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Environmental Regulation and Agriculture

1.17 p.m.

The Earl of Selborne rose to move, That this House takes note of the report of the European Union Committee on Environmental Regulation and Agriculture (36th Report, HL Paper 186, Session 2001–02).

The noble Earl said: My Lords, the subject of environmental regulation and agriculture is one on which some clear thinking is required. It is an area that in the past has often proved contentious and difficult to implement. A clear idea of the objectives that regulations seek to achieve is needed. There needs to be an understanding of the practicalities and there needs to be a determination of the most likely route to reconcile the two issues.

I hope that the report before the House today makes a contribution towards emphasising the need for long-term planning on how we can best achieve implementation of EU regulations in the UK so far as they impact on agriculture. I should declare an interest as a farmer. I thank our specialist adviser, Professor Bill Day and our Clerk, Mr Tom Radice who gave great assistance to Sub-Committee D.

Environmental regulation must apply to all industries and to agriculture, which manages 70 per cent or more of the land in the United Kingdom. They cannot and should not be exempt. The report recognises the need for agriculture to conform. It seeks to advise on how best the objectives of EU environmental regulation can be achieved, recognising some of the realities of the farming industry and how it differs from other industries. Farmers are not what are described as small and medium-sized enterprises (SMEs); they are often one-man bands with the office work carried out in the evenings or through part-time help from the wife.

It goes without saying—in no way is this relevant to whether it should conform to regulations—that the agricultural industry is under severe financial pressure. One should take that point into account because it will be more effective to implement regulations where they do not adversely or unnecessarily impact on the commercial viability of the business that is already under pressure.

There is an extensive list of EU environmental legislation both in existence and in the pipeline. I refer your Lordships to pages 110 to 118 of our report, containing the memorandum from the Department for Environment, Food and Rural Affairs—nine pages of regulation, which is quite a lot. Our record of implementation of EU environmental legislation is not impressive. The Better Regulation Task Force, when chaired by the noble Lord, Lord Haskins, drew attention to that two or three years ago. He

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characterised our response as often being too late for early discussion of regulations as they are developed, a reluctance to anticipate outcomes, and invariably having to catch up later on missed opportunities with little input from commercial operators whose job it is to reconcile their business with the regulations.

An example is the Integrated Pollution Prevention and Control Directive. The United Kingdom was initially opposed to the inclusion of intensive animal units in the IPPC directive. Animal units are clearly very different from usual industrial plant. We nevertheless later accepted that the rest of Europe was right and that they should be included. The result was that we came to the matter late. Undoubtedly, the fact that we had to implement the directive in a bit of hurry meant that we did so in a way totally unsuited to the nature of the industry. Even large intensive units do not have large personnel departments. They are unaccustomed to the complexity of information required for IPPC designed for large factory units.

I have no doubt that had the operators of intensive animal units—which, after all, must be regulated and have special characteristics in their impact on the environment and must be regulated—become involved early on, we would have reached a different solution that achieved precisely the same objectives more effectively and in a more user-friendly way. The lesson from the IPPC is: anticipate two, three or four years before the regulation comes into force and involve the stakeholder—in this, case intensive agricultural units—sooner rather than later, preferably in the earliest stages. I repeat that the objectives of the IPPC are perfectly laudable in reducing environmental impact; it is simply that the model for its delivery has been totally inappropriate.

I have given an example from the agricultural sector. I could cite other instances, both inside and outside the sector, of inappropriate delivery mechanisms. The classification of farm wastes has now caught up with us. On the disposal of ozone-depleting substances, your Lordships will remember the fiasco over decommissioning refrigerators. We had not anticipated the need to have commercial plant in place, and the directive had been around for a long time before we ultimately put the commercial infrastructure in place. The same is true of tyres, a matter still unresolved, where we have failed to match commercial realities with environmental imperatives.

Returning to farms, we have ineffectively tried to address the matter of plastic sheeting for 10 or 15 years. Farmers are still totally puzzled as to what they are supposed to with plastic sheeting if they cannot burn it, bury it or dispose of it in any other way.

So we must anticipate such issues five to 10 years ahead of enforcement, if possible, and must understand that government and regulatory authorities must have working links with the relevant industry to align good commercial sense and practice.

The example of countries such as Belgium, Denmark and the Netherlands in respect of the nitrates directive is salutary. It dates back some time but, recognising the impact of nitrate leaching, those

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three countries introduced a concept of nutrient budgeting that meant that when the directive was eventually imposed their farmers appeared to find the legislation less burdensome because they were already reconciled to the concept. That is an example of an excellent initiative leading the way to effective implementation and to alignment of commercial and environmental signals.

Our report suggests a new approach to implementing environmental regulations, not just in the sense of aligning commercial and environmental priorities but because of the nature of pollution and the regulations on the horizon or already with us. For example, the framework directive on water deals with diffuse pollution, which is different from end-of-pipe pollution where it is easy to determine who is the polluter and put in place appropriate enforcement measures. Diffuse pollution impacts on wildlife, water aquafers and the atmosphere and by its nature is impossible to trace. The framework directive will have to deal with leakages to soil, air and water. Ammonia is one such source. The incidence of micro-bacteria in water leading to pollution of bathing or drinking water is one issue that must be thought through in the context of best agricultural practice.

Under pillar II of the common agricultural policy, we can operate transitional arrangements to help to promote an infrastructure that produces commercial opportunities. I hasten to add that I do not suggest that we use subsidies to reward people for obeying the law, but simply that in such cases as those of refrigerators or plastics on farms, transitional pump-priming to align the market with environmental imperatives makes good sense and allows enforcement of the regulation to be more effective. That will be the case with diffuse pollution, where design of buildings or agricultural systems may well help water companies or catchment areas more effectively to hit their targets.

We must promote the partnership approach. In the report, we give credit to both the Department for Environment, Food and Rural Affairs and the Environment Agency for promoting just such a concept. They now recognise the need to involve stakeholders. That did not happen sufficiently early in the days of the Ministry of Agriculture, Fisheries and Food and negotiations did not involve the agencies as much as they should have—certainly not the farmers. There is talk of developing a risk-based approach to regulation, setting appropriate targets and promoting self-regulation where appropriate—ultimately, of course, backed up by enforcement. We welcome that approach and seek to give it greater momentum.

We were especially impressed by the evidence of Mr Ross Finnie, the Scottish Minister for Environment and Rural Development. The Scottish Executive set up an agricultural and environmental working group to examine the impact of environmental issues on farming and food processors over the next five to 10 years—precisely the right timescale, we felt. The aim of the group, which reported last June, was to identify the priority issues and consider ways to address them that would be good for the environment and good for business. The report

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addressed considerations such as how to interface with farmers, with some practical suggestions on delivery of advice and guidance, training, hill farm planning, commercial initiatives and the like.

The evidence section of our report, pages 91 to 93, summarises current and future legislation that impacts on Scotland and Scottish farmers. It is a clear and user-friendly analysis of the issues that Scottish farmers and other land managers will need to address over the next 10 years or so. We commend that approach and recognise that DEFRA does also. It has a greater problem simply because we have a much wider divergence of farming practices, habitats and environmental issues.

