Official Report: Minutes of Evidence

The Chairperson (Mr Butler): I welcome Manus McHenry, deputy director of agricultural policy division, and Zita Hale, deputy director of agricultural policy division. They will brief the Committee on Farming with Nature and the draft statutory rule (SR) and, after their briefing, hopefully, answer questions. I invite you to brief the Committee.

Mr Manus McHenry (Department of Agriculture, Environment and Rural Affairs): Thank you for the opportunity to provide the Committee with a briefing on DAERA's plans to introduce the Farming with Nature package and the proposed legislative pathway. You have the first part of the legislative pathway — the Farming with Nature (Northern Ireland) Regulations 2025 — in front of you. You have received a written briefing for today's meeting, and it will be in your pack. With your permission, Mr Chairman, I will give a short overview of the package and the planned schemes in it.

The Farming with Nature package forms part of the programme of change that is being progressed through the DAERA sustainable agriculture programme. It aims to contribute to the delivery of DAERA's strategic environmental outcomes by supporting farmers and land managers to make substantial contributions to environmental improvements and sustainability. The package is being developed through a co-design process that includes the agriculture policy stakeholder group and the Farming with Nature co-design group, which comprises key agriculture and environmental stakeholders. Internally in DAERA, there is ongoing engagement across a number of business areas, including design, delivery and inspection branches. The Farming with Nature package will be introduced by way of a phased approach and launched in 2025. It will comprise three phases.

Phase 1 is the Farming with Nature transition scheme. It aims to support biodiversity on farms by funding a range of environmental actions. It will underpin the overall package and allow farmers to implement actions that will deliver additional habitats, protect watercourses, provide green infrastructure for nature corridors and increase carbon sequestration. Five actions will be available initially, with plans to introduce further actions in 2026.

Phase 2 is the Farming with Nature landscape projects. It will allow groups of farmers to collaborate and develop innovative approaches to restoring nature at a landscape scale in Northern Ireland. Landscapes will be delivered by third-party landscape project coordinators selected through a competitive call. To ensure maximum environmental benefit and value for money, it is proposed that Farming with Nature landscape projects will seek to encourage innovation with bespoke measures tailored to the specific environmental needs of our project target area, rather than being limited to a set list of prescribed measures. It is proposed that we use this phase as a vehicle to transition the environmental farming scheme (EFS) group projects to Farming with Nature.

Phase 3 is the Farming with Nature priority habitats. It aims to increase the extent, quality and connectivity of habitats in farmed land in designated sites and priority habitat areas and to protect and restore priority habitats that are primarily located in the extensively farmed areas of Northern Ireland. Farming with Nature priority habitats will follow on from the EFS higher level. It is proposed that actions may also be available for land around protected sites, with the aim of protecting or enhancing priority habitats.

I will now provide more detail on the proposals for phase 1, the Farming with Nature transition scheme. The transition scheme is being developed to provide support to farmers to implement actions that will deliver additional benefits, protect watercourses, increase carbon sequestration and provide more green infrastructure on farmland. I mentioned that five actions will be available in the first year of the scheme: planting new hedgerows, creating riparian buffer strips, farmland tree planting, providing multi-species winter cover crop and the retention of winter stubble. The scheme will be developed further in year 2 to offer a wider range of actions, including the provision of wild bird winter feed crop. In addition, there will be supporting items to assist the implementation of actions. Those will not be mandatory for all actions but can be selected to suit individual farm requirements depending on the action involved. Examples of supporting items include fencing to protect hedgerows and riparian buffer strips.

The Farming with Nature transition scheme will focus on farmland outside designated sites and other priority habitat areas. It will provide support for farmers to undertake actions that will increase the extent of habitats on their farms. The scheme will open annually, and farm businesses that are interested in applying to join must meet the eligibility criteria for the scheme. The first tranche of the scheme will open to farm businesses in possession of a DAERA category 1 or 2 business identification number. Also in the first tranche, farm businesses holding a current EFS agreement — wider or higher — will not be eligible to apply. In 2025, farm businesses participating in the Farming with Nature transition scheme must have management control of the fields in which actions are implemented. Educational material and guidance will be available online to ensure that applicants understand the requirements of the scheme and the specification of each action. All actions must be completed and claimed by 31 March 2026 and 31 March 2027 respectively. In the first tranche of the scheme in 2025, it is planned that there will be a cap on the value of individual claims each year. In 2025, the Farming with Nature transition scheme will be excluded from the cross-compliance penalty regime.

