after themselves, families and child care. It would help in all sorts of ways. The key to it is flexible planning.

William Worsley: To develop that, we have touched on issues to do with succession and everything else. Something that really could be done to improve it is to follow the Welsh with PPS7. They have something called TAN6 that enables the building of a dwelling on the farm to enable succession to take place. It needs to be appropriate and everything else. We need to look at it more flexibly, and that would be one way to manage succession issues. Very often you have a farmer sitting in the farmhouse and becoming more elderly and the younger generation cannot get back on to the farm and deal with the succession because there is nowhere for them to go and live. If England can follow the Welsh lead here that would be a significant step forward. We welcomed TAN6 when it was announced in July as a really good move forward.

Q111 Mrs Glindon: You think it will be better if there is flexibility?

William Worsley: Yes. What is really important about development in rural areas, particularly the uplands, is that in most cases they are of very significant landscape quality. The most important thing we do here is that anything that is done should be good quality design. If you get the design right an awful lot can be done to help develop the countryside. That is the key point. It would be absolutely awful to see a lot of urban-style boxes built on farms that would be inappropriate for that location, but if we build appropriately in those locations we can do a lot to free up the system.

Chair: Is it just as affordable?

Q112 Mrs Glindon: How can you link quality to affordability? That is the issue, isn’t it?

William Worsley: This is a really important one. The first comment about "affordable" is that people think about building as cheaply as possible. I hope that the CLA will hold a design competition in the next year about how to do affordable housing to high quality design, but affordable housing does not necessarily mean cheap housing. We do not want to spoil the countryside just to build cheap houses; we need to find a way to build inexpensive houses to a quality that the occupant is proud of and can enjoy living in, and can be beneficial rather than detrimental to that location.

It is also about the social aspect of building affordable housing. One of the problems with the post-war council house building boom was that effectively urban houses were built in rural areas, usually in locations on the edges of villages. To this day they are referred to in villages as "the council houses" and the people who live there have never really been integrated into the villages. I am afraid that still tends to be the case 50, 60 years on. If we can build affordable houses that look like any other houses-so are built to a standard-they can work. In the village in North Yorkshire where I live I was involved 20 years ago in the building of some affordable houses. The great thing about them is that they are in the village and nobody knows they are affordable housing.

Chair: I have seen it.

Will Cockbain: On flexibility to allow development on a farm, where it is to be a house in return for that flexibility I think there would have to be some conditions. We do not want to see the system abused, but it should not be beyond the wit of man-I do not think the conditions should apply for ever and a day-to provide that, in return for that flexibility, for a sensible period that house cannot be flogged off-I nearly said "to the nearest banker with a large bonus"-because that would be an abuse and would not solve the problems we are talking about. There should be proper conditions for a reasonable length of time.

Q113 Amber Rudd: Given the many differences between the regional aspects of the uplands, do you think a national strategy is appropriate?

Dr Clark: Perhaps I may start off and then Will may say a bit more because he has been round many of the uplands already. Our view is that we really do not need another strategy. We have stacks of strategies already out there. We look forward to the work that Defra are doing, but we hope that it will be a confidence-building coherent policy statement-period. Let’s get on with some action after that. The last thing we need is another consultation period, a pseudo-White Paper, steering groups and that sort of thing. We need confidence building so we feel there is genuine commitment to look at upland areas in a coherent way and see food production as part of the recipe for those upland areas. As to regional changes, Will has been round many upland areas.

Will Cockbain: I think that if we had the coherent policy we talked about at the start, which recognises food production and environmental management and did not set one off against the other, that could filter down to other agencies: Natural England and national parks. In my trips around the English uplands, if you like, on the whole the national parks are reasonably supportive but they do not all see eye to eye; there are differences of opinion on the importance of food production as opposed to environmental management or ecosystem services. What is required is that Defra produce a coherent policy that makes sense to all those farming in the uplands and that filters down to other agencies rather than trying to develop another strategy.

William Worsley: We hope this will emerge from the CRC report and the work of this Committee. We would like to see Defra pull this together and agree a strategy and then get on with implementing it. We would hate to see yet another talking shop. Effectively, the work has been done and we want to get on with it.

Q114 Amber Rudd: What do you think would be the most important aspect of this coherent policy to have sustainable communities in the uplands?

William Worsley: There are four things in particular. First, we need changes in the planning system, as I have already alluded to; we need to enable rural economic diversification; we need to provide affordable housing; we need to develop the rural infrastructure, especially adequate broadband capacity, which is something on which the CLA have been lobbying very hard for quite a long time, with some success I am pleased to say. It is also very important to focus on medium and small-sized abattoirs. We would like to see a framework to bring new financial support to the uplands for carbon and water management and some form of banking structure; we also need to argue strongly to defend the CAP and payments to support these farmers.

Dr Clark: From our point of view, first the statement itself will be important in indicating there is confidence and understanding. Secondly, we have already talked about succession. Facilitation of succession is incredibly important and the planning system and national park authorities have a role to play because of their importance in upland areas. We think that the recommendation that came out of CRC in terms of the demonstration farm network that helps to improve knowledge transfer and research so we can farm in novel and productive ways is a good bit of the puzzle to maximise food production. You can then move into some quick wins.

Q115 Amber Rudd: Dr Clark, the NFU’s memorandum said that a national strategy should consider the short-term actions required to address the immediate challenges faced in the uplands. What short-term actions have you identified?

Dr Clark: We are thinking of things like listening to people, as we mentioned earlier. We think it would be a good idea to establish a national hill-farming panel, where Ministers would be engaged with the farming community-we would also like them to be engaged with the NFU-and would talk, listen and understand and see what it feels like.

