Official Report: Minutes of Evidence

The Chairperson (Mr Butler): I welcome the following departmental officials to brief the Committee on the SL1: Zita Hale and Manus McHenry, deputy directors, agriculture policy division; and Devina Park, head of Farming with Nature transition policy. Thank you so much. Our previous session ran over quite a bit, and you had an extended wait, so I thank you for your patience. Members have your papers in their packs, and I ask you to give us a high-level briefing.

Mr Manus McHenry (Department of Agriculture, Environment and Rural Affairs): Thank you, Chair, for the opportunity to provide the Committee with a briefing on DAERA's plans to introduce the Farming with Nature Scheme Regulations (Northern Ireland) 2025. You have in your pack, along with the SL1, the draft regulations, which set out the purpose of the legislation. We previously provided the Committee with an oral briefing on the proposals for the Farming with Nature package. With your permission, Chair, I will give members a short overview of the contents of the draft regulations, including details of the scheme, eligibility requirements, available actions and the application process.

The Farming with Nature transition scheme sits within the Farming with Nature package, which forms part of the programme of change that is being progressed through DAERA's sustainable agriculture programme. It aims to contribute to the delivery of many of DAERA's strategic environmental outcomes by supporting farmers and land managers to make substantive contributions to environmental improvements and sustainability. The Farming with Nature package aims to increase the extent of and improve the quality of habitats on agricultural land, while improving connectivity between habitats. It is planned that the Farming with Nature package will be introduced using a three-phase approach, with the Farming with Nature transition scheme as phase 1.

The Farming with Nature transition scheme has been developed through an engagement process that included the agriculture policy stakeholder group and the Farming with Nature working group, which comprise key agriculture and environmental stakeholders. There is ongoing internal engagement in DAERA across a number of business areas, including our design, delivery and inspection branches. The scheme aims to improve 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 water courses, provide green infrastructure for nature corridors and increase carbon sequestration.

The Farming with Nature Scheme Regulations (Northern Ireland) 2025 are intended to give DAERA the legal powers to introduce the Farming with Nature transition scheme and provide for the Department to make payments to eligible farm businesses that meet the requirements for scheme actions and supporting items. It is planned that, in 2025, the Farming with Nature transition scheme will focus on farmland that is outside designated land and other priority habitat areas. Five options will be available initially, with plans to introduce further actions in 2026. Those five options are: planting of new hedgerows; creation of riparian buffer strips; farmland tree planting; multi-species winter cover crop; and retention of winter stubble. Devina will provide detail on those options later. It is planned to further develop the scheme in year 2 to offer a wider range of actions. Early proposals include provision of wild bird winter feed crop. In addition, there will be a number of supporting items to assist the implementation of actions. Those supporting items will not be mandatory for all actions but can be selected to suit individual farming requirements, depending on the action involved. Examples of supporting items include fencing to protect hedgerows and riparian buffer strips.

It is planned that the scheme will open annually. Farm businesses that are interested in applying must meet the eligibility criteria for the scheme. The first tranche of the scheme will be open only to farm businesses that are in possession of DAERA category 1 or 2 business identification numbers. In the first tranche, farm businesses that hold a current environmental farming scheme (EFS) agreement, wider or higher, will not be eligible to apply. In 2025, farm businesses that participate 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 scheme's requirements and the specifications of each action. All actions must be completed and claims made 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, which will be set at £9,500 per farm business. In 2025, the Farming with Nature transition scheme will be excluded from the cross-compliance penalty regime.

I will pass over to Zita, who will take you through the provisions of the statutory rule (SR).

Ms Zita Hale (Department of Agriculture, Environment and Rural Affairs): Thank you, Manus. As Manus said, the regulations establish the Farming with Nature scheme and allow the Department to provide payments to eligible farm businesses that meet the scheme's actions and supporting item requirements.

