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Episode 9: Podcast Transcript

Briony Turner, Defra

Welcome to the Future Farming Podcast. My name's Briony Turner and I head up the team leading on strategy for the Future Farming programme and making sure that Defra (Department for Environment, Food and Rural Affairs) is on track to enabling farmers to produce food, have profitable businesses whilst also taking care of the environment. And the only way we're going to do that successfully is by taking the time to talk to farmers, to talk to our partners in the farming industry, to collaborate, to make sure that what we're actually doing works for the sector and that farmers can keep playing the vital role of feeding our country.


This episode is all about tenants and landlords. We've got our friends from the CLA (Country Land and Business Association) and TFA (Tenant Farmers Association), but we're also going to touch on the environmental schemes and the newly launched Sustainable Farming Incentive (SFI). So without further ado, Lynette and Harry from TFA and CLA, would you like to introduce yourselves?


Lynette Steel, TFA

Yeah. So I'm Lynette Steel from the Tenant Farmers Association, and I'm the farm policy advisor here dealing with the wider farming policy, but focusing specifically on the Future Farming and Countryside programme, which includes the environmental land management schemes.


Alongside my day job, I farm with my husband in North Hampshire and we're an arable and sheep unit with a HLS (Higher Level Stewardship) scheme. So fully briefed on the practicalities of running an environmental scheme on the farm.


Harry Greenfield, CLA

Hello, I'm Harry Greenfield from the Country Land and Business Association. So the CLA represents farmers and landowners in England and Wales. I work in our land use policy team specifically covering environmental policy, and I work on a mix of giving advice to our members and helping Defra to shape future policy. So like Lynette, I'm involved in the Future Farming and Countryside programme, and specifically the environmental land management schemes, but also advising our members on current policy and legislation, particularly environmental ones. So I spend a lot of time dealing with member enquiries around Countryside Stewardship (CS) and Environmental Stewardship (ES) and making sure that works for them.



Great stuff. So we’re recording this beforehand, but by the time people are listening, the Sustainable Farming Incentive will have launched. Its primary objective is to encourage and improve soil health. There’s a standard in there that helps recognise how moorlands provide benefits and public goods. And there’s also support to improve animal health and welfare by providing funding to help farmers with the cost of veterinary advice for their livestock.


The plan is to start small and incrementally expand the offer as we learn over the coming years about what's working, what isn't. But initially, there are 3 standards available in the Sustainable Farming Incentive, looking at arable and horticulture soils, improved grassland soils, and also the moorland standard. So that's out now, it’s eligible to tenants as the contracts are for 3 years.


And there's opportunity at 12 months to expand the ambition of what you signed up to so you don't have to jump all in at the beginning. There's opportunity to change as time goes on about what it is you want to do on your farm. If you get more confident with what SFI is, what it's all about, there are opportunities within your existing agreement to take on more and to be a bit more ambitious in what you're looking to do on your farm.


For tenants in particular, we're aware, not just for SFI but looking forward to Local Nature Recovery (LNR) and Landscape Recovery (LR), to make sure that it works for the tenant and landlord as well, to make the most of the schemes and the opportunity to deliver environmental benefits. Lynette and Harry, you've collaborated on some guidance. Do you want to introduce the guidance looking at environmental land management schemes?



Yeah, so CLA and TFA worked together over several months to produce some joint guidance for our members tackling this issue. I think it's… well, I suppose the first thing to say is there's a lot of uncertainty in general within the sector about future policy, future agriculture, the environment’s obviously rising up the agenda and with it the rise of private sector environmental schemes, and all of this can be tricky for anyone, but I guess when you add in landlord-tenant issues, it's particularly a level of uncertainty.


So we thought we'd try and get some common principles on paper and out to our members on what they should be thinking about and how to navigate that and make it as smooth as possible. The guidance starts off with some broad principles around what we mean by environmental public goods or benefits, setting out that one of the principles is that the person delivering them should be the person who receives a payment.


But also, I think, one of the main aims of the guidance was just to start a conversation between landlords and tenants. I think we want to make it clear that collaboration is key to this, and there are opportunities within the new agricultural to transition, the policies, but also, as I say, outside of that, and so the best way to take advantage of those opportunities is for collaborative working between landlords and tenants and starting conversations early.


I think lots of people are looking around to think, you know, what should they do, what way should you jump? Should you go into one of the new schemes? Should you wait? Should you go into a Countryside Stewardship scheme? Should you look at carbon or biodiversity net gain? And I think, whatever you choose to do, having a conversation is a good way to start, and this guidance aims to set out some of the things you should be thinking about if you want to go into one of these environmental agreements. Lynette might want to add a bit more.