Q116 Amber Rudd: There is no danger of it being the talking shop you described earlier?

Dr Clark: We have talked about upland demonstration farms, a network of demonstration farms that pick up rural development and use RDR funding and some of the knowledge transfer, technology strategy board type of activity. We have talked about home on the farm, which helps with succession. CLG could deliver an immediate policy change on that and enable some of that building work to start for investment in the next generation. We then have a series of ideas around the upland entry level scheme and facilitating entry for those on commons and tenant farmers where you need a bit of extra work rather than simply saying, "Here’s a scheme. Get on with it." We need to oil the wheels and perhaps use some of the people out there better than we do currently.

I have already mentioned LFA reclassification. I want to see Defra identifying the criteria needed to define upland areas and less favoured areas where there is a natural handicap, as the Commission are talking about them, and making sure they are suited to the UK climate, not just a central European one which is the current approach that the European Commission takes.

Will Cockbain: Farmers would also like to see a bit of development on agrienvironmental schemes. Predominantly in the uplands, they have been about stopping farming, reduction in sheep numbers and that sort of thing. For instance, if I as a farmer reseeded a meadow with alpine rye grass, white clover or whatever, it would reduce my need for nitrogen fertilizer. I would tick the "reduce pollution" and "climate change" boxes and maintain production. It might not sit too well with biodiversity, but there is a choice to be made. As to agri-environment-where it goes in the future and what other things we can put in for climate change-different people have different ideas about climate change, some of which in my view are a bit off the wall and not really practical. We need to see what is practical, get the stuff in there and deliver it.

Q117 Neil Parish: That leads quite nicely to my question, which might put a cat among the pigeons. The CRC report proposes some radical changes to the way the uplands are viewed and managed. If their recommendations are implemented farmers could move away from food production and towards management of carbon and water. Do you think there is support among the farming community for these changes?

William Worsley: Farming and food production is the core constituent of the uplands because that is what to a degree manages the landscape from which so many other people benefit. However, carbon and water are really important. I will pass this to Professor Buckwell because I feel I have done too much talking on our side.

Professor Buckwell: These are not alternatives. Farming is and always will be a core part of the management of what we want from our uplands, because the cultural landscape that surrounds farming is critical to the very important leisure, tourism and recreation industry. What we have all identified is that the uplands are in trouble and that is why there is a committee of inquiry taking place on it. Most of the potential lies in getting new financial resources into the uplands rather than massive expansion in agricultural output. However much we would like agriculture to be more productive, competitive and so on, the expansion and potential are mostly in the unconventional and non-market services for public goods.

Q118 Chair: Can you be more specific and give an idea of how it would work?

Professor Buckwell: I give two examples. In order to get money from carbon, carbon can be stored in the uplands in peat management, afforestation and through certain agricultural practices such as biomass and so on. The question is: how do you bring in that new money? This requires certification of the appropriate projects for the management of land so it can be certified as storing carbon and not emitting it, whether it is trees or peat. That requires technical work but also the political will to do it. On the one hand, we will need companies that are required to measure and record their emissions, either voluntarily or compulsorily, which will then have an incentive to purchase projects for carbon storage and management. Who will be supplying those projects? In principle, they will be uplands land managers.

This is not a short-term win; it will probably take a decade or longer to get up and running, but if we do not start now it will not even be ready then. I think the seeds of the arguments are there. We suspect there will be more afforestation in the uplands; there are plenty of groups out there who suggest it. This is one way to help finance it.

The other area is water filtration; the removal of discolouration and water storage. Again, who is to pay for it? It will not be the taxpayer through Defra’s budget or CAP payments; it will come from water consumers through the water regulators agreeing and encouraging appropriate upland management to provide these water services so the land manager is rewarded for his actions and costs and forgoing other activities. We will have some public water storage, filtration and discolouration removal services provided. There are some working examples of that. The question is: what is stopping those rolling out further? There are some answers to that.

Q119 Neil Parish: How does the money get back to the person who manages the land?

Professor Buckwell: He is either compensated for not doing other things or, in the case of afforestation, he is paid to afforest. There is an incentive in place to encourage afforestation that otherwise would not take place. Obviously, this has to be additional.

Neil Parish: And grassland?

Q120 Chair: We have to move on because of the time. Has the NFU answered that?

Dr Clark: There is the market approach that Allan just described to you, but we already have agri-environment schemes that pay for a benefit, whatever it might be, based on income forgone. It seems to me strange that you can produce a multiple benefit but you are paid only £100. It does not matter how many benefits you provide; it is based on your income forgone. If you are providing a carbon, water and biodiversity benefit, is that not more valuable than providing just one of those benefits? It is a matter of getting the money for that somehow. At the moment the markets for water and carbon are simply not economic to change management, but they might be if just an incentive could be added to some of the existing approaches.

Q121 Richard Drax: That leads on to the next question. The commission recommends that hill farmers should be rewarded for managing these national assets, such as landscapes and biodiversity. Do you see a potential conflict of interest between farming and national assets? How do you think it will affect farmers making management decisions?

William Worsley: I cannot see any conflict at all. I think that farmers manage the land to the best of their ability. They tend to have a responsibility of stewardship; they think it is very important and they want to farm right and manage the landscape and their holding. The problem is that they need to have the money to do it. That is why support is needed for the uplands, but I do not see it as a conflict.

Q122 Richard Drax: To push it a little further, on managing the actual assets I think your view is that you would rather get on with the farming side of it first and you think the priority is wrong; it has gone much more to the environmental side. Is that a fair assessment, generally?

