Official Report: Minutes of Evidence

The Chairperson (Mr Butler): I welcome the following DAERA officials: Mrs Anna Campbell, acting director of the agricultural and environmental schemes division; Mr George Moffett, acting deputy director of the agricultural policy division; Mr Aidan McEvoy, head of branch; and Ms Denise Phillips, acting head of branch. They will answer any queries that we have.

You are becoming like family; you have been here that often.

Mrs Anna Campbell (Department of Agriculture, Environment and Rural Affairs): It feels that way.

The Chairperson (Mr Butler): Do you have a presentation or opening remarks?

Mrs Campbell: I will make some opening remarks. Good afternoon, everyone, and thank you, Mr Chairman, for the opportunity to provide a further oral briefing to aid the Committee's consideration of the draft statutory rule (SR) and SL1 for the farm sustainability standards (FSS) statutory rule and the associated farm sustainability legislation. Those are the two new sets of regulations being introduced by the Department. The first is to replace the existing cross-compliance penalty system with a new framework focused on farm sustainability standards. The second is to set out the eligibility criteria and conditions for receiving the new farm sustainability payment (FSP). The purpose of today's briefing is to provide additional clarity and assurance to the Committee in light of residual concerns. I welcome the opportunity to provide assurances around the processes, intention and adaptability that are being applied throughout the development of the new FSS and associated penalty regime.

Stakeholder engagement has led to the development of the FSS and the penalty matrix. In response to consultation in 2018 and 2021-22, we have delivered seven clear FSS, which will replace the current 20 requirements under cross-compliance. We have ensured that those requirements address issues such as the need for protection of habitats and biodiversity, landscape and heritage. We have introduced education and guidance to the FSS arrangements to ensure compliance. We have, where appropriate, introduced controls by remote sensing and administrative checks in place of traditional on-the-ground inspections. We have developed a penalty matrix, which is more proportionate, fairer and easier to understand. The draft legislation before the Committee is built upon existing frameworks and informed precedents, considering lessons learned from the current arrangements.

I will look first at the powers of authorised persons. To protect public money, it is appropriate that the Department seeks and obtains evidence to support payment of grants and subsidies. I confirm for the Committee that there has been no increase to the powers of authorised persons; rather, the legislation re-enacts, without amendment, the powers that have been in place since 2015. I would also like to clarify that, under these regulations, the Department does not have the authority to seize property. In cases where a business refuses to provide the required evidence during an inspection, the Department's response remains limited to withholding payments due to that business. That approach ensures compliance while respecting the rights of individuals.

The powers themselves are limited in their application. They are only used for the purpose of carrying out selected inspections and incident referrals. The requirement for that is also set out in legislation and is subject to no amendment as a result of the FSS SR. To clarify some information that we provided in our additional briefing paper, which is in the briefing pack: in 2024, for example, those powers were used to complete just over 2,000 inspections for cross-compliance, which resulted in 624 businesses being in breach.

The powers of authorised persons provisions include a safeguard whereby the powers do not extend to a private dwelling house. That respects the rights of farmers under article 8 of the European Convention on Human Rights (ECHR) — the right to respect for private and family life — which is a key consideration that the Department must consider when developing policy.

The Department must also undertake equality and disability duties screening, which also includes consideration of the impact of the proposed policy on human rights, including article 8. That screening ruled out the need to carry out an equality impact assessment. I confirm that this policy was considered against all section 75 groups and all elements of the Human Rights Act 1998 (HRA), which brings the European Convention on Human Rights into UK law, with no potential adverse impact on HRA being identified. The next steps on screening, after the formal adoption of the policy, will be the publication of the equality and disabilities duties screening for information on the DAERA website. Subsequently, our teams will complete an equality and disabilities duty screening on the implementation of the policy. That will look at the delivery elements.

The Department acknowledges that the Committee has, in the past, expressed concerns about penalties that applied in respect of very-high-severity breaches. Additional information to help alleviate the Committee's concerns is set out in the briefing pack, and the Department trusts that that will offer greater clarity. The breaches that attract the highest level of severity have been very carefully chosen to reflect the severity of the damage that is caused to human and animal health and the environment. For example, the most severe instances of water pollution, resulting in widespread impacts and fish kill, are considered very-high-severity breaches. Such a breach can have significant and long-term, long-lasting impacts on the river ecosystem, water quality, angling and recreation. A second example of a very-high-severity breach is the most severe cases of animal neglect and cruelty, which can result in animals suffering such extensive injury that they have to be put down. Those examples help establish the type of rationale behind breaches that are identified as very high severity. It is worth emphasising that the bottom right-hand corner of the matrix will still only be reached on repetition of the breach. The impacts of those breaches not just affect the farm and the surrounding ecosystems but impact on food security and trade and the reputation of farmers across Northern Ireland.