Absolutely, you talked fully about what the guidance is there for, and we really hope that this won't just be looked at by landlords and tenants, as well. It’s for the wider industry, for agents to also hopefully use as a framework when they're involved in putting together a new tenancy agreement, or renewing tenancy agreements, or being involved in implementing an agri-environment scheme, so hopefully this will be taken onboard by everybody who's in the industry trying to get their head around how this is going to work moving forwards.



Yeah, it goes into a bit more detail about particularly some of the… I suppose the potential risk around having multiple agreements, which is one of the things we identified quite early on, that with these different opportunities for environmental agreements of different sorts, I think one of the risks would be that landlords and tenants might end up inadvertently entering into incompatible contracts or arrangements that would be at risk of double funding, which is one of the things that we know that both the government and any private funders want to avoid paying for the same thing twice.


So I think that clarity is to if, you know, if a tenants already in an agri-environment scheme or is looking to enter one, or if a landlord's thinking of going into a different type of scheme, how does that work? How could you kind of stack different agreements on top of each other? Or what's the implication if one party is in an environmental agreement as to whether or not another person could go into one? So that was one side of it, definitely. 


I think, yeah, it tries to make sure that there's clarity from the outset. And I think because these agreements are, you know, both the environmental management and private sector ones, are still in development, a lot of it's going to come down to the kind of legal details, the nitty gritty of what exactly it is you're signing up to and what that means, so I think we’re trying to make sure that's clear and that everyone’s clear from the outset as to what they're entering into.



Yeah, and that's going to be really key, and it is referred to a lot in the guidance, isn’t it Harry, that clarity is absolutely vital to understand what all parties are doing and what they're delivering. So a really good example of that is hedgerow management and establishment. So it might be that a landlord might establish a hedgerow, but that a tenant might manage the hedgerow.


So it's understanding what those environmental gains are, what the outcomes are and who's actually carrying out the management of it to receive those payments. So that's just a really good example of how, without fully understanding the agreements that each party are in, it could become quite messy quite quickly. So when you look at the guidance, read the guidance through, it does talk and refer to a lot about clarity and understanding. I don't think that can be pushed enough really, do you Harry, that that is absolutely key going forwards.



Yeah, and I think that's absolutely right, and I think it's also about the present and the future. It's about being really clear about what you're doing now, today or, you know, if you're about to enter into a new agreement. But I think that those conversations that we want to see between people will allow you to think more about the future and what you want to see from the future, and I think that's also important if, either the landlord or the tenant have an idea, even if it's just an outline of what they want to see from their business over the next 5-10 years. 


Obviously it's difficult because there's so much uncertainty, but at least if you know what direction you want to go in, you can have those conversations and then try to introduce some of that clarity. I think the danger perhaps is if people implicitly or, you know, people want to go in different directions, but they haven't necessarily articulated what they want to do, and so suddenly you find that at some point down the road, their interests kind of clash or, you know, get get messily tied up, as Lynette says. So I think it’s be clear about what you're doing now, but also about what you both want to do in the future, and how to talk about that now.



Yeah, and it’s becoming more common, legacy schemes coming to an end. So whether that's Environmental Stewardship schemes, which have been running for a long time, or whether it's a historic Countryside Stewardship scheme that’s still active, that may be in a roll-over phase. The guidance also talks about these schemes and how to transition out of those schemes into something new, something that might feel a bit unfamiliar with the tenant taking part in SFI and the landlord maybe doing a Local Nature Recovery scheme or Landscape Recovery.


So the guidance also talks about how to move forward with those discussions, like Harry says, in maybe achieving new ambitions rather than what has been implemented previously. So I think that's really key, and is going to become more key, obviously SFI has now launched, and we're going to see the LNR come forward in 2023 and so it's going to be really key to understand how you move from one scheme to another, and how you do it collaboratively as well.



Yeah, I think that point to collaboration is also something that's worth echoing, isn't it? Because, you know, the guidance talks about collaboration between landlord and tenant, but obviously collaboration is a kind of buzzword at the moment, and given all the uncertainty that we know the sector is facing, and the changes in policy will mean people have to think about what their options are, and collaboration seems to be quite a good strategy between farmers and land managers working together, sharing ideas, sharing thinking. 


So I think, you know, in my mind, those kind of open and frank conversations and collaboration between landlord and tenant are part of a much wider thing where ideally more of the sector should be having more of those conversations generally because I think you can get new ideas and share your thinking and, you know, everyone's facing the same issues, so sharing those thoughts about how to approach them is a benefit in itself.



