|Andrew RT Davies AM|
|Gareth Bennett AM|
|John Griffiths AM|
|Joyce Watson AM|
|Llyr Gruffydd AM|
|Mike Hedges AM||Cadeirydd y Pwyllgor|
|Dr Eleanor M Harris||Ymchwilydd Polisi, Confor|
|Policy Researcher, Confor|
|Dr Ludivine Petetin||Darlithydd yn y Gyfraith, Ysgol y Gyfraith a Gwleidyddiaeth, Prifysgol Caerdydd|
|Lecturer in Law, School of Law and Politics, Cardiff University|
|Dr Mary Dobbs||Cyfarwyddwr, Ysgol y Gyfraith, Prifysgol y Frenhines, Belfast|
|Director, School of Law, Queen’s University Belfast|
|Dr Nerys Llewelyn Jones||Partner Rheoli, Agri Advisor|
|Managing Partner, Agri Advisor|
|Dr Nick Fenwick||Pennaeth Polisi, Undeb Amaethwyr Cymru|
|Head of Policy, Farmers Union of Wales|
|Frances Winder||Cyswllt Amgylchedd Cymru|
|Wales Environment Link|
|George Dunn||Prif Weithredwr, Cymdeithas Ffermwyr Tenant|
|Chief Executive, Tenant Farmers Association|
|Huw Thomas||Cynghorydd Gwleidyddol, Undeb Cenedlaethol yr Amaethwyr Cymru|
|Political Adviser, National Farmers Union Cymru|
|Rachel Sharp||Cyswllt Amgylchedd Cymru|
|Wales Environment Link|
|Rebecca Williams||Cyfarwyddwr Cymru, Cymdeithas Tir a Busnesau Cefn Gwlad Cymru|
|Director, Wales, Country Land and Business Association Cymru|
|Tony Davies||Cadeirydd, Rhwydwaith Ffermio er Lles Natur Cymru|
|Chair, Nature Friendly Farming Network Wales|
|Elizabeth Wilkinson||Ail Glerc|
|Marc Wyn Jones||Clerc|
|1. Cyflwyniadau, ymddiheuriadau, dirprwyon a datgan buddiannau||1. Introductions, apologies, substitutions and declarations of interest|
|2. Trafod Bil Amaethyddiaeth Llywodraeth y DU||2. Consideration of the UK's Agriculture Bill|
|3. Trafod Bil Amaethyddiaeth Llywodraeth y DU||3. Consideration of the UK's Agriculture Bill|
|4. Trafod Bil Amaethyddiaeth Llywodraeth y DU||4. Consideration of the UK's Agriculture Bill|
|5. Papur(au) i'w nodi||5. Paper(s) to note|
|6. Cynnig o dan Reol Sefydlog 17.42(vi) i benderfynu gwahardd y cyhoedd o'r cyfarfod ar gyfer eitem 7||6. Motion under Standing Order 17.42(vi) to resolve to exclude the public from the meeting for item 7|
Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.
The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.
Dechreuodd y cyfarfod am 09:01.
The meeting began at 09:01.
Bore da. Good morning. Can I welcome Members to the meeting? Can people set their mobile phones to silent and turn off any other electronic equipment that may interfere with broadcasting? Any declarations of interest?
I want to declare that I'm an active farmer and a partner in a farming business.
We've had an apology from Jayne Bryant, who is not being substituted, and we expect Gareth Bennett to join us later.
Can I welcome our first panel? I can't see that far, so would you like to introduce yourselves, please?
I'm Ludivine Petetin. I'm a lecturer in law at Cardiff law school.
I'm Mary Dobbs and I'm a lecturer in law in the School of Law in Queen's University Belfast.
I'm Nerys Llewelyn Jones, solicitor at Agri Advisor.
I welcome you to the meeting, and you'll be pleased to know that I do wear glasses when I'm driving. [Laughter.]
Do you want to make any opening remarks or can I start with questions? To what extent is it reasonable and appropriate for the Welsh Ministers to use dedicated powers under the UK Bill to ensure farmers can continue to receive payment under existing financial support schemes post Brexit?
I think it's very appropriate to use those powers to continue payment under existing schemes initially, because obviously we need to make sure that those payments continue and are paid and administered appropriately until such time as there is a change. In terms of replacing existing schemes as well, obviously, it's important that any new schemes are dealt with and administered appropriately thereafter as well. So, it's very important that the powers are utilised for that purpose.
Okay, thank you. To what extent do the Welsh provisions in the UK Agriculture Bill set out in Schedule 3 provide a suitable legislative framework to deliver the Welsh Government's aspiration for the future of farming and land management in Wales?
Firstly, I think it's important to look at both the 'Brexit and our land' proposals and think about whether they're appropriate but also to go and look at the Bill. The Bill covers sufficiently most of what's in the 'Brexit and our land' provisions. It potentially is excessively limited when it comes to the economic resilience scheme in dealing with the rest of the supply chain. So, it can facilitate the payments to farmers and those individuals and businesses in the rural community, but it may be excessively limited for the extended supply chain, and then there's also the question about whether 'Brexit and our land' is excessively limited as well, so, potentially, that needs to be extended, in which case the Bill would need to be stretched further as well.
I think there is scope within Schedule 3, but if 'Brexit and our land' could be a bit more ambitious then you could have a problem, or you might have an issue, with currently what we have under Schedule 3 and the powers under that Schedule depending on the outcome of the consultation, as Mary just said.
Okay, thank you. The Bill includes extensive regulation-making powers but few duties. Should there be more duties? A definite nod there.
Most definitely there should be more duties and more objectives set within it and also I think the ability for there to be perhaps regional objectives set within that thereafter as well, so that we've got objectives that meet the needs of Wales as well as those that meet the need of the more general framework across the UK.
In terms of objectives, I think what is really important is to think about farming in Wales and to think about what the core values and core aspects of farming in Wales are. And thinking about small farming, thinking about agri-sustainability, thinking about wanting to keep the environmental protection that we have, and also thinking about the legislation in Wales that we have currently and about the sustainable management of natural resources. And, what we already have in Wales; how can this feed into the future of farming?
I just want to reconcile in my mind, because the briefing documents that we've had clearly point out that the Bill does lack clear objectives. But then, trying to reconcile that with, surely that's a political objective: the Government of the day sets its objective for how it wants to drive forward support in rural areas and the rural economy vis-à-vis the legislative framework that it might have to operate around. Have you got any suggestions how those objectives could be achieved through the legislative route, rather than the political route? Did I make myself clear there? Because, obviously a Government has the right to change and put a manifesto down, and those are its objectives, politically, but the legislative framework sometimes could constrain some of those objectives and actually acts as an obstacle if you're too prescriptive within the legislation.
I think you could look at it as an obstacle, but you could also look at it as being something that is framework setting for the benefit of a long-term, certain future in terms of agriculture and the environment as well. So, I think setting long-term objectives is definitely beneficial for the rural community and for agriculture and the environment and all the different things that we're looking to try and protect. I accept that the Government of the day can change legislation as well, but there needs to be some consensus as to what the overall objectives should be here and the framework setting.
One of the ways of doing that is to do so by virtue of or with reference to principles, you know: what are your principles in terms of—? So, sustainable development is a principle that we already have in our legislation within Wales, isn't it? So, that's a principle that could be core within this. That's one example, but I think that's one way to try and make sure that the direction, going forward, is also making sure that we're not undoing things that we've done in the past, as well.
I think I would build on that, also, by saying that—and it's linking in with what Nerys is saying—it's the difference, perhaps, between the overarching objectives and then developing and defining individual policies, or the weight that is given to individual policies or objectives then, later on. So, the overarching objectives, having the principles, and yes, as the Chair was saying, also, the idea of having duties to comply with those principles, to comply with those objectives, to strive to attain them is something, and then the balance and how those are developed can be done by each political group as they progress through, as well. So, there's still flexibility within it.
If I turn to fisheries, now, the Bill does not include any objectives. Should it?
I think we're going to repeat ourselves and say 'yes' is the answer—absolutely.
The answer being 'yes', then—very much so.
Yes, thank you, Chair. Good morning. There is a list of purposes, of course, in Part 1, isn't there? I'm just wondering whether you think that's a comprehensive enough list, whether there are any omissions, or whether there is anything that maybe we should be calling for, to be added to that list.
You mean clause 1(1).
Well, I think it is a good start, but it could be more ambitious and we need to be more ambitious. What we want is to truly achieve—it may be a bit fancy to say that, but—true twenty-first century agriculture. You know, thinking about the long-term consequences, thinking about rural communities and thinking about nature conservation and resilience. I think that what is listed under clause 1(1) is a good start, but we need to think about rural communities and more particularly generational renewal and public health, and just pushing things a bit forward, things that are important today. I think this is it; we need a bit more. We need a higher level of protection. We need to be driving this forward.
So, you mentioned rural communities. You think more along the lines of social issues as well, and not just the obvious environmental and economic groups.
Very much so, yes.
I think I would echo what Ludivine is saying there, and say there's much greater scope for a different range of purposes there. But there are also two different things: there's, one, having all the objectives for the piece of legislation and for the policies themselves, and then those specific objectives or purposes that you're referring to within that clause. So, you could have overarching objectives that are different from within that specific clause as well. Within that clause, then, the question is: do you have a list of extensive types of schemes, effectively, or do you take that little step back and say, 'We'll have environmental protection and conservation, we will have rural development and social development within it, we will have public health, and food quality', rather than very specific ones? Because it feels like it's been a bit like a dartboard and there is a list of individual ones, which are very worthwhile, but they're piecemeal.
And once you start listing there are obviously going to be omissions.
And what about energy? I don't see energy there either. Is that one that's important?
Energy security is important, and the conservation of resources is very important. I'd probably just put it under conservation of resources and resource security, maybe. The danger with energy is that you try pushing towards the production of energy though agriculture, which currently is not necessarily the most efficient use, and it can lead to its own problems in itself. So, it needs to be carefully done.
Okay. The Bill also extends or enables all land managers to access support. Clearly that's been a bone of contention for many. I'm just wondering what advantages or disadvantages you see in extending it to people who aren't necessarily active farmers.
I think the difficulty I'd have with the concept of 'land manager' is that there is no such concept at the moment. If you talk to somebody in a rural community, if you said 'land manager', that wouldn't really mean anything to them. I think we need to be very careful about how we define this. I think it's very important that it is those who are actually doing something positive on the land that are benefiting from any funding that is available. So I think it's really important to distinguish between one and the other. 'Manager' suggests that you don't actually get your hands dirty, so the language itself is difficult, I think. We do think to rethink, I think, how we are defining it.
My view is that you don't necessarily have to be working with a spade, no, but I think you do have to be able to show that you are carrying out positive actions that contribute positively towards the management of that land.
What I'm asking is: should it be restricted to active farmers? That's what I'm asking.
I don't like 'active farmer' either—
—which is why I'm reluctant to—. I think 'active farmer' also is not well defined. I think we need to come up with something that is more—. And what is wrong with 'farmer' and perhaps defining what 'farmer' means more specifically within the legislation?