In a sense, that demonstrates the need to think in regional terms. I hope that the Scottish Executive will not mind my saying that it is effectively dealing with the issue on a regional level. While commending the DEFRA farm focus division, we would like to see its national approach pushed out to the regions. Each of the five or six DEFRA regions should have its own farm focus division and group of stakeholders from farming and food processing who could meet water catchment managers, nature conservation agencies and the Environment Agency regional branch to discuss the agenda and proposals that might be appropriate for the region. Transitional support will sometimes be needed to build up capacity and to encourage new approaches to old problems. There should be opportunities from the second pillar, although the funding of that in proportion to the whole is not as high as the sub-committee would like.

We discussed with DEFRA how the data that it and agencies hold could be assembled most effectively and offered to farmers to support whole-farm or whole-parish planning, which is the key to delivering successful environmental management. We heard of difficulties from the agencies in accessing data held by the Government. We urgently need a common platform and a user-friendly system so that farmers could, subject to confidentiality constraints, when putting together their own farm and business plans, make full use of the welter of data generated by the Water Catchment Authority, the Environment Agency, local authorities, nature conservation agencies and local bio-diversity action plans. All those bodies, appropriately, advise land managers. Farmers suffer from a surfeit of advice. It would help if they could access advice in a user-friendly way through one portal.

The committee was alarmed by DEFRA's forecast that it might take up to 10 years to achieve—a timescale that we thought unrealistic, to say the least. But I was encouraged by Annex A of the Government's response. It talks of a provisional timetable stretching to 2005, which is more realistic. If that means that by 2005 we shall have a common platform we will be greatly encouraged.

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I conclude with a quotation from the Institute for European Environmental Policy, which is found on page 156 of the written evidence of our report:

    "In our view there are strong arguments for a programme of advance planning over a five to 10 year period, to prepare for meeting EU environmental standards effectively and with minimum burden on the farming sector. Within such a framework, farmers would receive a clear message about the requirements that they will need to meet in future, to guide them in their short and medium term planning and investment decisions. Individual farm plans assessing and interpreting environmental impacts could be prepared to assist in this process".

That is precisely the message that the report seeks to spell out. I am pleased that the Government, in their response, have warmly welcomed the report. I hope that DEFRA will be able to lead the way in Europe in reconciling environmental requirements with commercial realities on the farm. I beg to move.

Moved, That this House takes note of the report of the European Union Committee on Environmental Regulation and Agriculture (36th Report, HL Paper 186, Session 2001–02).—(The Earl of Selborne.)

1.34 p.m.

Lord Carter: My Lords, I congratulate the Select Committee on producing a thoughtful and well argued report. The importance of the subject was put succinctly by the chairman of the committee, the noble Earl, Lord Selborne, who, in the first oral evidence session, quoted from an article in Environment Action published in February 2002:

    "Laws introduced over the next few years alone, which include agricultural waste regulations, could cost farms £25-40 million and involve 200,000 Agency inspections".

As the noble Earl said, at a time when farming is under the most severe economic pressure that any of us can remember, the importance of lifting the burden of cumbersome, impractical and ill-thought-out regulations cannot be over-estimated. The report makes some important practical recommendations in that respect.

As someone who spent some 40 years advising farmers before joining the Government in 1997, I agree thoroughly with the idea of whole-farm planning. The report points out correctly that environmental and management systems require the linking together of business and environmental advice. That was music to my ears, as it echoes a theme that I have argued for many years. However, I admit to a wry smile when I read in the report about the pressing need to recreate the best features of the former National Agricultural Advisory Service (NAAS) and the Agricultural Development and Advisory Service (ADAS). It was exactly the loss of those features that many of us feared when ADAS was privatised.

With reference to accessible and local advice, I was delighted to see in the Government's response to the report, at paragraph 27, that,

    "the Environment Agency is currently considering the feasibility of setting up a network of agricultural inspectors to work with farmers. The vast majority of a farmer's contact would be with his local inspector, with specialists only brought in when their expertise was required".

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If the proposed agricultural inspectors could be called district officers we would neatly be back to the days of the old NAAS. In agricultural policy what goes around certainly comes around.

There is a strong public-interest argument in support of the view expressed in the report that environmental advice should be free. Of course a polluter should pay for acts of pollution. But how much better it would be to provide accessible, local free advice to prevent the pollution in the first place. The NFU in its briefing for the debate makes some cogent points. It particularly emphasises the need for agricultural proofing of the proposed regulations. It also stresses the importance of ensuring that farmers and growers have a sense of ownership of the environmental agenda. Such a sense of ownership is not likely to be forthcoming when farmers are thinking of signing up to the new entry-level agri-environmental scheme without knowing whether long-term funding has been secured for the duration of the five-year agreement. I understand that the Government have committed funds of £150 million for the first year, 2005-06. But there is no clear indication of the funding after the first year. Can the Minister explain what is intended to happen after the first year of the scheme?

With the proposed move to cross-compliance resulting from the mid-term review of the CAP, it is essential that the regulatory burden associated with cross-compliance is not further increased. It is alarming that apparently the European Commission could add regulations to the existing 38 in four categories if it so wished. That does not sit easily with the Government's declared, welcome theme throughout their response to the report of transparency and proportionality and their declared objective of achieving the desired outcome in the least burdensome way.

The OECD environmental performance review published in November 2002 pointed out that welcome progress had been made in the UK since its previous review in 1994. But, not surprisingly, it emphasises that there is still much to do. It makes the valuable recommendation that environmental concerns should be integrated with economic and social decision-making. Such a holistic approach sits well with the recommendations in the Select Committee report regarding whole-farm business and environmental advice. It would read across to the whole rural economy, in the context of social decision making.

It is clear from the report and the OECD review that, although a good start has been made, there is still a long way to go to get the right balance between ensuring proper protection and enhancement of the environment and avoiding overloading farmers with burdensome and impractical regulation. It might be worth pointing out that, in their spare time after dealing with cross-compliance, environmental and animal welfare regulations, country stewardship and all the rest, farmers still have the job of producing 75 per cent of the nation's temperate food. That fact is sometimes overlooked by the most enthusiastic proponents of environmental protection. The farmer's main job is to produce food, which is why the

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practicality of environmental regulation is so important. The recommendations in the report underline that importance.

1.40 p.m.

Lord Walpole: My Lords, I thank the Chairman, the noble Earl, Lord Selborne; our Clerk, Tom Radice; and our adviser, Professor Bill Day, for the report. I also thank our secretary, Marilyn Byatt, for kindly keeping us supplied with papers—up to the last minute yesterday, in my case.

I also declare an interest as a retired farmer who, for the last 20 years of farming, farmed with a management plan devised under a Manpower Services Commission scheme in 1980. It had a mission statement of environmental objectives and encouraged those who worked on the estate, including outside contractors, to understand and follow those objectives. I know that, at the beginning, my farm manager and several neighbours were sceptical, but soon they were enthusiastic, and so were our barn owls. We started with a single pair, and we now know, through our involvement with the British Trust for Ornithology, of seven nesting sites within five miles of the original nesting site. I am also a supporter of LEAF, Linking Environment And Farming.

Today, I shall examine the report from a farmer's point of view and ask whether the Government can persuade farmers to be more environmentally friendly. That will be even more important when the proposed changes in the EU common agricultural policy come in and farmers' income is largely dependent on environmental considerations.