Skipping through the citation and commencement and interpretation, I will begin with regulation 3, which specifies the duration of the scheme. It will operate for two scheme years, ending on 31 March 2027. Regulation 4 specifies the eligibility criteria for farm businesses: they must have a category 1 or 2 farm business ID number; they must not have an active EFS agreement in place; and they must have management control of the fields in which eligible scheme actions are implemented. Regulations 5, 6 and 7 specify the criteria for eligible scheme actions and supporting items. They advise that actions are not permitted on tier 1, 2 or 3 land, which tends to be special areas of conservation, special protection areas, Ramsar sites, areas of special scientific interest and other designated lands.

Regulation 8 specifies the basis on which the Department will make payment. It points out that schedule 3 lists the payment rates and sets the annual scheme cap at £9,500. Regulation 9 specifies that the cross-compliance penalty regime will not apply to the scheme. Regulation 10 specifies that administrative penalties for over-declaration will not apply to the scheme. Regulation 11 provides that on-the-spot checks will be 1% rather than 5%. Regulation 12 states that the Department shall use information recorded on the land parcel identification scheme (LPIS) to determine whether scheme requirements are met. Regulations 13, 14, 15 and 16 provide general powers for the withholding of payments; the recovery of overpayments; the powers of authorised persons; assistance for authorised persons; offences; and penalties.

Schedule 1 will provide the detail on each of the five eligible scheme actions, which Manus outlined and Devina will pick up. Schedule 2 sets out the criteria for all eligible supporting items. Schedule 3 sets out the associated payment rates for eligible scheme actions and eligible supporting items. Schedule 4 sets out the list of native hedge plant species that are eligible for the scheme. Finally, schedule 5 sets out the list of native tree species that are eligible for the scheme.

I will now hand over to Devina, who will provide more in-depth information on each of the five environmental actions and their supporting items.

Ms Devina Park (Department of Agriculture, Environment and Rural Affairs): In the first year of the scheme, as Manus said, there will be five environmental actions. They were selected based on the environmental benefits that they can provide. In comparison with previous agrienvironment schemes, this scheme aims to simplify the specifications, making them less prescriptive, and to emphasise the focus on the environmental actions and the benefits that each action can deliver. We have moved away from mandatory non-productive investments that we have seen in, for example, the environmental farming scheme. We now have items that support implementation in order to get environmental benefit.

The first action is planting new hedgerows. The aim of that action is to create lengths of hedgerow that are planted with native species where no hedge currently exists. Hedgerows provide vital habitats for a wide range of species, including birds, mammals, insects and plants. They serve as nesting sites for birds and mammals and are a breeding ground for insects. Hedgerows act as corridors that connect different habitat areas, allowing wildlife to move across landscapes. Other benefits include carbon sequestration, reduction of soil erosion and control of water flow. Under the scheme, the minimum length of hedgerow that can be planted is 10 metres, and it must be planted with native species, as listed in schedule 4 of the regulations. Protective fencing is available to help scheme participants to protect the hedge from grazing livestock and wildlife damage. Fencing of a maximum of two times the length of the hedge that has been planted is allowed. A payment of £6·49 per metre is available for that first action.

The second action is creation of riparian buffer strips. The aim of that action is to create vegetative riparian buffer strips that will prevent livestock from accessing watercourses, and reduce bankside erosion and the transport of pollutants to the watercourse. It will also provide habitat for wildlife and form links between other habitat areas. Within the second action, there are two options: a 2-metre buffer strip and a 7-metre buffer strip. Buffer strips must be fenced off and protected from damage by livestock. A retention period of 15 years will apply. Gates and posts will be available for that action and are mandatory in the 7-metre option in order to facilitate watercourse maintenance by Rivers Agency. Drinking-water troughs and pasture pumps are also available if required. The payment for a 2-metre riparian buffer strip is £1·41 per metre. If you include the payment for mandatory fencing, that takes us up to £7·93 per metre. In the 7-metre option, payment for the strip is £4·93 per metre, with payment for the mandatory fencing bringing the overall payment up to £11·45 per metre.