The English part of the Bill is more defined in the way it sets out the criteria. In fact, I've got it here and it says:
'starting, or improving the productivity of, an agricultural, horticultural or forestry activity.'
That's the definition that would be in the Act as opposed to a 'land manager' in the Welsh Act, or the Welsh part of section 3. Do you think that the English definition or the UK Government's definition is a better definition to work to as opposed to what the Welsh Government have put forward?
I think it's a better starting point, yes. It's not perfect, but, yes.
I'm going to come in. So, Nerys is a proper lawyer. I'm a legal academic, which makes us have a slightly different perspective on this, which is: yes, it is much more precise, it is one that we can come to grips with more easily, but I would consider that there's some flexibility that is needed, and the 'land manager' facilitates that flexibility because it facilitates more to do with the actual use of land and the management of land that is not precisely and specifically limited to farming as we understand it. We could change the definition of 'farming', but that brings its own problems in itself. So, maybe 'land management' is not the most appropriate or useful term, but to have something that's broader than just 'farming', I think, helps further the objectives that are striven for within Wales.
What I wanted to say in terms of the land managers is if we are opening new schemes to land managers broadly defined, it means more competition to access the funds. And I think here that by having this universal system, the universal schemes that are mentioned in 'Brexit and our land', it is a good and a positive thing to do that, but you are creating more competition among farmers and beyond—horticulture, forestry. But what that might lead to is actually unfairness in the system, where some actors will need the money and some actors won't, and by treating everyone the same and equally, you might actually create unfairness in the system. So it needs to be carefully looked at and assessed.
The other issue clearly that's been dominating the discourse around proposals in Wales is the proposal to do away with the direct payment, or basic payment, for farmers here in Wales. Now, clearly, we've already heard concerns that farmers in the uplands will be disproportionately affected, maybe tenant farmers as well, and I'm just wondering two things, really: what other groups, potentially, might be disproportionately affected by that intention, and secondly, what can we do to maybe mitigate some of those effects?
I'm going to start here. One of the main problems we have is that the Bill, or 'Brexit and our land', does not differentiate between the different types of farmers we have. It's a one-size-fits-all approach, and therefore whether you are a small farmer or whether you are a big farmer, you are treated the same. And this means that, again, it creates unfairness in the system. And by having this one-system approach, it will have a negative impact, because removing direct payments for a small farmer will have a huge impact on how they work on a daily basis and how they might—I'm going to say survive. But when you remove it from a farmer who has a lot of land and is very profitable, it might not make such a huge difference. And I think that we need to really look carefully as to the impact of removing direct payments and, in particular, for small farms.
I have grave concerns about the demise of the direct payment. I think, if the ultimate goal is to do away with the direct payment, then that's fine, but we need to have a very carefully staged process that gets us to that point. My concern is that, when we talk about transition, we're talking about changing it within that period of time; actually, I'd like a clear decision as to what is happening, then a period of at least three years where people can put their businesses on a proper footing so that when it does disappear we are prepared for it.
Also, the other issue is that we're making decisions about changes to direct payments without any idea of what the trading position is going to be or what the effect of Brexit actually is going to be from a trading point of view. So until we know the answers to some of those things, the certainty that the direct payment does provide at the moment is actually important, not just for the farmers, but I think for the banks and for those who rely on farming businesses from an economic point of view. So I think a short period of time where we're looking at direct payments coming to an end is a massive concern within the rural community.
And on that note of transitioning, can you describe to us the scale of the challenge, in terms of transitioning to the new systems by 2025, or maybe a bit later? Clearly, when you look at Glastir and the problems there, and upscaling it by a factor of however many, then clearly there are capacity issues and a lot of practical issues, one would imagine.
I think we need to have the confidence to say, 'Well, look, we'll make a decision, but we will allow a significant period of time for us to make the changes that we need to then put that in practice.' It's a confidence thing, I think, isn't it, to say, 'Well, actually, yes, this is what we're aiming towards, and we're going to have plenty of time to put that in place properly', as opposed to trying to rush something in, which we've had to do under a European system. We don't have to do that any more.
So, is the proposed transition period not long enough? Is that what you're saying?
It's not just to do with the actual length, but as well I would have concerns that a vast proportion of the farms would also not be able to be economically viable even after the transition period, because the public goods scheme won't actually help the farmers to make a living. Well, it depends on how it works as well, but it's not really going to help support them, considering the current reliance on the direct payments, and the economic resilience scheme is focused on making people more economically viable and sustainable themselves. So, it's a short-term thing, and 'Brexit and our land' specifically says that some of the farmers won't basically be economically viable, because you're targeting the ones that may become so. So, part of the challenge for the Welsh Government is to consider whether they want individuals to stop farming and to stop working the land, and if they are going to stop, what's going to be the future for those people as well.
Clearly, just to put it into the context of what's happening as we speak, I suppose, in terms of an emerging deal, if, let's say, that we do remain within the customs union for maybe two years and then, beyond that, we're still not quite sure, you would argue that we really shouldn't move until we are quite sure. Even if it means that we don't go any further for two years, then that's the best way to do it.
And I'm not saying that you can't do so or make some basic changes to the scheme as it stands, but nothing which is so dramatic that that also has a knock-on impact that is adverse—
In other words, we can't set our long-term course until we understand what the longer term implications of Brexit are to our trading conditions.
Finally from me, then, again following this line of questioning, really, in England they've had certain pilot schemes to look at potential models or ways of operating. I presume that you'd be keen for that to happen here in Wales before any final decisions are made.
Yes, as soon as possible. There is so much that could be done that could be positive for farmers, that could be positive for the environment, and there is scope to do anything we want and to be creative, and I think that it needs to start as soon as possible, thinking about collaboration between farmers at landscape level, at catchment-to-coast level. It's time to be ambitious. I'm trying to be positive.
And that's not reflected in what you're seeing in terms of the Bill.
I'd just put a note of caution on pilots. I think we need to be clear what the purpose of that pilot is as well. We can spend a lot of money on pilots but, actually, if—. You know, we have got a really good track record as well in terms of protecting the environment and enhancing the environment in Wales in the schemes that we've got. Rather than reinventing the wheel with another pilot, I think we need to be very clear about what our ambitions are for those pilots before we do them.
Following our evidence last week around the budget, I wouldn't be confident that there is an earmarked pot for pilots in any case in Wales.
Good morning, all. I want to move on to monitoring and enforcement, and have an understanding of your views on the provisions relating to monitoring and enforcement and to what extent you think that they're, first of all, appropriate and, then, sufficient.
In terms of what the current position is, we obviously have things in terms of the environment, animal welfare, et cetera. There are criminal sanctions in place in relation to breach of those, as well as the financial penalties that are incurred at the moment under basic payments or under Glastir, et cetera. Also, the other thing with those penalties is that they're on a percentage basis, so you could have somebody that is penalised much more heavily than somebody else because it's based on a percentage as opposed to actually looking at what the breach is. So, we must have a rigorous enforcement policy, but I think we do need to think about the proportionality of that policy and how it does best achieve. For example, if you found that a farmer hadn't got adequate housing, or something like that, wouldn't it be better that that farmer was required to invest in that housing as opposed to a penalty being imposed? It's just a very practical example of how you could improve the position by positive management and mentorship, perhaps, as opposed to a very punitive enforcement policy.
Just on a general thing to do with the monitoring and enforcement, the Bill itself isn't hugely clear. It lays the potential for various approaches. There is an indication in it that it's going to be quite reliant on self-monitoring and the gathering of information by the farmers and land managers. This is a useful mechanism from the Government's perspective as it cuts down resource reliance. However, this is reliant on farmers, who may not have the requisite expertise, may not have the resources themselves to undertake it. This is quite burdensome. It's problematic in just gathering the information on the farmers, but it also potentially undermines the efficiency and effectiveness of both the schemes themselves and, looking into what Nerys was saying, the environmental and general standards within society as well. We like this idea of self-regulation to an extent in society, but you always need independent expertise; you always need to have the Government or its agencies undertaking monitoring and enforcement mechanisms itself, or you risk, basically, it being completely undermined.
But I think that's where we should be putting the investment, in that expertise, in that advice service, and in making sure that those improvements are happening, as opposed to—. The enforcement policy fails if there are prosecutions. It's making sure that these things don't happen in the first place, and that people are educated as to what is the best practice available for them on their particular farm. So, I think changing perhaps the way that we approach our enforcement monitoring policy would be very beneficial.
There is monitoring being carried out by a variety of agencies—for example Farm Assured Welsh Livestock, which looks at Welsh lamb and beef. So, farmers are engaging in that willingly and are paying for that service already. And that monitors everything really that is carried out in a cross-compliance check on a farm. So, why are we doing both? It just doesn't make any sense to me at all.
You started talking about who should be responsible for the functions and the monitoring, and almost suggesting maybe that it ought to be delegated away from the land manager. I'm going back to 'land manager', not 'farmer'. So, who do you think might be best placed, if not the individual land manager? Could it be Natural Resources Wales? Could it be the national parks? And, to an extent, I suppose, they already do. And what are the main risks and benefits to that approach? You've started outlining that. And I'm going to add also that, in some cases, it is clear that the monitoring is not working, when we look at the state of the rivers in Pembrokeshire, where I live, and Carmarthenshire, which neighbours it.
I think that, as Nerys was saying, we need resources to be put into informing and training farmers or land managers so that they are a bit more aware as to what they can and can't do and how they can solve the problems that they're facing. And, I think here, what we are talking about is creating more requirements, more constraints on them, and then the standards changing as we go along, and they might not be in the financial position to actually reach those higher requirements, or they might not be aware of them. I think we need more communication between the different types of land managers and whoever is enforcing those new functions.
But what I also wanted to say is that the costs of having so much monitoring and so much enforcement need to taken into account, and not all of the funds being put towards monitoring and enforcing. Some of those funds need to go to farmers. So, it's not all about how we achieve those outcomes and what we do with them; it's also about spending it on the actual farm.
So, you're asking about the benefits and the risks. I was saying a little bit about the enforcement mechanisms—the risk for enforcement. A possibility would be to have shared responsibility between the agencies, between the various official groups, and also the individuals, but also groups of individual land managers as well. So, you could have group schemes where you take responsibility for the catchment area. So, this is one thing that's been suggested. There are various authors like Ostrom—but, actually, also, a PhD student who is just finishing in Queen's, working with farmers in Northern Ireland to do with diffuse water pollution—so, exactly that problem that you're talking about—and getting farmers to work together in developing schemes, and then having extra incentives where everybody complies. It's much more complicated than this in getting into it, but there is the possibility of using group schemes within that—so, shared responsibility between the land managers and the agencies. The difficulty, if you leave it for just individuals, is not merely the lack of expertise, it is also essentially the potential for regulatory capture by those individuals as well—that they would take control of it and might guide it in a different fashion.