No doubt farmers will receive monitoring visits from various organisations. It is essential that those visits are co-ordinated, otherwise far too much time will be spent going over the same points again and again. As the noble Earl, Lord Selborne, pointed out, many farms are one-man bands. If he is sitting in an office being asked things time and time again by someone from the Ministry or even the "Department of Whatever", the farmer is not working. The Government should give us back the Agricultural Development Advisory Service, the best service that the Ministry of Agriculture ever gave. It was free.

In most cases, the Environment Agency will need to be the lead monitor, and it is imperative that it has access to all the information that it needs, such as the integrated administration and control system, which, at the moment, it does not. I understand from the Government's response that that is on the way. The Environment Agency's booklet Best Farming Practices: Profiting from a good environment is well illustrated, succinct, readable and helpful, whereas we were told firmly in the Committee that the information put out by DEFRA was not read by many farmers, and, if it was read, it was not fully understood. That was a quotation; it was not I who said it. We were disappointed to hear that it might take DEFRA 10 years to reach the stage at which all the systems that we sought would be up and running.

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Some landlords, especially the National Trust, take the forthcoming legislation seriously and are organising meetings for their tenants and appointing staff with special responsibility for helping tenants with environmental problems at no cost to the tenants. That is highly laudable, and I urge more institutional and private landlords to do the same.

The Committee visited Mr Andy Drake's two neighbouring farms at East Knoyle in Wiltshire. There had been a considerable amount of rain in the previous few days, which accentuated the problems of that 300-acre dairy farm with 250 milking cows and 100 followers. The soils are silty clay and lie wet for long periods of the year. They drain directly into the River Stour, a tributary of the Hampshire Avon, which is a good reason for not polluting it in any way. The farm buildings on the higher farm included the milking parlour and stood on the top of the hill overlooking the Stour Valley.

The main risks were spillage from the slurry lagoon, seepage from the silage clamp and spillage of fuel oil. Cures were suggested by Mr Drake's advisers. The fuel problem was cured by bunding the tanks and taking extra care. The spillage from the slurry lagoon was dramatically reduced by taking the rainwater out of the slurry stream and diverting it down a renovated and improved ditch. The silage seepage was alleviated by adding a further barrier on the downhill side of the clamp. The costs of carrying out the work were small, but the improvement was dramatic.

On the lower farm, a demonstration had been set up by, among others, the Maize Growers Association to raise awareness of the environmental risks of dairy farming. Farmers were shown areas where environmental damage had occurred and some alternative husbandry practices that could be adopted. The use of earlier varieties of maize allows earlier harvest, which should reduce soil compaction. Subsoiling and ploughing were therefore possible after the maize harvest to improve soil structure. The introduction of winter wheat to be used as silage into the rotation produced another forage crop and helped the farmer to do cultivations at a more sensible time. The conclusion is that, when planning for the future, farmers must put environmental priorities far higher up the list. The solutions may be the best from a financial point of view as well.

Another topical problem that we met at the farm was that of old tyres. Traditionally, farmers have used them to hold down silage clamps. Andy Drake was no exception; he had hundreds of them. However, there comes a time when even old tyres used on silage clamps become too old and damaged for further use. How can he get rid of them? I am open to suggestions from the Minister.

In spite of the overcast weather and rain the day before, our visit was worthwhile. It is important for committees of the House to see these things at first hand and to get their boots dirty.

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There are a few other environmental problems to which I would like to draw the Minister's attention. Global warming is now an accepted fact. The sea will rise and cause coastal flooding; winters will become wetter and warmer; and summers will become dryer and hotter. We must take that into account, when considering the long-term environmental problems in agriculture. We must consider different varieties of crop, and we will have to create environmental corridors, for instance, for the cold-loving flora and fauna to move northwards. Such corridors on a small scale are essential, when fields are large, for joining together areas of woodland and meadow. That is why roadside verges are vital to our wildlife. There are serious problems on our smaller rural roads. Verges are being destroyed by large vehicles passing each other, articulated lorries cutting corners and tractors and similar vehicles with double or over-sized tyres driving down lanes that were designed for a horse and cart.

Will the Minister discuss that with his colleagues in the Department for Transport?

Finally, I welcome the response of the Government to the report, especially paragraph 35 about the Environment Agency and IACS, and their remarks in paragraph 42 about joined-up government. I, too, suspect, as did the noble Earl, Lord Selborne, that Annex A means that DEFRA hopes to achieve in five years what it told the committee would take 10. I, too, feel that that is a little slow.

Finally, will fridge mountains and tyre mountains be followed by farmer mountains?

1.50 p.m.

Lord Crickhowell: My Lords, it is a pleasure to follow the noble Lord, Lord Walpole. He said that we should get out and about and look at farms. I do not have to go far from my home in Wales to see my neighbour's farm. It is one in which the occupant thinks that the way to get rid of plastic scrap is to spread it over his hedges and that it is a suitable occupation for a Welsh farmer to collect a large number of old motor cars and leave them on his fields.

Noble Lords need to be reminded of the point made by my noble friend Lord Selborne. We are dealing with small businesses and some which simply do not have a modern approach to management. Therefore, we must measure our response to take account of that.

Once again, it is an enormous pleasure to thank my noble friend Lord Selborne for introducing a Sub-Committee D report and for his masterly chairing of our committee. I also want to thank our special adviser, Professor Bill Day, and our clerk, Tom Radice, who made our task easy and a pleasure.

I shall concentrate on very few points in the report—in particular, points listed on page 9, Box 1. The first point is the early involvement of all stakeholders during the development of legislation. In that connection, my noble friend spoke about IPPC and intensive animal units. I was reminded of a visit that I paid as chairman of the National Rivers Authority to my opposite number in the Po Valley,

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which was illustrative of the point that he made about different national approaches; namely, how, if these matters are approached early in a comprehensive way, an effective system can be produced.

In the Po Valley there are a large number of pigs. We visited one pig unit which had a sewage treatment works which could have dealt with the sewage from a town with a population of 80,000 people. The next-door village had no sewage treatment works at all. Indeed, I was informed that the city of Milan depended on a sewage treatment works which was largely installed by the monks in the Middle Ages. However, in the Po Valley it was appreciated that by far the greatest pollution hazard was the output of piggeries and intensive milk units. The problem was tackled extremely effectively. No one argued that it was uneconomic or impossible for farmers to do.

Therefore, early involvement of the stakeholders is needed. Box 1 also refers to the importance of the collaborative process of potential regulators interacting with the would-be regulated and non-governmental organisations. The report says that the regulatory agencies—the Environment Agency, the Scottish Environment Protection Agency and English Nature and its counterparts—have a crucial role in developing more flexible and user-friendly approaches.

I emphasise the need for flexible and user-friendly approaches. One of the first jobs carried out by the National Rivers Authority was the serious problem of point-source pollution from agricultural units. A tough line was taken and, when necessary, prosecutions were made. Above all, we realised that to be effective it was important to gain the co-operation of farmers. The way to do that was to work closely with them and to gain their confidence.

By the combination of being prepared to be tough when people failed and polluted and, at the same time, helping them in a friendly and flexible way, considerable success was achieved. The Environment Agency has been developing similar approaches since.

I want to press the point made in paragraph 19 of the report about the need for joined-up action by government departments and agencies. There were certainly suggestions from a number of witnesses that the different interests within DEFRA and the principal agencies were not operating in a joined-up fashion and promoting environmentally-friendly agricultural practices. Mr Taylor, the DEFRA witness, said,

    "I think it is probably right that we are not yet operating in a joined-up way as we would like to".