Will Cockbain: Farmers will respond to market signals. We have had a very depressed market for food products, even sheep, for several years. I will not go on, but a unique set of negatives came into play at once-currency fluctuations, FMD and BSE-which helped create that, but farmers will respond to market forces. The outlook for food production is reasonably good at the minute. We see farmers starting to reinvest in their businesses; they have confidence in that market for food production.

You mentioned other markets such as planting trees. That is a very long-term commitment. The reality at the minute is that if there is not to be public money available, the amount of guaranteed private money that must come in is a long way off. There is a potential market for eco-system services and that type of management, and it may well happen. I do not think there is currently a market mechanism, and we are way off it. When that market does emerge it will be very volatile. For example, if Andrew has a company that emits carbon and it should not and he wants to do something about it he enters into contracts with farmers, or whatever, to mitigate it, but if five years down the line his company develops technology that reduces it for him, he will not want to pay for it. Therefore, it is potentially a volatile market.

Q123 Chair: I am very conscious of the time. May I ask you to try to keep your answers a little shorter?

Will Cockbain: Farmers will respond to what they see as sound and reliable market signals; they won’t respond to something they regard as airy-fairy and wishy-washy.

Professor Buckwell: The key to land management is balance. We are talking about finding ways to reward a different balance of outputs from the hills, because if we simply carry on as we are we will not change the poverty in the hills. The other area we have not mentioned is renewable energy. There is huge scope for renewable energy in the uplands in wind, hydro and biomass. Again, it is a matter of balance, location, design and local acceptability. Of course we have to find the right balance; we will not smother all the hills in windmills.

Chair: As long as we do not have wind farms all across North Yorkshire.

Professor Buckwell: Exactly.

Q124 George Eustice: Another area is public access and trying to monetise it. In its submission the NFU says we need to find a way to do it, but it goes on to say it is incredibly challenging because only 30% part with any money when they go to the hills anyway and about 2% of visits to the natural English environment involve going to the hills. Do you have any ideas about how you could develop income streams from that sort of tourism or public access?

Dr Clark: We do not suggest that we put counters on each of the footpaths and toll them through, or even erect fences on LFA boundaries. Clearly, these are interesting and important tourist assets, and perhaps some of this is already reflected in the single payment scheme but is not logged as such. I know that you are to talk to the national parks in a moment or two. They take some interesting approaches. They look at a local tourist tax and divert that money into helping to manage land as well as repair the damage or conserve some of the landscapes around there. They even contract with farmers to do that sort of work. There are some ideas. Perhaps we should look at some sort of pilot to ask: how do we capture some of the tourist use that is made of this area in a more considered way than we do currently?

Q125 George Eustice: Have you done any work in terms of what happens elsewhere in the world and what other countries have tried in this area?

Dr Clark: The French seem to be quite good at this sort of approach. I don’t mind paying a bit of money on top of my bill when I am there.

Q126 Cha ir: I do not think it is necessarily a Conservative approach to tax the business sector. I shall put the next question to each in turn, starting with the CLA. There have been concerns about applications for the uplands entry level stewardship where agreement has not been reached. What mechanisms have you considered to try to achieve dispute resolution between landlord and tenants or commoners in order to facilitate agreement in the UELS?

William Worsley: I am aware that there have been one or two disputes, but we have no evidence that this is a problem of any scale. There is in place agreed guidance by the Tenancy Reform Industry Group. On the whole, this is agreed on a case-by-case basis between landlord and tenant and seems to work satisfactorily.

Q127 Chair: I know of two areas of the country in North Yorkshire and Cumbria where there has not been an agreement, so what resolution mechanism is there?

William Worsley: The answer is that there is in place TRIG guidance. I am aware but do not know the details of one of the cases you are talking about; indeed, in this particular case we have members on both sides of the fence. On the whole, it is a case of sensible people getting together to have a sensible dialogue and coming up with a sensible agreement. On the whole, this tends to work. In other property disputes there is the ability to apply to the President of the RSCS for arbitration, but on the whole I am not convinced this is particularly prevalent other than the two schemes you are talking about.

Will Cockbain: We are concerned. We know there is plenty of good practice and that some very large estates have taken the view that the Uplands Entry Level Scheme is a replacement for HFA. They have taken a responsible attitude and are not trying to get their hands on 50% of it, or anything. However, we all seem to know of one case. We now have a couple of other cases. In one case agreement has not been reached and it has been dragging on for an awfully long time. There are other recent cases of which we have heard, for which we do not have all the facts and figures, where we are told agreement has been reached on a common, but that perhaps a larger percentage of the agri-environmental moneys than is justified has gone to the commons owner.

During the development of the Uplands Entry Level Scheme we lobbied Defra quite hard about why the owner of a common needed to be a counter-signatory where the graziers could agree a management regime. Defra chose to go down the route of wanting the commons owner’s signature, but it is a worry. We agree with Williams that it is not, to the best of our knowledge, hugely widespread, but where we have such cases they could lead to dangerous precedents, put farmers off applying for agri-environmental schemes on commons and also attract very adverse publicity to the general public about how money is spent.

Q128 Chair: To my certain knowledge, it is the small units and graziers with the right to graze who have not been paid a penny piece, which I think is regrettable.

Will Cockbain: Commoners have these inalienable rights to graze animals. What is happening now is that to have an agri-environmental agreement the grazier must graze less stock.