There's also the difficulty of cross-border pollution. And here I raise that lovely phrase of 'common frameworks'. Common frameworks don't have to be the scary thing that some people feel that they are—overly restrictive on the devolved jurisdictions—but to have just shared common standards, to make sure that you don't have to worry about land on the other side of the border coming in and polluting the land here. And that's essential if you're to maintain standards in Wales. So, that's just something to flag as well, in that context.
I think we need to be careful that we don't legislate for the minority, and end up legislating for the majority. The majority of farmers are compliant, the majority of farmers—or land managers—are, I think, capable of monitoring themselves, and are capable of recording these things and being very positive in their approach. I think the difficulty we have is that we have a minority, and we should target that minority and deal with that minority quite severely, I think. And I think that then means that we have a better—. In terms of regulation, it's always better if there is a voluntary approach, and there is such a voluntary approach in terms of pollution in Pembrokeshire going on at the moment, with a group of farmers. And I think that kind of approach should be rewarded. Because we can legislate forever, but if it's not actually changing the way that we do things—. And there is funding for changing and improving the resources on farm—there's no question about that; that is crucial.
Thank you, Chair. I think you touched on this earlier—the phasing out of payments and the transition period, which was the question area I was going to ask you on. So, we've got you on the record on that. But if I could just maybe take the governance and inspection cycle a little further, if I may, the Government have cited that they would look to national parks and Natural Resources Wales—. With the greatest respect to both organisations, I don't think they've got a brilliant track record in this particular area, and to assume that level of inspection and duty would be huge, in my opinion, for them. Do you feel that such organisations would be fit for purpose in becoming the inspection bodies, or do you think it's far better off having any inspection process at the farm gate, as it were, rather than, obviously, further down the road?
I think it's difficult for an organisation, for example NRW, because they have two different functions—they have an advisory implementation function and they have an enforcement function. I accept there has to be a body that has that enforcement function, but I think there needs to be perhaps a separate body that is a trusted farmer partner that would enable things to change at a farm-gate level, as you were suggesting. So, it's great having one organisation that does everything, but, at the same time, there are certain things that would be better done on a more, peer-to-peer, farm-gate level, and I think that we should have that. NRW should be the last resort—that enforcement should be the last resort. There's so much more that we could do before we get to that stage, and then it reduces the enforcement burden on them, because things aren't there to be enforced in the first place.
And that would be for you two as well—on that level of enforcement, it should be the last resort, and it shouldn't be something that should be the front-of-house of the operation.
It should be the last resort, but it should always be there as an option as well. And that's why you also need to make sure there's a good supply of information, and both self-monitoring and, at the very least, some form of auditing of that monitoring, and checks every now and again.
Can I ask you, in the Bill itself, there's a provision there, clause 26(4)(b)—I sound as if I know every clause there; I don't, I'm reading the briefing document—and it allows the Secretary of State to fix an upper limit of what might be spent within the devolved areas—?
I'm irritated, but Ludivine—
That's a considerable power, I would suggest. It's not obligatory under WTO rules, as I understand it. But more importantly it doesn't set a minimum amount. If you accept the principle that the Secretary of State should have that power, then surely they should also have the power for a minimum level, because, actually, if you don't have minimum level, then where does the maximum sit, as such? You will get great divergence around the UK. And in particular, then, in evidence to the Constitutional and Legislative Affairs Committee this week, the Cabinet Secretary indicated that, if that provision stays within the Bill, she sees that as a red line and wouldn't be able to recommend to the Assembly a legislative consent Order around this Bill. I'd be interested in your thoughts on that particular area.
So, just going back a step, there is no such thing as a cap—a ceiling—in relation to the obligations coming from the World Trade Organization under the green or the blue box; there is only a limit in relation to the amber box. But economists have looked at it very carefully and the UK would be entitled to around £6 billion of payments under the amber box. Therefore, there is more than plenty available under the amber box for farmers to receive financial support.
Now, I completely agree with you that what exists under clause 26 overall, and in particular under the specific provision that you mentioned, is that what we have is a recentralisation of powers to Westminster—this is what happens here—but we have it in relation to financial support, but also in the design of the schemes within the devolved nations. So, it enables Westminster to actually decide thinking about future schemes within Wales as to under which box each scheme is going to fall. So, even if Wales would say, 'We think that the public goods scheme falls under the green box', but Westminster thinks it's an amber box scheme, then, under clause 26, it has the final say; it has the final word. Therefore, here we really have a big change as to the relationship between the UK and the devolved nations, because, at the moment, the UK central Government has no say over that; it's a relationship between the devolved nations and the EU.
Yes. The EU—
So, in essence, it's not a creation of a new power responsibility; it's a responsibility that currently exists in Brussels that would sit at UK level now to, obviously, allow the UK market to operate, I'd assume—that's why it's been put into the Bill. Would that be your interpretation of it?
Yes, but it's the EU, first of all, which will set under which box the payments fall. So, at the moment, pillar 1 and pillar 2 are under the green box. Then, every member state of the EU, including the regions, will comply with that. But here, it could be the other way around, where you have the devolved nations within the UK setting their own schemes to do as they wish—and they can do so under WTO obligations. But here what the central Government is doing is saying, 'Well, actually, no; we're going to set house rules for you. Even if you think they might be different, we're going to do that.' And that's not—. The agreements of the WTO are not that restrictive.
And, crucially, what Ludivine is saying in relation to that is that with the boxes—because there is no cap under the green and blue boxes—the UK, as she was saying, will be putting them into those specific boxes, but also is going to impose, potentially, caps on those payments as well. That's not required by international law, and therefore the UK does not need to do that. So, at the very least, each of the devolved nations should be going and having a say on those creations—if they should be created at all—and then should also be having a say on the amber box. There have been suggestions in the last little while about amendments to the Bill in order to go and facilitate each of the four nations going and having a say in relation to this. But, as it stands, this would be considerable centralisation of those powers.
Okay, and do you think that there's definitely an anomaly there, if you accept that these powers are required, that there isn't—given that you've got a maximum, there isn't a minimum? Because I'm assuming this has been put in place to, obviously, preserve some sort of balance in the market, but if you don't put a floor in that market, accepting that you've put a ceiling in it, you'll get greater disparity again, then. So, if you accept this, then there should also be a minimum to it as well as a maximum.
Clause 26 clearly states that central Government can set the amount of funds going to each devolved nation, and there is no mention, as you say, of a floor—a financial floor—that would be there in order to ensure that, in the long term—. Well, at the moment, there is nothing that would prevent central Government from saying, 'Well, we're not giving any more money to farmers'—not, I'm going to say, over the next few years, but 10, 15, 20 years down the line. There isn't such a thing, no.
To have a balanced internal UK market, absolutely, but there are also other elements of the Bill that would also undermine an internal UK market, such as, for instance, the difference in objectives, or just the very difference in having the ability to access different schemes, or even, indeed, having different standards across the UK as well would all lead to differences in competitive situations for the—
The Chairman might tell me to shut up, because I appreciate there's a line of questioning that other Members want, but, if I could just maybe take that point a little further, this Bill, obviously, had been put together before much or any discussion around UK frameworks. Now, if everything in this Bill is about protecting the single market of the United Kingdom, how do you see this Bill fitting into those types of negotiations to create those UK frameworks, because there's agreement about the need for the UK frameworks, but, other than that, I don't see any other discussions going on around frameworks. So, how does the Bill inform those frameworks?
There's an agreement as regards the need for some frameworks of different natures. So, partially, the problem is that the agreement for the need for frameworks is limited very much to—I think it's 24 legislative frameworks out of over 150 potential frameworks that are currently controlled by the EU and within the devolved competences. It's going to have a significant impact, as will any trade agreements, and as will any agreement with the EU, with the final withdrawal agreement. It puts a pressure on the different nations to go and agree to certain standards if there's to be an internal market. If this Agriculture Bill is put forward and accepted, then it will put pressures on the four regions, the four nations, to go and either come in under England's approaches to various things or to go and potentially compete instead.
Okay. I think we're going to have to move on, Andrew. I was just going to say that we've got a whole new debate, which we won't have today, about cross-border farms, and there's a substantial number of those. John Griffiths.
Yes. If we move to marketing standards and carcass classification, the Welsh Government may require food producers in Wales to meet high standards—we would certainly hope so. How can we be sure that those high standards are not undermined by imports, either within the UK or internationally, and is this something that the Bill should address?
In terms of thinking about those standards, so thinking about environmental standards, or food safety or animal health, they are international standards, created by various organisations that exist currently. And most countries within the international community actually abide by those standards, whether they are binding or whether they are voluntary. Therefore, there is, in this instance, a minimal—they are minimal standards, that are already set and that already exist. And the UK is compliant with many of those standards, and so are most of the countries worldwide. So, in terms of thinking about safety and consumer information and labelling and traceability, there will be—there is—a minimum bar that will be set. But what has happened with the EU, the UK and Wales is that we aim at going towards the top—a higher level of protection for consumers, for the environment, for animal health and welfare. And, yes, there is some concern that the products that we might buy in the future will not have as high standards as we currently have, and this needs to be considered carefully.
The Bill, no, does not address that. And—
Yes, and it goes back to—. It could. And it goes back to the lack of having objectives within the Bill striving for something better.
You're probably talking about a food Bill, really, because I think it comes down to labelling as well, in terms of identification and the source of where things come from. I think we do need to be careful. I'm an advocate of high standards but we need to make sure that the market is there for those high standards as well. So, there are two different levels. I think there is the baseline level of things that we should definitely do, irrespective of what the market position is on it, but then there is a higher standard, which we would aspire to and we would like to have, but I think there has to be the market for that higher standard as well. And that could be quite interesting from within the UK point of view as well as internationally, so I think that's something we need to look at going forward as well.
If I could chip in really briefly there, and I promise to be brief, but—. One thing to do would be potentially to include a non-regression principle, not merely just to do with the environment but to do with food quality, food health standards, and to say that the standard we've reached is the minimum that we will go to in the future, that we won't go below that, and that could be included within the objectives, and then have your common frameworks as well.
Okay. Moving on to intervention in agricultural markets, there are powers in the Bill for Welsh Ministers to intervene in exceptional market conditions. Could you give us an example of the sort of circumstances that would, in your view, constitute exceptional market conditions and are you satisfied with the list of definitions, that they're sufficiently broad and complete?
I think it's the difficulty with listing again, isn't it, because the fact that it says 'exceptional' means that we need to be able to analyse that on a case-by-case basis. I think that we need to be careful that we don't look to that list and restrict ourselves to what's on that list. That is a starting point of examples, I think, isn't it? I think we need to be careful to analyse everything on a case-by-case basis. There are things that here we have no idea about yet perhaps that could impact on our markets. I think I'd be reluctant for there to be any curtailing on the Welsh Ministers' powers in relation to that at this stage.
You were talking about funding earlier with direct payments, but, looking at overall funding, the UK Government has confirmed that overall funding for UK farm support will be protected in cash terms until the end of the current Parliament in 2022. The level of funding beyond that is yet to be determined. What are the risks associated with this and how might this impact on the delivery of the Bill's objectives?