We have found support from all stakeholders for the approach. I am confident that the vast majority of farmers expect the Department to take action in such cases and that it is appropriate that a farmer committing such breaches should not receive the same level of public subsidy as the vast majority of farmers who are not. It is worth stressing again that the Department has learnt lessons from cross-compliance and, informed through consultation and stakeholder feedback, developed a more proportionate penalty regime whereby non-compliance in areas such as animal identification, registration and movement will no longer attract a very-high penalty. Three quarters of all underpinning requirements do not carry a severity level that can result in it being considered a very-high-severity breach, and a 100% penalty is linked to repetition. It is worth noting that, under current cross-compliance, it is possible for a farm business to incur a 100% penalty without repetition.

On the separate issue of eligibility for the farm sustainability payment in 2026, I confirm that the qualifying crops are the same as the crops that were eligible under the farm sustainability transition payment and the basic payment scheme before that. The requirements associated with the historical years exercise are only applicable in the reference period 2020-21 to determine whether a farm business is eligible to apply for FSP in 2026. If a farm business satisfies historical years requirements and declares and claims grass on its FSP application, it will be eligible for payment under FSP. The standards, together with the accompanying penalty matrix, are designed to promote greater compliance by providing farmers with clear expectations, practical guidance and access to training. They are more aligned with Northern Ireland's unique landscape and farming practices, ensuring that they are both relevant and achievable.

I hope that the clarifications in the briefing and my opening remarks on FSS and FSP have been helpful. My colleagues and I are happy to answer any questions that the Committee may have. Thank you.

The Chairperson (Mr Butler): Thank you so much. Genuinely — this will be unusual — I thank you for your work on this, because there is a lot of detail in there, and you have, without doubt, answered some of the questions that the Committee raised. Certainly, from my perspective, it seems to be a step in the right direction.

One of the challenges, which has always existed, concerns the need for people to be able to interpret a new regime and the information that farmers and their families receive in the wider set-up at home. Is there a communications strategy that is ready to roll, in a timely manner, to inform people of any changes, so that they will not fall foul of the changes? I know that there are very few changes, and much of it is the same as it was before. My question is more around the penalty matrix, the severity and other stuff. Is there a comms strategy ready to go?

Mrs Campbell: There is indeed. We have been planning for this in the background. The standards that are being put through include a focus on training and education. We are looking at having things that are easy to understand, easily available and accessible in other formats as required. That is not just for the people who are breaching, but for information and so that anyone can pick it up and find out, "What does it mean for me? What am I supposed to do?" We want to make it clear to all farm businesses what standard is expected of them and why. It is important that people understand the reasons why they are doing this.

We are building a training regime and have a comms plan in place for it. An issue for us that remains and that will always remain is that of timing. The closer we get to the time, the less time we have. We are preparing in the background and, when we get to that stage in the year, we will be ready to press the button to start pushing out the comms, because they are inextricably linked with FSP and there is a lot of messaging to go out to farm businesses.

The Chairperson (Mr Butler): I do not want to cross over into other members' particular areas of concern. I will ask just one more question, which relates to a question that the Committee asked on the five-year period for the total number of repeated breaches and the number of businesses involved. The number of businesses in breach appears to have been reasonably static during those five years: the numbers go from 73 to 78 businesses, although there is a wee blip when 92 and then 93 businesses were in breach. There is one thing that that does not pull out about the 73 businesses in breach in 2020 and the 78 businesses in breach in 2024. I am not going to ask whether those are the same businesses, but is there a pattern in the businesses that breach more than annually? I understand that businesses repeatedly breach in-year, but has any analysis been done, over a five-year period, to establish whether the same businesses repeatedly breach over a longer period? I get that it is an annual application.

Mrs Campbell: Denise, I am not sure whether you have information on that. It is in the additional letter that we sent out.

You will appreciate that there is an awful lot of information.

The Chairperson (Mr Butler): I know that there is, yes.

Mrs Campbell: We are tracking back to which bit it is. I take it that this is on your question, John: you asked us for some additional data. I am sure that that we do that in our analysis of how those things operate. We can certainly look at the —.

Thank you for that, Denise.

Your question was about the repeats of the —.

The Chairperson (Mr Butler): Not just within the year, but over the five-year cycle.

Mrs Campbell: You are looking specifically at the 73 figure.

The Chairperson (Mr Butler): The what, sorry?

Mrs Campbell: You are looking at the letter that was sent through from the departmental Assembly liaison officer (DALO) on the back of John's questions.

The Chairperson (Mr Butler): Yes, it is in the Committee pack.

Mrs Campbell: You are looking at the figures of 73, 67, etc. We have that detail, but I do not have it to hand. That is part of the analysis that we do of who the big repeaters are and how to approach them. Think about the bottom right-hand corner of our penalty matrix. If someone is routinely repeating breaches and not taking on board lessons, and the impacts are severe, they should get to the stage at which their income is affected in terms of the subsidy that is received.