Farmland tree planting is the third available action. Through that action, we aim to integrate native trees on farmed land. Areas of trees can provide habitat for a variety of wildlife, offering nesting sites, food sources and shelter, and they can act as wildlife corridors. Trees and understorey plants can provide nectar and pollen for bees, butterflies and other beneficial insects. That third action could be integrated across farmland to suit the system that is in place, in plots of a minimum of 0·05 hectares. The trees could be placed downstream of livestock buildings or to help shelter livestock. Trees must be planted at a rate of 1,600 trees per hectare. For a 0·05-hectare plot, that equates to 80 trees. A retention period of 20 years applies. The payment rate for farmland tree planting is £6,756 per hectare. That equates to £337·80 for a 0·05-hectare plot.

The next action is retention of winter stubble, which can provide habitat for birds, small mammals and insects. It offers cover and protection during the winter months, when other resources may be scarce. Other benefits include enhanced soil biodiversity, through, for example, providing food sources for earthworms. It can also help to prevent soil erosion and increase the organic-matter content of the soil. That action is available on arable land that is growing a spring-sown or autumn-sown cereal, oilseed rape, protein crop or linseed. It is not available on stubble following the harvest of maize or undersown crops. The stubble must be retained following harvest until 15 February the following year. The payment rate for that action is £93 per hectare.

Finally, multi-species winter cover crop is a new action under agrienvironment schemes in Northern Ireland. The aim of that action is to, over the winter months, establish a multi-species cover crop between two cash crops to protect soil surface; provide root growth that benefits soil structure; support soil biology; and minimise nutrient leaching, soil erosion and run-off. Multi-species cover crops also help to sequester carbon and reduce nutrient leaching from soils. Again, that action is available on arable land. The payment rate is £225 per hectare.

Four supporting items will be available in year 1: protective fencing; a gate and two posts; drinking-water troughs; and pasture pumps. As I mentioned, in most cases, supporting items are not mandatory. However, they are mandatory in the case of riparian buffer strips in order to prevent livestock from reaching the watercourse. A gate and two posts are required in a 7-metre strip, as I mentioned, to facilitate work by Rivers Agency.

It is planned that further actions will be introduced in year 2 of the scheme. That range of further actions is under consideration and development, and we are engaging with our stakeholder groups on that work.

I will pass back to Manus.

Mr McHenry: OK, Devina. Thanks.

I will finish off with the application process. The plan is to open the scheme in the middle of June for six weeks. The Farming with Nature transition scheme is part of DAERA's commitment to digital-first service delivery. Applications for the scheme will be made through a geospatial online application that can be accessed through DAERA online services. Farm businesses must, as part of their application, select the action that they wish to complete and eligible ground over which they have management control, and they must record on a map specifically where the action is to be located. The online application system has been designed to be customer-friendly. To assist farm businesses, the application will be prepopulated with field data on what has been claimed for as part of the 2024 basic payment scheme (BPS) application. For the land selected, the application system will indicate the actions that are available for selection. If a farm business has not made a 2024 BPS application, there will be no prepopulation of fields. However, farm businesses can still add land to their application and select eligible actions. Technical videos that were recorded by the College of Agriculture, Food and Rural Enterprise (CAFRE) are available to view prior to application submission in order to support applicants' understanding of the actions required. The technical videos, along with guidance sheets and a link to the business tools, will be available on the DAERA website.

The online application system will also provide a running total of the application value, based on the actions and supporting items that have been added to it. That will allow a farm business to ensure that it submits an application that is within the application thresholds: a minimum of £2,500 and a maximum of £9,500 . During the application window, help will be available through the use of a dedicated email address and the DAERA online helpline number. Digital assistance will be provided initially over the telephone, and a dedicated team can screen-share and assist customers with the online application. Farm businesses are strongly encouraged to ensure that all members register for a DAERA online account via the government gateway, even if they work with an agent. All communications related to the scheme will be issued electronically. As DAERA continues to expand its digital communication across the agriculture and environmental scheme division, farmers are reminded to regularly check their email inbox for important updates and notifications.

Mr Chairman, that finishes the presentation on the Farming with Nature transition scheme. I am happy to take any questions. Thank you.

