HC Deb 22 July 2004 vol 424 cc68-72WS
The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett)

I am announcing today further measures concerning the implementation of the decoupled single payment in England. These include measures to promote more environment-friendly and sustainable farming, to go alongside the reduction in red tape and boost to farm incomes that CAP reform will deliver.

The CAP reforms agreed last year were a major advance which will encourage an improvement in the economic and environmental performance of English agriculture. The reform adopts a new deregulatory approach to farm support, by decoupling agricultural subsidy from production and simplifying the application process for farmers. Ten major CAP payment schemes will be replaced by one new single payment—considerably reducing the administrative burden for farmers. And the greater freedom to farm provided by the reform will offer opportunities for the industry to enhance incomes.

We have consulted widely on the key aspects of today's announcement. I believe the measures I have decided upon represent the best balance of interests, taking account of the all the representations I have received. Further decisions will be announced over the coming months.

As part of the reform, farmers in England sharing some £1.7 billion of payments under the CAP will have to meet new cross-compliance standards designed to protect the environment, animal health and welfare, public health and plant health. Following public consultation and discussions with the range of stakeholders, I have decided upon a series of practical cross-compliance measures that will set a new baseline standard for environmental performance for agriculture. These are a relatively light requirement, representing a mixture of common-sense farming practice and support for existing legislation, which should help drive an improvement in overall performance and deliver public benefit. They will help contribute to a number of the Government's objectives set out in the strategy for sustainable farming and food by protecting soils, wildlife habitats and the landscape. A description of these measures (which are distinct from those included in agri-environment schemes) may be found on the DEFRA website and my Department will be sending a communication to all farmers shortly.

The possible cross-compliance measure which has most divided opinion was whether farmers should be required to leave uncultivated two metre field margins alongside hedges and ditches, as an alternative to payment for these measures through the new entry level stewardship (ELS). After careful reflection I have decided that the way forward is to use both cross-compliance and ELS in a complementary way. For cross-compliance purposes farmers will be required to protect hedges and ditches by not cultivating, fertilising and spraying within two metres of the centre line (or a minimum of one metre from the top of the bank in the case of ditches). In addition, farmers will be able to receive payment under ELS for positive management of their hedges, as well as for establishing and managing a range of buffer strip options next to the cross-compliance protection zone around hedges and ditches. Since one of the qualifying conditions for the hedgerow management options in ELS will be that farmers leave a minimum uncultivated strip, those farmers entering hedges into ELS will largely be meeting their cross-compliance requirements in this respect. I am aware there are particular issues about how we accommodate those farmers who have retained small fields and those who want to plant new hedges. We will discuss with the industry and key stakeholders the practical details, so that we can announce the specific arrangements in the early autumn. Finally, I intend to implement this particular cross-compliance measure from the start of the main cropping cycle in July 2005, recognising that farmers have already made plans for the coming season.

Cross-compliance measures will be enforced in a cost-effective and proportionate way that avoids placing unnecessary burdens on farmers. Full use will be made of existing inspections where possible, with the Rural Payments Agency working in close partnership with the specialist agencies to ensure a fully co-ordinated approach. This will be developed in line with other departmental initiatives such as the whole farm approach, which is designed to streamline farmers' interactions with Government.

Close partnership working in order to join up public services at the point of delivery to our customers—whether to farm businesses or other customers—is a key element of the reforms I announced yesterday as part of our Rural Strategy 2004. The new Integrated Agency will be a future partner of the Rural Payments Agency, both in these arrangements for delivering cross-compliance, and in providing environmental grants through the agri-environment schemes.

The cross-compliance measures which have been selected will be complemented by those available through agri-environment schemes in England, which are designed to deliver environmental enhancement and positive management for the public good. A new scheme, environmental stewardship, is being introduced in 2005 and this includes the new entry level stewardship (ELS). The ELS will be open to applications from all farmers, and will provide payments to enable farmers to deliver what society increasingly demands: the sustainable management of our countryside as a whole. This expansion will be funded partly through a deduction (known as "modulation") from the new overall CAP single payment pot. Modulation takes two forms a compulsory element levied at a uniform rate in all member states and the possibility of an additional national rate, at the discretion of the member state. I have decided to take advantage of the option for additional national modulation in England, subject to detailed EU rules being formally adopted early in the autumn. Modulation will be levied at a rate of 5 per cent. in 2005 and 10 per cent. in 2006, when we expect take-up of ELS to be considerably higher. These amounts include both the compulsory EU element and the additional national element. The combined modulation rate to apply in 2005 will therefore be very similar to the modulation rate of 4.5 per cent. previously scheduled to apply in that year. The funds raised through modulation in these years will be matched by funds from the Exchequer, doubling the amount of money returned to the rural economy.

No decisions have yet been taken as to the rates of modulation and of Exchequer match funding that will apply in England from 2007. These will depend on a number of factors, including future EU financing arrangements for rural development measures and take-up of the ELS. But, based on current estimates, the overall rate of modulation may rise further in future years.

On 22 April I made a written statement concerning the determination of the regional boundaries in England for the purposes of the single payment. I can now confirm that farmers will be able to make representations against the location of the Moorland Line on their holdings. The arrangements will be operated by officials in the Rural Payments Agency (RPA) and Rural Development Service (RDS), and farmers unhappy with the results of their representations will be able to make an appeal through a formal appeals procedure. The process will begin during August, when application forms and guidance notes will be available in an information pack from the RPA. Farmers will be able to ask for a pack by ringing an RPA helpline. Under the flat rate payment system we have adopted in England, set aside rates must be calculated using a method set out in European legislation concerning the single payment. I can now announce that the percentage of land to be set aside in the coming year in each of the English regions is as follows: 8.0 per cent. outside the upland severely disadvantaged area (SDA) 1.3 per cent. within the non moorland SDA

There will be no requirement to set aside land in the moorland SDA. These rates are lower than have applied in the past, but a greater area of land will attract a set aside obligation from 2005, thus approximately maintaining the area of land under set aside overall.

Information concerning the management conditions that will apply on set aside land will be made available shortly and a communication will be sent to all farmers.

The National Reserve is the mechanism by which certain defined categories of applicant may apply for subsidy entitlements for which they would not qualify through the normal process. A range of decisions relating to the reserve are required to be taken at UK level and some others have UK wide implications. As the Northern Ireland consultation process has only just finished and full consideration of the results has not been completed, it is not possible to make an announcement at this stage. We will be discussing the issues further throughout the summer and hope to be in a position to make an announcement shortly after the recess.

Another issue that will be given further attention over the coming weeks is how to apply the new scheme in respect of common land. My officials will shortly discuss a potential solution with stakeholders.

Further decisions concerning implementation of CAP reform will be announced in due course. The RPA is currently in the process of contacting those farmers with historic subsidy records to inform them of the crop area and livestock numbers that will be used to calculate the historic entitlement and resolve any queries. If a farmer is unhappy with the outcome of a representation against a decision concerning this data, he or she will be able to make an appeal through a formal appeals procedure. Also during the summer the RPA will provide an opportunity for farmers who have not yet registered their land on the rural land register to do so. This exercise is intended to benefit farmers who consider that they may be entitled to the flat-rate element of the single payment, and/or would like to apply for environmental stewardship. In Spring 2005 the RPA will despatch application forms to farmers for the single payment. The deadline for completed application forms to be returned to the RPA will be 15th May 2005. In the summer of 2005, when the aggregate area of land applied upon is known, we will advise applicants of entitlement amounts. The window for making single payments to farmers runs from 1 December 2005 to 30 June 2006.

Forward to