Oral evidence: The future of farming, HC 216

Oral evidence, 27 October 2026.

Witnesses

Stephen Morgan MP, Mike Rowe and Gareth Baynham-Hughes.

Chair

Good morning, everyone, and welcome to this meeting of the Environment, Food and Rural Affairs Committee. This morning we return to our inquiry in relation to the work of the Department and its arm’s length bodies. Welcome, Minister, to the Committee. Just for the benefit of those who are following our proceedings and for the record, I invite you all to introduce yourselves to the Committee, and I will start with you, Mike.

Mike Rowe

Good morning, I am Director General for Food and Farming in DEFRA.

Stephen Morgan

I am Member of Parliament for Portsmouth South and Minister for Food, Fisheries and Farming.

Gareth Baynham-Hughes

Good morning, I am the director for Marine and Fisheries.

Chair

We have a lot of material to cover this morning so we will just crack on. First, congratulations on your appointment, Minister. You were originally appointed as a Minister of State by Keir Starmer and then reappointed by Andy Burnham as a Parliamentary Under-Secretary of State. What is the difference between the two jobs in terms of how you are able to do it?

Stephen Morgan

It is a real privilege to be before the Committee today. It is my first time before the Select Committee; indeed, the first time before a Select Committee as a Minister of this Government. It is a real privilege to be the Minister for Food, Fisheries and Farming, now appointed twice by two separate Prime Ministers. To have the opportunity to serve in Government representing a constituency that looks to the sea for its food and livelihood is a real pleasure. I have been conscious that the Government have been working really hard on a whole range of areas including the “Land Use Framework”, the “Farming Roadmap” and other initiatives, and that actually it has been a very challenging time for farmers across the country. We always say that farmers are used to dealing with change, but they do not take resilience for granted. That is why I have been really keen to get out and about across the country to engage with our fishermen and our farmers on the issues and challenges that they face. As a result of that it is very clear to me that we need to do more to support the resilience of the sector across our country.

Chair

I thank you for that. Mindful of the fact that you yourself appear to have a hard stop at noon can we maybe just keep questions and answers for everybody tight? The question was, what is the difference between being a Parliamentary Under-Secretary and a Minister of State?

Stephen Morgan

Essentially they are just different grades within the Department, are they not? Obviously my responsibility—

Chair

Does it have an impact on how you are able to do the job?

Stephen Morgan

No, I do not believe so. My job is to listen to the sector, to act on what I am told, and to make decisions that are based on evidence before me.

Chair

I want to start this morning by looking at a few issues around fisheries. The Committee has its inquiry into fisheries and the marine environment. We have published our first report, “Resetting the relationship with fishing communities.” We have had your response. Reading it short you are quite happy with the relationship between the industry, the communities and the Government?

Stephen Morgan

We also work in partnership with fishing and seafood sectors. There are lots of ways that the Government already do that; I have made it a priority in my first few months in post representing Portsmouth South with a small fishing community. I am not complacent, and that is why I am really keen to engage with communities across the country, which is why I visited Newlyn, I have been up to Scotland, Fraserburgh, Peterhead and I have been to Weymouth. I have been to Grimsby to meet fishermen directly to talk to processors and others.

Chair

In our report we suggested the creation of regional management groups. That was an idea that did not find favour with you. What is your objection to them?

Stephen Morgan

We already engage through regional fisheries groups, and we have certainly taken on board the feedback with regard to improved communication with the MMO; I have also spent time with the MMO in Portsmouth. There are lots of ways that the Department already engages with the fishing community. There is always more we can do, but I want to make sure that engagement is meaningful and improves outcomes to drive the agenda that we want to see, which is a thriving, sustainable fishing community.

Chair

Do you see no need for regional management plans?

Stephen Morgan

There are already structures in place. There are online meetings and physical meetings. I have been very impressed by how I have seen the MMO engaging with the fishing community. There is obviously work in hand around negotiations currently. I regularly engage with the fishing community, and I have established a regular forum to meet with representative bodies. I am always keen to learn from the Committee as well.

Chair

We also suggested a sea use framework, akin to the “Land Use Framework”. You did not like that idea either?

Stephen Morgan

I welcome the work of the APPG for fisheries and I am due to meet representatives of the APPG in the next few days. Coming into post it strikes me that there is not a particularly clear strategy around fisheries. I will therefore use the feedback from this Committee and the APPG to set out a direction of travel to support our fisheries communities for the future.

Chair

The APPG’s plan for a thriving and sustainable UK fishing industry said that you should produce a fishing strategy within the next 12 months. Is that something you can commit to doing?