The Chairperson (Mr Butler): I get that and genuinely have no issue with it. I am just thinking about whether there is anything that sits outside the matrix and the financial penalty that would help to understand and identify why there is an annually repeated problem and could then lift that business out of there or encourage it to get out. The financial aspect of the penalty is significant, but can the Department do anything else in a case of, "Repeat, repeat, repeat"?

Mrs Campbell: We would like to build that into the reviews that we talked about. We are looking to establish our baseline data in 2026. In 2027, we will start to get that comparison data and see those elements. We will build that into an analysis of what that means on the ground.

Mr Aidan McEvoy (Department of Agriculture, Environment and Rural Affairs): In the instance of a first-time breach, mandatory training needs to be completed. That education and training is built in. That was not in place under cross-compliance. If somebody has a first-time breach, they will complete mandatory training, which will hopefully improve understanding and lead to —.

The Chairperson (Mr Butler): That is brilliant. It leads back to my first query, which was around information. Rather than there just being a stick, there is the opportunity for additional training to give people information, which will hopefully drive down the number of individual businesses that either breach or breach repeatedly.

Mrs Campbell: Our absolute intention is to make sure that someone who is breaching understands what has happened and why and is not left in a scenario whereby they are having a penalty applied but do not understand the details behind it. The regulations will help with that.

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

Ms Denise Phillips (Department of Agriculture, Environment and Rural Affairs): Some consultation feedback emphasised the need for training and education. The penalty matrix is underpinned by guidance. As well as the training for everyone, there are guidance letters to get farmers who might not be compliant to a state of compliance.

The Chairperson (Mr Butler): OK. Thank you. I understand that.

Mr McAleer: The issue that I raised previously is referenced in the correspondence from the Department, which, regarding accessing computer or other records relevant to an inspection, states:

That is what I wanted to tease out previously. The Committee has expressed a feeling that some of the powers are a bit draconian. However, that clarifies that the Department cannot access computer or other records relevant to an inspection unless the holder or farmer allows it. You do not carry out enforcement action as such: is that right?

Mrs Campbell: That is it exactly. The draconian nature of it is when you have to start setting out in legislation the detailed wording that supports what we are trying to do. It sounds an awful lot worse than it is. It sounds confusing and complicated, but, in essence, it allows us to access data that is held on a computer. It is allowing us to move with the times and technology. A lot of that information was in books, and people passed over sheets of paper. This allows us to take the data in whatever form it comes, including on computers. If the data is not being provided, that is preventing us from completing the inspection. We do not have powers to seize and have no intention of doing that. However, very often, those sorts of conversations are undertaken with farm businesses around the kitchen table after an inspection. They are conversations of learning, back and forth between farm business and inspector, on what something means and the reasons why. This allows us to access the evidence in order to help them to get through the inspection, and then give them the correct payment at the end as swiftly as possible.

Mr McAleer: So you do not have enforcement or seizure powers as such.

Mrs Campbell: No, we do not. Nothing in that element of the regulations has changed. It is exactly as it was under the cross-compliance regime.

Mr McAleer: That is fine. Thank you.

Mr Irwin: Thank you for your presentation. You are aware of my opinions. I have seen penalty matrices and decisions that penalised farmers heavily for late permits and other things that were really not a major issue. I know a farmer who lost his entire single farm payment two or three years on the trot because of the same issue. Under the new penalty matrices, who will make the final decision? Is it an individual inspector?

Mrs Campbell: The inspector will be there inspecting the elements set out in the regulations. You make the point about smaller elements that ended up in someone losing 100% of their payment. That will not happen any more, because, under this regime, it is the severity that is important. Previously, it was possible to get to 100% through repetition or straight off. If you had done something minor and repeated it over and over, that could take you up to 100%. If you had done something that was considered to be severe, that could take you straight up to 100%. That is now not possible. For minor breaches, such as in relation to ear tags, even if they are repeated, you will go through a process of learning, understanding and information. You will have an opportunity to fix that and learn from it. That will prevent you from getting into that corner, which is a great development.

Mr Irwin: I welcome that. If the Committee did not accept the new matrices, would we be left with the old matrices and the old penalty system?

Mrs Campbell: At this point, cross-compliance would be the only viable alternative that we would have to deliver.

Mr Irwin: That is OK. Thank you.

The Chairperson (Mr Butler): Any more questions, members? No.

The date for this will be 25 November, unless something happens, because the SR is by negative resolution.

There are no more questions. You got off easy today. Members, you need to eat more scones and stuff before these people come in. Thank you so much for your presentation.

Mrs Campbell: Thanks very much for your time.