We discussed this on the way here, actually. There is a big difference here between 2022 and the end of Parliament. The end of Parliament could be much sooner than that. I'm not—
Just what's on the news.
And, of course, if we think about the current situation with Brexit, we are creating a lot of uncertainty for farmers. This is what is happening at the moment, so it's very different between saying we guarantee funding until 2022 or funding during this Parliament. And, of course, if we have uncertainty as to how long Parliament is actually going to exist, we are creating huge uncertainties for farmers and this is not good for investment, it's not good for banks, it's not good on a daily basis for farmers. I also would like to add that moving away from a multi-annual budget to an annual budget post Brexit is going to be incredibly difficult for farmers. Farmers need to plan ahead. We are talking about schemes that could be five, 10 or 15 years long. But if, in contrast, we have annual budgets, then we have a big problem here. How can we fund a 10, 15, 20-year scheme on an annual budget?
I would just add that—. So, absolutely in agreement—we were discussing this on the way over—but the other problem is that, or challenge is that, funding is currently under the Barnett formula; as in, funding, once it's post-CAP, for all the money that comes in this direction, is via the Barnett formula. That leads to the money for agriculture and land use not being ring-fenced. And the same for rural development. There is a review that is just starting to be undertaken at the moment. The sooner that that review can be completed would be extremely beneficial, because that would provide some greater certainty as to whether it would be part of the block grant or whether it would be ring-fenced in future.
I'm in agreement with that.
Sorry, I indicated by mistake. I'm just going to ask one question at the end, if that's all right.
The other question's on clause 26. I don't know if we've covered that enough. Do you want me to still ask that about clause 26, Mike?
I think we have covered that, Gareth. If I can just, very briefly, cover the collection and the sharing of data, to what extent are the powers provided to Welsh Ministers to require information in connection with the agri-food supply chain appropriate and proportionate? And what are the practical and financial implications for farmers and others in the agri-supply chain of meeting the Bill’s requirements?
I think collection of data needs to be set in the context of what the purpose of the data is, and provided there is a clear public benefit to the data, then the collection of data, I think, is warranted. But, at the moment, there is certain data that's being collected that doesn't need to be collected, and I think we need to, perhaps, ratify and rationalise that slightly.
We also need to be careful as to the burdens we put on farmers and, also, think about whether the farmers are adequately equipped to deal with that kind of requirement and burden. So, thinking: do they have broadband? Do they have the adequate training? It's also important to consider that.
I tend to agree with you. I think that one of the difficulties is that people asking for data—. It's like when they design computer systems—they add anything they could possibly ever want in the fullness of time, just to make sure that they don't have anything missing, and that does create an added burden. Anyway, Andrew, you want to finish.
Just very briefly. We haven't touched on tenants. A recurring theme in the Bill, and also the evidence to the Bill, seems to be concerns that tenants are particularly exposed to some of the provisions. I can see nodding from your good selves. That would indicate a level of agreement. Would you say there is a deficiency in the Bill at the moment in the way tenants' rights are protected, in particular, potentially with future payments? Because the Bill does allow for globalising payments and adding a lump sum at the start, which, potentially, could go to the landlord rather than the tenant. And yet the tenant's the one who's done all the work.
Most definitely, there are issues in terms of tenants. That is one of the issues with the term 'land manager', and the implications of that, in terms of the tenanted sectored. Capitalising payment as well is an issue because, I think, you could end up with areas of land not being farmed at all because there wouldn't be any viable reason for farming them.
And I think, also, the other thing in terms of direct payments is, if you're a tenant farmer, your security is your livestock, your deadstock and the fact that you're having a regular payment once every year, which is pretty much guaranteed unless you do something wrong. So, that is hugely beneficial in terms of borrowing or security to the tenanted sector. So, I think we do need to think quite carefully about how we manage that transition from a tenanted sector point of view, especially.
And rents as well—what the rents will be from a landlord's point of view. There are implications here if it isn't planned very carefully in terms of what happens. Some of the tenancies as well are pre-1995, which means they're protected tenancies. There are clauses in those tenancies that mean you can't do certain things, you can't diversify, you can't—. So, there are lots of restrictions in what you can do. So, there's a lot of thought that needs to be put to that.
So, it's fair to say the Bill is deficient when it comes to tenants' rights in particular.
A good four minutes over. [Laughter.]
Thank you. Can I thank you for coming along? Thank you for your answers. They've certainly given us a lot of things to think about. You'll get a transcript. Can I suggest you check it for accuracy? Because, if you're anything like me, when you turn to talk to people, sometimes the microphone misses words. So, be careful and check it, because it normally misses about three or four times the words with me, so if you could just check that and thank you very much.
Bore da, good morning. Can I thank you for coming along to answer questions from us this morning on this issue? Do any of you want to make any opening statements or are you ready to move straight to questions?
Straight to questions is fine for me.
Fine. It's slightly easier for us as well. If I start off, then, to what extent—oh, sorry, can you introduce yourselves for the record?
My name is George Dunn, chief executive of the Tenant Farmers Association of England and Wales.
Bore da. Rebecca Williams, director of the Country Land and Business Association in Wales.
I'm Huw Thomas, political adviser, National Farmers Union Cymru
Nick Fenwick, head of agricultural policy for the Farmers Union of Wales.
Thank you very much. If I can start off with the first question, to what extent is it reasonable and appropriate for the Welsh Ministers to use delegated powers under the UK Bill to ensure that farmers can continue to receive payments under existing financial support schemes post Brexit? Who wants to go first?
I think it's essential that we've got some mechanism for ensuring that there is continuity of payments after we exit the common agricultural policy shortly. I wouldn't want Wales to be in this sort of unenviable position that Scotland are in at the moment where they're not participating in the Agriculture Bill and, at the moment, there isn't any domestic legislation introduced to facilitate payments beyond the CAP. So, I think we welcome the assurance that that gives, but perhaps we would question and say whether we could have had indigenous Welsh legislation, for example, passed in this place rather than piggybacking via the Agriculture Bill.
We think it's absolutely vital that there are powers to ensure continuity, but we would also say we need to have powers that allow us to move at a pace that takes into consideration the changing circumstances of our position post Brexit. So, we don't know whether it's going to take seven, 17 or 27 years to adjust to the new norms outside of the European Union, so we do need a framework that allows us to flex and adjust accordingly.
I just want to say I think it raises some interesting questions in terms of governance, in terms of responsibility and ministerial responsibility for the powers in the Bill. This is a UK piece of legislation that will be scrutinised at Westminster, as well, and any amendments made at a Westminster level, and I'm yet to really understand what the interaction is between Welsh Ministers and UK Ministers in terms of what changes need to be made on the face of the Bill and how those are brought forward and what role the Senedd has in influencing or shaping those amendments in the future. We know that there may be amendments to the English provisions through the scrutiny process in Westminster, and I challenge really how, if those changes would be necessary for the Welsh element of the Bill—where they are made, how they are made or how they are scrutinised adequately to make sure that they're fit for purpose for Wales.
I would agree with many of the previous comments. I think, obviously, there is a need for such legislation to be passed, but we're usually in a situation of saying the devil will be in the detail. In this case, the devil is in the detail, and there are some devils in there, I'm afraid, that are really quite worrying.
Okay. Thank you. To what extent do the Welsh provisions in the UK Agriculture Bill set out in Schedule 3 provide a suitable legislative framework to deliver the Welsh Government’s aspirations for the future of farming and land management in Wales?
I think the Bill offers an interesting—. There's a question of timelines here that we need to consider. So, we understand that the indigenous Bill that we will refer to will be forthcoming in due course, but there is this Westminster legislation as a fallback, if you like, for the interim. But the consultation 'Brexit and our land' was talking about proposals that come into being at 2025 at the earliest, possibly beyond that if we look at transition differently. So, to what extent does this legislation need to have provision in there for the future land management is another question, before we ask whether it's fit for purpose, because you might think by the time we get to 2025 we might have the indigenous legislation we need here in Wales, so, therefore, that becomes a moot question. It's a timeline question that I don't think we've bottomed out yet.
I absolutely agree with that. This is a piece of logistics in terms of getting us through the next few years, and the discussions that we have had with Welsh Government would indicate that they want to bring made-in-Wales legislation before the Assembly sometime around 2020 or 2021. So we are looking at this as a stopgap piece of legislation as opposed to the final endgame.
I think, looking at the powers as well, the powers are so broadly drafted in the Bill that it will allow Welsh Ministers to chart whatever course they decide they want to chart in response to the consultation, and following the White Paper next year as well.
I think our concerns are laid out in our written evidence very clearly, and I would reflect many of the comments made earlier.
The Bill includes extensive regulation-making powers for Welsh Ministers but few duties. Should it include more duties?
Absolutely, yes. It's a medium-sized Bill in a very important area for the whole of Wales. There should be some firmer duties on Welsh Ministers to ensure that we do have a viable, sustainable and resilient Welsh agricultural sector going forward.
I fully concur. Looking at the Welsh provisions, I think the word 'may' occurs there about 23 times. There's very little mandate in terms of what Ministers must do. So we would like to see more of that.
Two points, if I may, from the evidence you've given us so far. Huw, in your opening remarks, you said it's unfortunate that the Welsh Government have chosen to piggyback on the back of the UK Government's Bill, and then Rebecca and George touched on the point about Welsh Government introducing their own Bill, and the timeline in particular—Rebecca, I think it was, who talked about 2021. We've got an election in 2021. How realistic do you think it is, from your understanding of where Welsh Government are now, for them to be in a position to bring forward a substantial agricultural Bill that will meet its own aspirations within the timeline that we have left of this Assembly, given what's already in Schedule 3 to this Bill to cover the transition period?
I think it's very difficult to say. I suppose that's really a question for Welsh Government. I think we would like to see indigenous legislation eventually.
What I'm asking you is—you guys and girls interface with Welsh Government day to day. You're the representative unions and associations of the rural community. So I'm asking: is it possible for that to happen?
It is possible, but when you look at the amount of legislation that we will need to get through, the mountain that we have to climb, it looks highly improbable at the moment in terms of our ability to have the time, energy and resource to do what we need to do. If you take my sector, the tenanted sector, I think the Welsh Government is only waking up to the responsibilities and duties it has to the tenanted sector of agriculture given that that is now a devolved issue, and there is only now an understanding of needing to look at the legislative framework for that. That's a very important part of the sector of agriculture in Wales.
I would say that there is necessary legislation in association with Brexit, and then there is legislation that you volunteer to bring in, which adds to your already huge and overwhelming workload. That's the case here, as it is in London. Anything that's over and above is dangerous, and rushed legislation is often very bad legislation. It's unscrutinised, it's not properly considered, and I think that the House of Lords Delegated Powers and Regulatory Reform Committee make it very clear what the dangers are. This Bill encompasses subject areas that should or would normally deserve their own Bills.