I welcome the indications in the response of the Government that they recognise the problem and seek to do something about it.

My noble friend Lord Selborne said that we had been impressed by the approach adopted in Scotland. He said that it is easier in Scotland, partly for geographic reasons—they may object to his suggestion that it is a regional approach. During my time as Secretary of State for Wales, I found that we had real advantages over England. That was partly because I

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was the Minister responsible for all aspects of policy and the officials all answered to me, but it was also due to the scale of the operation. We all knew each other and met each other frequently. There was a degree of co-operation which is possible in Scotland and Wales but far more difficult in England, and far more difficult for DEFRA. Therefore, I understand the problems.

Certainly, we were impressed by the Scots, as we were impressed by the activities of the National Trust. There is no doubt that the National Trust has made enormous efforts to inform, educate and help the farmers for whom it has responsibility. It showed what could be done by a sensible approach to these matters.

I turn to page 11, paragraph 28 of the report and the question of whole-farm environmental management and regulation. The chief executive of the Environment Agency stated:

    "Overall what we would like to see is an environmental farm management system which would encourage farmers to take a systematic approach to their environmental management and could form a platform on which they could demonstrate environmental performance, which would allow them to have a much more systematic approach to each of the regimes which they did have to comply with and minimise duplication of paperwork, duplication of systems and duplication of basic requirements across the farm".

That is central to everything in the report. To have that kind of approach, as stated in paragraph 35, we must have access to information, and efficient ways of handling and managing it are crucial to an integrated approach to environmental regulation. I therefore turn to the point referred to by a number of noble Lords who have spoken, the question of the IT policies of the department. In particular, I refer to the evidence section on page 125, where the exchange that I had with the DEFRA witness is set out and the now notorious admission that it might take 10 years before we have the parts of the policy coming together.

I am afraid that I challenged the unfortunate witness with a challenge I once heard made in a Cabinet Committee by my noble friend Lady Thatcher when she was Prime Minister: "You mean it's going to take longer than the two world wars combined. We achieved quite a lot in the way of scientific and technical progress in each of those world wars. I don't think that is acceptable". I do not think it is acceptable in this context either. I am chairman of a company in IT management. We see a Government energetically implementing and financing change in central and local government across the field and I welcome that. Changes are taking place on a timescale which makes such an approach nonsensical.

Yes, of course I understand that one should not attempt to put everything in place at once in an all-embracing package. That is a way to disaster, as has been proved on so many occasions. However, one must be prepared to put the bits and pieces together pretty fast. I read the Government's response. I welcome their acceptance of our recommendation, but I did not read their conclusion in the same way as some of my noble friends. I believe they say that an important part of the package will be together by 2005, but I do not believe they are saying that the kind of

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comprehensive working arrangements that we believe ought to exist will exist by 2005. I believe that that is left up in the air.

I conclude by re-emphasising that this is a fundamental point if we are to have the kind of arrangements working in the way that they ought to work. A 10-year programme, even an accelerated one as set out in the Government's response, is still not acceptable. I hope that those who are responsible in the wider context—in the Cabinet Office and elsewhere—for the development of the Government's IT policy will be examining this matter and helping and assisting DETR to develop a programme that meets the needs of the environment and agriculture and that we finally get some sensible and acceptable arrangements.

2.2 p.m.

The Earl of Erroll: My Lords, this interesting and thorough report is most welcome from the noble Earl, Lord Selborne, and the Select Committee. I was delighted to see that the Government have accepted all its recommendations. I am speaking in the debate because I am married to a farmer. During the mid-1970s and early 1980s, I also wrote software mainly for the agricultural market. I know about that theoretically, even if some of it went to France. Recently, I have been trying to help my wife overcome her technophobic attitude and adopt a technophillic attitude. She has taken to it like a duck to water. She finds e-mail brilliant because she can track where things are. She often looks for information on the website to help her with the business and she gets most annoyed by what is not available. I shall return to that matter later.

When reading the report, I was most struck by regulations and regulators, which are causing many problems in business life. The Government accepted recommendation (a), that formal regulation should be avoided wherever possible. On the other hand, how does one know where one stands if there is no formal regulation? I agree that one should not have formal regulation, but I think back to January when a health and safety inspector wandered on to the farm uninvited. He spotted a gamekeeper riding a quad-bike, walked up to him and said, "Where's your helmet?". He slapped an enforcement notice on him for that. He then asked, "Where's your certificate of training on the quad-bike?", and the gamekeeper said, "I've been riding it for ages". He slapped another enforcement notice on him for that and gave him two weeks to produce it. The gamekeeper said, "Hang on, I'm in the middle of the shooting season and I can't go off just now and leave the pheasants to die of natural causes", so he was given a month's extension to the end of February.

I have no idea whether that was within the inspector's powers and nor does my wife or anyone else. You dare not question it because if you get a bad reputation you will be blacklisted and they will be down on you like a ton of bricks—and you know it. There is a terrible moral blackmail. So where do you

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go to find out whether the person is acting ultra vires or not? In a few instances, government inspectors have developed a reputation for acting a little arbitrarily, which I have seen in other areas too.

I turn to communication and the question of where one stands. The other day I looked around the kitchen and at the many 2ft high piles of bumf which needed reading—2ft high because they fall over after that. On the top of one I noticed various pieces of paper such as the Water Code; the Green Code; Part 3 of the Food and Environment Protection Act 1985; Health and Safety at Work etc. Act; the Soil Code; the Air Code; Statutory Instrument 2001 No. 3966; and an environmental impact assessment and guidelines on new regulations from 1st February 2002. And that was just what my wife happened to have lying around ready to hand.

I am not sure that my wife has had time to read those documents. People forget that when farmers are busy complying with EU environmental regulations and so forth, as there is not enough income in doing that, they are out there doing other things as well. Some people are also putting something back into the community, working for charities and so forth.

On farming, my wife must be au fait with all the rules of the countryside stewardship scheme; and she also has couple of cottages so must know about property and tenancy rules and the environmental health issues involved. An inspector marched in the other day to check them—again we had no idea whether he was acting ultra vires. She has to know about planning rules because land registration is currently a big issue. There is a squabble about a bit of land on the edge of our farm and the issue is complicated and must be dealt with quickly.

As regards footpaths, we had someone wandering around the place, drawing lines on maps and disagreeing with earlier maps we have. She has to know about employment rules and the health and safety at work regulations. If noble Lords have a VDU, I hope they have made sure that their farm secretaries who occasionally come in are complying with the regulations. As regards equipment, she must have all the correct certificates and insurance cover, which may no longer be valid. You therefore have to ensure that all the insurances are correct and that you are covered against all the various issues and that correct inspections are carried out. I shall not go into the rest of the requirements because I do not want to talk for too long.

Farmers are probably trying to make an additional income, so they may have another business to run on the side and they must know about all the issues relating to that, too. My wife is also a trustee of a couple of organisations, so she has to know about trustee rules, regulations and laws. We had something from the Charity Commission about that the other day.

In addition, you have to check the figures supplied by all your expensive advisers who may have been filling in your IACS forms, charging you and giving you agronomy advice, because sometimes they get it

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wrong. Last year, my wife was accidentally advised to spray twice, which was unnecessary, and she spotted it, not the agronomist.