Professor Buckwell: I hope we will not make a big story out of one case, but the principles are that there must be a fair share of rewards according to risks, responsibilities and effort expended by the various parties. It would be wrong to try to prescribe a solution to this to fit all common land, or all grazing licensing arrangements, because the particular arrangements and rights and responsibilities of the parties vary enormously from one common to another and one part of the country to another. This area is a very complex one and the last thing we need is a prescriptive approach that tries to say what the solution should be. Get it down to the parties talking on the ground. Usually, the problem is non-communication.

Will Cockbain: I disagree. I think that at the end of the day there needs to be a bottom line.

Chair: To be honest, I would like to see a dispute resolution mechanism in place.

Will Cockbain: As to whether it is legislation or guidance, we have guidance and it is not being adhered to in a minority of cases.

Chair: I am sure we can continue this conversation outside the room.

Q129 Amber Rudd: I want us to address the issue of income forgone. I know the CRC report recommended that the definition be broadened to include the full cost of a farmer staying in business. Given the financial constraints we are under, how would your members respond if we applied that to the uplands alone?

Dr Clark: In terms of income forgone, we have been quite critical of it for a long time because it sends the message to the farming communities that, no matter what they do and what the benefits are, they will be paid only to put them back to where they would have been had they not participated in the agreement. In those terms it is a very strange incentive regime. We think that a better approach, which would still be within the WTO rules, would be to take greater account of opportunity costs of participating in an agreement. You look not just at the costs of management and some of the fixed costs; you look at what farmers might otherwise have been doing. Other countries seem to be able to produce a much more generous payment as a consequence of income forgone using the same mechanism as authorised by the EU than we do in England. We think Defra need to be more imaginative about their use of that approach. It is also a great shame that under the 2000 to 2005 programme some incentive, a 20% top-up, could have been paid. To say there is an incentive here on top of income forgone for doing really well, or achieving something over and above just keeping to the rules, is a great idea. Surely, there are things that can be done in terms of income forgone that has far greater regard to that approach.

Q130 Amber Rudd: And the particular aspect of separating out the uplands?

Dr Clark: I think this approach applies not just to uplands but across the board in terms of environmental stewardship. I find it very difficult to justify saying that it applies only to the uplands. We have just talked about how lowland livestock farmers have some important environmental assets in their management. They also need access to that sort of approach.

Q131 Amber Rudd: Professor Buckwell, in particular the CLA said something about having a definition such as "best alternative occupation", which is the same principle.

Professor Buckwell: Yes; it is the same principle as Andrew said. I absolutely agree with what Andrew said. CRC have offered a solution. The key thing is to persuade the Commission that these can be fitted within WTO rules, because that is the problem with all of this. I think your specific question was: can it apply to the uplands alone?

Amber Rudd: Yes.

Professor Buckwell: It is a good question. My answer would be yes, because that is precisely why we have had this inquiry given the peculiarities and problems of the uplands. The way you do it is by defining the LFA payments in this way. I think this is what the Commission have in mind in their leaked communication by switching LFA into Pillar 1, in a sense giving more of the whole payment to people in certain parts of the territory who farm in these particular conditions. We need a different approach for them. I think there is an acceptable argument to make that case.

Q132 Richard Drax: Do you think the National Parks Authority’s interpretation of planning regulations prevents hill farmers in those areas from making a decent living?

William Worsley: Having considerable experience of national parks and having served on a national park authority and living very close to one, I am very pleased that the Decentralisation and Localism Bill will look at the governance of national parks. I would like to see economy being included in the remit of national parks. This is really important. I would not want to see the powers of national parks enhanced. The planning problems are that much more acute in national parks than in other rural areas. There are planning problems in rural areas, as I have already alluded to. I think they could be dealt with. The key is the need for better planning guidance and interpretation of that guidance on the ground. National parks are very important, so we must not treat them lightly. The importance of them is the quality of design in national parks. We would like to see a more sensible and appropriate approach.

Will Cockbain: If you look at the percentage of applications passed, certainly in my own national park in the Lake District it is quite high. I do not think the national parks can be blamed for stifling farm development. What can be blamed is the fact that because of the regulation in place potentially some applications never go forward because they just do not tick the box. Of those that do tick the box and go forward, about 90% are passed, but, as we said earlier, we need flexibility to allow more potential applications to develop businesses within the parks.

William Worsley: There is one further point on this that I should have mentioned. It is very important that there is better landowner and farmer representation on national park authorities. That used to be the case and has become less so over the past few years. It is really important that the park authorities-they vary hugely-have on them adequate representation by people who actually manage the land.

Dr Clark: Guidance to national park authorities should recognise how important farming is in those areas. The national park authorities recognise it but the guidance from Defra has not done so in the past.

Q133 Neil Parish: I want to ask about the replacement of RDAs by Local Enterprise Partnerships. How will that affect rural areas and uplands in particular?

William Worsley: I think it is really important that LEPs have adequate rural representation on them, particularly when they cover rural areas. The key is to ensure that the needs of the rural economy are properly represented. What worries us about LEPs is that they will be largely urban-dominated, and "rural" will be ignored or left aside. That would be really worrying, so we have some concerns about the abolition of the RDAs.

Dr Clark: To exactly the same extent, we have looked through all the successful LEP proposals and they pay scant regard to agriculture, rural businesses and small businesses. It is in our interests to engage; we have to, and we want to make sure they take agriculture seriously. As to the successful ones, Cumberland and the Isles of Scilly seem to be ahead of the game; the others get pretty low marks.

William Worsley: We are also concerned about what will happen to the RDP money with the abolition of the RDAs.

Q134 Neil Parish: You say that the LEPs may not recognise agriculture, so are you telling me that the RDAs did?

William Worsley: The RDAs were very variable. As to my own RDA, Yorkshire Forward, we thought it was pretty good.