The Chairperson (Mr Butler): Thank you, all, for that really interesting piece of work. I am very interested in trees and in the Department's ambition for tree planting and afforestation. There was a joint Committee meeting this week with Ofcom about storm Éowyn. One of the issues is where trees are planted. Is there any scope for providing guidance to ensure that trees are not planted near power lines or poles for telecommunications? It is about ensuring that all the Departments speak with one voice. There is a dearth of good legislation on hedges or trees. They are brilliant to have, but they make bad neighbours in some ways. Is there scope for that?

Mr McHenry: As part of the application process, there is information on where trees should be planted on a farm.

The Chairperson (Mr Butler): I know that there is some guidance on that. We have a lot of poles that carry electricity and telecommunications. Given that we have been told that storms will happen more often, would it be prudent to ensure that information's inclusion in the guidance? Maybe it is included.

Ms Park: It is included as part of the guidance. There is guidance available. There are guidance videos and guidance sheets that will be available as part of the application process and online afterwards. The guidance sets out how to plant trees in a way that is safe for the environment and safe in respect of power lines and that kind of infrastructure.

The Chairperson (Mr Butler): Super.

My next question is about the powers of an authorised person. I paid a bit of attention to that. Is that a direct lift from previous provisions on the powers of an authorised person? There are no new powers.

Ms Park: No, those are the standard provisions that are in all our regulations.

OK, good. You call them "standard", but there are significant powers there. No problem. Thank you for that.

This is more about buffer strips than hedgerows. The regulations are specific to new hedgerows, so you get no credit, I suspect, for maintaining a hedgerow that is already there. Maybe that is not the case. Many farmers already have buffer strips and maintained hedgerows for environmental reasons. Will they be eligible if the buffer strip already exists, or is this for new buffer zones?

Mr McHenry: For the purposes of this scheme, Chair, it is for new buffer strips that are introduced on to the farm. At this stage in our development, it is for an addition to the business rather than an existing one.

The Chairperson (Mr Butler): Just to be clear, will farmers who already meet the 2-metre and 7-metre spacing criteria not be eligible?

Mr McHenry: No, they will not.

The Chairperson (Mr Butler): That is a bit draconian. There is no incentive there, but I appreciate the straightforward answer.

I have a final question. Your paper highlights various approaches being taken across neighbouring jurisdictions. Do you have a system for liaising with them directly to learn from them — the good, the bad and the ugly — or is it a desktop exercise?

Mr McHenry: Do you mean across the regions?

The Chairperson (Mr Butler): Yes, with the different jurisdictions.

Mr McHenry: We regularly meet folk in England, Scotland, Wales and the South to discuss their schemes. In our development to date, we have been trying to take on board the learning from the schemes that they have introduced and apply that to ours. Indeed, the phased approach is something that some of those regions are quite envious of, in that it allows you to develop the scheme in stages rather than doing everything at one stage, which has brought issues with paying out money and farmers being able to implement actions on the farm.

The Chairperson (Mr Butler): Is the system all online and technological? Is it already embedded in the systems that are there, or will it require new systems?

Mr McHenry: For the purposes of this scheme, a new system is being developed to allow farmers to apply. Our spatially applying the actions on the farm is very new and will be very beneficial going forward.

The Chairperson (Mr Butler): OK. Thank you very much.

Mr McAleer: I welcome the presentation, so thank you very much. I have a couple of questions. Do farmers or landowners carry out the work and claim for payment retrospectively, or does the Department pay them up front before they carry out the work?

Mr McHenry: I will take you through the application process, Declan. The farmer will apply to do a range of measures on their farm. They will then take those measures forward and implement them on the farm. They will then apply for payment for the work that they have completed. Following that, they will receive payment. That is the order in which it should take place.

Mr McAleer: So, they apply retrospectively.

Mr McHenry: That is right.

Mr McAleer: On the timing of this, autumn is good enough for planting hedges and so on, but, for fencing, you will be fencing during the winter months when the land is not in the best of shape, because the work has to be carried out by the end of March. Is that viable? Is there no flexibility in that at all? Does it have to be done within the financial year?