Okay, thank you. Part 1 of Schedule 3 sets out the purposes, or many of the purposes, that Welsh Ministers can provide funding towards. I'm just wondering, looking at that list, whether anything has been omitted, whether there are areas that you think should be included or added, and also whether there should be an ability within the Bill to amend it at some point.
In our written evidence, we did say that we thought we needed two additional elements for that section, certainly one looking at improving the health and well-being and food security of citizens, and food security is a public good. Food may not be a public good in itself, but food security certainly is. And we also think that we need to have a focus on grazing livestock systems in the uplands that have taken a hit over many years, providing public goods as well. So, we think that those two elements need to be added to the Bill.
I think one of the complications with that provision in the Bill, for us in Wales particularly, is reading it in the context of the Well-being of Future Generations (Wales) Act 2015. We have statutory legislation here that is about environmental, social, cultural and economic well-being, and the balance between those responsibilities. When you look at the definitions set out in the Bill, there's not a conflict, but you can read them very differently on this side of the border than you might in England. When it comes to interpretation, if this does make it to the statute, it will become very interesting in terms of how you make decisions binding both pieces of legislation together.
So, given that the four cornerstones of the well-being of future generations Act are economic, environmental, social and cultural, would you expect to see social and cultural purposes being included in this list, or would you rather just reference the future generations Act?
To what extent we can call upon the future generations Act as being the foundation to much of our legislation here in Wales may be a question, but then you're back to this cross-border different interpretations of the same wording, based on a different context, and how that fits together. If, as has been suggested, the Welsh-made legislation may take longer to come through, that could become even more complicated in the future. So, having the same words for England and Wales, more or less, has benefits, but also it doesn't reflect or show understanding of the fact that we are starting from different places.
So, there's a warning signal here, then, if we are explicit in listing the purposes in the UK Bill, we may undermine the well-being of future generations Act—
—and I presume that the UK Bill eventually would trump the well-being of future generations Act if there was any dispute.
Absolutely. It's a cut and paste from the English sections—Parts 1 to 5 are a cut and paste. It seems to have little or no influence from Welsh thinking or a devolved point of view, which is very concerning for devolution, I would say, given the support it's had from the Welsh Government.
And we've also got the Environment (Wales) Act 2016 as well, as well as the future generations Act. The environment Act is a baseline in terms of what the direction of travel for environmental management has been in Wales and, again, there's no cross-reference, which I think is an omission.
I concur with what my colleagues here have said, really. Certainly, food security as a public good is something that we've advocated for for a long time, and it's obviously quite depressing that the Bill specifically says that direct support is to go as well. So, there's no financial provision around that either.
If I can just add as well—again, it's been said in our written submission—the fact that this Bill was presented and started to pass through Parliament at a time when the Welsh Government was consulting on the very things that this Bill deals with seems very disconnected and very concerning given, again, that the Welsh Government has supported that section of the Bill.
And raises a serious question about due process as well, I would suggest.
Okay. Another issue that's been raised regularly, of course, is that this legislation, and the Welsh proposals, opens out funding to all land managers, not just active farmers. Now, clearly, as stakeholders you have strong views on that, and I'm just wondering what advantages and disadvantages you see stemming from that proposal.
This is an area that Rebecca and I have talked about on many occasions, and I think we share—without wanting to speak for Rebecca—the intention that the people who are taking the economic risk should be the ones who are rewarded through the schemes, but we suggest that this is an agriculture Bill, that we need to be supporting agriculture through the Bill, and that perhaps we should have a reference back to the definition of agriculture that exists within the Agricultural Holdings Act 1986 and the Agricultural Tenancies Act 1995, which is set out in section 96, which defines what agriculture is, and the people who are predominantly involved in that activity should be the ones who have access to this funding through the scheme. In terms of who should be the recipient, and this is where Rebecca and I will part company, we think that the person who is in occupation, who is in day-to-day management control and taking the economic risk, should be the active farmer and the recipient of the money.
I think, on that point, we have discussed it in quite a lot of detail, and would concur that the need to identify the risk is important and understand where that risk lies. It's called the Agriculture Bill, but the forestry sector is also included within the provision, so there's a misnomer there somewhere already. But if we are looking at land use more generally, in terms of what the Welsh Government is proposing, there is a need to look differently in terms of who is supported.
We would advocate looking differently at the active farmer test. There is certainly a need for some sort of test or some sort of barrier to ensure that it is going to the right places. But the 'active farmer' is a construct of the European Union and the rules of Europe and if we are leaving, this may be a chance to look at it afresh. That's not to say that we should get rid of it and not have anything, but let's take a step back and if this is a chance to enable more people to enter the industry or to support people who are maybe not actually actively farming to do something different, now is the time to do that, with time as opposed to making rushed decisions.
And the previous panel actually, didn't they, indicated that there wasn't sufficient clarity around what land managers are and what active farmers are?
Yes, the Bill doesn't help at all on that.
I think, from our consultation with members around this, they very much resent the term 'land manager' actually; they very much see themselves as farmers and food producers and I think that gets back to the point more generally that we've consistently made that funding should be for active farmers—those who are taking the risks associated with producing the food. There is a danger, as we see it, that finance money will heamorrhage away to other areas potentially—golf courses, NRW land, forestry—and a whole host of other eligible claimants may emerge, diluting the available pool and that will cause damage to our industry.
I think the question and the comments very much reflect, in some ways, the difference between the way we think here, or our regard for farm payments, and the EU's understanding of farm payments. We collectively see it as payments to farmers, whereas I think the EU recognise far more that it is a payment to farmers who are the powerhouse of rural economies and who support far more jobs than just the farms themselves. That's why the EU is looking at strengthening its active farmer rule. Unfortunately, it seems, superficially at least, that we are moving in the opposite direction. The people in the firing line here if we get this wrong are not farmers per se, they are farmers and entire rural economies, and that's why this absolutely needs to be brought back to some form of active farmer criteria.
If I can, and I asked the same question of the other panel as well: the Bill has the UK definition,
'starting, or improving the productivity of, an agricultural, horticultural or forestry activity',
as opposed to just Schedule 3 for the Welsh side of it, which talks of active farmer. Do you think that the provision that is in the UK Bill is a better provision and meets some of the points that you have talked about in your evidence to us, rather than what we have at the moment in the consultation, which obviously just talks of—? It doesn't talk about 'active farmer'; it talks about 'land managers'. I think, from the Tenant Farmers Association in Wales, you've gone a bit further and said that it should actually stipulate that
'they are available only in respect of individuals who are operating units which are predominantly agricultural in nature.'
And by 'they', I mean the money side of it—the support.
Correct. We think that both aspects of the Bill—the English and Welsh bits of the Bill—are inadequate when it comes to defining this particular piece of the kit that we will need to make these payments, and we have proposed some amendments in written evidence to you.
I would say that anything that brings us back towards 'active farmer' and those people who benefit the wider community and wider economy locally, as opposed to being in a position to suck money out of a local area by receiving a payment for doing nothing effectively, is going to be a move in the right direction. But I would agree with George that it's not significant enough of a move and we have made it very clear that those who take the risk—like other organisations—those who take the financial risk should be the people who are eligible to claim any moneys.
That really brings us on to my next question around ending direct payments to farmers. Clearly, it'll have that same impact in terms of the way that that money cascades throughout the wider rural economy, but I'm just wondering, you know, we've heard about potential impacts to upland farmers, tenant farmers, are there any other sectors that are going to be disproportionately affected by this, do you think?
I think a major concern that, again, this committee has heard from us is that upland farmers are sometimes singled out as being more vulnerable than others, but I think there are farmers in every parish of Wales that are vulnerable to what has been proposed, both in England and Wales—if they live in parishes in England, that is, of course—because of the fact that agriculture and food production is not placed at the heart of the policy and that impact will then have a wider repercussion. For example, in lowland areas, people think, 'Oh, well, you can just switch to dairy production', but of course, that would be very bad for the dairy industry if everybody in lowland areas did do that or indeed switched to arable or something else. That's certainly not the case in an awful lot of lowland areas. There are some very good farmers at the moment that don't have that option and they may not be able to tick all the boxes that some of the, maybe, hill farms would be able to tick from a public goods point of view. So, there's this postcode lottery issue. Within every parish, I think there are vulnerable farms.
I fully concur with those remarks. I think it's difficult to try and tease out which sector will be most adversely affected. I think the big unknown is the sort of Brexit that we're facing as well. We know that a 'no deal' scenario will be very damaging. But there's a spectrum in between potentially and we just don't know what sort of Brexit we're facing. One of the principal reasons we're resistant to the removal of direct payments is that we don't know where we will be in a few months' time as regards our trading relationship with Europe. We do know that our competitors in Europe, our principal competitors, will still receive 70 per cent of the CAP payments, which will come as direct payments, so that's what we're facing. So, we've got to have a level playing field. We've talked about a level playing field within the home nations, but also with our nearest competitors in the EU-27 as well.
There is an element of inevitability, possibly, in knowing that the long-term position will be a future where direct payments, as we currently understand them, will cease to exist. It's not to say that there will be no support or no other replacement support, but what we don't know here in Wales so much is how that would happen and what the implications and the timeline is. Again, this goes back to the different timelines and processes between England and Wales. In the 'Health and Harmony' consultation, which in England DEFRA published, there was much more information there about capping, how they may reduce direct payments, how they would bring in pilots in the interim. So, while the future is unclear, at least there's some sort of process in place. What we've seen for Wales is, you know, direct payments would come to an end and we understand that, but what we don't know is how they will come to an end and when and what that process will be. I think bringing this legislation out without having that consultation in Wales, about the financial impact, has caused more concern than they've seen in England, where they know there's going to be a 20 per cent reduction or there are going to be caps in place, and businesses have been able to manage and control that a little bit more because knowledge does help in these situations.
And I would say that, as an industry, we're not opposed to change. We understand that things change and we need to respond to different market conditions, to the environment, to what's happening with the climate, et cetera. But we need to be changing to something that is better not just different, and we're not yet convinced that we are going to be able to have something that is better, because we don't know the circumstances within which we're going to operate. Even the speculation over what was agreed yesterday, we don't yet know what's in that deal, and yet there's lots of commentary about how that's going to impact upon Wales and the wider UK.
I think we also need to be careful that we don't demonise direct payments. There's a feeling around that direct payments are bad, agri-environment payments are good, but direct payments, as Nick was saying, have underpinned resilience, underpinned businesses facing volatility. The multiplier effect of farm businesses in the rural economy is huge, and there are plenty of people in receipt of direct payments doing the right thing by the environment, by animal welfare, by biodiversity et cetera. Remove those payments and you risk losing quite a lot in terms of those other wider benefits at the same time. We are a little bit conflicted because we've got members who will ring us up literally in tears, saying 'My business is finished if direct payments are taken away from me. I don't know what I'm going to do.' But we've also got younger, newer entrants into the marketplace who say, 'Actually, the direct payment is a cost to my business because the landlord expects me to pay the direct payment plus rent for the holding', so the sooner we get rid of them the better as far as they're concerned. So, there is a bit of conflict even within our own organisation about where direct payments sit. But certainly I would argue that we need to be moving at a pace that understands the environment within which we're operating. And without knowing that, setting the transition now seems to me to be not very helpful.
