By Henrietta Appleton, GWCT Policy Officer (England)
The Environmental Land Management Scheme (ELMS) currently consists of the Sustainable Farming Incentive (SFI 2023), Countryside Stewardship (mid and higher tier and soon CS-Plus) and Landscape Recovery, with the ultimate aim of replacing the existing Basic Payment Scheme (BPS) by providing support to farmers based on “public money for public goods” to achieve the dual aims of supporting environmental ambitions alongside food production.
But will ELMS plug the ‘funding’ gap that the withdrawal of BPS exposes the farming industry to? This was one of the concerns raised by the Defra 1922 Backbench Committee when they asked GWCT to appear before them to give evidence.
The simple answer is no, given the reliance of many farm businesses on BPS. Defra’s own analysis showed that 38% of farmers would have made a loss between 2017 and 2020 without direct payments. However there is a more complicated answer that considers not only the economic aspects of the transition but also the ability to deliver the environmental outcomes needed to meet Government targets.
In general the GWCT believes that Defra has developed a good policy structure in ELMS although the nature of the engagement process means it has taken about 6-7 years to reach the current structure – and ultimately it is still based on the same principles as the EU-based scheme (see Same old, same old blog). This is a great disappointment and not what was initially promised, which was that delivering environmental benefits would be rewarded.
From a delivery perspective the main problem that Defra still faces is the need to engage farmers and, in this respect, there has been a lot of discussion about payment rates and whether farmers will have to resort to intensifying production. As far as the new SFI is concerned, time will tell whether the flexibility the new scheme offers combined with the payment rates will deliver the basic environmental outcomes envisaged, but right now, as harvest gets underway, farmers have other things on their minds.
The Importance of Countryside Stewardship in Delivering Environmental Outcomes
But if ELMS is to really deliver the environmental outcomes expressed in the Environmental Improvement Plan (EIP23), the focus needs to be on Countryside Stewardship (CS) – and in particular CS-Plus which Defra has promised but about which we have little detail at present. However, indications are that payment rates will be purely based on costs incurred and income foregone – in other words no reward element.
It is often said that farmers need to be in the black to farm green and this is important as it should not be forgotten that farming is a business and needs to make money – albeit in some cases very little. If Government is serious about plugging the BPS gap and about bending the curve of wildlife decline, then it needs to be serious about paying for the public goods that farmers are delivering and to focus on the approaches to species recovery and sustainable farming practices that are known to work.
Whilst in the future the development of natural capital markets will provide a private source of green finance for the land management community to deliver some of the environmental outcomes, such as water quality, at the moment much of it is still in its infancy and not able to plug the funding gap.
Government therefore needs to recognise that in the meantime it is important that the payment rates in CS, and CS-Plus in particular, reflect the value of the public goods that farmers are delivering. This requires a ‘reward’ element in the payment equation. But clearly Treasury is only going to approve this if the investment is value for taxpayers’ money.
The Need for Management and Targeted Interventions in ELMS
This is where we continue our call for the need for ‘management’ in the delivery of environmental options and for money to be focussed on what we know works. Of course most of the options in ELMS are based on those developed over a number of years and so we know that they work – to a degree.
Just focussing on habitat alone in agri-environment schemes, which has so far cost the taxpayer c£9bn, has quite simply not resulted in the recovery of our biodiversity – as evidence by the continuing downward trends of indices such as the farmland bird index – nor in the delivery of the broader environmental goals such as improved water quality and soil health.
It has also resulted in a reduction in the area of food production – although not necessarily a reduction in yields. By taking out corners and areas of the farm that are uneconomic to produce food (especially given high input costs), farmers can increase their yield per hectare and their margins whilst also helping achieve government targets.
Recent analysis of employing existing ELMS options to deliver environmental targets in the Upper Eyebrook Catchment (in which the Allerton Project sits) would require either a 23% reduction in the arable area (if the existing woodland area was expanded by 16.5%) or a 47% reduction in the arable area if arable reversion was the only approach taken (i.e. no additional woodland). These are significant figures given the need for farms to also focus on food production.
So what is the answer? Quite simply to make the areas of land put aside for nature and dedicated to food production more efficient and effective in delivering those outcomes. And that means focussing on management and targeted interventions.
For species recovery we have continually demonstrated the need for a wide range of approaches that, whilst based on habitat, may also require other interventions such as supplementary feeding and predation management during the breeding season. In terms of farming, the GWCT was involved in a Defra project looking at the role of Sustainable Intensification in achieving these dual aims, the results of which appear to have been shelved (What is Sustainable Intensification? | Sustainable Intensification (siplatform.org.uk)).
We believe Defra should dust down the final report and use the conclusions from it to help design CS-Plus. As well as adequately rewarding farmers for helping Government meet its own legally binding targets.