Mr McHenry: Unfortunately, with the way in which the scheme is designed and the budget being for the year, the work has to be completed within the year. If you were to get a particularly difficult and wet winter, that would present challenges, as it has in the past. It will be kept under review, but, as things stand, the farmers will have to complete the work during that period.

Mr McAleer: It can be very difficult, as you know. If you have a very wet November, December, January and February, that is not the best time to be out fencing.

Finally, tree planting is part of the scheme, I see that there are other schemes, such as Forest Service's small woodland grant scheme. If a farmer has a hectare that they want to plant out, how will they choose whether to go for the Forest Service's small woodland grant scheme or this scheme? What is the difference, and how would they choose?

Ms Park: The action of the Farming with Nature transition scheme is really about giving farmers flexibility to put small areas of trees in across the farm. The small woodland grant scheme being offered by Forest Service has a 0·2-hectare minimum, whereas, for this scheme, the minimum area is 0·05 hectares. Within the £9,500 cap, you can plant up to 1·4 hectares, so we are working at a different scale and, perhaps, giving farmers more flexibility about where on the farm best suits trees and their farming system.

Mr McAleer: I have just one last wee thing. I am very grateful for this information, because I have been asked a lot of these questions. Will farmers go online and, in effect, do this for themselves? Is there a designated group of support organisations or people who could advise farmers? Does the Department provide a list of people whom it approves and who can assist and advise farmers on what type of hedges or trees to choose and things like that, or do the farmers do it for themselves? Is there any approved list of —?

Mr McHenry: Guidance material will be available as part of the scheme, and information will be included in it and in videos. Information will also be available from CAFRE. The knowledge advisory service also provides best practice on hedge and tree planting, Declan.

Mr McAleer: Do you recommend that farmers go to CAFRE for advice?

Mr McHenry: Yes.

Mr McAleer: Thank you very much for that information.

The Chairperson (Mr Butler): Further to Declan's question, I would like clarification on one point. An initial application is made for whatever schemes the farmers wants to avail themselves of, an assessment is made by someone from the Department — an official, I imagine — and then a further application is made on the basis of that assessment. Is that correct? Have I picked that up correctly?

Ms Park: As part of the spatial system that Manus mentioned, there will be areas that, in order to protect breeding wader sites and so on, are not suitable for tree planting, for example. Therefore, an applicant will not be able to select such an area for planting trees. That is part of the built-in assessment.

A DAERA official will also look at farmland tree planting, in particular, because we do not want to put the tree in the wrong place, so there is that as well. As you work through the system, the claims process allows you to go back in and adjust what you had applied for to what you actually carried out.

The Chairperson (Mr Butler): For efficiency, can a farmer make a single application for multiple aspects? Is a DAERA official able to look at all those things in one go, or does this require a series of experts to come out and, for example, look at the trees, hedgerows, buffer strips, designated waterways or waterways and make an assessment? Can it all be done efficiently?

Mr McHenry: Are you thinking about this from the point of view of inspection?

The Chairperson (Mr Butler): No. I am thinking about the application. The application is made, and an assessment is made of the site. Obviously, after the assessment, there is a further refinement of that application, I suspect.

Mr McHenry: Yes.

The Chairperson (Mr Butler): At that point, has the Department sufficient inspectors of applications to make it as easy and seamless as possible by taking on the entire application?

Mr McHenry: To be honest, for this scheme, tree planting is the one that needs to be checked before it takes place on the farm. The other measures should not need that.

The Chairperson (Mr Butler): Is that because it is spatial?

Mr McHenry: That is right. On the other point, just to be clear about it, the farmer makes the application to the scheme, but the claim window differs from the EFS, in that the farmer in the EFS is held to what he originally applied for. In Farming with Nature, farmers can go back and claim the right amount. They are not held to what they applied for. There is room in there to adjust the original application.

The Chairperson (Mr Butler): Obviously, with upper limits —

Mr McHenry: — and to avoid any penalties.

The Chairperson (Mr Butler): OK. Thank you very much for that.