Dr Clark: Have you heard the phrase "better the devil you know"? Seriously, the Local Growth White Paper, which was partner to the LEP announcement, makes clear that the LEPs will not deliver rural development programme grants. They may become involved in the leader projects but there will be some other as yet undefined sub-national network.

Q135 Chair: In the interim are you worried that there will be a lacuna between the RDAs going and the LEPs starting as regards RDP money?

William Worsley: Yes; we are very worried about it; this is one of our real concerns.

Will Cockbain: I chair the North West Livestock Programme which is part of axis 1 RDPE and was run by North West Development Agency. I chaired the previous grants panel about a fortnight ago. As yet, the NWDA staff do not know what is to happen; they have had no guidance from Defra. The grant panel is made up of two or three agency people and quite a number of farmers give a lot of their time to go to it. I think it is an exceptionally good programme. Rosemary Radcliffe has been to visit it. We are worried about how it will be delivered in future.

Q136 Chair: I thank you most warmly on everyone’s behalf for being so patient with our questions and for your contribution.

William Worsley: Can I thank you very much? We feel this is really important, so important that we have done our own report on it, which we will submit to the Committee.

Chair: Thank you very much indeed.

Memorandum submitted by the English National Park Authorities Association

Examination of Witnesses

Witnesses: Dr Nigel Stone, Chief Executive, Exmoor National Park, and Peter Barfoot, Head of Conservation, North York Moors National Park, English National Park Authorities Association, gave evidence.

Q137 Chair: You are both very welcome. I ask one of you to introduce yourself and your colleague for the record.

Dr Stone: I am Dr Nigel Stone; I am the Chief Executive of Exmoor National Park Authority, and I should like to introduce Peter Barfoot who is Director of Conservation at North York Moors National Park. Obviously, we are able to talk in some detail about our own national parks but where we can we would also like to represent our colleagues in other national parks.

Chair: Thank you for being so patient. I am sorry we have overrun. As you will have realised, there was a vote earlier in the day.

Q138 George Eustice: The Commission for Rural Communities said that we needed a national strategy for the uplands. Do you share that view, or is it basically the fact that the challenges they face are the same as those facing any rural community?

Dr Stone: You ask two questions: one is whether there should be a strategy. I do not believe that the uplands share the same problems of all rural communities. The uplands have the issues that face all rural communities writ large, often because of the nature and geography of the areas’ remoteness etc. As to a national strategy, I would almost echo the response given by Dr Clark of the NFU. We have all seen lots of strategies, but we want a very clear statement from Government that the uplands are on the radar and that Ministers are interested in seeing how uplands and upland communities are thriving. A number of suggestions have been made, such as ensuring that a ministerial portfolio includes uplands specifically. I would add something along the lines of ensuring that you monitor the state of the uplands from all three aspects-economy, environment and community-and that when policy is developed it does so against the particular barriers to engagement in the uplands.

Q139 George Eustice: But do you think you need a distinct set of policies for the uplands, as opposed to just one for rural communities; or is it the case that if you had a coherent package of policies for rural communities the uplands would benefit equally from it?

Dr Stone: There may be challenges in particular areas because of the nature of their rurality. I do not think we can say there should just be some upland policies separate from rural ones; there is a whole spectrum of issues and challenges. If we look at a subject that has already been mentioned, broadband access and telecommunications, because of topography there are particular challenges in upland areas. You may well have a particular focus on how the roll-out of those technologies takes place in a challenging environment. I think it will depend on the nature of the policy, but uplands and upland communities should be there and represented nationally so there is that kind of overview of policy impact.

Q140 George Eustice: What about between different upland areas? Basically, do all of them face the same challenges or are there differences between them?

Peter Barfoot: Obviously, there is a spectrum. Uplands are generally rural areas; they face the same challenges and issues as other rural area. They also face specific challenges of their own, so in as much as there is a strategy for the uplands, issues need to be addressed that are specific to uplands. But do not run away with the idea that all uplands are the same; they vary considerably. We have seen some of the issues that arise here. For instance, earlier we talked about the assessment of the condition of moorland SSSI, which is the same from the west of Wales to the east of England. An upland that receives 100 inches of rain is very different from one that receives 30 inches. There are national issues relating to uplands, but there also needs to be flexibility in accepting in detail that these areas differ.

Dr Stone: I think the general challenges are faced by upland areas. The specifics of how they are responded to and addressed might be different in different places.

Q141 George Eustice: We heard earlier from the Tenant Farmers Association. Their concern was that the way subsidy had moved to area-based payments and Single Farm Payment disadvantaged a lot of their members and farmers, and CRC picked up the mood among farmers that they were just being turned into glorified park-keepers rather than actual farmers. Is that a sense you have picked up? Do you think that is a fair comment?

Dr Stone: Yes. Particular challenges are faced by tenant farmers. They do not have the options. Obviously, what they can do is very much determined by the nature of their tenancy and so on. The language about park-keepers is not helpful. I think their point-we heard it from the NFU and the CLA-is that this is about integrated land management. These areas deliver a huge range of public benefits, not public goods, to the wider community, and the people who essentially manage these areas and deliver that wide range of benefits, be they landlords and tenants, should benefit from that. Ultimately, there should be a synergistic relationship between landlord and tenant. There will be good and not so good landlords and tenants.

Peter Barfoot: There is no doubt that the uncapped availability of headage payments resulted in environmental damage in the uplands. I do not recognise the statement that it did not cause over-grazing; it did, and on a very large basis.

Q142 George Eustice: They say it was overstated.

