Review of Support Arrangements for Less Favoured Areas (LFA) in Northern Ireland

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1 Review of Support Arrangements for Less Favoured Areas (LFA) in Northern Ireland Summary A consultation response from RSPB Northern Ireland, May 2009 LFA Compensatory Allowance is a significant component of Axis Two Rural Development funding, therefore must contribute to improving the environment and countryside by supporting sustainable land management; The concept of High Nature Value Farming (HNV) must be fully defined and acknowledged in an Northern Irish context; The RSPB does not support options one and two, as they will deliver no environmental benefit; Option three is inadequate in its current form and, if implemented, should contain within it agri-environment incentives for LFA farmers; The RSPB supports LFA money in Agri-environment, specifically for LFA farmers; The RSPB agrees that farming in disadvantaged areas requires support. Option four, if implemented, must be linked with specific grazing regimes to deliver environmental goods and eco-system services. Introduction The RSPB is Europe s largest wildlife charity with over one million members, over 10,000 of which live in Northern Ireland. We manage one of the largest conservation estates in the UK, covering c hectares. In Northern Ireland, we own or manage over 3,000 ha of land. Sixty of our reserves are farmed, covering more than 20,000 hectares, with around 170 tenant farmers, and 200 employees. We protect and enhance habitats such as lowland farmland, heather moorland, lowland heath, wet grassland, estuaries and reed beds, and our reserves help to protect 63 of the 77 most rare or threatened breeding birds in the UK.

2 The RSPB is the UK partner of BirdLife International, which is a global partnership of non-governmental conservation organisations. BirdLife International strives to conserve birds, habitats and global biodiversity, working with people towards sustainability in the use of natural resources. The RSPB works closely with our BirdLife partners on EU agriculture policy issues. In Northern Ireland, we have a particularly strong partnership with Birdwatch Ireland. The RSPB s vision for agriculture is for sustainable systems of farming that produce adequate supplies of safe, healthy food; protect the natural resources of soil, air and water that farming depends on; help to protect and enhance wildlife and habitats; provide jobs in rural areas and contribute to a diverse rural economy. European and regional review of LFA support should be seen as opportunities to develop systems of public for farming that delivers environmental and public goods 1, and are justifiable to the tax paying public in the longer term. There is an evident need to reform LFA support. As currently implemented in many Member States and regions, the measure does not adequately address the Axis 2 objective of improving the environment and the countryside, nor is it targeting the sustainable use of agricultural land. Any changes to the scheme should be viewed in the light of environmental challenges faced by the EU now and in the future 2, as identified by the Common Agricultural Policy (CAP) Health Check 3. General Comments Less Favored Area Compensatory Allowance (LFACA) is a significant component of rural development funding in Northern Ireland (NI). If the current spending pattern was to continue at around 22 million a year, this will have consumed 44% of the Northern Ireland Rural Development Plan (NIRDP). As stated within DARDs consultation, over 70% of NI s land mass is defined as either a Disadvantaged Area (DA) or Severely Disadvantaged Area (SDA) therefore making farmers residing in these areas eligible for the payment. This is a significant land area and presents an opportunity to sustain agriculture which delivers public goods, such as valuable landscapes, biodiversity, soil conservation and fire prevention, as acknowledged by the European Commission. LFA payments also reside within Axis two of the Rural Development Plan (RDP) which aims at improving the environment and countryside by supporting sustainable land management. With this in mind, any changes to LFA payments must differentiate farming that delivers these public benefits from farming that does not. Many national LFA schemes are still focused only on addressing socio-economic issues in rural areas, 1 Ecosystem services are the benefits people obtain from ecosystems. These include provisioning services such as food and water; regulating services such as flood, carbon emissions and disease control; cultural services such as spiritual, recreational, and cultural benefits; and supporting services such as nutrient cycling that maintain the conditions for life on Earth. 2 Farmer, T et al. (2008) Funding for Farmland Biodiversity in the EU: Gaining evidence for the EU budget review, Institute for European Environmental Policy, June Biodiversity Decline, Climate Change, Water Quality and Bioenergy.

