Defra pledges to cushion basic payment withdrawal

Defra has pledged to cushion the impact of the withdrawal of the basic payment against a background of concern about the mental health and well-being of farmers: Defra pledge

Defra’s own statistics show that 16% of farm businesses are already unprofitable – even while direct payments continue to be made. That would rise to 42% without direct payments, which the government intends to phase out over seven years from 2021.

Much emphasis seems to be placed on resilience, and farmers are resilient, perhaps sometimes too much so for their own good. However, resilience can turn into a resistance to adaptation to changing circumstances.

Defra faces enormous challenge on Brexit

The Department for Environment, Food and Rural Affairs (Defra) has made good progress in its preparations for exiting the EU, but it faces an enormous challenge. It is now not able to deliver everything it originally intended for a ‘no-deal’ exit, though Defra told us it still aims to have sufficient arrangements in place if needed, says the National Audit Office (NAO).

Defra is one of the government departments most affected by EU Exit. It is responsible for 55 of the 319 EU related work streams across government, covering chemical and agri-food industries, agriculture, fisheries and the environment.

The NAO report acknowledges that Defra has achieved a great deal in difficult circumstances and to a very demanding timescale. For example, Defra has: developed detailed plans for its preparations, secured HM Treasury approval for £320 million spending in 2018-19; started to build new IT systems; recruited over 1,300 new staff by March 2018 [unfortunately inexperienced ones replacing experienced ones who left - WG]; strengthened its project management capability; and published consultation documents on agriculture and fisheries.

Despite these and other developments, the constantly changing environment has made it challenging for the department to make and stick to a robust plan and meet its project deadlines. The risk of Defra not delivering everything it had originally intended for a no deal scenario is high and, until recently, not well understood by the department. In the work streams the NAO examined it found the following examples where Defra would not be ready:

• Exports of animals and animal products from the UK are valued at £7.6 billion. For the UK to continue exporting, it must comply with international health requirements and all exports must be accompanied by an export health certificate. Defra needs to negotiate with 154 countries to introduce 1,400 different UK versions of current EU export health certificates. Defra is focusing on reaching agreement with 15 of these countries which it estimates account for 90% of total exports, but will not reach the other 139 by March 2019. It has accepted the risk that UK firms exporting to countries where agreements are not reached may not be able to do so for a period after EU Exit.
• Export health certificates will also be required for the first time for exports to the EU if there is no deal which will result in a significant increase in certificates needing to be processed by vets. Without enough vets, consignments of food could be delayed at the border or prevented from leaving the UK. Defra intended to start engaging with the veterinary industry in April 2018, but has not been permitted to do so and now plans to launch an emergency recruitment campaign in October to at least meet minimum levels of vets required. It plans to meet any remaining gaps through the use of nonveterinarians to check records and processes that do not require veterinary judgement.
• The fishing industry contributes £682 million to UK gross domestic product. Defra is still developing its plans to strengthen its control and enforcement activities in English fishing waters. Defra hopes to significantly increase vessel patrol hours, but due to delays in procurement and planning is unlikely to reach its originally intended patrolling capacity by March 2019. In a no-deal scenario, Defra may have to scale up its capacity over time, but is confident that it will be able to manage the risk of any disruption in the interim.

There are further challenges that sit outside of Defra’s control. The UK hopes to seek continued participation in the European Chemicals Agency, but this is dependent on a negotiated settlement. Without this, UK chemical manufacturers would no longer be able to export products to EU member states as registrations of products would cease to be recognised by the EU. To recover market access, they would need to reregister their products on the EU's system via an affiliate or representative located in an EU member state. This is a lengthy process that cannot be started until the UK has left the EU.

Due to the shortage of parliamentary time available, there is a high risk that Defra will not be able to deliver all of its legislation by March 2019. It has three new bills and 93 Statutory Instruments to convert EU law into UK law and is now having to prioritise.

Defra has not been able to fully support businesses in their preparations. As a result of government restrictions, communicated through DExEU, it has not been able to hold open consultations with stakeholders on their preparations for a no-deal scenario. It has also, until very recently, been prevented from issuing specific information for the chemical industry or food importers and exporters.

Amyas Morse, the head of the NAO, said: 'The scale and complexity of what needs to be done to leave the EU is a significant challenge and Defra is impacted more than most. It has achieved a great deal, but gaps remain and with six months to go it won’t deliver all it originally intended in the event of no deal, and when gaps exist, it needs to focus on alternatives and mitigations.'

'Like other departments, it now must ensure its voice is heard by the centre of government to provide an accurate picture of what is possible if a negotiated settlement is not reached, and even if it is.'

