Plans for the scheme to replace the EU’s Common Agricultural Policy depend on changes in land use that bring both increased farm productivity and environmental benefits, but in a report published today the Public Accounts Committee says Defra itself concedes “its confidence in the scheme looks like blind optimism”.  

Defra has given no detail about how either the necessary productivity increases or environmental benefits will be brought about, nor how these will offset the new Environmental Land Management Scheme’s dramatic effect on English farmers, who will see their income from direct payments reduce by more than half by 2024-25.  

Replacing the CAP which provided financial support to farmers and rural development funding for more than 40 years before Brexit - in 2019-20 farmers in England received over £1.8 billion in direct payment subsidies - is “an opportunity to reset the approach to land management in England and deliver benefits for the environment whilst also promoting a sustainable and productive farming sector”.    

But the Committee says the Scheme appears “beset with many of the same issues that have undermined ambitious Government programmes in recent years” and the lack of information from Defra early enough to allow farmers to plan their businesses and take advantage of the new opportunities “is causing anxiety in the sector, exacerbated by a historic lack of trust caused by the Department’s past failures in managing farm payments”.  

Defra has also “not explained how the Scheme’s changes in land use will not simply result in more food being imported, with the environmental impacts of food production being ‘exported’ to countries with lower environmental standards.”  

The Committee says Defra has not established the metrics or objectives to enable it to demonstrate that the £2.4 billion a year it plans to spend on agricultural schemes is providing value for money, or contributing to government’s wider environmental goals including the statutory commitment to reach net-zero carbon economy by 2050.   

Sir Geoffrey Clifton-Brown, Deputy Chair of the Public Accounts Committee, said “We have known we were replacing the CAP since 2016 and still we see no clear plans, objectives or communications with those at the sharp end - farmers - in this multi-billion pound, radical overhaul of the way land is used and, more crucially, food is produced in this country.  

“Farmers, especially the next generation of farmers who we will depend on to achieve our combined food production and environmental goals, have been left in the dark and it is simply wrong that Defra’s own failures of business planning should knock on to undermine the certainty crucial to a critical national sector.  

“As the report makes clear, without subsidies the average farm in England makes a net profit of just £22,800 a year including all labour and investment in businesses. The fear therefore for small and tenant farms who are operating on wafer-thin margins is that many will go out of business and the average size of farms will increase and some of the environmental benefits of ELMs will be lost.   

“The UK is also already a large net importer of food and we heard in evidence that the ELMS’ vague ambition to ‘maximise the value to society of the landscape’ may in reality mean that increases further. The recent energy price crisis should be a salutary warning of the potential risks to the availability and affordability of food if the UK becomes even more reliant on food imports.”  

NFU Vice President Tom Bradshaw said: “Farmers in England are extremely concerned about the development of ELMs and this report from the PAC should serve as a wake-up call to the government.

“Despite recent announcements from Defra on new schemes being introduced, there remains very little detail available for farmers, meaning they are unable to make informed decisions which will impact their businesses for years to come. This lack of information, at the exact time direct payments from current support schemes are being phased out, leaves farmers in an untenable position.

“As the current ELMs schemes stand, we have considerable concerns that not all farmers will be able to get involved. There are incredibly limited options for upland farmers, who stand to lose far more support than they will gain from new measures announced so far, and it’s not clear how accessible it will be for tenant farmers, who are responsible for managing over a third of the land. These farmers play a vital role in rural communities and maintaining the farmed landscape we all value.

“The NFU has always maintained that enhanced environmental delivery must go hand-in-hand with sustainable food production. Government has still not made clear how food production fits in with its proposed new schemes. This must be addressed now, if they expect farmers to join. The irony is otherwise, as the PAC highlights, we could simply end up increasing imports of food produced to lower environmental standards.

“It’s crucial Defra carries out and publishes the results of impact assessments to understand the true impact of the proposed changes, something we have repeatedly asked for but has not been forthcoming.

“We know that the public hugely value the high standards of animal welfare, environmental protection and climate ambition that farmers work to. Our vision for future policy is to support this sustainable food production alongside environmental delivery and ensure it thrives well into the future. We urge government to engage with the NFU and farmers from across all sectors to make this a reality.”