3 and payments are used as income support for farmers, with no clear policy objective other than retaining rural populations. As Northern Ireland has delineated a large proportion of our rural area as LFA, this has resulted in a very untargeted system of support, that does not focus payment in any meaningful way on sustainable land management, nor reflect areas of High Nature Value (HNV) farmland. There is a clear need to recognise that farming can generate environmental benefits which are valued by society but whose value is not reflected in market prices 4. The RSPB strongly endorses calls for the re-orientation of current polices to ensure they are underpinned by the public money for public goods principle, within the framework of a European sustainable land use policy. Please find below a detailed response of policy priorities that are of most concern to the RSPB, which highlights opportunities for the natural environment in Northern Ireland. Consultation Questions 1. Are you content that all of the relevant issues have been captured and adequately explored? No. The RSPB feels that the concept of HNV farmland has not been explored or acknowledged in the detail that it requires. Although mentioned 5, it provides anecdotal evidence, at best, for the scale and importance of the concept. According to the Northern Ireland Strategy Plan for the NIRDP , HNV areas in Northern Ireland will include some Less Favoured Areas (LFA); all ESA s; higher tier options in CMS that include habitats such as heath and moor; organic farm practices; and Natura 2000 sites. It is estimated that up to 50% of Usable Agricultural Area (UAA) of Northern Ireland could be eligible as HNV land. The HNV farmland concept needs to be translated into a working definition in Northern Ireland, and is likely to incorporate a diverse range of habitats at multiple scales. The concept of HNV farming recognises that some types of agricultural systems are intrinsically more beneficial, in environmental terms, than others. Europe s Environment Ministers have signed up, through the 2003 Kyiv Declaration, to identifying HNV farmland in their countries, and taking adequate biodiversity conservation measures in it. The maintenance of HNV farming systems is now recognised as a challenge for EU agriculture and rural development policy, and enshrined in rural development guidelines for the programming period 6. Although the specific features of HNV farming differ across the EU, they share some common elements (see Appendix). 4 Rollet, A et al (2008) Delivering environmental services through agri-environment programmes: a scoping study, Prepared by Land Use Policy Group, November Review of Support Arrangements for Less Favoured Areas in Northern Ireland (2009), Chapter 8 LFAs and the Environment, pages See Council Decision 2006/144 on Community Strategic Guidelines for rural development: High nature value farming systems play an important role in preserving biodiversity and habitats, as well as in landscape protection and soil quality.

4 HNV systems across Europe are facing the twin threats of abandonment and intensification. In the UK, HNV farming is typically found in semi-natural grazing systems or low intensity grassland systems, much like the Glenwherry area of County Antrim. Such areas tend to have a high reliance on semi-natural vegetation as the main source of grazing. These systems tend to use lower levels of chemical fertiliser, pesticides, herbicides and veterinary drugs, and so encourage the survival of rich insect communities, a significant group of plants intolerant of high nutrient levels, and many avian and mammal species. HNV systems can also be associated with traditional management practices, such as the late harvesting of meadows and arable crops, which can create favourable conditions for wildlife. Species such as the corncrake, chough, corn bunting, twite and great yellow bumblebee benefit specifically from HNV management, and it helps conserve globally threatened habitats such the machair, now restricted to the north west of Scotland and western Ireland. In addition to the role of low intensity livestock grazing in habitat management, extensive HNV management also contributes to the delivery of ecosystem services such as nutrient cycling, water catchment and storage, soil protection and carbon storage. It would be therefore reasonable to conclude that HNV farming systems in the UK are found, although not exclusively, in the LFA, particularly the SDA in Northern Ireland. Although highly productive in terms of environmental benefits, they are often lower in terms of commodity productivity, and therefore less competitive in many markets. Relatively extensive livestock farming in more remote and fragile areas has often been economically marginal for many years, but may have been artificially propped up by headage-based Pillar 1 payments that encouraged the retention or increase of animal numbers. With increased levels of decoupling looking increasingly likely post 2013, pillar 1 payments may not be financial incentive enough to retain appropriate stocking levels, contributing to environmental degradation of these valuable and sensitive areas through under-grazing. Therefore, Axis 2 LFA payments, if they are to continue, must acknowledge HNV farming systems and what they deliver for the environment. Instead of assigning these areas to disadvantaged in market/production terms, they should/could be seen as highly valuable for the environment as a public good. Institute for European Environmental Policy (IEEP) (2006) note that there is a sizeable overlap between areas of high environmental value, especially those dominated by low intensity livestock production, and areas currently classified as less favoured. In any future review of LFA classification, the opportunity should be taken to incorporate criteria which improve targeting to environmental priorities such as High Nature Value (HNV) farmland and valued traditional landscapes 7. 7 IEEP (2006), An evaluation of the Less favoured Area measure in the 25 Member States of the European Union,