The full report can be found here: EU exit

Committee report criticises Defra

The House of Commons Defra Committee has produced a report in response to the Government's consultation on the future of agriculture: Report

It states, 'The evidence from a range of agricultural businesses indicates that their sectors will face significant impacts from the proposed withdrawal of Direct Payments. The level of impact will vary by sector as the economics of each are so different. There are likely to be particularly damaging effects on grazing livestock, cereal and mixed farms and the withdrawal of support and any subsequent closures of businesses could have wide reaching impacts on the rural economy and its communities. As in our Brexit: Trade in Food report, we were disappointed that these impacts have not been thoroughly assessed by Defra on a sector-by-sector basis, to then inform future agricultural policy.'

The report notes, 'The consultation paper lacks discussion of wider food policy and has failed to link agricultural policy to wider public health goals and reducing diet-related diseases. Healthy food makes a wider contribution to public health, which is in the public good and we recommend it should be supported as such under the new model of awarding payments to farmers.'

Defra to get big staff boost

Defra gets the second largest additional sum of any department (after the Home Office) to prepare for Brexit, an additional £310m. About 80 per cent of its work is affected by Brexit, given that its main task in the past was to seek to influence EU policy and implement directives It needs to develop new systems for agricultural policy, fisheries management and environmental protection. In particular it needs to develop the Government's rather vague green paper on food and farming into a set of viable policy instruments.

Staff will be boosted by 65 per cent. Of course, in the interim, many experienced staff have been lost. Under New Labour I had a period of secondment with the animal welfare team, and I was impressed by the way they integrated veterinary expertise with more generalist skills. But, like the rest of Defra, they were subsequently hollowed out.

Stakeholders such as the NFU will be giving evidence to the House of Commons Defra committee about the department this morning. It will be interesting to hear what they have to say. The initial discussion seems to be about farm policy rather than Defra's capabilities, but I will watch some more later.

The future for food, farming and the environment

The Government consultation document is now available with replies required by May 8th. I have not had time to analyse it yet, but hope to do so before long: Consultation

This is clearly an important stage in the evolution of a domestic agricultural policy after Brexit, although I have some scepticism about how much government is influenced by the responses submitted.

Can Defra cope?

At yesterday's Lords committee meeting, I was asked if government needed to be more proactive in identifying regulations that could be abolished or modified after Brexit. My response was, in effect, that Defra had been hollowed out so much, I doubt whether it had the capacity.

This view is confirmed by the latest Whitehall Monitor published by the Institute for Government: Whitehall Monitor

It points out that Defra has estimated that around a quarter of EU laws (around 1,200) relate to its work, and that 80 per cent of the department's work is 'framed' by EU legislation. But staff levels have fallen by a third since 2010.

It also notes that Defra has had relatively little recent legislative experience, its responsibilities since 2010/11 being limited to two Government bills that became law.

Does it matter that Andrea Leadsom doesn't understand history?

Does it really matter that Defra secretary Andrea Leadsom does not understand that farming is a relatively recent development in human history? This blog post argues that it does: Getting it wrong

More to the point, what we got in her speech at the Oxford Farming Conference was a series of platitudes, but very little detail on what the future holds for British farming in policy terms. OK, there are going to be two consultations, but that is a tried and trusted way of delaying taking difficult decisions.

Some thought that her predecessor at Defra, Liz Truss, was a lightweight. Mrs Leadsom doesn't lack confidence or optimism as a dedicated supporter of Brexit, but what she can deliver for the industry remains to be seen.

Leadsom promises 'bonfire of controls'

Defra secretary Andrea Leadsom has promised a 'bonfire of controls' at the Oxford Farming Conference with a 'slash and burn' approach to EU regulation: Red tape to go.

This may be easier to promise than deliver given the complexity of the regulatory environment. Promising to scrap red tape always generates a good headline, but what is really needed is to review each regulation and the purpose it serves. This require some expertise.

However, she is targeting the 'three crops' regulation designed to promote biodiversity on larger farms and this has gone down well with the CLA.

Green campaigners have been more critical, but my view is that the three crops regulation is a rather blunt policy instrument which constrains farm level decision-making without contributing much to sustainability.

Minette Batters, deputy president of the National Farmers Union, said she was disappointed Mrs Leadsom was focusing on less important farming issues relating to Brexit rather than farmers' main concerns such as continued access to the single market and a steady supply of foreign labour to pick crops.

Is Defra ready for Brexit?

It has been estimated that around a quarter of EU derived regulations fall within the ambit of Defra. Is Defra ready for Brexit? No, although the more important question is whether it will be ready by 2019.