Well, you've taken me right on to transition, actually, because I was going to ask you to describe how challenging getting the transition up to 2025 is going to be, because we hear references to the problems with Glastir and then you can multiply that by however many contracts there are likely going to be longer term. Is it a feasible timescale to get this in place by 2025 or maybe a little bit longer?
No, not without huge, huge problems and potential collapses, as we saw in England in 2005 and 2006, and indeed more recently in Scotland and in England in 2015. We are currently in a position where a few thousand amended contracts are being sent to farmers to give them a one-year extension for their Glastir advance and various other elements of Glastir, and within days of that starting to happen there are problems that have been occurring. One of my jobs yesterday was notifying Welsh Government of problems with contracts, problems with contracts not being available, maps not being available, and that's with just a handful—effectively, relatively speaking—a handful of very complex contracts, which farmers are being expected to look at over a period of a few weeks in order to make sure that they work for their farms and that they fully understand the obligations for their businesses over the next 12 months after December this year. The thought of implementing a completely new scheme that may cover anything perhaps up to 30,000 or even more areas of land, if it was open to all, fills me with horror, given the problems—it's not all been problems; there have been some great elements to these schemes, but there have been some huge, huge problems when administering just a few thousand contracts. And that's one of the real dangers for moving away from a system of direct payments.
One thing I would like to emphasise when it comes to transitioning away from direct payments or something akin to direct payments is that we've been told for years that there's an inevitability that things are going—you know, 'You need to get used to it.' As George said, we are not opposed to change. It's an imperfect system, but it still serves a function. But Tony Blair told us in probably 2004 that we need to prepare because there won't be any payments in 2015. Of course, the EU, as Huw has said, has just announced that it's cutting the CAP budget because we are leaving the EU, so they're losing that contribution. Where are they ring-fencing the money? They are ring-fencing it in direct payments and cutting the RDP support, the pillar 2 support. So, the inevitability becomes a self-fulfilling prophecy, and, actually, the only thing inevitable about it is that, if we keep saying it's inevitable and also we don't recognise that it serves an incredibly important function, then we cause huge, huge damage potentially.
I think Nick's identified the issues very, very well there. I think we need a transition period that is as long as possible, really, if we are to get the industry—. We need to transition very gradually. I think five years is very ambitious. Whatever you're doing in the transition period, you need extensive piloting of whatever schemes you are devising. You need to be able to regularly review, modify and change those schemes as any issues emerge. We know from past experience that Glastir, for example, wasn't very well piloted and it was beset with problems. So, we need to learn the lessons of the past there.
And in terms of the piloting, you would see that as a key feature in bringing forward any new proposals. How long do you think we'd need to pilot properly—?
Until we're getting things working, until we can get them to work and scale them up properly.
So, you wouldn't actually put a date on that. You'd say, 'Let's take time to get this right and then move forward.'
Tir Cynnal was trialled for, what, seven or eight years, before they decided to roll it out across Wales?
We've spoken a lot about the industry's need for a period of transition. I think we shouldn't underestimate the need for the civil service, stakeholders and administrators of the scheme also to transition and learn and adapt. So, while my gut feeling is to agree with Nick and this can't be done in five years, if you wanted to chuck hundreds of people at this and a lot of resources, maybe you could do it in that timescale, but it's a question of balance and what's appropriate. It's very easy to say, 'The industry doesn't react well to change; it takes longer and we're asking for too long a transition period', but, actually, it's not a one-way process, and we shouldn't underestimate how much time—. The civil service isn't a quick ship to turn, and if we are going to build systems, build IT structures that need time, and things that govern and work well, we shouldn't just be looking in one direction for that answer.
I think it's important to say that change could happen relatively quickly, and it may be change that we don't want to see. If you look at some of the unintended consequences of previous Government policy, and if you look, particularly across the border in England with the feed-in tariff for the renewable energy and the amount of maize that's been grown in inappropriate places and raising the price of land for individuals looking for feed—. So, we run the risk of making change happen significantly very quickly against the five principles that the Cabinet Secretary has set out for this future policy. So, the transition needs to be as long as it needs to be in order to ensure that we check back with the five principles and say, 'Is this policy still working? Yes—let's carry on. If not, we need to change', and setting an arbitrary timetable for that seems to us to be inappropriate.
Good morning. I want to talk about monitoring enforcement and have your views on the provisions that relate to it, and to what extent you think they are both appropriate and sufficient, and also for you to think about whether you think that they could be delegated, say, to a third party like Natural Resources Wales or national parks, and if that is the case, what the main risks and benefits might be, that you might've identified, in terms of such an approach.
Well, I'm happy to kick off and say that, for many years, we've argued that the bureaucracy that is often, or the accusation of excessive bureaucracy and inspection regimes et cetera levelled at Europe is sometimes very justified, but often not. And I think there is a greater appetite in the UK for having excessive bureaucracy and inspections et cetera than there is on the continent, in fact. And this Bill fills me with horror in terms of the carte blanche it potentially offers to administrations with very little consultation or scrutiny, or democratic process in terms of giving people powers that are excessive, I would say, without proper scrutiny.
So, it certainly raises concerns. It's one of the reasons we were opposed, as a union, to leaving the EU, because we felt that things wouldn't go in the direction that many people, including farmers, thought it would go; we felt it would go in the opposite direction. Of course we need a robust inspection regime, we need a fair one and one that is aligned with other regimes, to ensure that animal health standards and welfare standards, for example, are maintained. But we need to also remember that we have the highest level of standards in the world already, across the EU, and I would say particularly in the UK.
In terms of farming out such responsibilities to third parties, I think that raises additional concerns, given the potential for differences in terms of how things are administered. I think, as a union, we have always favoured such responsibilities staying with Government, given that Government and the civil service is effectively supposed to be neutral in terms of how it administers, especially when you get situations where the inspectorate also become the enforcing power and the prosecutor as well. And that is a very, very dangerous situation that already exists with regard to some issues.
I think there was certainly a lot of frustration with regulation and red tape amongst the farming community and that persists. I'm sure it will persist beyond Brexit as well. What we need, I suppose, is a fair and robust system of regulation, an outcome-focused approach. I think we can look at doing things differently through earned recognition, so farmers who are shown to be compliant historically are perhaps less at risk of being chosen for inspection, for example.
On your point about other third parties having a role in oversight of regulation, I think it's something that we would be quite nervous about. They may have different views to Government. How they will police these things, and how they will monitor compliance—there are questions that would cause us concern. Like Nick said, our view is that those powers best remain vested in the hands of Government. Rural Payments Wales Online—I think they've got quite a good track record in terms of inspection. It needs to be—we need something that's designed in conjunction with the industry, and we have worked in partnership with RPW Online in the past. I think farming that out to a third party is unnecessary and potentially a recipe for disaster.
I think we need to look at why monitoring and enforcement is such an issue and is of such concern. It's fundamentally to do with the fact that there's a breakdown of trust between government and farmers at the moment. Genuinely, farmers see inspectors as being someone there to penalise them, look for problems, look for things that are broken or where rules have not been followed. If we are going to move into what's advocated in the Bill in terms of a different way of working, a different relationship, or payments on a different basis, we need to work to re-establish that trust, where farmers are seen as people who can deliver and do deliver what the public want in terms of the breadth of what's possible.
The other bit that's failing is that where farmers are breaking the rules, the enforcement is not working effectively at the moment. That is, again, a bit of the trust position. Those farmers who do well, which is the majority of farmers in the grand scheme of things, don't have the trust in the system that, when there are people who are doing bad things, or who are damaging the reputation of the farming sector in terms of what can be delivered, that isn't called out and that isn't enforced. So, I think we need to look at where the balance lies in how you do that. The majority of farmers work with Government and want to work with Government towards doing the right thing, and they should be given more trust to do that, and maybe not inspected so regularly. But where there are issues and cases where things are going wrong, we need to deal with them appropriately to give the other farmers the trust in the system that they are doing the right thing.
And we absolutely need a good system of accountability because we are talking about public money being spent and we need to have an adequate system of control for that money. But I think quite a lot in the past we've had a situation where individuals are guilty until they're proved innocent in terms of the regulatory framework, and also there's an issue of double jeopardy: using the powers that the Minister might have to deny someone some money when in fact there are perfectly good and reasonable things that you can do through other means to prosecute or to bring cases against those individuals. So, we need to be careful we're not giving Ministers the opportunity to apply double jeopardy more widely. This is one of those areas within the Act where we are waiting for regulations to come forward for Ministers to use, and perhaps a useful thing that this committee might do is to ask Welsh Government to provide you those regulations in draft so that you can scrutinise them before their introduction, so that there is an opportunity to properly look at whether those systems are going to be fit for purpose.
In terms of the final part of your question, I would echo what everybody has said: passing responsibility for enforcement to people who've got conflicts of interest is never a good idea.
Can I just, with your permission, Chair, go back to what Rebecca said? Because we heard it from the previous witnesses as well: that there are very few farmers, land managers, who do continually break the rules, and consequently, they make the headlines and they give a bad name to everybody else. It's the same in any community where that happens. So, would you agree with the previous witnesses, who said that what might be really needed here is to target those individuals, perhaps more severely, from carrying on in the way that they are—and I'm clearly talking about river pollution here, in my part of the world—so that we're not going back around the same incidents time and time again, which would equally, then, make people understand, if they don't already, that it is the minority, not the majority?
I think my focus would be not necessarily on targeting the negative, but highlighting the positives and working with those people who are actually making a positive difference in terms of what they're delivering and are demonstrating best practice and going above and beyond what any regulation requires them to do. There are hundreds of farmers who are in that category and we don't do enough to show, describe or sell the benefits of good farming practices to the wider public. In the new world, we will have to be more open about farming and we will have to be able to sell the positive story of farming to the general public, because funding will be different in the future.
We need to move away from where we are now. Incidents of pollution—and rightly so—are on the news, but we never see the counterbalance in terms of what good farming looks like. It's always easy to target negativity. And while I would agree we need to make sure that there are appropriate measures in place to deal with those people, we shouldn't focus on the lowest common denominator; we should focus on the positives and we should build a system that rewards good behaviour, not just targets bad behaviour. That should be secondary. We should be moving the industry forward progressively, and we will catch up with those people at the bottom as the system moves forward, but we shouldn't be creating a system that is based on the lowest common denominator and holding the rest of the industry back.
In terms of what provision?
I'm reasonably supportive of those provisions on delivering public good, and we would absolutely support them in terms of our organisational position—that they offer an alternative means of income for many farmers to be rewarded for delivering good practice. We think it is a positive step forward. It's not perfect, and the devil is in the detail, as has already been said, but we think it's going in the right direction.
I stayed up all night crafting some really great questions—well, I thought they were great questions—and Llyr goes and asks them all. [Laughter.] I'll deviate from the questions I was going to ask. What's good about the Bill?