I will hand over to Zita to take you through the next steps.

Ms Zita Hale (Department of Agriculture, Environment and Rural Affairs): With regard to the next steps in the Farming with Nature package, we plan to bring forward two statutory rules for Committee scrutiny in the coming weeks. The first is an affirmative statutory rule, and you have a copy of the rule in your packs. It is being introduced to make technical amendments to the existing retained EU regulations to allow the Department to introduce the transition and landscape schemes for the Farming with Nature package in 2025 and the priority habitats in 2026. It will make the following amendments to the retained EU regulation No 1305/2013. Article 28(5) will be amended to allow the Department to operate the transition scheme on a yearly basis rather than seek five- or seven-year commitments. In practice, that will mean that farmers can apply annually to carry out environmental improvements on their land. Article 28(10) will be amended to allow the Department to introduce the scheme while maintaining the powers that allow the current tranche of EFS to operate. Article 35(8) will be amended to allow the Department to operate the landscape scheme beyond the current seven-year limit in the legislation and sets a minimum of one year for the scheme to operate. Article 35(10) will be amended to allow the Department to establish the groups and conditions as part of the intended design of the landscape scheme.

We anticipate no controversial impacts as a result of the legislation. The amendments are purely technical. Subject to any comments that you might have today, we intend to formally lay the SR in the Business Office tomorrow. The Minister intends to introduce the draft affirmative SR in the Assembly, following scrutiny by the Examiner of Statutory Rules and further consideration by you, towards the end of May, hopefully. Depending on the successful passage of the affirmative SR, the Department intends to present a negative SR for the Farming with Nature transition scheme to you for your consideration and approval. Our current timetable suggests that that will be towards the end of May or in early June. The negative SR will establish the scheme rules, the eligibility requirements and scheme payment requirements for the Farming with Nature transition scheme and will provide the legislative basis for the policy position as set out by Manus.

It is planned that further negative resolution statutory rules will be brought to the Committee for scrutiny in 2025 and 2026 to establish the rules that pertain to the Farming with Nature landscape projects and priority habitats scheme. Manus and I are happy to answer any questions that members may have on the policy proposals and the affirmative SR for the Farming with Nature package.

The Chairperson (Mr Butler): Thank you so much. I will try to keep my questions short so that I do not ramble too much.

This looks pretty good. You are hoping to roll out the first phase of Farming with Nature and the transition schemes in 2025. Are there any anticipated dates for the two further phases?

Mr McHenry: The landscape projects will begin later this year. We are working towards that at the moment in developing the business case. The priority habitats scheme will be introduced in 2026, again subject to the development of a business case.

The Chairperson (Mr Butler): OK. One of the points here is that:

Does that mean that, in 2026, it will not be excluded from the cross-compliance penalty regime?

Mr McHenry: It will be under review. The reason for the plan this year is the speed that we are working at. We are trying to manage cross-compliance this year and farm sustainability standards next year. In order to ensure that we are able to roll the scheme out this year, the decision was taken to leave it out this year. However, it will be kept under review for 2026.

The Chairperson (Mr Butler): OK, thank you. This is a replacement for the EFS scheme. Can you outline the key differences between the two schemes?

Mr McHenry: The EFS was a five-year scheme and was funded for that period, with an upper limit of £12,500. All the works had to be completed in year 1 of that scheme, but the farmer remained in contract for five years. The Farming with Nature transition scheme is an annual scheme. It will have a cap on it, but I do not want to say anything more about that until the business case has crossed the line. The cap will remain for each year, but a farmer can come back and apply on a yearly basis. Some of the criticisms of EFS centred around the inspections and the challenges that went with them. We have designed the scheme in order to simplify it and make it less bureaucratic and easier for farmers to complete the works and ensure that they meet the required standards.