5 2. Are you content with the conclusions that have been reached within the evidence chapters? No. Although we feel this review is comprehensive and provides valuable insight into LFA policy framework, we feel it is missing some key points. Chapter 4 makes reference to future challenges, however does not include those identified by the European Commission (EC) as biodiversity decline, climate change, biofuels and water quality. These are areas where those receiving LFA support could deliver in NI e.g. carbon storage and sequestration in peat soils or upper catchments water management. HNV farming should be acknowledged within the concluding remarks of chapter eight, as mentioned in Question 1. We also feel that the concluding options presented in Chapter 12 are not adequate to address the future of LFA support in light of the new challenges. 3. Do you agree with Option 1 that there should be no future LFACA Scheme and that the funds released should not be reallocated to other rural development measures? If so, please explain your reasons for this choice in the context of the evidence that has been presented in this review. No, we do not agree with this option. Although the LFACA has not been providing environmental public goods at their maximum capacity, there is huge potential for this to be turned around. Any available funding that is set within Axis 2 of the RDP which aims at improving the environment and countryside by supporting sustainable land management, should be fully employed for the benefit of the environment. If the decision is taken to end LFACA support, the allocated funds should be redirected to the NICMS and show demonstrable (is this a word?) benefits. 4. Do you agree with Option 2 that there should be no future LFACA Scheme and that the funds released should be reallocated entirely to Axis 1 and Axis 3 measures of the Northern Ireland Rural Development Programme? If so, please explain your reasons for this choice in the context of the evidence that has been presented in this review. a. If your choice is Option 2, to what priorities under Axis 1 and/or Axis 3 should the monies be directed, and why? No, we do not agree with this option. See Question 3 response. 5. Do you agree with Option 3 that there should be no future LFACA Scheme and that the funds released should be reallocated entirely to the agri-environment programme? If so, please explain your reasons for this choice in the context of the evidence that has been presented in this review. We do not agree with this option as it stands. Although a funding boost for agrienvironment could significantly benefit the environment, individual farmers already in receipt of both LFA and agri-environment payments would lose their LFA payment. This would not provide LFA farmers any offsetting benefit from increased

6 agri-environment payments, unless certain incentive conditions were attached, specific for LFA farmers. The increase in agri-environment funding would also not ensure that funding was targeted to LFA areas, which include many of our fragile and protected habitats, particularly in the SDA. a. If your choice is Option 3, should the additional monies be directed through the existing agri-environment measures, or are adjustments to the programme required (including, for example, ring-fenced monies for certain areas)? Please give reasons for your answers. In order to maximize the environmental benefits deriving from future LFACA payments, farmers must be paid for providing environmental goods and ecosystem services. 1 Current research across the UK is seeking to evaluate the full range of ecosystem services accrued in area eligible for LFA support, and it is imperative that LFAs are recognised in the context of a changing climate. 70% of our drinking water is gathered in the uplands, and the capture and processing of drinking water is a major land use. The uplands/sdas are also at the centre of an emerging wind industry, contributing to a future energy mix to help tackle climate change. There is also a predominance of peat soils in the UK uplands, which have been forming for thousands of years. As terrestrial carbon is a major component of peat, managing peat land to protect existing carbon stores and to enhance further sequestration of carbon, against a backdrop of increasing greenhouse gas emissions, is now a major land use objective in the uplands. LFACA funding directed towards the Northern Ireland Countryside Management Scheme should therefore be set aside specifically for farming that can deliver much needed ecosystem services, specific to areas to be defined in the new EU common criteria for LFA. Such farmers could deliver various habitat enhancement options that are already taking place in the SDA and DA, as well as those ecosystem services mentioned above. In order to provide adequate incentive for farmers to enter this scheme, LFA funding should be used to provide a top up 8 for farmers that previously received LFACA. This would ring fence LFA funding for LFA farmers and help towards offsetting the imbalance from the removal of previous LFACA support. This could have multiple benefits in that: LFA support could be delivered through an existing scheme, minimising administrative expense and excess red tape; Environmental outcomes would be the explicit aim of the payments, placing LFACA firmly within Axis 2 aims, as advised by the EC; Would provide incentive for farms in LFA to adopt agri-environment, benefiting protected areas and endangered species (as highlighted by DARDs review); 8 Currently taking place in the new Wales agri-environment scheme entitled Glastair, which is set to begin in 2012.

