Examination of Witnesses (Questions 220
- 239)
WEDNESDAY 24 OCTOBER 2007
Mr David Fursdon, Professor Allan Buckwell, Mr Andrew
Douglas and Mr John Don
Q220 Lord Palmer:
Did you say 12%?
Mr Douglas: Yes. Scottish Power have stated
their intention; they would like to put 12% of Scottish agriculture
under bio-fuels. I am only quoting figures from Scottish Power;
we have not discussed this but it is quite a mind blowing suggestion.
Q221 Lord Plumb:
Have Scottish Power also said what they want to do with all these
wretched wind farms which are appearing all over?
Mr Douglas: I think the problem with the wind
farms, as you know, is that the infrastructure is causing more
problems now than the wind farm. I looked into wind farms and
of course I had no infrastructure at the top of my hills so they
were not interested. I also had low flying jets which made it
worse. I think wind farms would appear, certainly I think in the
Borders, to have reached their limit. The wind farm companies
tell me that every time a council has approached them, they have
moved them onto the next council, and they moved them on again
to the next one. I think wind farms have probably reached their
summit mainly because of the infrastructure system.
Q222 Lord Palmer:
I hope you are right, I have to say.
Mr Don: We think it is very important that the
heat and light from biomass and bio-fuel production, using that
on a community scale, will actually create huge benefits within
the community where it is happening. We would like to see much
more emphasis in policy directed to that rather than directed
to these mega wind farm projects.
Q223 Lord Palmer:
That is very interesting. Moving onto climate change, it has been
argued that land managers' contributions to addressing climate
change are not properly supported by the CAP. Do you have suggestions
to offer on how policy might be changed to promote the beneficial
farming practices that have been identified and in order to discourage
environmentally harmful practices which I think is a very important
point, especially from the media and indeed from what the public's
conception of agriculture today is all about?
Mr Buckwell: We argued in the consultation on
the reform of the RDR that it was extraordinary that there was
not a chapter in that on climate change; there was not and there
is not. It did seem to be an extraordinary omission. What can
be done? There is a debate here about whether this is a private
or a public issue. If we can agree carbon accounts for land managers
and the extent to which farmers and foresters are storing carbon
in their soils or in their trees and we can agree the accountancy
basis for that, then maybe this is an area where private action
is sufficient, where there are enough companies who are wanting
to offset their carbon emissions to want to do deals with land
managers who are storing carbon. At the moment this has all been
done through informal and non-governmentally approved and recognised
offsetting schemes. We are saying that a primary task in all this
is to agree the basis and the carbon accounting methodologies
and technologies to unlock this potential. In a sense this is
where the regulatory function can be to create the circumstances
for a private market to operate but at the moment it does not.
In our view that is a key step. The CLA has been working for a
couple of years on this and we are hoping to launch our own version
of carbon accounts for land managers (which we call CALM) as a
contribution to helping this process forward. However, if the
private sector is not going to pay for it and we want it done,
then this may have to be part of the stewardship of the upland
areas or the community's forest. We have an open mind on this
but we are saying there is a challenger here that we want different
behaviour and we have to find the technologies and the incentives
to bring about that different behaviour.
Mr Fursdon: Can I specifically answer the question
about the actual farming techniques, the way of actually doing
that in an acceptable way for climate change. One of the things
that we would be expecting to look at in terms of where the money
should be supporting development within agriculture is things
like precision farming where the precision application of nutrients
does no damage. This is where the research and technology needs
to be leading us and these and other methods of farming more efficiently
will hopefully have a climate change benefit as well as continuing
to produce the products that we need to produce.
Q224 Chairman:
On the assumption that grain prices, if they are not going to
remain at the present high level at least they are going to be
at a level higher than we have seen in the relatively recent past,
the global pressure on grain price is going to remain pushing
them upward, what is the future of bio-fuels?
Mr Buckwell: It may not be very long. I suspect
that because policy has now determined that there will be an expansion
in bio-fuels there will be an expansion in bio-fuels and we will
then learn whether it is greenhouse gas saving or not, or whether
it is the most effective way of achieving that. We will go through
a phrase where they expand. If that drives up the food prices
even more then I suspect that might be quite a brief phase. I
think we have a learning process to go through. Obviously farmers
welcome anything that maintains their commodity price; farmers
who use them are not so thrilled.