The Chairperson (Mr Butler): Brilliant. OK. Just finally on this, I know that I cannot hold you to a figure, because it is subject to the business case, but farmers are incredibly nervous about their fiscal viability at the moment for a number of reasons. Is it the ambition that there will be no reduction in what may be available to partake in such a scheme?

Mr McHenry: I am sorry: could you repeat the question?

The Chairperson (Mr Butler): I understand that you cannot give me a fiscal value, because that is subject to a business case. Is it the ambition to see no reduction in the availability of —.

Mr McHenry: That is the Minister's ambition at this time, yes.

The Chairperson (Mr Butler): OK. Finally, there are five aspects of phase 1. I take it that any and all are available to any farmer, so you do not have to hit all five.

Mr McHenry: No. A farmer can select the ones that, he feels, will be most suitable for his business.

The Chairperson (Mr Butler): Is there assistance in the Department for farmers with regard to that?

Mr McHenry: We are developing the application process at the moment. The guidance within that should support any farmer with their application to the scheme.

The Chairperson (Mr Butler): Brilliant. Finally finally, there are real opportunities with Farming for the Generations to speak to young farmers in particular or the younger generation in an education space with regard to this and that understanding to be dragged through. Is there any collaboration in that space?

Mr McHenry: Not at the moment. If we feel that there are opportunities and options there, we will, of course, take them forward.

The Chairperson (Mr Butler): There needs to be advocacy for young voices.

Mr McHenry: We can take that away, yes.

The Chairperson (Mr Butler): OK. There is plenty of interest in this one.

Mr Blair: You made a good point in your final question. That is not to say that you did not make good points in your previous questions. [Laughter.]

Thank you, Manus and Zita, for the information that you have provided today. It is clear that there has been some co-design of the scheme in collaboration with stakeholders. Can you give us any idea of what work went on and what support has come from stakeholders, assuming that they are supportive of it?

Mr McHenry: A range of industry stakeholders were involved in the co-design, including NI Environmental Link, the RSPB, the NI Agricultural Producers Association and the Ulster Farmers' Union. Their support in determining which options we should run with initially for the scheme has been helpful. We will take that to the next stage, when we start to think about what options we should include for next year. Their support for what we have been doing has been pivotal in enabling us to move it forward this year.

Mr Blair: That is good. That is all from me. That is a helpful answer: the stakeholder engagement is there.

Mr Irwin: I have a couple of questions about the scheme. Is it a voluntary scheme, or is the sustainability payment subject to participation in the scheme?

Mr McHenry: At this moment in time, it is a voluntary scheme. Any farmer can, if they are in control of the land that they manage, apply to the Farming with Nature transition scheme.

Mr Irwin: You said that there is a cap on the value of claims: when will it be decided what that cap will be? It is very open-ended.

Mr McHenry: It is going through the business case stage, so I am restricted in what I can say, but I can say that it is an annual scheme, so, whilst there will be a cap each year, there will be nothing to stop a farmer reaching the cap in year 1 and reapplying to the scheme in year 2.

Mr Irwin: Do you have to apply before you commence works, or do you claim after the work has been done?

Mr McHenry: You claim after the work has been done, which is different from the EFS.

Mr Irwin: That needs to be made clear.

Mr McHenry: Yes.

Mr McGlone: It is maybe

for this, but, where I come from, the likely question would be, "What sort of money's in it?"

Mr Irwin: They are not going to tell you that.

The Chairperson (Mr Butler): That was a nice, short, blunt question, Patsy.

Mr McHenry: We are working our way through that. The business case is working its way through the system, Patsy, and, as I said, I cannot say too much more until that is signed off. I hope, however, to be able to come back to the Committee when I have those figures.

Mr McGlone: Right. Dead on. Thanks very much, Manus.

The Chairperson (Mr Butler): We will hold you to that, Manus,

I can assure you of that.

Mr T Buchanan: I have just one issue. Does a farmer have to have the minimum of three hectacres to qualify, as was the case with the single farm payment?

Ms Hale: Yes.

The Chairperson (Mr Butler): Are members content at this stage?

The Chairperson (Mr Butler): Thank you very much. I cannot promise that you will get off as lightly when you come back with a bit more detail.

Mr McHenry: It must be Easter. [Laughter.]

The Chairperson (Mr Butler): Thank you so much.