The IACS forms that I have been helping her with—sometimes up until two and three o'clock in the morning—are a nightmare. This kind of burden should not be placed on small farmers, big farmers or anyone else until there are proper systems in place. We should not expect them to fill in these forms. If they get things wrong, they will be penalised. My wife believes that if she gets one of her IACS areas wrong, she will lose all of her area subsidy or whatever it is that she gets. I do not know whether that is true, but it seems to be a totally penal system, which is quite wrong.

How do you communicate these requirements to people? Some people are dyslexic. My eldest son is very dyslexic—he has a scribe to help him with his exams—and my wife is not a particularly fast reader. It is difficult for people who do not absorb information easily to wade through these documents. If you have a short-term visual memory problem, which some people have, you will not absorb all the information properly and quickly.

Perhaps you should look at other ways of doing it. This is where IT comes in, because you can communicate in various ways simultaneously. You can use sound, you can use the written word and you can link matters properly in a consistent way. You can follow threads of thought without being constrained to the thoughts that a person puts on paper.

I am concerned about the way in which information is communicated. I was intrigued by the excellent aims of the Head of Farm Focus Division. In paragraph 171 he states that there is,

    "scope for making better use of the information we have, reducing the number of contacts, liberating farmers' energy and creativity for business and social purposes rather than for compliance with bureaucratic processes".

Later in the report, both the Head of Farm Focus Division and the Director of the Environmental Protection Strategy avoid questions on the water framework directive. Why? Because they are not experts on it. At paragraph 185, the chairman of the committee sensibly said,

    "The trouble is that farmers are expected to be experts, you see".

That is very significant.

On the next page, in response to the noble Lord, Lord Crickhowell, he states:

    "It would be nice to think that we could give clear, unambiguous guidance to farmers in particular cases, but I think that this is actually quite risky".

If the experts bring out these things we shall be sending in enforcement people—who, potentially, could bankrupt small businesses—who cannot give proper advice because they know it is impossible to meet the requirements. How on earth will a farmer—whose educational standards may be very high, too high or too low—understand the communication? How on earth will he get it right?

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I come from the IT world. I have written a great deal of software and developed many systems. There is a great deal of potential for communicating this information electronically using the Internet. Many people now have access to the Internet and communicating in this way will become more and more common. The concern about exclusion will become a nonsense because technology will have by-passed it in the next year or so.

All websites will have to comply with the new EU directive by April this year and will have to be accessible by the disabled. I am sure that the Government will comply with that directive, just as they will comply with the e-government 2005 directive from Europe that government services must be delivered electronically by 2005. But what is this 10-year period everyone is talking about? The Government have a duty to that extent.

Certainly local government must comply by 2005. I declare an interest in that I am a part of consultancies which are trying to help local government to hit its e-procurement 2005 targets, which are posing many problems. You cannot set unrealistic targets for other people and not adhere to them yourself.

My general feeling is that something should be done about the situation. When I was writing programs, if I had taken 10 years to sort them out I would have been out on my ear. I had to deliver something that was useable within six months to a year or people would get fed up. I would not have kept any of my clients.

The Government should not penalise small business people trying to have a life. Many of these regulations and directives and other requirements are doing that. You should not regulate until the regulations can be easily understood and the information is easily accessible and communicable. The information should be available electronically, because that is the way the world is moving and it would be delivered in more easily understandable form.

We must make sure that the unintended consequences are handled in a sensible way. Reference has been made to the polythene problems and so on, and I know that the disposal of pesticide containers will pose problems. There have to be sensible and practical solutions to such problems at zero cost to the farmer.

I have a general worry about the way that business life is going. We seem to have about 17 people in various organisations, agencies and government telling one poor person at the coal face who is trying to get a business going, trying to run a business or trying to pay taxes, what to do. That will be unsustainable in the long run.

2.13 p.m.

Lord Plumb: My Lords, I welcome the opportunity to comment on this timely report by the Select Committee. It is a pleasure to follow the noble Earl, Lord Erroll. He echoed the views of many hundreds of farmers throughout the country. In that connection, I remember the occasion when my IACS form came into the office. As I was abroad, I was unable to sign it so

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my wife did so. There was some trouble; my wife's signature was not accepted and eventually I had to provide my own—but when the cheque came, it was made out to my wife. Had I had the courage, I would have sent it back, but I was not in the position to do so.

I declare an interest as an environmentally friendly farmer. I hope to return to that activity this evening if the Minister replies adequately and quickly at the end of the debate. I am, therefore, committed to farming under the rules of the countryside stewardship scheme. Contrary to the views of one or two speakers, I welcome the support that I have received from DEFRA, and that from FWAG, which first considered the scheme that we are now operating—I hope successfully.

In welcoming the report, I congratulate its chairman, my noble friend Lord Selborne. He has done an excellent job in terms of presentation and in keeping together his committee—backed by a good team and loyal staff. As we know only too well, farmers are critical of yet more regulations. My noble friend's report makes the claim—a point picked up by the noble Lord, Lord Carter—that laws introduced over the next few years alone, which will include agricultural waste regulations, could cost farmers between £25 million and £40 million. The point is made that this could involve 200,000 agency inspections. The mind boggles. The cost of fallen stock, animal disposal, the nitrate directive and many other factors mean huge costs.

To apply the regulations right across the rural areas of the European Union—where there is such a variety of landscapes, villages, forests and farmland—and at the same time bring about adequate reform in the common agricultural policy, with which we all agree, to support a more environmentally friendly approach and implement environmentally measures that fit into the CAP, amounts to a formidable task. This will succeed only if agriculture remains the major interface between people and environmental issues, and if agriculture is sufficiently profitable to enable investment or reinvestment. Farmers also have a duty as stewards of many of our natural resources. It is therefore a question of balancing all those interests.

The report recognises that farming is a business, which can succeed only if it is competitive as regards our colleagues in the rest of the EU. It cannot do that given the gap in currency values that we have experienced in the past few years. It makes life extremely difficult in terms of competing, particularly in the field of exports. I cannot over-emphasise the importance of harmonisation if the measures set out in the report are accredited in each of the member states.

There is, as the report fully recognises, a wind of change blowing across rural landscapes. I believe that most farmers have become resigned to accepting that change from the subsidies that they have known over a period of years to environmental support is coming. But if it leads to more expensive bureaucracy, it will fail. That point is referred to in paragraph 41 of the Government's response to the report, which states:

14 Mar 2003 : Column 1620

    "Defra will ensure that it is developing something that will be of benefit to industry and not cause additional unnecessary bureaucracy. It will test each phase carefully with farmers and others who are affected".

I hope that, in replying, the noble Lord, Lord Whitty, will give absolute confirmation that that is the real intention.

There is nothing new in what we are doing. We have been involved in this for some time. Bodies such as FWAG, Linking Environment and Farming (LEAF), the AONBs which operate throughout the country—I often say that areas of outstanding natural beauty are also areas of man-made beauty—and many other farming organisations are preparing the way for change.

In 1996, Commissioner Fischler asked me to chair a conference in Cork where over 500 representatives from different organisations from the whole of the European Union, local authorities, and so on, came together to look at future rural development. We produced a 10-point plan, and as I read the report of the committee, I reread my report of the Cork declaration. They fit together extremely well; they are fully compatible on matters related to sustainable rural development, diversification, subsidiarity, simplification and finance, as well as management, research and programming for rural development for each region.