Q225 Viscount Brookeborough:
In the statement that you submitted to us I think you said that
although grain production was going up, grain production per capita
in the world was going down. Does that not argue entirely against
what you have just said, especially if you are taking more land
out for bio-fuel?
Mr Buckwell: I hope it does not. What I have
said is that the policy on renewable energy is that bio-fuel will
be a contribution. It seems to me to be perfectly sensible. Let
us try it and see how far it goes and how cost effective it is
in producing greenhouse gas. Let us see if it reduces any greenhouse
gas emissions once people agree what the accountancy is, which
they have not. This is a diversion of what could be food grain
into another purpose. Given the demands from the human population
one wonders how far that can go. I suspect that this will be a
decade or two of experimentation until we find other forms of
renewable energy that are more effective. There is a lot of land
based renewable energy—it can come from biomass, particularly
in the less productive areas and by the utilisation of grass and
other green material—and we have a lot of technology to
develop to exploit those possibilities.
Q226 Lord Plumb:
I want to talk about modulation. In your evidence you wanted to
step outside things like modulation. At the same time modulation
is very much an issue, whether it is voluntary or whether it is
compulsory. Natural England told us that the amount should be
increased for modulation; you are saying something somewhat different.
I am very interested in your comments on this because, as I read
it, you said that your concern was about the distribution key
which was applicable to compulsory modulation under which we receive
only 80% of what is deducted from the single farm payment. How
do you see the future developing on modulation? It is an issue
that never seems to be resolved and therefore I think it is important
that people do understand what this is about both on a voluntary
and compulsory basis.
Mr Buckwell: In a sense the UK is hoist by its
decisions in the 1980s and 1990s to not make use of what we now
call Pillar II, the predecessor schemes. Therefore we have a miserable
share of Pillar II budget, therefore if we want to have sensible
sized environment schemes and rural development schemes we have
to modulate. The UK is out of line with all of the other Member
States through its history of how it has developed policy over
the last 20 or 30 years. Therefore that has brought up this discussion
of voluntary versus compulsory modulation. English, Welsh and
I suspect Scottish farmers feel that we have gone far enough at
the moment by the decisions that have already been made where
our modulation will be approaching 20% by the end of this financial
perspective. If there is more compulsory modulation one assumes
that the voluntary modulation will diminish accordingly. However,
paradoxically, because with voluntary modulation all the receipts
remain in the Member States that is more attractive from our perspective
that compulsory modulation where 20% of it is siphoned off. This
then gets us caught up into these wider issues about the distribution
of the budget and co-financing which of course have to be grasped.
In our feeling we have to get the big picture right first and
if we are all agreed in Europe that there is going to be more
funding in the things we currently do in Pillar II and if that
is going to be co-financed we have to agree the keys for this
so it is seen to be fair and reasonable to all Member States,
whereas at the moment the UK is not being dealt with fairly on
this score we feel.
Q227 Lord Plumb:
What about Scotland?
Mr Don: In general terms we would like to see
the argument on modulation disappear into a more sensible regime
in 2013 which would be fairer to the UK, to England, Wales and
Scotland. In the meantime we are caught in the dichotomy. Our
individual member farmers are not very keen on increased voluntary
modulation or modulation of any sort. With a historic payment
we have always said in our organisation we see a move from the
core Pillar I funding to more money going into Pillar II, to use
the current terminology. What we would really like to see is a
re-thought out policy in the future. As I said in my opening remarks,
we see a policy for land management rather than the CAP embracing
all the issues of land management rather than just agriculture.
Q228 Lord Plumb:
Do you see the problem increasing because of the new member countries?
Sitting there we had the minister from Romania telling us that
the average sized holding in his country was something like three
hectares. When you talk about switching money from Pillar I to
Pillar II for whatever purpose or however it is done, how can
you relate this to the wider scale? We talked to him about the
possibility of the use of this in terms of environmentally friendly
farming et cetera and he said they do not want money for that,
they want money to improve their structures and that is understandable
but if they improve the structure of farming surely that comes
back into Pillar I. It is a dilemma I think that Europe itself
is going to battle with for a very long time.