Peter Barfoot: I can show you some stocking statistics that indicate that the introduction of certain types of headage payments resulted in a 30% increase in the sheep flock in the North York moors. There is a record here. Whether the pendulum swung too far the other way is a moot point.

Q143 George Eustice: What do you think of the idea of some sort of headage payment coming back?

Peter Barfoot: I do not think it is necessary because it can be achieved the other way. You were discussing the issue of payments based on income forgone. The current European legislation already allows for cost of management. In our own experience, if we say we want someone to keep his sheep on the moor there is a cost involved in that and payment can be calculated against that. You are paying for active management; it is a positive payment, not a payment which says, "What you are doing will cost you, so we’ll make up the difference."

Q144 Amber Rudd: The national parks’ vision for 2030 includes "to foster and maintain vibrant, healthy and productive living and working communities". Is it necessary to have the well-being of local communities as a statutory objective in order to achieve this in the uplands?

Dr Stone: I think the evidence you received from the CRC was different and is slightly incorrect. Reference was made to national park authorities having "to have regard to", but we have the express duty to foster social and economic well-being, at the same time as achieving national park purposes.

Just to give you a flavour, national park authorities comprise mostly local people from the national park communities; they are people nominated from the constituent authorities that make up the national park area. Yesterday we had an authority meeting on Exmoor. One of the questions we asked members was what kind of topics they would like to have for briefing sessions over the next phase. I will read them out to give you a flavour. Members wanted to know how broadband and mobile communications roll-out across the park was getting on; they wanted to know how the reviews of CAP and LFA reform were going; they wanted to know how we were doing in terms of affordable housing provision; they wanted to know what we were doing in relation to the tourism economy; and the last suggestion was how we were doing in relation to achieving the management plan for the park. Those topics alone I hope give you a flavour of the attention and commitment within park authorities to the social and economic well-being of the areas. We are not narrowly focused at all.

Q145 Amber Rudd: I intended to go further and ask whether you thought the national park authorities were sufficiently accountable to local communities, but if the local communities are involved in them perhaps you have answered that question.

Dr Stone: We are the only planning authorities on which parish councillors get to sit, because of the nature of upland areas. I think the CRC report made a point about upland areas and their degree of representation. The nature of most upland areas is that they are covered by more than one local authority; they are often the rural hinterland to what may well be a much more densely populated urban area. The number of representatives that these upland communities have on their respective councils is often very small. That is getting worse because of boundary reviews and equalisation of populations within council wards and divisions. That means there will be fewer people representing upland communities on the other local authorities. The nice thing about national parks is that those local authorities have the opportunity to appoint a person with that local connection to the park authority. Therefore, in the majority of cases we have people who live in or near the national park area.

Q146 Amber Rudd: So, do you think they meet the duty to seek to foster economic and social wellbeing within the community by having those local representatives on it?

Dr Stone: Yes, but the way it is phrased at the moment is as a supporting duty, so we still have the clear purposes. What we are trying to achieve is sustainable development; we are trying to achieve environmental, economic and social enhancement.

Peter Barfoot: Obviously, we are going through a review of governance, so there is a conversation on that. We will continue to work on it and see what our local communities consider to be the way forward. We are not saying that this what we have and this is where we stay. You mentioned representation of farmers and landowners on national park authorities. In my case, 25% of the authority are farmers or ex-farmers who live in the national park. I do not know what percentage would be considered reasonable, but it is quite a decent representation of land managers.

Amber Rudd: That is encouraging.

Dr Stone: By the way, both our chairs are planners and farmers.

Q147 Chair: The Commission for Rural Communities told us that not one house has been built in Northumbria National Park in 20 years. How do you respond to the criticism that the planning restrictions are too tight within national park authority areas?

Dr Stone: Northumberland is exceptional in the sense that it has a very small resident community anyway.

Q148 Chair: If we take the more general point about lack of affordable housing, one case in North Yorkshire received a lot of public attention when rebuilding was not allowed and it just carried on as a dwelling. The other thing is economic development and allowing diversification.

Dr Stone: Affordable housing is a priority for all national park authorities. I believe we have policies that support affordable housing. In my own national park we have given more than 60 planning consents in the past four years and the majority are being delivered. I was interested to hear the answers you received from the previous set of witnesses. Policies like home on the farm and the ability to convert existing buildings on a farm into dwellings already exist, certainly in our national park. The emphasis is on affordable housing above all other types of housing provision. Collectively, at present we have been incredibly innovative in what can be achieved basically within national planning guidance, and we are very willing to engage in the whole local community’s agenda and see how that can be further facilitated. A real concern we have is that the barrier is not planning but funding. In particular, we are about to engage in a conversation with the Homes and Communities Agency about how the needs of uplands and national parks can be met against more general planned growth.

Q149 Chair: Would you respond to the specific criticism from the CRC because it is their report?

Peter Barfoot: From knowledge of my own park, we have approved 40 affordable homes in the past three years. We have approved the building of a residential care home for the elderly in one of our communities. That was identified as being desirable by the community in the Esk Valley. I can think of numerous cases where we have approved the conversion of farm buildings for dwellings for sons or daughters of resident farmers. Where we do run into complaints about that we ask for an agricultural worker’s dwelling condition to be placed on the original farmhouse; otherwise, it will just be sold off as a dwelling. We are also in the process of approving the use of derelict buildings for estate-tied workers, for instance gamekeepers. What we will not approve is the sale of a derelict building for conversion to a dwelling where there is no local need because there will be no end to that market.

Dr Stone: In the CRC’s report there are lots of case studies, the majority of which are in national parks and have had the engagement of national park authorities in bringing them around.