Yeah, and one thing that is mentioned within the guidance, which I think is something that is key to perhaps focus on when you're looking at collaboration, whether that's doing a joint agreement or 2 separate agreements, is the timescale of the agreements, and how if there's various agreements with different timescales and notes on the same piece of land or farm or holding, then how they're going to work together, deliver those outcomes but also conclude as well, because there will be an end to these agreements and you need to think about that, for tenants, that exit strategy potentially, depending on the term of your FBT (Farm Business Tenancy), but also for landlords in how they're going to maybe continue with a higher level agreement, where the tenant potentially has been doing the environmental work through contract agreement, for example. So, I think that's something that actually the guidance touches on, which are, what are those practical tips, I suppose, that are really important to scope out and fully understand as well?



Yeah, that's really helpful to draw on, Lynette. I know, for example, the tenure for tenancies has been a policy question that we've been niggling with within Defra and have really welcomed your input and feedback on the design of our policies and so, for the Sustainable Farming Incentive, we've looked to help mitigate that uncertainty. 

So, for farmers on a 1-year rolling tenancy, that can come to an end within the 3-year period of the Sustainable Farming Incentive and they can exit it without penalty. So trying to account for different situations, for different tenants within the scheme, and there's also no requirement for landlord permission for a tenant to enter into the Sustainable Farming Incentive in 2022, because we noted the obligation to do that should be part of bigger discussions between tenant and landlords about the wider agreement because obviously it's not just the Sustainable Farming Incentive they might want to consider, there are also private investments in different strategies within those relationships that need to be part of that collaborative and open conversation that your guidance really helpfully touches on.



Yeah, I was just going to say on that, because I think that sometimes it seems to me that the discussion about landlord consent is framed in a bit of an unhelpful way, and it might be more useful given what we've all just been saying, to talk more about landlord support. And, you know, in an ideal world, you've got a supportive landlord who wants the tenant to succeed, who wants their business to be successful and wants to see them take advantage of these opportunities.


I think the narrow focus on the kind of legalistic idea of giving consent for them to do something, it's one aspect of it, but I suppose it's more about, you know, is the landlord supporting tenants to think about what their opportunities are and to take advantage of them?



Yeah, we're definitely seeing that more now with new tenancy agreements as well, new clauses being in the tenancy agreement which talk about obviously this new policy and how it's going to be implemented on farm. So we're seeing a lot more support from landlords to enter into these schemes, whereas previously it hadn't been mentioned in tenancy agreements.


So one thing I would definitely advocate is that people read their tenancy agreements before they sign them, whether that’s a new tenancy agreement or a renewed tenancy agreement,  because we are in a new era of policy, so we are going to be seeing these new clauses and these new wordings in there.

So, it's just to ensure that everybody, both parties, landlords and tenants, fully understand what's in their tenancy agreement, what they're signing up to and how they can, within the terms of their tenancy, take part in these schemes, because one thing that is really important to highlight is that the tenancy agreement takes precedence over an agri-environment scheme agreement. So there's plenty of opportunity here, but it's fully understanding your position that you're in when you enter that tenancy.



Yeah, I think that's a really important point to make that, yeah, the tenancy agreement takes precedence. So I think you just want to avoid a situation, which I think we've seen murmurings of on both sides, from landlords and tenants, of thinking that new policies or schemes upend or rearrange the existing land tenure arrangements, when they clearly don't. 


I think you need to, yeah, start from a tenancy agreement, which may mean, you know, amending or changing it, or start from at least what's written in it, and then see how that fits with the various environmental agreements that are on offer rather than the other way round.



Excellent. Definitely agree on the need to make sure that it works for farmers and farming businesses because ultimately, as we've tried to articulate clearly in the most recently published food strategy, the primary role of farmers is food production, and then the environmental schemes that are on offer from government are in addition to that. 


So, the Sustainable Farming Incentive doesn't require land to be taken out of production, be looking to the future towards Local Nature Recovery that could work alongside food production, much like Countryside Stewardship has. So, having that long term view between tenants and landlords on agreement of expectation, of ambition for the environment, whether that's looking at the government environmental land management schemes or private sector schemes that might be coming forward over the coming years, I think is really valuable and is really helpfully set out in that guidance.


If you were a farmer, what's the first step I should take, if you're interested in broaching those conversations with your landlord? What advice would you give to these farmers? 



So, discussion to start with, open that discussion with your landlord or with your tenant, and talk about your ambitions for any environmental delivery that you hope to sign up to and achieve on the farm.


Work together to understand how you might be able to achieve those ambitions and what each other’s ambitions are, and set out some clear roles and responsibility on how they're going to be achieved and who is going to be involved. For some, it will be very straightforward, where one party might not want to be involved at all, and it's just a single agreement.


Whereas for others it might be a multi-layered agreement which is funded through private and public finance, so it could be much more complex. It would also be really important to define who takes on what level of risk and liability for delivering these environmental outcomes.