What's good about the Bill? I think it's good that we've got the supply chain issues in there, and they are very important, because I think one thing we would all agree on is that if farmers got more return from the marketplace, we wouldn't need so much from the public purse. But, they need to work adequately. The marketing standards stuff is good, but we need to make sure that we're applying those standards to traded products as well as to domestically produced products, so that there's an equality of application. The elements on productivity are good—that we can support productivity to that extent—and the Welsh provisions are better than the English provisions in that respect. So, there are some good elements to the Bill, but the fundamental problem that we have is that these are all 'mays' and 'maybes' not 'wills' and 'will absolutely do'.
I agree entirely. The supply chain area is really valuable. There are some big questions about the fact that that doesn't extend to Wales, and it's understandable why that might not be the case, but the discussion hasn't been had as to whether it should or shouldn't—whether those powers should or shouldn't be extended to Wales. So, there's a big question mark. Our organisation understands that, when it comes to consolidating power bases within the industry, there's a good reason why you want cross-border rules and co-operation, but I think there's also an argument to say if you're a group of farmers in a certain area of Wales, you should be allowed to apply to the Welsh Government and Welsh Assembly—or Welsh Government—for some sort of additional powers, if I can put it that way, rather than having to go to Westminster. So, there are some questions—. You know, I would suggest there's a bit missing in Schedule 3 as regards that.
I'd certainly agree that the supply chain provisions are good ones. We've been calling for greater transparency in the supply chain for a long, long time. We've got some concerns about them, but this may be the beginning of something new. As was said, if we weren't in such a weak position in the supply chain, we wouldn't be looking so reliantly on support either. It's the flip side of that as well.
Before Rebecca comes in, it's worth noting, obviously, with the French agricultural Bill that's going through at the moment, there is a shift in that relationship between retailer and primary producer farmer, and, in fact, on contracts, for example, it would be the farmer that would issue the contract rather than the retailer. That is a complete rebalancing of that relationship. This Bill hasn't chosen to use that ability, whereas the French are using it. Sorry, Rebecca, did you—.
I would agree with everything in terms of the supply chain, but I think it's important to reflect that the message of the Bill of payment for public good is a big step forward, or a big step in a different direction from where we've been. When it's introduced, whenever that is in the future—date to be defined—this does offer an alternative income stream for some businesses, where it sits alongside productivity and the ability to produce market goods. So, we think it is a really important recognition that farmers do deliver a huge range of benefits that society does want and should be rewarded for, and should be recognised in terms of what they do. And while we know that farmers have always done this and done it in addition to their direct payment, I think that flip messaging in terms of rewarding farmers for the delivery of public good is really important from a public perception of what farmers can do. This shouldn't replace production; it's just a change of messaging that farming is much more than just production—it's a breadth of benefits. The way that British farmers farm and farmers in Wales farm contributes to society as a whole.
Could I just cover two other areas in my question slot? The other was the question that I put to the other panel around tenants. To me, the Bill seems quite deficient on the protections—I'm sure George will mostly agree with this; I'd be interested to hear from the other three as well—that it offers tenants, in particular around support payments. Would you agree with that point?
A hundred per cent, and the committee may be aware that DEFRA has got something called the tenancy reform industry group, which Welsh Government is represented on as well. DEFRA Ministers called the tenancy reform industry group over a year ago to ask it come forward with proposals that would ensure that the tenanted sector in Wales and in England was able to be sustainable and resilient in a post-Brexit area, and produced five useful reports for Welsh Government and DEFRA to look at, in the full expectation that we would see some legislation within the Agriculture Bill. It was a huge disappointment on 12 September when we saw there was nothing in the Bill for agricultural tenants. My conversation with DEFRA Ministers was that the business managers in Parliament were concerned about getting a larger Bill through the House in time. But, for goodness' sake, for such a time as this, we need to be having joined-up Government and having all the aspects taken forward.
We've proposed a set of amendments to the Bill, both for Wales and for England, which the clerk of the Bill committee has said is out of the long title of the Bill. So, we are going to have to look for new legislation. We've been talking to Welsh Government about how it would take that forward and, certainly, we've had not a commitment, but an understanding that in any made-in-Wales legislation coming forward, they will have to have provisions for agricultural tenants, and I think the phrase that I was given was 'if it doesn't work for tenants, it doesn't work at all'. So, I think there is an understanding that this needs to be corrected, but currently the legislation we have in front of us doesn't go anywhere near enough.
I think it goes beyond being deficient, in that it's completely silent. That's nothing really, isn't it? Again, George and I have discussed this in depth. We need to be sure that when they do bring forward tenants legislation, it is fit for the new world, not the world that we're in now. So, there is a process and a timeline issue here again. There is no point in renewing and reviewing the tenancy legislation looking backwards in terms of how it fits, in terms of the structures we have now. So, until we know what the new world looks like, we are unlikely to know exactly what kind of amendments we may need to the tenancy legislation. And until we've done all this piloting and transitioning, and everything else that's going to happen in the next few years, if we are going to amend tenancy legislation, it is so contentious, it is so complicated, and so many people are affected by it, from every direction, we must ensure that we do it right and do it on the right footing. And the timing of that will be critical to getting the right outcome.
I'm in complete agreement with what's just been said. Tenancy is absent from the Bill, and it's an opportunity that's been missed really.
I would say there are—. I'm in two minds, because, on the one hand, it's concerning that this is, effectively, a skeleton Bill, which grants huge powers to Ministers—incredible amounts of powers, and quite, I wouldn't say unprecedented, but concerning, as highlighted by the Lords. And therefore, there are sections of this Bill, as I said earlier, that should be dealt with by individual Acts, individual Bills, that are considered and properly scrutinised. Now is not the right time to deal with a lot of that stuff, and, unfortunately, we are dealing with it—it's a decision, it's a voluntary addition to the huge workload that's already there. So, whether—
Correct me if I'm wrong, but the Agriculture Act of 1947 managed to deal with tenancies, it did, didn't it?
Yes, but this is something that's far—
The point I'm making is they were dealing with the consequences of the second world war and everything else.
Yes, and that wasn't a framework—that wasn't anything like a framework like this is. That was very specific and detailed and focused, whereas this is very, very broad. So there is an argument that, if you're going to do that and make some sort of skeleton Bill, or skeleton Act, then yes, okay, let's have everyone and his dog putting their little bit in there. That's fair enough. And for that reason, we would argue that the red meat levy issue should also be there, and, as you know, it's one of the amendments put forward. So, that's one of the things that we—. If that's what's going to happen, yes, put that in there. But I think there's this overarching concern that you legislate for things at such a high level, with such a carte blanche for Ministers, that you don't get the opportunity to really scrutinise the actual outcome of that. And that's very different from the Agriculture Act 1947, where people could read exactly what the implications were.
But the point I'm making, on the evidence we've received this morning, as George said, is that it was more a Bill that was crafted by the business managers in the House of Commons, rather than maybe a Bill that would meet the needs of the agricultural and rural community. And I think it's important for us as a committee to reflect that—. Would you agree with that assertion?
I think that this might be the first time that your witnesses are disagreeing. Because I think, for such a time as this, when we're making such a massive constitutional change in the status of Wales and the United Kingdom in the world, that we need to lift all elements of the blanket and deal with everything, from a systems and integrated approach. So, leaving bits of the system, like the tenanted sector of agriculture, out of scope in terms of change is inappropriate. We need to be looking at everything. As difficult as that might be, the population of the UK has given a democratic mandate that we are leaving, and it's up to governments to ensure that the systems are fit for purpose when we do leave. And this is one area that has been completely left out. So, I think, as difficult as it is—and perhaps we should have started two years ago; you know, here's an Irishman telling you where to start your journey from—we should be in a position of saying we need to take a systems and integrated approach to ensure that all sectors of society are ready for post Brexit.
If I can just come back on George, then, and say I would have preferred to have seen all the necessary essential work associated with transitioning existing EU regulations into domestic regulations without vast, sweeping, untried changes being introduced, while concentrating on looking at tenancy and diverting any additional spare resources to looking at tenancy while dealing with these huge changes sometime later on, after we know what Brexit might look like.
Could I just ask the final point? I'm conscious time is running on. If John does his first, then I'll come in, if that's all right.
Okay, yes. I'd like to ask about marketing standards and carcass classification. Hopefully, we'll have high standards for food producers, but there will be a need to ensure they're not undermined by imports, either internationally or, indeed, from within the UK. So, how do you think we can best guard against that danger of what would be unfair competition, really? And is the Bill the vehicle to do that?
I think Ministers have got to match their rhetoric with the legislation. Currently, the legislation doesn't give a requirement that the same standard should apply. We hear UK Ministers saying, 'Over my dead body', and all of that, all the time. We know that the Welsh Ministers are very keen to ensure that we maintain standards, but unless you have a legislative fallback position, we've got no chance under WTO to implement those standards on imported products. So, we must ensure that there is ink on the paper on that.
I think the Bill could have been that opportunity to enshrine our desire to have and uphold our high standards in this country. I think it's been a missed opportunity. The UK Government hasn't taken a coherent position on this. As George said, we've got Secretaries of State saying, 'Over my dead body', and others sort of playing around with words and saying things like, 'We will not lower our standards as a result of Brexit', which doesn't address the substantive point. So, I think there's been a missed opportunity here. We're proud of the high standards of production that we've got in this country. Our consumers want those standards; we want to uphold them. But it would be completely wrong if we were in a position where we were undermined by imports produced to lower standards coming in after Brexit. So, yes, we need something done in this field. I think it's regrettable that the opportunity presented here has been missed.
I think that's quite clear. Moving on to intervention then in agricultural markets and the powers in the Bill for Welsh Ministers to intervene in exceptional market conditions, are you satisfied with the list that's provided in terms of the definition, and what would you consider to be an exceptional market condition that would warrant intervention in that way?
I think these powers are to be welcomed. Again, it's one of those areas where we might want to have a 'must' as opposed to a 'may'. We also need some clarity around natural disasters and disease issues as well as market problems, to make sure that they will be covered by those provisions. Also, I think, when you read the clauses within the Bill, they tend to suggest acute issues, but what about chronic issues of things that have been long lasting? Tuberculosis, for example—there's a long-lasting issue in how we deal with that within the Welsh livestock sector and the Welsh dairy sector. So, there needs to be an assurance that natural and disease-related issues are included and long-running issues are also identified as being capable of intervention.
I think it's difficult for us to anticipate all the factors that could impact and cause the adverse market conditions. I think our first concern is—you talked about how Welsh Ministers 'may' make and publish a declaration in accordance with this paragraph. It's a discretionary power. There's no mandate to use it. So, we would say Welsh Ministers perhaps should be obliged to use it. It's also about 'severe' disturbance as well. We would say, 'What is that threshold of 'severe'? Should we perhaps be saying a 'serious' disturbance, rather than a 'severe' disturbance?' There's an element of subjectivity there as well. I think it's welcome but it's not—I think there's some way to go with that as well.