Mr Fursdon: Can I just say one thing on modulation?
When it actually arrives on the paperwork that you receive and
it says "Modulation" and you look at it and it takes
money off, it is a pretty seminal moment as you will know. I think
it emphasises the feeling amongst a number of people that it has
gone from here but if I am to actually develop my business where
is it going to be available to me in the future? The whole question
of Pillar II and whether it is accessible is linked to this. I
think the feeling about how one can actually plan an agricultural
business in the changing that is going on at the moment is really
quite hard and I think that is part of it. Will Pillar II and
the funds that have been modulated actually provide an ability
to plan forward for your business in a way that Pillar I has traditionally
done? I think that modulation raises that whole question.
Q229 Viscount Brookeborough:
I must declare an interest in that I live in Northern Ireland
and Northern Ireland is not represented here today, but we do
have various rural development funds at the moment which may be
proportionally more than the remainder of the United Kingdom through
the peace dividend and I do use some of it. For the CLA first,
you indicate that more funding should be directed towards Axes
1 and 3 of the Rural Development programme. Would you like to
comment a little more on this? More broadly, could you outline
your views on how rural industry should be supported by this and
other funds? For Scotland, we would like to know to what extent
this may contribute to a moving of population from the rural area
to other areas?
Mr Fursdon: Could I start by the second part
of your question which is about rural industry and say that I
think the Common Agricultural Policy has a bit of a role but there
are a lot of other things which impact on rural industry and rural
business development which probably lie outside the Common Agricultural
Policy. I am thinking in terms of things like the planning system
and that sort of thing which actually has the capacity to alter
the ability of rural businesses to develop and diversify in a
way which might allow the market to provide a solution if the
template was right and planning formed part of that template.
I see it having a bit of a role but there is quite a lot of rural
business development which is not impacted, I do not believe,
by the CAP.
Q230 Viscount Brookeborough:
In Northern Ireland we live close to the Republic and we would
find that money that is made available to the government is far
easier to get at in the Republic. We would say that if you go
into an office and say, "I've got an idea for rural development
in the Republic" they would say, "Brilliant, this is
it, this is what you can have". If you were to say, "What
are the problems?" they would say, "Oh, sort them out
later". If you go into the equivalent which would be a UK
type office they would say, "Oh my goodness, there are a
lot of problems here; we don't know how we'll get round this".
These stumbling blocks are very, very important whether it is
planning or otherwise.
Mr Fursdon: I absolutely agree and I think the
thing is compounded a little bit by the way in which, if you take
the aspect of the CAP that might be applied to this which would
be the Rural Development Regulation and you look at the fact that
we are now facing a situation where everybody is trying to do
it differently in all the RDAs around the country and you have
different schemes being evolved and in terms of a national organisation
which we are, trying to look at it strategically is increasingly
difficult because you have different interpretations around the
country. I reinforce what you say so that it is actually compounded
by the way in which Pillar II is being dealt with in the regional
development agencies.
Mr Buckwell: We do not think your colleague
Lord Haskins did us a huge favour in devolving responsibilities
of some of this to RDAs who do not seem to us to be the ideal
organisations to deliver. Regarding the emphasis we made on more
Axes 1 and 3 this was intended to be more of a European point
and it was Lord Plumb's point that we are trying to devise a second
pillar of the CAP that suits incredibly different countries—27
of them across the EU—and in many of the countries in the
east and the south of Europe there really is a lot more need in
Axes 1 and 3 to improve the infrastructure and the restructuring
of marketing and quality production of food and getting farmers
to work together because they are incredibly small structures
and so on. There is also more of that work to be done in the United
Kingdom and in England, and I can perfectly understand the Government's
questioning why they should be European funded, but in the wider
context of cohesion across an EU of 27 I can perfectly see that
the south and the east of Europe see a tremendous use for the
ideas of Axes 1 and 3, competitiveness of agriculture and diversifying
the rural economy. I still think, as David said, that what really
determines whether your rural economy is vibrant or not is more
to do with your domestic infrastructure, service provision, planning
system and tax treatment of small businesses and so on.