Q150 Chair: Is there an issue about national park authorities representing people with interests from outside the area who have businesses, and could that be addressed through legislation?

Dr Stone: I do not understand that point.

Q151 Chair: My understanding is that in most cases to be elected to the planning authority you must have a business or be a councillor in that area.

Dr Stone: No. To be on a planning committee you would need to be a member of the council. Within the national park set-up the majority of members are either parish councillors or district or county councillors, but we also have some members who are appointed to the park authority by the Secretary of State. They have a whole variety of backgrounds, not necessarily business people, and on the whole they are not residents, although many of them have contacts. They are all equally committed to what is best for the local community. They certainly take the duty to foster social and economic well-being as a primary consideration for them.

Peter Barfoot: I think that is a recognition that the public benefits of national parks go well beyond their physical boundaries.

Q152 Chair: Turning to the Uplands Entry Level Stewardship, I am sure you are aware that in one case in North Yorkshire and, I believe, one in Cumbria there has not been agreement. Would you favour a dispute resolution mechanism?

Peter Barfoot: My understanding is that the root of this is within the European legislation and there is difficulty in being able to cope with multiple interests in single areas of land. It is also my understanding that this does not apply just to agri-environment schemes; there are also issues where there is a Single Farm Payment with no physical boundary with the land. It may be something to address in the forthcoming CAP review. There needs to be a mechanism that accepts that two people can have an equal interest in an area of land and you might want to enter into an agreement with one but not the other. That is one side of it. The other is that there probably ought to be some form of adjudication, like an agricultural tribunal, where a decision is made and that is binding.

Chair: Is that what the court leet is meant to do?

Peter Barfoot: No.

Q153 Chair: I had never come across the court leet before. As a national park authority what do you think you can do to encourage a higher take up of UELS?

Dr Stone: We provide support to the farming community. Farmers come to us to enter into agri-environment programmes across the board. For example, on higher level stewardship we often provide farm environment plans and those kinds of things, which aid and facilitate their entry into that scheme. In relation to Upland Entry Level Stewardship, I guess that in most national parks there are opportunities for farmers to come along and get briefings on what is involved. It is not such an issue at the moment on Exmoor because a large number of farmers are still in the ESA agreements and so are in that transition phase. As to the design of the Uplands Entry Level Stewardship, while many of us regretted the loss of HFA if there was something put in place, I would commend both Defra and Natural England for their degree of engagement in trying to design a scheme that was accessible whether you are in the north or south west of England. But one of the real challenges is that it is a new environmental scheme levered into an almost non-existent gap between an entry level scheme and a higher level scheme. They are trying to lever another scheme into the middle of that and people are now juggling their points. One of the big challenges facing people is how they can reconfigure their applications to get a major benefit from it.

Q154 Chair: Would the Commons Act 2006 have helped if it had been implemented before the HLA changed to the UELS?

Dr Stone: I am thinking of individual farmers and their applications, which applies in the majority of cases in Exmoor. I think there are particulars needs in commons. The majority are being resolved through discussion, collaboration and facilitation.

Q155 Chair: But those people have not had a penny piece in all the time this has been going on and would otherwise have received the HLA.

Peter Barfoot: The current scheme is over-complex. A lot of farmers struggle to fill it in on their own. We provide a lot of assistance to farmers in that respect. As Nigel said, it has come along on the basis, "Well, we’re going to produce it as an agrienvironment scheme." The entry level scheme is there, the high level scheme is there, and they try to force the UELS in between. There are so many issues with agri-environment that it is difficult to know where to start in trying to make them more accessible, less burdensome in terms of bureaucracy, cheaper to deliver etc.

Chair: That is very helpful.

Q156 Amber Rudd: The CRC report suggested that more of the available European funding should be targeted on the uplands and "less perhaps in some areas where it’s not being very wisely spent". Do you think there is a case for rationalising public support to fewer farmers in the most valued areas?

Dr Stone: Can I circulate these diagrams?

Chair: We are running out of time.

Dr Stone: I understand, but basically, all it illustrates is the breakdown of income for an average upland farm in the south west of England and what the foreseeable prospects are likely to be. What has been said by other people who have given evidence here is that the public funding support is a critical element of farm income. These are areas that have particular disadvantages in terms of developing farm income and diversification and other sources of income, and these are areas that deliver high levels of public benefit. We would strongly argue that whatever the change in agricultural funding, both single payment and agri-environment, there should be targeted support for uplands.

Peter Barfoot: To expand on that, we have talked a great deal about farming, and uplands are not just about farming. The majority of the land is managed by farming, although in my own national park a significant proportion of the land is either woodland or grouse moor. Grouse moor is not farming but is very important to the economy; it brings in substantial amounts of money and employment and, if it is carried out sensibly and properly, it delivers a great deal by way of environmental benefits, but they are also rural communities. Our biggest single industry is tourism.

Chair: We will come to that, if we may.

Q157 George Eustice: I wanted to talk about the carbon and water markets, which we discussed with both the NFU, the CLA and the Tenant Farmers Association. I know that the national parks already work with some of the water companies to try to find ways to get income that can help farmers who adopt a particular type of land management. Can you say a little more about how those work and what the barriers are to doing more of it? I know the TFA were very sceptical about the value of it; CLA thought there was potential, but still obstacles to it. Do you have a view on that?