Mr Blair: Thanks to all of you for the information provided. This question is not directly related, but I hope that, if you cannot answer it today, perhaps you could check it out and report back to us. I do not expect you to have full details, because some information might be required from other business areas of DAERA. I recall that, in the last mandate, it appeared that some of the sequestration measures being carried out by farmers were not being captured in the greenhouse gas inventory across the UK more broadly. Can we be assured that every effort is made to capture all the actions so that those carrying them out will have them reflected in any future carbon audits or carbon budgets that come along? There was some evidence, particularly on growing hedges, that that was not being included in the figures. We are going back here a bit — this is historical — but, going forward, we need to ensure that all of this is itemised, listed and captured by other bodies.

Mr McHenry: It is important to have a robust monitoring and evaluation framework around the scheme, John. We have to ensure that that is included as part of our development of the scheme. That is one of the areas in the EFS in the past that the Department looked at and wanted to take forward and improve on in Farming with Nature.

Mr Blair: OK. That is great. Thank you.

Ms Finnegan: I have a quick question. If farmers already get their single farm payment, can they apply dually for this scheme, or would they have to forfeit a portion of their single farm payment?

Mr McHenry: No. They will go ahead and apply for their single farm payment at that time of the year. The window for the Farming with Nature package will then open, and they will apply for that. It will not have any impact on their farm sustainability payment.

Ms Finnegan: OK. You talked about different phases in the scheme. Is there any chance that farmers can do just phase 1 and not the rest of them, or do they have to apply for the complete scheme?

Mr McHenry: If they decide that phase 1 suits their business, that is fine. They are under no requirement to apply to any other phases.

Ms Finnegan: OK. It is really useful to know that when farmers come to ask me about it.

Lastly, can farmers go and get assistance from DAERA staff or wherever to make the applications?

Mr McHenry: There will be the videos, and there will be information that supports the application, but farmers will also have the agent's support, if they wish to go down that route. They can go through their agent to do it. It is similar to the BPS and the farm transition sustainability payment.

Mr McAleer: Can they go to the DAERA Direct office?

Mr McHenry: Yes, there will be support from DAERA Direct office staff, if needed.

Mr Irwin: I think that my question has been covered. It was on the 2-metre buffer strip along rivers. Does it affect a farmer's sustainability payment? Even though they have fenced the land off at 2 metres, do they still get paid?

Mr McHenry: It is still eligible, William. That area is still eligible: it is the same as it was in the previous schemes.

Mr Irwin: The EFS was very rigid. One farmer had to pay back his entire payment because, when his daughter identified the fields to the fence, there were three meadows with one river running along all three. The farmer was made to pay the money back even though he had identified where the fence was to be. Sometimes, things can be too rigid.

Mr McHenry: Through the work that we have been doing, we have tried to ensure that there is flexibility. We have included tolerances in this scheme that were not in the EFS. Farming with Nature includes a tolerance that means that, if you were to complete a length of work and it was not the exact length — if you went slightly over or slightly under it — you would not be hit with a penalty, whereas, previously, there was the potential to be penalised.

Mr Irwin: That makes sense. OK. Thank you.

The Chairperson (Mr Butler): You have a bit of flexibility. You can imagine a situation where you may not be able to achieve a continuous 10-metre length of hedgerow or fence, but you can pick it up and continue it. I imagine that there will be the flexibility to address that.

Mr Irwin: In the situation that I identified, the guy's daughter had identified on the map where the fence was to be. It was all the one field, but there were three meadows in it, if you understand me, and, because they were identified differently, he had to pay the money back. It seemed very unfair, because the fencing was done.

The Chairperson (Mr Butler): Members, are there any other questions?

Mr McAleer: Can the buffer strip be more than 7 metres, or is that the maximum?

Mr McHenry: That is the maximum.

Mr McAleer: It has to be within 7 metres.

Mr McHenry: Yes.

The Chairperson (Mr Butler): OK. Thank you very much for your presentation. We really appreciate it.

Mr McHenry: Thank you.

The Chairperson (Mr Butler): Members, are you agreed that the Department proceed to make the SR? If so, we will consider it and the Examiner of Statutory Rules's report in due course.