Farmers and Conservation in the Uplands: The wider context James LePage (Defra)

Wider Context – Landmarks EU Exit Referendum – “once in a lifetime opportunity….” 25 Year Environment Plan Sept 2017 Health and Harmony Consultation Spring 2018 Agriculture Bill – yesterday! A new Environmental Land Management System

25 Year Environment Plan Introduce a new environmental land management system to incentivise and reward land managers to restore and improve our natural capital and rural heritage. “Public money for public goods” “Natural Capital” underpins our health and economy Sister strategies: Industrial Strategy - how to boost productivity Clean Growth Strategy - policies to mitigate climate change and deliver clean, green growth Public Goods are things that benefit more than just the recipient and cannot be rewarded by the market alone. Around £4bn* worth of environmental benefits from farmland, forestry, woodland and trees per year in the UK, including: By adopting this Plan we will achieve: 1. Clean air. 2. Clean and plentiful water. 3. Thriving plants and wildlife. 4. A reduced risk of harm from environmental hazards such as flooding and drought. 5. Using resources from nature more sustainably and efficiently. 6. Enhanced beauty, heritage and engagement with the natural environment. In addition, we will manage pressures on the environment by: 7. Mitigating and adapting to climate change. 8. Minimising waste. 9. Managing exposure to chemicals. 10. Enhancing biosecurity.

25 Year Environment Plan – example policies for land management Embedding an ‘environmental net gain’ principle for development Improving how we manage and incentivise land management inc designing and delivering a new environmental land management system; Introducing new farming rules for water; better use of fertilisers and pesticides Improving soil health and restoring and protecting our peatlands Focusing on woodland to maximise its many benefits Reducing risks from flooding and coastal erosion inc expanding the use of natural flood management solutions Protecting and recovering nature inc Developing a Nature Recovery providing 500,000 hectares of additional wildlife habitat & more effectively linking existing protected sites and landscapes Conserving and enhancing natural beauty inc Reviewing National Parks and Areas of Outstanding Natural Beauty Helping people improve their health and wellbeing by using green spaces Encouraging children to be close to nature, in and out of school I’ve picked out the ones most closely linked to ELM as a delivery mechanism

Health and Harmony Consultation - Moving away from the CAP Implementation Period CAP Start of .. At some point .. UK formally leaves EU New agriculture policy begins Direct Payments will be phased out Designed to help farmers prepare for change Leading to the….. Productivity measures during phase out of DP Likely start between 2020 and 2022 New environmental land management system Devolved administrations will have flexibility to target own support

ELM is part of wider Defra policy developments: Farming Excellence, Profitability and Resilience Supporting rural and upland communities A new Environmental Land Management (ELM) scheme Elements of new policy Reducing Direct Payments in an ‘agricultural transition’ Animal Health & Welfare  

Agriculture Bill – Published 12.09.2018 Headlines: 7 year transition period away from Direct Payments - time to adjust Differential reductions as opposed to flat rate (25% off largest holdings) De-linking from requirement to farm New ELM system of “public money for public goods” The Agriculture Bill sets out how farmers and land managers will in future be paid for providing better air and water quality, improved soil health, higher animal welfare standards, public access to the countryside and measures to reduce flooding. Payments enabling investments in new technologies and methods that boost productivity, during the seven year transition period for famers

Agriculture Bill For 2019, Direct Payments will be made on the same basis as now, subject to simplifications where possible. Direct Payments for 2020 will also be made in much the same way as now. There will then be an agricultural transition period in England between 2021 and 2027 as payments are gradually phased out. Most farmers will therefore see some reduction to their payments during the transition, although those who receive the highest payments will see bigger reductions initially. This will free up funds to invest in public goods. Direct Payments during the agricultural transition period up until 2027 will be “delinked” from the requirement to farm the land - to help new entrants get into the sector and give farmers flexibility to plan for the future. Leaving the European Union and the Common Agricultural Policy: a new farming and environmental policy framework Funds freed up will go into the ELM pilot, planned from 2021.

A new environmental land management system

Environmental Land Management Aim: realise long-term environmental gains, contributing to delivery of 25YEP goals Approach: A New Relationship Land managers will be contractors, paid for the services they provide to deliver environmental outcomes, in combination with their primary commercial business. Farmers will no longer be our ‘customers’ or dependent on subsidies based on quantity of land. Farmers and land managers sell products on the market (like food or timber); and / or providing environmental services and benefits that society relies upon, for which government will pay.