7 Would facilitates CMB in reaching beyond a 50% target of farms in CMS, benefiting the environment and wider society, demonstrating defendable rural development funding in an uncertain future; Would ensure that double funding for environmental goods is not occurring; Helps maintain declining HNV farming systems; Rewards farmers for providing environmental public goods instead of consigning them to Disadvantaged ; The RSPB believes that in order to receive this top up, farmers would have to enter NICMS, if not already taking part in the scheme. This would mean that in order to access LFA funding, farmers would have to enter into NICMS agreements and select from a suit of options deemed appropriate for the LFA areas. Like the previous LFACA funding, this would acknowledge that farming practices in such areas requires increased labour input, therefore meriting higher payment. Options could include: Soil/peat management for carbon sequestration; Riparian zone establishment and other measures to improve lowland water quality; Farmland bird options; Bracken control; Annual Heather regeneration; Extensive mixed grazing regimes. However, this list is not exhaustive.[jbam1] Payment levels could be based on economic modeling work undertaken during the LFACA review. This showed that a payment level in the region of 60/ha is sufficient to incentivise farmers to do something they would not otherwise do, securing active farming across LFA defined areas. 9 Farmers who are already in CMS could get this top automatically if management practices were deemed appropriate for LFA objectives. If not then additional management prescriptions would have to be taken on in order to meet agri-environment LFA eligibility criteria. 6. Do you agree with Option 4 that there should be a future LFACA Scheme? If so, please explain your reasons for this choice in the context of the evidence that has been presented in this review. The RSPB agrees that farming in disadvantaged areas needs support to maintain active farm management and the delivery of environmental public goods. To date the current scheme has not delivered the Axis two objective of improving the environment and countryside by supporting sustainable land management. If LFA support cannot be delivered through the proposed agri-environment method we proposed in our answer to Question 5.a., then it should evolve into a system of payments linked to the positive externalities of appropriate agricultural land management, such as maintenance of habitats, species and ecosystem services. A key strength of LFA support that differentiates it from agri-environment in particular, is a focus on maintaining existing farming systems, and therefore allowing the maintenance of generally positive practices (such as low intensity grazing). This is in contrast to payments that may require changes to existing practices, for example to create or manage specific habitats. From the recipient s 9 DARD (2009) Review of support arrangements for Less Favoured Areas In Northern Ireland

8 perspective, the ease of access to such a payment regime has been very positive, and the level of administration associated with the application process is comparatively low. However, such payments have not represented value for money and therefore must be amended to more specifically secure delivery of environmental and other public goods. a. Do you agree with the broad outline for such a Scheme that has been given and the reasons for this? If not, what changes would you like to see and why, in the context of the evidence that has been presented in this review. In particular: (i) Do you agree that the focus of future of support should be the SDA (or any future designated LFA)? The future of LFA support will partially be dependant on the common criteria for intermediate LFA set by the EC. The RSPB believes that farming in the SDA is in greater risk of decline and abandonment so is in need of greater support. If this cannot be delivered through agri-environment then it should be delivered through reformed LFA support that rewards farmers for delivering environmental public goods reflective of Axis 2 commitments. (ii) Do you agree that applicants to the Scheme should farm at least 10 ha of land in total (of which at least 3 ha must be in the SDA)? If not, what would you like to see as the minimum size and why? We do not support this option. This could exclude many farmers who reside within areas classified as HNV. Such farming systems often operate extensively in environmentally sensitive areas. The SFP and LFACA received may be the only incentive keeping farmers from abandonment and keeping this land in GAEC through cross compliance. Excluding the LFACA from those who exercise very limited agricultural activity could penalise farmers who are diversifying into other non-agricultural activities, but are still contributing significantly to the rural economy/environment. It could also divert funds away from organisations which maintain areas of land in GAEC whilst providing exceptional levels of public goods, i.e. managing land for nature conservation. This, again, highlights the inadequacies of current LFACA expenditure, which does not account for the delivery of public goods from certain parts of the industry. (iii) What are your views on the range of farm enterprises that would make a farm eligible for support? All farms who are defined by the eligibility criteria to be set by the EC should be eligible for support.