Q231 Viscount Brookeborough:
Particularly, too, tourism in Scotland. We sometimes visit further
north than Sutherland and the picture we get from local people
there is that the hotels are not developing—if anything
they may be going downhill—because there are fewer tourists
going further north because there are fewer facilities and less
support for the environment there.
Mr Douglas: I think you are obviously concerned
about the rural de-population in Scotland (this came up earlier
on) and we already have in Scotland the Land Management Contract
Scheme which has run out of money at the moment but it is in place
to give environmental benefits in Pillar II which are non-competitive.
The main payment out of Pillar IIs the LFASS payment which I talked
about earlier which is designed to keep people in these rural
areas. As someone said earlier in the meeting, tourists are obviously
very important to Scotland—I think it was our colleague
from England who said this—but the tourists do not want
to see a Scotland with no animals, so we have to keep people there
farming in some way to have the hills in an attractive state for
the tourists to go. I must say that the tourist problems in Scotland
are not being helped by the enormous costs of getting to the north
of Scotland from wherever because of transport costs. I can see
that problem becoming greater over the next year or two.
Q232 Viscount Brookeborough:
What developments could there be through funding?
Mr Douglas: The RSPB are very keen to have the
wildlife explored in Scotland. They always argue when we go to
LFASS meetings that they need the money to keep people there,
even to show tourists the wildlife that is on the Scottish mountains.
Q233 Viscount Brookeborough:
I do not think we have very many new ideas of what could be done
if this funding became available and how it could integrate with
agricultural communities.
Mr Douglas: We have discussed in our organisation
that possibly some of the LFASS money would be directed to small
businesses which might operate in some of the highland areas of
Scotland, farmers having their small farm and having an alternative
business.
Q234 Viscount Brookeborough:
Do you have problems with planning for diversification?
Mr Douglas: Yes, we do.
Q235 Viscount Brookeborough:
In some cases it might even be where somebody wants to change
the use of a barn and not even change the appearance of it and
they are told they cannot do it.
Mr Douglas: There is a major problem with planning
in Scotland, yes.
Mr Don: I would add that that differs from region
to region but on the whole planners are obstructive rather than
constructive in more cases than not. From the reports that have
been coming in centrally to us there are difficulties with planning
and making changes to strategic plans, five year plans. It is
a very rigid system.
Q236 Viscount Brookeborough:
So when funds do become available there are major national stumbling
blocks.
Mr Douglas: Yes.
Q237 Viscount Ullswater:
I should say that I am involved in farming in the Lake District.
From what you have been describing it sounds as if agriculture,
certainly in the Borders and further north, is under severe pressure.
If I was in any other business I would expect the assets to be
reducing in value, ie the land would be reducing in value. However,
the opposite seems to be happening. Why should we, as tax payers,
be funding a business of which the asset value seems to be continuously
rising? People seem to be wanting to invest in land and then,
when they have invested in land (generalising of course) they
say, "We can't make money out of this; we need some support"
and that sort of thing. Is there an answer to that?
Mr Douglas: I accept that land prices in Scotland
are holding firm but I think everyone would agree that it is non-farming
money that is focussing on the land price. As you agree, when
the people come there they think it is a great life coming to
Scotland and buying a farm but then when they try to make any
money out of it it is a different ballgame. We are finding that
lifestyle people are coming to Scotland, buying the farm and then
they are asking the existing farmers who are there to do the farming
for them, whether it be contracting or on the new tenancy programmes
that have been put in place by the Scottish Government. That is
happening all the time.
Q238 Viscount Brookeborough:
From a Northern Ireland perspective, farmers are buying land—all
grass, no cultivation at all—for up to £20,000 an acre
so they must see something that nobody else has seen.
Mr Douglas: If we had sat here a year ago and
someone had told us that milk would be 30 pence a litre by Christmas
we would say that was absolute rubbish, yet here we are, we are
facing it. If anybody had said to us that wheat would be £200
a ton in a year's time nobody would have believed it. This has
all happened.
Q239 Chairman:
Surely the position now, because prices are so strong, is that
we can remove any form of support in terms of income support and
just pay for the environmental security side. The market has sorted
income support.
Mr Buckwell: For how long?
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