Yeah, I think there's also a role here for landlords to, in some cases at least, act as a kind of, always a convener. I think we've seen some examples of estates with with several tenants where the landlord is able to kick off a discussion looking at that bigger scale and longer term, thinking about what's the opportunity, what's the potential that the landscape could deliver, how does that fit, as you say, with continued food production? 


And what are the roles of the different people whose businesses operate within that landscape? Once you start the discussion, I think there's also opportunity to benefit from from that sort of collaboration, whether that's, you know, I think we've seen examples where people are looking at doing environmental baselines, which we think is quite a good starting point often to see what you've already got, the sort of environmental value on the land, how it could be managed in the future and how it could deliver more environmental benefits, and doing that across, for example, an estate, across several different farms, where it may be financially beneficial because it could be cheaper to do it once rather than lots of people trying to do their own separate ones, and it can see some of the benefits in terms of environmental activity and how neighbouring farms can complement the activities of each other.

You know, that happens anyway through farming clusters, but there are also examples where forward-thinking landlords are playing a facilitation or convening role for groups of tenants, and I think that, you know, we're probably going to see more of that, I expect.



Yeah, there was a really good test and trial in Devon, the Clinton Estate, who did some really great demonstrating of how tenants can come together and the landlords can come together to deliver those larger landscape-scale changes. So that's kind of the ideal, isn't it, seeing these pop up all over England, hopefully. 



Excellent. So the Sustainable Farming Incentive, when this is aired, will have launched. Obviously, from a Defra perspective, we've tested, we've engaged with industry, we've spoken to you guys, you've created this guidance.

It has an important caveat that the guidance will change as developments in the sector, in environmental management schemes, and presumably wider in private industry as well, changes. So I guess it's a, don't read it once, it’s a keep checking back in, keep talking and keep refreshing oneself of what the latest terms and conditions are, and what the best practice looks like, and also reaching out for support and advice from you guys. Is that right?



Yeah, I'd say so. I think advice is really important and both Lynette and myself offer advice to our members. So that's one avenue, I think. Obviously, lots of farmers have their own professional advisors, or have access to other advisors, so I think, you're right, it's not about reading something once and then leaving it alone. It's about, given the pace of change and the  uncertainty that's slowly becoming hopefully more clear, I think it's definitely something that needs to be revisited and people's ideas will evolve over time, I imagine, I think at the moment, people I speak to at least don't necessarily have a very clear idea of what the next few years looks like, they have some ideas of the direction they want to go, but a lot of it's contingent on waiting for things to be further developed. So, yeah, we'll have to keep on coming back in touch.



Yeah, and we're obviously going to stay in touch with the CLA and work on this together because there is this environmental benefit that needs to be brought, the industry needs to engage with it and our members must do as well, so this is very much a working piece that we're going to continue to talk about along with Defra as well, so it's kind of a watch this space.



And I know in Defra, we, off the back of some important feedback we got from TFA and CLA, as well as the NFU, established a tenants working group. It’s been working for the last couple of months and will be reporting back over summer on, not just the work of the Future Farming and Countryside programme and the environmental management schemes, but more broadly how farming policy in Defra is working or not for tenants, and what we can do to make things better, and the only way we can do that is to talk to each other, and keep talking and learning from what isn't working and adapting, and change accordingly. 


So Harry and Lynette, if we're looking to the future in 7 years time, what does success look like, and also feel like, from a tenant’s perspective, also from a landlord’s perspective? 



I think success will be ensuring that all farmers and land managers and landowners can contribute and benefit from the new environmental schemes, really recognising everyone's contribution to delivering the environmental outcomes that we are seeking and aiming to achieve.



Yeah, I think I'd agree with that. I think it's about making sure that the transition particularly is managed in a way that doesn't have unintended consequences. We're quite clear now on the goals that we're all aiming for, but how we get there is the big question. So I think what it looks like in 7 years time is that those ambitious goals, we've actually got there and there hasn't been collateral damage in the process. There are big opportunities, but it's not an easy road to get there, is it?



So a huge thank you to Lynnette and Harry for walking us through the guidance, messages of needing to collaborate, be transparent, initiate conversations early, and also feed back when things aren't working, whether that's to the TFA, CLA, or to us in Defra. We’re really interested to make sure that we capture your views, what works well, what doesn't, and try and make things better for farmers and landlords as we go and strive for our ambitious environmental goals alongside continuing to produce food for the country.


So thank you Lynette and Harry  for joining me for the conversation. Also thank you very much to our listeners. If you’ve got any comments, let’s have them. Thanks. 



Thanks very much.



Thank you very much and goodbye.