Dr Stone: I shall focus first on water because we have a very close working relationship with South West Water. They are actively funding to the tune of £3.5 million over five years peatland restoration projects in Exmoor and Dartmoor National Parks. We are also engaged with them and Natural England in doing some research, working with farming communities within a catchment on Wimbleball reservoir, which is owned and managed by South West Water, to look at how we can arrive at a sensible, practical set of measures that would enable South West Water to reward those land managers for ensuring they do not have pollution problems in that reservoir. They are very keen to develop a practical approach to that. There are examples in other parts of the world where I understand farmers in catchments are rewarded for the quality of water that that catchment delivers. One of the complexities in this country is that often we have very fragmented ownership and different land management practices within the same catchment. I do not suggest that it will be straightforward and easy.

Q158 George Eustice: What is the actual model for doing it? Can you describe the model? Is it just a grant to do restoration?

Dr Stone: No. The current work is that. The vision of South West Water, as I understand it, is to provide an annual revenue payment to farmers in catchments based on the quality of the water that that catchment delivers. I do not know the detail of how they would do that. I think they would say it is far more economic for them to pay people to ensure there is delivery of high-quality water than it is for them to put in treatment afterwards and deal with the problems of low-quality water. Therefore, they can make a business case for it. Centrally, they need Ofwat approval for it. They have Ofwat approval for the peatland restoration, but they have not yet got approval for the next step, which presumably will be in the next round of Ofwat reviews.

Q159 George Eustice: Is there anything that Government could do to remove obstacles or create incentives for this to happen?

Dr Stone: Yes. It would be excellent if Government would engage with the water companies and Ofwat in terms of the form this might take.

Q160 George Eustice: I want to ask for your view on the RDPE and how it should be administered. We know that the NFU in particular were sceptical about the LEPs taking on that role; indeed, the mood music from the Department is that they will not do it; they will probably administer it themselves. Do you have a view about how best to handle this fund?

Dr Stone: We have quite a lot of views. To describe it at the moment, I think there is a tendency to look at the four axes within the programme almost as separate entities, and that is not at all helpful when trying to look at some kind of integrated delivery. It is very difficult for small upland farmers without the capacity to engage in complex and expensive bidding processes to access these funds. To be fair to the South West RDA, they supported three hill farm projects in that area, one on Bodmin, one on Exmoor and one on Dartmoor, to work with the farming community and facilitate access particularly to axes 1 and 3, but we see real benefits in axis 4 and a leader-style delivery. Peter will say a bit more about that. We think that real opportunities for integration are being missed. To give just one example, axis 2, agri-environment, is about delivering environmental benefits. On Exmoor that often means farmers working together to do some moorland management and yet they cannot get axis 1 funding for the kit they need to manage it.

Q161 George Eustice: One of the complaints I have had from farmers who have been involved in it is that although the emphasis from the European Union is very much on business development, albeit with an environmental dimension, the way Defra have cloaked it with their own guidance means it is driven down to very specific environmental projects.

Dr Stone: We have taken the RDA to task many times. They will always say that if you read the measures and objectives they all look really good. The problem arises when it actually comes down to the bits that they are allowed to do.

Peter Barfoot: I think we have a fundamental problem about integrated delivery. We have had two stabs at it with the ERDE and the RDPE and both times we have failed to achieve anything approaching integration. By "integration" I mean the old three-legged stool: environment, economy and local communities. We in the North York moors provided the lead partner role for our leader partnership area, which is much bigger than just the national park. At the outset I was hopeful that if good projects came forward that fitted axis 1 or axis 2 we could say, "Well, this is joined up and we will draw on those funds and will be able to achieve more by joining everything together." That was a pipe dream, and anything that came out of our leader process that was environmental could never even look at getting axis 2 money for environmental work. Therefore, we are just not joining things up.

In the uplands in particular, where there is a need for fine grain stuff that is community driven and bottom up, with good ideas coming from local communities, the attitude should be: "Right, we’ll run with that and it’ll work; it’ll provide two part-time jobs." Two part-time jobs in an upland community is a lot. Part-time jobs and that type of thing enable a small farmer to get extra income. That is the level at which we ought to be working. I do not know all the machinations of the European regulations, but somehow we want to join it up, make it work and deliver it.

Q162 Chair: Perhaps I may ask one last question. There are a couple we have not had time for and we would like to write to you about them. In the context of 70 million visitors to national parks a year, what ideas do you have for those visitors to support the farms and economic activity in an acceptable way?

Dr Stone: Quite a number of parks have voluntary visitor contribution schemes. I think the best worked-up example I know is in the Lake District where there is a separate body that administers and manages it in co-operation with the tourism industry. Many visitors will pay an extra £1 a night or for a meal and so on. Visitors will contribute in that way. We have a small scheme in Exmoor. I guess you do in-

Peter Barfoot: No.

Dr Stone: No, you don’t. So these things have been tried and piloted, but they are not substantial sums of money. The Lake District is the biggest and I understand that is over £100,000 a year. I would need to give you the accurate figures.

Chair: It would be helpful to have those figures.

Dr Stone: The others of which I am aware are much smaller in scale. As to the potential to expand them-because they are complicated to run and manage-they are important, but I do not think they will replace other sources of funding.

Peter Barfoot: From the tourism point of view, it is a big economic driver in the areas.

Chair: I was thinking of bed and breakfast.

Peter Barfoot: Yes. Some farmers benefit directly; others do not. In making that link, in my own mind I have never come up with a satisfactory mechanism that is not hideously complicated and will not cost an awful lot of money to run. Effectively, from my own point of view it is a matter of visitors coming to the area and driving the industry. Taxes are paid and that is invested in providing the public benefits which some of the visitors come there to see in the first place.

Chair: Thank you for your patience. I apologise again for the inevitable delay in starting. I thank you and my colleagues so much for remaining. We will certainly be in touch again.