Environmental Land Management Schemes (ELMS)
Background
The new Agriculture Bill passed its second reading in Parliament on the 10th October 2018 and is now going before a Public Bill Committee on 23.10.18 before moving on to the Report Stage and a final reading in the Commons, before it then goes before the House of Lords and is subsequently granted Royal Assent. The Bill aims to set up the legislative framework necessary to enable the UK government to administer and regulate its own independent agricultural policy following leaving the EU. It also sets out the aspirations for DEFRA’s future Environmental Land Management (ELM) Policy which will eventually provide support to farmers/landowners, replacing the direct payments currently made through the CAP.
Environmental Land Management Schemes (ELMS)
The stated aim of the new ELMS is to give support to farmers/land managers by providing “public money for public goods”. These new support mechanisms will be introduced towards the end of the seven year transition period after 2021 (during which Direct Payments will be phased out gradually) following the EU transition period from 2019 to 2021. Trials of ELMS are expected to run from 2019 to 2022, with pilot schemes running from 2021 to 2024 so that from 2025 the new ELMS will be fully up and running in England and Wales.
Definition of “public goods”
The government currently defines acceptable public goods as:
- managing land or water in a way that protects or improves the environment;
- supporting public access to and enjoyment of the countryside, farmland or woodland and better understanding of the environment;
- managing land or water in a way that maintains, restores or enhances cultural heritage or natural heritage;
- mitigating or adapting to climate change;
- preventing, reducing or protecting from environmental hazards;
- protecting or improving the health or welfare of livestock.
Notably absent is support for improving farm productivity and food production, most likely because of WTO rules which limit food production subsidies to avoid unfair competition however there is pressure from some stakeholders for the government to recognise the importance of encouraging food production.
How practically will ELMS work?
At this stage the way ELMS will work is still being formulated by DEFRA and debated by the ELMS Testing & Trials Advisory Group, so there is no firm detail available as to how applying for the new ELMS will differ from the Countryside Stewardship (CSS), or what level of payments will be paid for the “public goods”. According to DEFRA’s “Health & Harmony” consultation paper, however, the intention is that the new scheme(s) will improve upon the (much criticised) CSS scheme by streamlining and simplifying the application process, having rolling monthly start dates, making monthly rather than bi-annual payments to successful claimants, and providing more support to land managers, and other suggestions are also being considered.
Current agri-environment schemes
The existing agri-environment schemes (CSS Mid-Tier, Higher-Tier, Wildlife Offers and Capital Grants) provide bi-annual payments over a set period (usually 5-10 years) for carrying out certain environmental activities such as farming in certain environmentally friendly ways, undertaking planting specifically to improve the variety of trees, wild plants, birds and wildlife, and improving the land. The capital grants are for work such as improving hedgerows/boundaries, restoring historic buildings, woodland grants, or for preparing an application for a Higher-Tier agreement. Only the Wildlife Offers is non-competitive (i.e. if you apply and can meet the requirements, you will receive the payment), with the other three being competitive, where not all applications are automatically successful (although some Capital grants can be non-competitive). Applications can be costly to prepare and submit but only the applications that best meet the regional environmental targets and priorities are granted an agreement. Once granted, claims then have to be submitted each year providing fresh evidence of compliance, and subject holdings are subject to random inspections throughout the year, sometimes with only 24 hours’ notice, to check for compliance, with penalties being applied for non-compliance. However the scheme has suffered from poor administration, slow response times, and in some cases crippling delays in making payments. Whatever new agri-environment scheme is set up to replace CSS, it hopefully will re-build farmers/land owners’ confidence that government support can be better administered, that the application process can be less onerous, and that payments will be made on time.
Current proposals for implementing ELMS
The current proposal that seems to be gaining traction is that Land Management Plans be developed by the farmer/land manager with help from their land agent/specialist environmental advisor, and Environmental Land Management Contracts are then issued for the provision of environmental goods and services based on these. This seems to imply that the Government is leaning towards the CLA proposal, set out in their “Land Management Contract” (LMC) document published in May 2018, which proposes that some non-competitive grants (Universal LMCs) should be available to all land managers to conserve and manage the land in an environmentally friendly way, and some competitive grants (Enhanced LMCs) offered to enhance and restore landscapes and farm holdings. In addition there may be a grant to provide funding to apply for an Enhanced LMC. It is expected that these LMPs would need to be developed by the farmer/land manager with some help from “specialist advisors” such as land agents/environmental consultants. It is yet to be seen whether the Government will also provide financial support for farmers to prepare at least their initial Land Management Plans, perhaps in a similar way to the Farm Business Advice support offered to farmers following Foot & Mouth in 2001.
Will ELMS offer appropriate financial reward for environmental and other “public goods”?
The Government states it intends to offer “fair rewards and strong incentives for participation [in an ELMS]”, however at this stage the requirements for entry and the formulas for calculating the level of payments to be made are also still to be debated and agreed. The funding has currently only been guaranteed until 2022, but there are calls for the government to commit to a long-term budget to allow for clear business planning and investment by farmers/land managers. Whatever support schemes are eventually made available, they will need to fit in with farm and land management business plans, and, as they cannot be compulsory, the Government will want to ensure the new schemes make financial sense for farmers to take part. Farmers/land managers must make a profit, or there is a chance they won’t be taken up, particularly following the difficulties experienced with the existing CSS schemes.
Feedback from other stakeholders
The feedback from lobbying groups representing landowners/farmers/environmental & wildlife groups is overall fairly positive about the principles of ELMS and the definition of “public goods” eligible for “public funds”. There is however pressure for the definition to be expanded to also include “rural vitality and national health and wellbeing” and “public benefits that are delivered by sustainable farming and forestry practices”, and that “supporting domestic agriculture to ensure food security and stability of food supply” should also be recognised as a public good. All stakeholders would prefer more certainty on the funding to be provided post-2022, and highlight the difficulties for farmers/landowners planning long-term investments in their farming/environmental practices without such certainty. Most stakeholders also welcome the promise of reducing red-tape and simplification of the application process, but environmental and wildlife groups in particular also stress the importance of robust oversight of the benefits, and feel effective regulation will be key.
Summary
ELMS will therefore most likely be the cornerstone of agricultural policy in England and Wales post-Brexit. It is clear that after the UK transition period farmers/land managers in England or Wales will need to apply for an ELMS to receive any Government funded financial support, and it is likely that an application will require some kind of environmental audit of their land, whether done by the farmer, or with the support of a land agent/environmental consultant. How the application is submitted, and how much detail will be needed, is yet to be confirmed, bearing in mind that the Government’s intentions are to “simplify the 2019 Countryside Stewardship application process in England, within the rules of the implementation period” and “reduce the bureaucracy” and “any needless paperwork, which has been widely criticised”.
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