I believe that Britain is setting the rest of Europe a fine example, particularly through bodies such as LEAF. I was pleased to hear the noble Lord, Lord Walpole, support LEAF earlier. Some 15 per cent of cultivated land is represented by LEAF members. There are 44 demonstration farms right across the country. Some of them have been going for 12 years, so the lead has been set in that direction. The focus is to develop a system of farming, realistic and achievable for the majority of farmers to reconnect with the end customer. LEAF is also involved in other countries in Europe. It can demonstrate its environmental credentials in the quality assurance scheme it is working on at present, linking in with the little red tractor on quality standards.

Much of this report was written before the most recent proposals on CAP reform were published by the European Commission. Of particular importance are, as the noble Lord, Lord Carter, said, proposals on cross-compliance and the introduction of decoupled payments.

Environmental regulations are one of the four categories with which compliance will be compulsory. In their current form, the regulations allow the Commission to add significant environmental burdens to agriculture and horticulture. I hope, therefore, that the Minister can give us an assurance that the Government will remain vigilant and ensure that any cross-compliance regime is compatible with the need to retain a competitive and sustainable agricultural industry in the United Kingdom. The potential for the regulations to create unfair competition for UK producers is significant and must be resisted in order to become energy-efficient and environmentally acceptable.

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I repeat that agricultural and rural development can succeed only if they remain the main interface between the people and an environment which, overall, is viable and profitable.

2.23 p.m.

Lord Livsey of Talgarth: My Lords, it is a privilege and pleasure to follow the noble Lord, Lord Plumb, who has had such a distinguished career in the farming industry and, indeed, the European Parliament. I remember the Cork declaration very clearly and agree it was an excellent document, which paved the way for the future.

I congratulate the chair of our committee, the noble Earl, Lord Selborne, as well as members of the committee, the Clerk, Tom Radice, and his staff. I was not a member of the committee when the environmental regulations and agriculture report was produced, so I can look at it fairly objectively, from the outside looking in.

On the inside flyleaf of the report are 45 acronyms. One of them is EMS. To me that means the monetary system of the European Community—but no, it means environmental management standards in this case. GAP is an unfortunate acronym, as it describes something praiseworthy. There is also GIS and MAGIC, which is apparently multi-agency geographic information for the countryside. The flyleaf of the document encapsulates the problem. Each of those acronyms needs to be explained.

Like other noble Lords, I greatly appreciate the whole-farm approach espoused by the report and its recommendations. The core recommendations are on risk-based approaches, partnerships between regulators and regulated, whole-farm planning, which goes with the whole-farm approach, and government support for transition into new regulations, together with matters concerning barriers to information exchange.

The report says that of the 50 environmental legislative items coming in, 20—two fifths—will impact on agriculture. How can the environmental goals in farming be achieved without some enforcement? Yet that causes the problems that have already been mentioned.

The environmental issues within EU legislation address air quality, chemicals, land quality, water quality and waste and packaging. We already have four EU directives that impact on agriculture—the Water Framework Directive, the Integrated Pollution Prevention and Control Directive, the Nitrates Directive and the Waste Framework Directive. The increasing burdens on farmers were mentioned by the noble Lords, Lord Carter and Lord Plumb. The chief executive of the Environment Agency—the noble Baroness, Lady Young—has stated that smarter, less cumbersome regulations need to be brought in. I agree. The noble Baroness has called for the adoption of environmental management as standard, with a single framework to help farmers manage environmental input.

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The problem is the approach that is needed. As the noble Lord, Lord Plumb, said, the changes for environmental controls are statutory. There are two possible approaches. We can use a carrot to encourage compliance or we can use a stick approach. Many aspects of that approach have been mentioned in the debate, so I shall not go into it.

Diffuse pollution has been highlighted as a major problem, as I know from my experience as a former farm manager and smallholder. Engaging stakeholders early in formulating EU environmental legislation is particularly important. We might get practical results from that. The integrated framework for farm planning in that respect becomes more and more crucial.

A number of organisations have got in touch with the committee about the report. Page 7 of the report refers to the scope for implementing regulations in a user-friendly manner. That is extremely important. Indeed, opportunities for mitigating regulatory burdens through measures such as pollution prevention are, again, extremely important. The case for greater self-regulation in return for more targeted external regulation, while still complying with environmental obligations prescribed in EU legislation, is also extremely important.

The Environment Agency advocated expansion of funding for agricultural environmental schemes, which is extremely important and endorses the whole-farm approach. The NFU has said that it wants a competitive and sustainable agricultural industry; indeed, it is that organisation's duty to aim for that, but it is extremely difficult to achieve at present. The DEFRA report, Farming and Food: A Sustainable Future, also underlined some of the important points, calling,

    "for subsidies to be redirected from producing crops to protecting the environment".

What kind of delivery system will be put in place for that?

The Curry report states:

    "We believe that farming and the food industry is on an unsustainable course in economic terms, and it is also unsustainable environmentally".

That is a real crisis statement of the first order. The situation must be overcome, and it represents an enormous challenge. The major challenge will be to discover how we go about it. I am pleased that the government response accepts all the committee's recommendations.

In conclusion, the European Union Committee report maps out a sound environmental and farming future. It is good that the Government accept the recommendations, but I believe that they have a challenge. No lead has been given on economic incentives for farmers who carry out what is required in the rural environment. The Government are strong in aspirations but weak on the delivery and support system networks, which do not exist as they once did. The noble Lord, Lord Carter, referred to NAS and ADAS and to the fact that they were free at the time of delivery. The challenge then was to produce enough

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food for the country; now it is to produce it in an environmentally friendly way. Surely, that is a challenge equal to the one we had in the past.

We need whole-farm plans and environmental and economic targets that produce sustainable outcomes for farming families and the environment, with a value placed on the goods. That can be produced only through an integrated system of universities and colleges, staff and students and an advice network with advisers in the field. A headmaster told me recently not to worry, because 98 per cent of his students were environmentally conscious. The next generation will be in a position to deliver those objectives.

2.34 p.m.

Baroness Byford: My Lords, I thank my noble friend Lord Selborne and his committee for producing an excellent, thoughtful and detailed report.

The committee proposed a clear set of principles, recognising the importance of the relationship between environmental and agricultural policy in the context of current negotiations on the enlargement of the European Union and the mid-term review of the common agricultural policy. We are grateful to the committee for its excellent work. The eight recommendations in the executive summary speak for themselves. The first recommendation was on the need for a new risk-based approach to farming regulation which makes full use of self-regulation and avoids formal regulation wherever possible. Noble Lords have already touched on that issue.

In its briefing report, the NFU also recognised the need for a new approach to regulation. Such an approach must include an assessment of whether the environmental objectives sought really have to be pursued within a regulatory framework at all. The NFU endorses the recommendation that, as noble Lords have said, stakeholders must be engaged at the earliest possible stage in the development of EU legislation. In addition, the NFU recommends that the process of "agricultural proofing" must be engaged from the outset to ensure relevance and proportionality.

Many noble Lords said that agriculture's problems with environmental regulation arise not only from the regulation design process but more often from interpretation and implementation at member-state level. As noble Lords said, codes of good agricultural practice to help farmers deliver environmental objectives should be user friendly. Advice and encouragement should be the first step to ensuring a successful outcome.