Future ELM CAP Direct Payments. 87,000 farmers Cross Compliance and Greening: 13 Statutory Requirements 11 GAEC 3 crop rule requirement Ecological Focus Area requirement Protection of Permanent Pasture CAP Agri-Environment c29,600 farmers (inc those still in pre 2014 HLS) CS Applicants must follow cross compliance and greening and then select from: Mid Tier (inc 4 wildlife offers) Higher Tier Woodland Capital Hedgerows and Boundaries Capital Historic Buildings Capital Facilitation =230 prescriptive (process based) options and items to select from + Application and Claim Forms Annual start dates Future ELM A new contract (agreement) between land managers and society One baseline (regulation) One set of guidance Outcome focussed Natural Capital Valuation c88,000 participants by 2028 Whole Land Plan Rolling application windows Flexible agreements, with annual re-assessment Adviser support Overlap of requirements issues for land managers to juggle Make it simpler! Distil the complexity of CAP into a single scheme based on public money only in return for public goods provision (….. and some payments to reduce pollution above the regs and good practice baseline).

Environmental Land Management (ELM) A new ELM scheme could include some or all of the following: Multi-annual agreements User-friendly focus Innovative mechanisms Capital grants Funding for collaborative projects Innovative mechanisms Health and Harmony: Consulting on the future for food, farming and the environment in a green Brexit.

ELM Some ELM Concepts Outcome base payment Natural Capital Valuation Co-design Test and Trial Whole Land Plan Broadly Accessible Admin Simple Landscape Scale Advisor support Land manager in control Some ELM Concepts Tests Shorter and tend to focus on specific elements or building blocks Lower risk, involve limited funding, few participants and can be explorative and iterative Payment by results 25YEP pioneers Analysing over 100 proposals received from stakeholders Selection will be based on what specific design ideas will be tested We will work with stakeholders to develop proposals that offer new or innovative approaches to the delivery of environmental benefits, within the scope of the current legislative framework. Trials Provide proof of concept for new ideas, allow us to assess the relative deliverability and value for money of more novel or innovative delivery methods, as well as understand the role they can play in the future system Could run for various lengths of time and will only be introduced into the national system once we fully understand how they add value

Reward continuation of existing public goods provision What public goods and how might ELM help land managers to deliver more public benefit? Habitats and species Carbon storage Water storage Culture (landscape and HE) and public access Reward continuation of existing public goods provision Diversity and connectivity of habitats New habs creation (e.g. pollen and nectar strips), Improved water storage or carbon sequestration New access provision, education provision, community engagement Reward enhanced public goods provision Reduce sediment and chemical pollution, Reduce air pollution, Slow water flow or wind erosion risk. Reward environmental risk reduction (beyond regulation) to protect assets and improve the flow of public goods ELM participants can apply two broad strategies to optimise natural capital: Keep agronomically good land farmed but adapt to ensure “keystone resources” are still there for nature, basic landscape structure is retained and environmental risks are reduced. Simple measures to still ‘share’ land with nature (e.g. wildflower and nectar margins); reduce chemical losses; actions that ‘slow the flow.’ For agronomically poor land the ‘productive’ focus switches to public goods as ELM offers a better cost-benefit return, albeit scope for secondary commercial benefits still e.g. high quality, low intensity sheep meat from traditional breeds. Enable natural habitat regeneration, where that might optimise outcomes. The result should be better optimisation of natural capital and more sustainable, profitable and resilient land based businesses

How ELM might contribute a successful land based business “To be in the black it helps to be green” ELM participation will complement a conventional food or timber business, or provide an alternative income stream – it’s their choice ELM shows how ‘un-productive’ land actually produces things of great value (public goods) and rewards them. ELM helps optimise profit from the land, based on knowledge of its full natural capital potential. ELM encourages protection the assets (e.g. soil) and enhancement of the services (e.g. pollination) that underpin sustainable food production ELM simplifies the complexity of current CAP Pillar 1 and 2 schemes “ELM will make a business more sustainable, resilient and profitable”

Timeframe Tests and trials Pilot UK formally leaves the EU Implementation Period Agricultural Transition Fully functioning new ELM system Tests and trials Pilot Environmental Land Management: Tests, Trials and Piloting