9 (iv) What are your views on the use of minimum and maximum stocking densities? The RSPB believes that a closer link with livestock-related activity is essential to any future LFACA scheme. The retention of appropriate levels of grazing, and of suitable mixed (cattle and sheep) grazing regimes is fundamentally important in many of NI s more remote areas. It is important to retain land managers in these areas, but it is important that an axis 2 measure does so for the environmental outcomes they provide. Where public funding is directed towards the retention of appropriate types and levels of grazing in these areas, there must be a discernible public benefit outcome to justify the targeting of funding to taxpayers. The environmental benefits of these types of HNV grazing systems, in terms of the maintenance of habitats and species, can generally be achieved through some simple eligibility conditions attached to payments. In this way, they are different from the enhanced management that is currently achieved through the agri-environment approach of compensating for additional costs and income foregone required to amend management practices to achieve specified environmental outcomes. The basic support that can be offered through an LFA approach allows payments to be made for the retention of existing land management practices, which by their nature are relatively environmentally sympathetic. A recent study by a PhD Student at Queens University used GPS to track ewes in upland areas. The study confirmed that hill breeds such as Blackface and Swaledale tend to graze mountain land from top to bottom. Other breeds such as Cheviot, Llyen, and Texal crosses spent most of their time grazing on lower ground rarely visiting heathland further up the mountain. Of late, farming practices have in some areas changed, with fewer mountain farmers keeping Blackface Ewes (horned ewes), which are ideal for heather grazing. This has come about with better prices for lambs from crossbred ewes and also the grazing periods on heather mountains where no sheep graze from November to February. Therefore, hill farmers have decided to reduce the numbers of horned ewes. It has also been found that cross breeds stay at the entrance to the mountain, and would even starve rather than graze higher up. Heather on these mountains (Mournes, Sperrins, Antrim Glens) is getting more dense and leggy with reduced stocking limits. The RSPB suggests that consideration be given to provision of LFA funding for retention of Blackface ewes on heather moorland, to enhance the environmental value of the areas, and help threatened populations of grouse and other ground nesting birds. Such support should be seen as an enhanced environmental outcome in which farmers should be rewarded. (v) What are your views on the use of a possible environmental option within an LFA support scheme? What sort of environmental issues could usefully be addressed by such a mechanism?

10 LFACA should have an explicit environmental objective for all entrants. See question 5.a. and 6.a (iv) response. 7. Are there any equality issues that you would like to raise that have not been addressed adequately? No comments at this stage. 8. Are there any issues relating to rural proofing that you would like to raise that have not been addressed adequately? No comments at this stage. 9. Are there any other issues you would like to draw our attention to in the context of this review? It is highly likely that the LFA defined area will decrease under the new EC common criteria. This will mean that less farmers will benefit from LFACA in the future whatever form it takes. It is essential that any excess funds from this decrease in area be recycled into Axis 2 of the NIRDP. Such funds could be used specifically for the transition of any changes to how LFACA will be delivered in the future. If delivered through the current CMS mechanisms this should incur a minimal cost. This would continue to incentivise farmers into CMS and reward those for delivery of environmental and public goods. Appendix Features of HNV farming in Europe Tend to be livestock based Low intensity and low input Support important habitats and features Associated with species of conservation importance Often feature land use mosaics (smaller-scale and diverse land cover) Less productive in commodity terms More geographically remote Associated with social and cultural issues, such as ageing populations or loss of traditional skills Contact name: Mr John Martin, Land Use Policy Officer, RSPB Northern Ireland. john.martin@rspb.org.uk; Tel: ;

11 Page: 7 [jbam1]any others?