In turning to some of the specific evidence given to the committee, I draw noble Lords' attention to the cost of regulation. The fact that I am the fourth speaker to mention the issue should demonstrate to the Minister how important it is. The chairman has referred to the Environment Action publication of February 2002. The leading article stated:

    "Laws introduced in the next few years alone, which include agricultural waste regulations, could cost farms between £25-40 million and involve 200,000 Agency inspections".

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That is a huge burden, and one must again ask whether it is really necessary.

The cost of the IPPC regulations was raised with me again just two days ago in an informal meeting with egg and poultry producers. The regulations will add significant costs to the industry at the very time when cheaper chicken meat is flooding into UK markets, and that includes imports from countries that do not bear many of our regulatory burdens. As the Minister will be aware, infected substandard chicken meat has been arriving in the UK and is a great concern. I therefore have a few questions for him. Who decides on the scale of costs placed on UK business? Is it DEFRA or the Environment Agency? If it is neither of those, who is it? Are the costs checked?

One or two noble Lords mentioned the issue of regulation for which our country is not prepared. Noble Lords have also cited the dumping of fridges, electrical goods, tyres and plastic sheeting. Decommissioned cars are becoming a huge problem in our countryside. In less than four weeks, on 1st April, I think, we will also be hit by the fallen stock directive. In a debate last week, I asked the Minister to say a little about proposals for coping with the fallen stock directive. He was unable to address the issue then, but I hope that he can do so today.

In the Better Regulation Task Force publication of November 2002 entitled Environmental Regulations and Farmers, the noble Lord, Lord Haskins, recognised that farmers have been subject in recent years to a considerable increase in regulatory obligations. The report highlighted the number of regulations governing environmental and food safety and those dealing with animal welfare. He also acknowledged that the public expect British farmers to produce food to high standards, but he found no evidence that the consumer was prepared to pay a premium for food produced to meet those higher standards.

The balance of which noble Lords have spoken is hugely important as regards regulation. It is against that background that we must continue to ensure that new regulations do not put UK farmers at a financial disadvantage. If we fail to do so, we shall end up by exporting not only our farming industry but also our food industry and will become totally dependent on imports, thus wrecking our balance of payments and failing to look after our countryside.

In the 2000 report of the noble Lord, Lord Haskins, the committee found a lack of co-operation between officials involved in developing environmental and agricultural policies, a failure by government and farming representatives to engage sufficiently early in European policy development and poor communication between policy makers and those who regulate. The noble Lord, Lord Haskins, pointed that out in 2000 and here we are over two years later still saying the same thing. I hope that the Minister will give some encouraging messages as regards progress that has been made on that matter.

In their response to the Select Committee report, the Government stated—as, indeed, my noble friend Lord Plumb said—that DEFRA would develop something

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which would be of benefit to the industry and not cause additional unnecessary bureaucracy. On reading through the Government's response, I was glad to see that they were supportive of many of the committee's recommendations. However, I have one or two reservations. What disappoints me most is that some changes are to be implemented some time in the future. Some will be implemented this year but some will be implemented next year, some the year after and, as my noble friend Lord Crickhowell, said, some are to be implemented nearly 10 years hence. That is simply not good enough. The noble Lord, Lord Haskins, pointed out back in 2000 the need for urgency. I wonder how far we have moved forward on those issues. I understand that it takes time to put procedures in place. But with farming in its present crisis, the one thing that we do not have is a great deal of time. My noble friend Lord Crickhowell expressed his dismay at the delay in the system, particularly on the IT side. I share that dismay. I believe that all noble Lords find that unacceptable in this day and age when IT systems are developing so quickly.

Finally, I urge the Government to remain vigilant and to ensure that any cross-compliance regime that is introduced is compatible with the need to retain competitive and sustainable agriculture. A balance has to be struck between the farming industry and those who have to work the land and between NGOs and those who want to conserve and preserve our countryside, as we all do. A balance obviously has to be struck between what the Government have to do formally and what they can do on a voluntary basis.

As my noble friend Lord Selborne said very specifically in his clear opening speech, clear thinking is needed now. The objectives that we are trying to achieve must be established and practical measures must be adopted. As I say, we need a partnership between farming, industry and all of us as individuals, but we also need to press forward with great urgency. I again thank my noble friend Lord Selborne and all those who worked so hard and contributed to this excellent report.

2.44 p.m.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, I thank the noble Earl, Lord Selborne, the other members of the committee and those who contributed to the debate. As has been said, the Government's general response to the report is very much in favour of the objectives that it recommends. In that sense I believe that we all look to the same outcome.

There has been a fair degree of consensus in the debate. Underlying some of the comments—I refer to the noble Baroness, Lady Byford, and the noble Earl, Lord Erroll, in particular—is an emphasis on something that we cannot perhaps avoid. The fact is that we are changing the nature of support for farming across Europe as a whole. There are negotiating arguments about how far and how fast that should be done, but it is changing, as the noble Lord, Lord Plumb, said, to environmental outcomes rather than

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production outcomes. Either way, that involves large sums of taxpayers' money and regulations about the application of that money. To that extent, agriculture will always have slightly more regulation in one sense than other industries. It also cannot escape society's general concern, which applies to so many other industries, about the environment, safety and the welfare of workers and consumers, which has already hit many industries.

The issue is not whether one can avoid regulation, because we cannot. However, as the noble Lord, Lord Livsey, said, we will look at alternatives to regulation, such as economic instruments and so on. Much of the regulation is already in the pipeline. Our discussion is about how we deliver that regulation. Nor—this is perhaps even more controversial—can we entirely avoid the costs to the agriculture sector of that regulation. Many other industries already absorb their externalities in terms of pollution costs, for example, which agriculture does not as yet do to a large extent. We want to do so in a way that is compatible with production and the environment. A cost is nevertheless involved. The question is: how can we ensure that the industry absorbs that cost in a way that does not make it uncompetitive? It would be foolish to suggest that we could avoid it.

The noble Baroness has previously challenged me to explain the position with regard to fallen stock. That is not quite central to the report but it is symptomatic. There is a new regulation; it may be unwelcome but it is based on good environmental, safety and disease considerations. Anyway, we have it. It involves a system to which the industry will have to adapt. The Government have proposed that we put our existing resources at the disposal of a national collection scheme. Those resources largely relate to OTMS. The scheme is already in place. We may be prepared to put in a little more in terms of directing a new scheme; the devolved Administrations have also said so.

At the end of the day, some of that cost will fall on farming. The reason why we have not, so close to the deadline, got a proper disposal system up and running is because farming—or its representatives—has resisted the view that it should contribute towards that cost. Frankly, in other sectors, the industry would have to bear all of that cost. The industry does not have a sensible approach in that regard or others. If we all do strongly what the report suggests—that we should engage stakeholders early in the processes of drawing up the regulation and of sorting out how to implement it—some of the problems can be avoided. Some of the proposals could become much more user-friendly in that process. We accept that recommendation. At the end of the day, if we have a complete stand-off between the industry and the Government, we will not achieve the best way of dealing with the regulations.

The background to this issue involves the difficulties of the farming industry and of making adjustments to the new requirements. The Curry commission and the Government's response to it set out clearly that we must make substantial changes. The Curry commission and the Government fully endorsed the

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overall recommendations of the report from the noble Lord, Lord Haskins, and the Better Regulation Task Force, which contained some of the report's recommendations.