The Institute for Government has undertaken a very interesting study of Whitehall's preparedness for Brexit which is quite positive about the Department for Exiting the European Union. Defra is one of five departmental case studies: Institute for Government

What is particularly worrying in Defra's case, given the range and complexity of the issues involved, are the cuts in staff and budget that have taken place. Defra's budget is 17 per cent smaller than it was in 2010 and will be about 35 per cent smaller by March 2019. Moreover, staff have already been cut by 35 per cent.

If all the depleted staff had to do was to deal with Brexit, it might be feasible. Decisions about which regulations to keep and which to change can be taken after Brexit. However, staff also have to do their 'business as usual' work and there is no shortage of challenges, e.g., bovine TB, not to mention the question of relations with the devolved administrations.

The challenges facing Andrea Leadsom

An interesting survey, with many useful links, from Emily Lydgate of Sussex University at the challenges facing Andrea Leadsom as Defra secretary: Angry farmers and environmentalists

Andrea Leadsom is new Defra secretary

Andrea Leadsom, formerly a junior minister at the Department of Energy and Climate Change, is the new Defra secretary of state. A Warwick University politics graduate, she stood down from the leadership race against Theresa May after her performance in the referendum debates had raised her profile.

She faces a challenging task. Brexit has important implications for the agriculture and food sector. Food processing is one of the country's most important industries and is particularly significant in the North of England. (The writer should declare that he is a substantial shareholder in Cranswick plc, the Hull-based food processor which is a FTSE 250 company).

One of the challenges is that Defra has been hollowed out as a department. Does it have the capacity and the resources to ensure that agriculture and food is taken sufficiently seriously by the new 'Brexit' department (we await its official title) headed by another Warwick graduate, David Davis?

Is Defra for the chop?

There are rumours that the Department of Environment, Food and Rural Affairs could be disbanded in the latest round of government cuts. It has already been severely weakened in staffing terms.

Food and farming could go to the Department of Business; environment could go to Energy and Climate Change (DECC); rural development could go to Communities and Local Government. Indeed, one could rebadge DECC as the Department of Environment, Energy and Climate Change. It is not clear who would deal with animal health and welfare.

Needless to say this hasn't gone down too well with farmers' representatives, even though some of them formed the view that Defra stood for Department for the Elimination of Farming and Rural Activity. They preferred the old clientist MAFF. But they fear that if Defra went, farming and food would not be properly represented at the Cabinet table.

Objectors say it is not clear who would lead on CAP reform, although the Treasury might like that role.

Double change at Defra worries farmers

The double change at Defra of secretary of state and farm minister has worried farmers and their friends, although new secretary of state Owen Patterson is said to be on message on badger culls: Defra

Patterson asked Hilary Benn 500 questions on badger culls when he was at Defra and has been on a study tour in the United States to look at bovine TB and its control.

Caroline Spelman was never fully convincing as a safe pair of hands in what admittedly is a disparate and challenging portfolio. However, what really worries farmers is the departure of Jim Paice as farm minister who was seen as having an understanding of the industry and a sympathy with farmers as one himself. Ironically, Dave Cameron sacked him by mobile phone when he was announcing the new code of practice for dairy farmers which many saw as his biggest achievement. Tributes to him from farming leaders here: Paice

However, the arrival of David Heath in his place means that the Lib Dems at last have a representative in Defra, a suprising omission given where they hold many of their seats. It also means an end to the experiment of Isles of Scilly MP Andrew George as Lib Dem liaison person, something that never really worked.

Whether the presence of a Lib Dem will mean any change in policy remains to be seen. The real need now is for Britain's voice to be heard effectively in the CAP negotiations in order to bring them to some kind of reasonable conclusion and not hopelessly behind schedule.

Elsewhere Lib Dem Jo Swinson, until now PPS to Nick Clegg, is reportedly in at BIS and will be responsible for the Grocery Adjudicator Bill, a key topic for those in the food chain.

Lib Dems lack say in farm policy-making

Defra is just one of three government departments that does not include a Lib Dem minister. Moreover, all the ministers in the department have strong farming links, inclining them towards a productionist agenda.

Lib Dem farm spokesman Andrew George, the MP for West Cornwall and the Isles of Scilly, has criticised the Conservative stranglehold on posts. Differences have emerged on the proposed badger cull and the decision to abolish the Agricultural Wages Board.

Mr George has been trying to work with the Secretary of State, Caroline Spelman, to have some say about how budget cuts are made. However, he has admitted that he was 'not yet in the inner circle of Defra ministers'.

Most disagreements are likely to be over matters of domestic policy such as the two that arisen already, rather than attitudes towards the CAP where both parties share a relatively liberal, market oriented stance. However, the Lib Dems are particularly attuned to the concerns of smaller farmers from whom they receive electoral support.