I think it's also important to consider this a power the Ministers have in Wales as well as one the Secretary of State has and how beneficial is it to the UK to have two Ministers having separate powers to make declarations independently when we have such an integrated supply chain across England and Wales. What happens if a Minister here in Cardiff was to make a decision, and Westminster was to take a different approach, and how that may have adverse effects on the supply chain? So, while I'm not suggesting Welsh Ministers should have less, this is a classic example of where there is need for co-operation and agreement in terms of what the definition of 'severe' might be. When you're talking about localised, are you talking about localised in Wales? What does that mean in terms of businesses on the border and cross-border farms? This one, possibly, we just need to take a step back on and look at it more logically. I don't think it's in the best interest of the industry to have competing powers in England and Wales on this one.
It goes back to the point, and I know you raised it in the previous session, about what's missing from the Bill in terms of frameworks. This, for me, would be something that would sit firmly under the heading of, 'How can we work together as a UK?'
I would agree entirely with what Rebecca said. At the moment, there are plenty of things the Welsh Government has the power to intervene with under CAP regulations. It's a very, very lengthy piece of legislation, and that is all done under that CAP framework legislation. This is a power without any higher up, overarching framework—it's just a power. I think it relates back to a concern I know you raised with earlier witnesses that is under clause 26(4), which is the potential, as I read the Bill, for the Secretary of State in England, or the UK Secretary of State, to effectively decide that they're not really very keen on something that the Welsh Minister might be doing very reasonably—something that may be essential for our industry—and the English Secretary of State, as I read the Bill, under clause 26(4)—sorry, the UK Secretary of State could suddenly say, 'I don't like that and I'm going to put a stop to it.' Even though it's fully compliant with WTO rules and it's currently available under CAP legislation, in future, it gives them that veto on interventions in Wales, and indeed Welsh interventions in other areas, without there being, again, a framework to say what's reasonable or whether there's an arbitration process, et cetera.
What was that point in clause 26 that has a maximum limit attached to it? The question that I put to the other panel was: if you accept the logic of that—and I think from the indication that you gave, Nick, you certainly don't accept the logic or the need for that, because it's not required under WTO rules—and if it does get through, then surely it needs to have a minimum as well then. Because if you haven't got a minimum, where does the max sit? You just create a bigger differential between—
It's a really interesting point, and under CAP legislation—and I know it's not popular, and we'd be the first people to criticise a great deal of CAP legislation—there are minimums and maximums set for what you can pay for x, y and z—area-based payments or less favoured area payments, et cetera. There are thresholds, and if you go over those thresholds, you're either not allowed to, but if you do, you have to justify it within set criteria that are set out in detailed legislation. Again, this is a skeleton of something that means that proper scrutiny of whether, indeed, you should or shouldn't have a minimum or what is an appropriate minimum—. It doesn't allow for that scrutiny because it's such a thin skeleton, if you like.
And I do take that point, but I will take it on again to a point that, if you accept that they're going to put the max in, you definitely have to have a minimum in it as well.
I think the position that we would suggest is that, rather than trying to jiggle around with the WTO requirements, which are for other purposes, what we need to have within the Bill for both Wales and for England is a must that Ministers should have a multi-annual financial framework for the policy. Because, at the moment, we know that we have a commitment to 2022; we've got the Bew review looking at how that's split between the four bits of the United Kingdom, but there's no commitment beyond that. So, all of this may perhaps—. They don't have to spend anything.
So, rather than put it into the clause that deals with something that is about our relationship with the WTO and the UK as a member state of the WTO, in that respect, and therefore we need a UK framework for that to operate so that Wales can do what it wants to do within the heading that's there, there should be, within the Bill, a commitment that Ministers have to have a multi-annual financial framework for the period of time—for five or seven years ahead. That's the better way to deal with the issue, I think, that you're addressing.
Taking it on to the point about the review the UK Government have announced into funding—obviously, they've committed not to deliver in Barnett—would those types of recommendations be within the remit of that review group that they've set up?
Not yet—no, I don't think they are. They've only got to look at the end of the commitment already given; so they're not required to look beyond that. We've certainly said that they should be and they should have a remit to say how future funding should be split between the four parts of the United Kingdom and how a multi-annual framework should play out in those parts of the UK.
The interesting thing there is we're talking about a UK framework or multi-annual funding, but Scotland's not included within the provisions of this Bill. So, that, I think, should be noted as a risk for Wales, because the relationship between, or the baseline, if you like, in terms of policy for agriculture would be different in Scotland, and they're not on the same journey. We should just be conscious about what the implications of that might be and how that may affect decisions around funding or the approach that DEFRA or the UK Government may decide to take in terms of future policy. While it's not implicit within the Bill at this point in time, we shouldn't overestimate the impact that politics is having on the direction that the Bill is taking.
That is an important one, it's a political choice to put an option in the Bill, rather than a block coming into the Bill.
Absolutely, and I know there are calls to include the provisions for Scotland in the Bill and there are amendments to that effect. Who knows how that might end up? But, we should be conscious of what the implications of not having Scotland on the same journey as the rest of the UK are. That, I feel, leaves Wales in a slightly more vulnerable position.
Chair, if I could just come back, I think it's important for committee to understand—I appreciate that I'm not a barrister or a solicitor, but subsection (4) of clause 26 appears to be unrelated to WTO thresholds and limits and concerns about that. It simply grants the Secretary of State the power to decide that, if they don't like something that's going on in Wales that Wales feels is necessary and is reasonable, they can put a stop to it, in a way that I don't think is probably possible now because of the EU framework. It's important for committee to understand, and we've discussed this before, that the CAP framework is not just a framework of legislation, it's a framework of financial thresholds that say you have to spend between x per cent and y per cent on water pollution or climate change or whatever. At the moment, it's just a carte blanche for the different regions to spend what they want on what they want.
We would agree. There's no way in which the UK Government should have a veto over Welsh policy in this area. There must be, within a UK framework, some system to ensure that these things are done by agreement or arbitrage.
I fully agree with those comments. Obviously, the WTO matter is a reserved matter, but it relates to agriculture, which is a devolved matter. We would say that we are seeing a centralisation of powers here, for quite arbitrary reasons, from reading the Bill. We would say that there needs to be consent and agreement from Cardiff, Edinburgh and Belfast on that. We don't want to see these powers pulled into the centre and exercised solely by the DEFRA Secretary of State. there needs to be a way that Ministers can sit round a table and agree and discuss how they want to use them. We don't want to see DEFRA exercising a veto over a Welsh policy decision, but we also accept that there need to be sensible limits on spending as well, but they need to be agreed across the UK, not imposed.
Finally, from me, I'm going to talk about collection and sharing of data: to what extent are the powers provided to Welsh Ministers to require information in connection with the agri-food supply chain appropriate and proportionate? What are the practical and financial implications for farmers and others?
I think we've long called for greater transparency in the supply chain as NFU Cymru. We need to see greater fairness, and mandatory price reporting may go some way to doing that. I think the powers are very broad, so we don't quite know how they might be utilised as yet. We do have some concerns. We've had farmers raise concerns with us about the red meat benchmarking project, for example, and the dairy conditional aid scheme, about the data that's been gathered there and what it's been used for. We are a small country—Wales is a small country—I suppose if freedom of information requests were made about the data that the Government hold, I don't think it would necessarily take a genius to work out where some of it may have come from. I think you could probably possibly connect the dots and work that out. I think it really comes down to how the power is used by Welsh Ministers. It's walking that fine line, really. We had a bad experience, obviously, back in the summer where some information was leaked about TB and badger control activities. That hasn't done much to instil confidence in farmer members about the data retention procedures of Welsh Government.
I would say, if Governments are here to do anything, they're here to correct market failures. One of the attributes of a perfectly competitive market is perfect knowledge in that marketplace. We have suffered for many years from imperfect knowledge within the supply chain, and the powers within the Bill would address that significantly. Yes, there are concerns about the privity of contract and all of that and sensitive financial data, but I think these powers will give Welsh Ministers a good deal of leverage to ensure the supply chains are operating sufficiently and fairly within Wales, and hopefully the powers will be used sparingly because people will do the right thing in terms of sharing data with each other. What we found with the groceries code adjudicator, in terms of the relationship between direct suppliers and retailers, is that, actually, the work that's been done with code compliance officers has improved the way those relationships operate. So, we hope that once these powers are on the statute book, we will will see a greater degree of willingness for organisations to be reasonable in terms of what they do with that data.
I think it comes back to this question of trust again, in terms of what we're missing at the moment is that trust that the data will be used well and wisely and it seems the need for the data has not yet been explained or understood. So, as George said, having data is important, and we live in a data-led world at the moment, so providing data is reasonable and sensible if you understand how it's going to be used and for what benefit—but that the trust is there to make sure that your confidentiality, your safety and other things that have been at risk over previous breaches will not happen in the future.
I agree with all the comments made already. The one thing I would add is that I would be concerned about the fact that some of this regards what the Ministers 'may' do and not what they 'must' do. There is a host of information that is already gathered from farmers and from others under EU legislation and other legislation and it's concerning that that may be lost. Because this says 'may' do something, we could end up in a situation where we're not gathering farm income data, we're not gathering a whole host of data that we currently are required to collect, and we can look back over years to watch trends et cetera, and that stuff that's collected under EU legislation probably primarily—without that, what are we going to lose? Because there's no obligation here to continue doing what we currently are required to do under EU regs.
Okay. Can I thank you all very much for coming along? It's been very informative to the committee and certainly very, very informative to me. Can I just urge you to check the transcript because I often find, because I quite often turn to the person I'm talking to, it sometimes misses the odd word. So, can you just check the transcript that none of your words have been missed if nothing else? So, thank you all very much for coming along.
Can we break and come back at twenty past? Yes.
Gohiriwyd y cyfarfod rhwng 11:07 ac 11:20.
The meeting adjourned between 11:07 and 11:20.
Good morning. Can I welcome you to the committee? If you'd like to introduce yourselves for the record. And do you mind if we go straight on to questions, or do you want to make initial statements?
I think we're quite happy to go straight on to questions.
Certainly. I'm Rachel Sharp. I'm the chief executive officer of the Wildlife Trusts Wales.
I'm Frances Winder. I'm the conservation policy lead for the Woodland Trust. I'm here representing Wales Environment Link
My name is Tony Davies. I'm a tenant farmer in mid Wales. I'm here representing the Nature Friendly Farming Network, of which I am the chair of the Wales steering committee.
I'm Eleanor Harris. I'm policy researcher and, at present, Wales's representative of the Confederation of Forest Industries.
Croeso. Welcome. If I could just start with a question: to what extent is it reasonable and appropriate for the Welsh Ministers to use delegated under the UK Bill to ensure that farmers can continue to receive payments under existing financial support schemes—?
Sorry, can you repeat the first part of that question?
Yes. Should we continue to use powers delegated under the UK Bill to ensure that farmers can continue to receive payments as they currently are?