In particular, we consider that the multiplicity of directorates, inspections, different agencies and different sets of regulations with which farmers have to deal, as alluded to by the noble Lord, Lord Plumb, my noble friend Lord Carter and the noble Earl, Lord Erroll, is one of the problems. Sometimes they are contradictory, and sometimes regulation in one area will cause a problem of failure to meet the regulatory outcome in another. Therefore, the whole-farm approach—taking the totality of the farm and regulating that—will not only make life easier for the farmer in having to deal with far fewer sets of regulators, it will also maximise the environmental, safety and other outputs.

However, it is difficult to get from here to there. There is a great deal of inherited regulation and a great many inherited relationships and inherited attitudes. Our farmers need advice in order to get through the labyrinth. I take the point that in the earlier era of ADAS and so on there may have been more structured advice. But, ultimately, through negotiation and discussion with farmers, the system must change. We believe that if we can move to a whole-farm approach, both in planning production and in regulating that production, then that is where we should all be aiming.

Clearly, the fact that farmers are largely small businesses aggravates the situation of multiplicity of contacts. However, it does not alter the fact that farmers must do many different things with the land. That can have different impacts on other parts of the countryside and on society as a whole. Therefore, we need to bring together those different aspects in a compatible way and we need to assess where the greatest risks lie.

The first and second recommendations of the committee relate to that. They concern risk-based regulation in terms of both the regulation itself and the way that the regulation is enforced. A risk-based approach is an important ingredient of that, but it requires a mutual trust between the regulator and the regulated which is often absent. There are problems on both sides in that respect. However, if we are to have an overall farmers' environmental management procedure and if the EMSF—to add another set of letters to the acronyms of the noble Lord, Lord Livsey—which the NFU and the Environment Agency are currently engaged in delivering, is to work, then there must be a system of mutual trust so that we can understand how the matter can best be approached.

If we establish that, then voluntary activities and other approaches will help to deliver the outcome that the regulation seeks to achieve. The Government also strongly support the concept of working together, which, in effect, is the basis of the third recommendation.

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The fourth recommendation is that we build a new approach to environmental regulation around whole-farm plans and whole-farm management systems. As I said, that is our overall objective. The EMSF will provide farmers with a straightforward tool so that they can demonstrate compliance with various aspects of the various forms of regulation to the satisfaction of the different regulators.

The Environment Agency can also use those data in order to take a more holistic approach. It can simplify the bureaucracy and the administration by putting in place standard procedures, standard registration and standard application structures. As the noble Earl, Lord Erroll, said, IT greatly helps that possibility. We certainly want to meet the deadline of 2005 in all our services. Of course, take-up is not necessarily the same as offering the service. Nevertheless, the more farmers who are engaged in that and the more robust our systems by that time, the more effective it will be. Therefore, we shall build the EMSF. That part of the regulation is already being pulled together and forms a substantial part of the environmental regulation of farmers.

I turn to the Health and Safety Executive side of the issue. The self-assessment system that it is introducing for farmers and elements of the new agri-environment scheme, to which my noble friend Lord Carter referred, will also help to provide the building blocks for whole-farm self-assessment and therefore whole-farm regulation.

To my noble friend Lord Carter I say that from this year the new agri-environment scheme will be piloted and should be introduced in full, subject to the pilots, in 2005-06. An allocation of European-matched funds has been made to ensure that that happens.

My noble friend tempts me to commit the Chancellor of the Exchequer to ensuring that the same or higher level of finance is there in the future. I fear that I am not in a position to do that. However, farmers who enter the scheme are in a contractual arrangement and the Government abide by their contractual arrangements. Following Curry and following our sustainable food and farming strategy, I hope that it is clear that the strategy that we have adopted has a central theme relating to the agri-environment schemes so that one can make certain presumptions. Beyond that I shall not commit the Chancellor of the Exchequer.

The fifth recommendation of the Select Committee is about farmers' skills. That relates to new skills that they have to acquire over and above the traditional and more modern farming skills that most of them have already. That includes business skills and IT skills. It is important not only that we help them to develop such skills, but also to adapt the systems so that it is easier to use the technology that we are bringing on stream.

It is important that the agencies use the same approach. If a farmer provides to any government agency certain information, subject to the normal data protection laws, that should be available to other

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agencies. Therefore, we accept the report's sixth recommendation that the barriers to information exchange should largely be removed.

We are already taking steps to enable effective data sharing, while working with farmers and with the farming unions to determine to what extent information is acceptable to them and how they can best use it. We are also drafting a regulatory reform order for the release of agricultural census and survey data to the Health and Safety Executive, to the Food Standards Agency and to some of the DEFRA agencies where under current legislation there are legal barriers to exchanging information. That is being dealt with in a cautious way but as rapidly as possible. We are being cautious because the issue of commercial confidence needs to be incorporated.

It will take time to put all those regulatory changes in place. However, we accept the seventh and eighth recommendations that timescales for development should be reduced as much as possible. I have referred to the activity under the general auspices of the Environment Agency. The other big element which is subsidy related, relates to the RPA—the Rural Payments Agency—which deals with all the IACS arrangements. There again we are rationalising the information required for the whole range of IACS payments and we are helping farmers by providing them with a digital up-to-date map of their holdings and a basic form and map that they can fill in so that they do not have to re-invent the wheel every year, or in some cases every quarter. That is an important step forward. The Rural Development Programme IT strategy should be completed by 2005 and the electronic files will be immediately accessible on line.

Underlying many comments not only about information but also about policy and enforcement is the fact that there should be more joined-up government between the various government agencies. That is a clear aim for the Government. We have established a DEFRA-chaired steering group for the regulation of agriculture which started last year and we are bringing together a common strategy with consistently better policy and enforcement practice. On the basis of the Better Regulation Task Force, on the basis of the Curry commission recommendations and on the basis of what has been tackled by the Select Committee in its report, the Government are implementing a more efficient, a more user-friendly system of regulation of agriculture to help farmers to cope with that and to manage their production systems in line with that. We also have a strategy to introduce risk-based environmental regulation across all sectors, but particularly focused on agriculture. We also have a strategy for joined-up government to tackle that.

Several points were made by noble Lords, but most of them fall within those broad areas. I concur that problems with the regulation of tyres, plastics and refrigerators—and all the other problems that have emerged—largely reflect a lack of engagement with stakeholders at an early stage and a lack of consideration of the particular problems of farm

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businesses in complying with general regulation. As part of our reform of the system, we are attempting to tackle such problems.

Finally, the noble Earl, and others, challenged us about the 10-year period, to which reference was made during the course of the inquiry. The noble Lord, Lord Crickhowell, was especially ferocious on the matter both in the committee and in the Chamber. Let me make clear that if we were dealing sequentially with all those matters, it would take 10 years. If we can deal with many of them in parallel, bring them together, engage stakeholders and succeed in achieving joined-up government, it could take a lot less time than that. The timescale for the big chunks of rationalisation, such as those of the Rural Payments Agency and the Environment Agency, is indeed 2005—two years.

Ten years is an unacceptable timescale to me and my ministerial colleagues. If we are to transform not only the system of regulation but the relationship between farmers and government agencies, we need a much shorter timescale. I shall not provide an alternative date today, but I sympathise and agree with the view that 10 years is far too long and that, after the delivery of those two big chunks in 2005, we should get much closer to delivering the totality.

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