Productionist move at Defra

Rural development programmes should place more emphasis on competitive agriculture and less on environmental considerations, according to new farm minister Jim Paice:
Rural development

In some respects this may be seen as a return to a MAFF-style productionism at Defra, even if the name of the department has not (yet) changed. However, it is often forgotten that there are three dimensions to sustainability: economic, social and environmental. What the balance should be between these is a matter for debate.

The biggest challenge facing Defra is the budget cuts that are going to hit it given the ring fencing of the NHS and lower than average cuts that are likely in defence and education. If it wasn't for coalition politics, one might wonder why Energy and Climate Change needs to be a separate ministry.

Spel(l)ing it out

New Defra supremo Caroline Spelman went down well at her first Farm Council as she has a fluent command of French and German which facilitated informal discussions with ministers. She has built up informal links with German agriculture minister Isle Aigner on the issue of lighter regulation and is planning a bilateral meeting with French minister Bruno le Maire.

She is taking a relatively reformist stance on CAP, noting that there are four constituencies to be satisfied. She told Farmers Weekly 'Farmers need a good deal from CAP reform. So, too, do consumers, taxpayers and the environment. It is a four-pronged approach to how we reform the CAP.'

Rumours have been circulating that Defra will be abolished or rebadged and substantially restructured. However, the minister said: 'I am not a huge fan of big structural change. In my experience, messing around with structures can end up costing money as well as saving money. It is not my top priority.'

Reading the farming press one gets the sense that farmers have realised that it is not bonanza time, particularly given the fiscal constraints. Cost and responsibility sharing on animal health is still very much on the agenda and the commitment on a bovine TB cull is very qualified.

All four Defra ministers have strong farming connections which is how the Conservatives tend to recruit their ministers and there are no Lib Dems in the department, somewhat surprising given their rural focus. However, this is not necessarily a MAFF (Ministry of Agriculture) in all but name. As far as CAP reform is concerned, the personnel may have changed, but British interests in value for money have not. Indeed, they are likely to be emphasised even more.

Lobbying links

Questions are being raised in some quarters about links Defra secretary of state Carloline Spelman has had with the lobbying industry. Of course, it is not unknown for politicians in opposition to have such links or to undertake business roles and Defra has made it clear that everything will be done in compliance with the ministerial code. Read more here: Lobbying

Productionist emphasis at Defra

The productionist emphasis at Defra continues with junior ministerial appointments: Defra . Jim Paice, the Minister of State, was substantially involved in the Young Farmers' movement and has been connected with farming all his life. The 'Pussy', Richard Benyon, is MP for Newbury and is stated to be a local farmer. (As it so happens, I had lunch in the constituency on Sunday and my enquiries suggest that he is more a country landowner than a farmer, not that there is anything wrong that: they often tend to have stronger conservationist instincts).

However, Lord Taylor of Holbeach has not become the Lords minister as expected, the post going to Lord Henley.

The ministerial team would thus be an all Conservative one. However, I am uncertain what is happening to the fisheries portfolio and there were rumours that this was destined to be occupied by the Lib Dem MP for the west of Cornwall and the Scilly Isles, Andrew George.

Sweet appointment at Defra

Caroline Spelman is the new secretary of state for Environment, Food and Rural Affairs. As it so happens, I was with some Defra civil servants yesterday and they were intrigued about what the outcome might be.

Nick Herbert was the shadow spokesperson, but I was not greatly impressed by some of his comments: indeed, I even thought of writing to him and offering some advice! There was speculation that a Lib Dem might get the post and it has been suggested that one of the junior posts in the department will go to the Lib Dems.

Caroline Spelman has a background with big sugar. She worked for the British Sugar Corporation and held the sugar commodities post at NFU. She also worked for the International Federation of Beet Growers in Paris. I have had some dealings with big sugar myself and I know they are serious players.

Her appointment will no doubt be welcomed by the barley barons in East Anglia and the NFU. Farmers felt that Defra until Labour had become the Department for the Elimination of Farming and Rural Activity. I do think that there are some issues on which they have legitimate grievances, for example the failures of the Rural Payments Agency and policy paralysis on bovine TB.

Nevertheless, I would appeal to the new ministerial team not to shift policy too far in a productionist direction and neglect environmental considerations. A good record on the environment is ultimately important for the relationship between the farmer and the consumer.

I know that many individual farmers undertake excellent initiatives on conservation and environmental protection. The typical farmer still has a real dedication to his calling and sees himself or herself as a 'trustee' of their farm. This is not always sufficiently acknowledged. But it does need a supportive policy framework to sustain it.