Stephen Morgan

As I mentioned I have come into post and seen that there is no strategy. I am very keen to work with my Department, my officials, and the sector to think through the long-term vision for our fishing communities.

Chair

Is that a commitment to one in 12 months or not?

Stephen Morgan

I am meeting with colleagues of the APPG in the coming days.

Chair

We could write the strategy tomorrow, though it would only be meaningful if you produce it.

Stephen Morgan

I recognise the value of a strategy, and I am keen to work through that in partnership with others.

Chair

Okay, I will take that as a no, then. I am going to look at the year-end negotiations that have started this week. Who is leading for us in them?

Stephen Morgan

Priorities around fishing, for me, are obviously the negotiations with our coastal states, making sure we get the best deals through the best negotiations—

Chair

Who is leading the negotiations, Minister?

Stephen Morgan

It is DEFRA officials.

Chair

Yes, DEFRA officials, so it is not yourself or Mike. Who will it be?

Stephen Morgan

It will be Gareth from my Department. I obviously set the parameters for that and the principles for the negotiations and then hand over to officials to work through the detail with coastal states and others.

Chair

Would you anticipate getting involved at any stage?

Stephen Morgan

Of course. I have obviously seen the principles for the negotiations; I cannot get into the detail of how those negotiations will proceed. My engagement with the sector has obviously been key to those negotiations, as have some of the visits that I have made to Norway and other places, to understand some of the issues and challenges.

Chair

I want to look first at the position around Northern Shelf cod. Given that there are three distinct sub-stocks, are you content that the ICES advice for a zero TAC—total allowable catch—is a sensible basis for negotiation?

Stephen Morgan

I obviously cannot comment on live negotiations.

Chair

No, I am not asking you to. I am asking if you are content that that is a sensible way to negotiate. You have three distinct biological sub-stocks in the northern, the Viking and the southern areas, but they are being treated as one.

Stephen Morgan

I have seen advice. It is important that, in terms of negotiations, we follow the science. These are obviously very much live discussions, and I will bring in Gareth on that point.

Gareth Baynham-Hughes

Our starting point is the science. There has been a lot of work over the last year or so with ICES—the International Council for the Exploration of the Sea—to look specifically at all the scientific questions around cod, including the sub-stock question. It has set up a tiger team. Actually the Minister is not aware that we had a letter yesterday from ICES thanking the UK scientists for their contribution on that. That gives a reasonable basis with a range of scenarios for a negotiation that will then take place for Northern Shelf cod between EU, UK and Norway. A zero TAC advice is always extremely difficult, including the risk of closing other fisheries if you cannot have any bycatch, so it is complicated.

Chair

If you had a zero TAC for cod in the North sea, what would the implications be for other whitefish species?

Gareth Baynham-Hughes

The implications would be severe.

Chair

It would be a joke.

Gareth Baynham-Hughes

That is why consideration has to be given to other measures. There has been work throughout the year with the sector as well on additional measures such as spatial closures or other forms of closure that could provide stock protection but allow some other fisheries to continue. As the Minister says, these are live negotiations.

Chair

What is the Government’s assessment of the relative health of the three different sub-stocks?

Gareth Baynham-Hughes

I do not know the very latest formal assessment, obviously, as we were part of the ICES tiger team; that does suggest there is still uncertainty around the sub-stock in the southern North sea in particular. There are ways in which scientists are trying to understand the different recovery potentials of the sub-stocks, which are all managed as a single stock in these negotiations. Those are the things that the expert negotiators, not just from the UK but from other countries, work through. We take industry position inputs into this kind of negotiation; for example, last week we received material from some of the Scottish whitefish producers setting out alternative ways in which you could manage this fishery.

Chair

Are you content to negotiate on the basis of it being a single entity, even though they are all different?

Gareth Baynham-Hughes

At the end of the day there will be a single TAC agreed for those three stocks because that is the way the northern shelf cod is managed.

Chair

Is that the way you view them?

Gareth Baynham-Hughes

I expect it to reflect an intricate understanding of the science around the stocks.

Chair

Okay. I want to look at the imbalance between the fish that are taken as a consequence of the bilateral between the UK and Norway. Last year, Norway caught 22,581 tonnes of whitefish in UK waters. We caught 9,496 tonnes in Norwegian waters. How did we get to that outcome?

Stephen Morgan

I recognise the importance of partnership with Norway, which is why an early visit was to Norway to meet with my equivalent Minister, to make sure that we continue to get the best possible outcome for the UK fishing industry. I am aware of the concerns that you yourself have raised, Alistair.

Chair

Is that the best possible outcome, 22,000 to 9,000?

Stephen Morgan

I am aware of the challenges around Shetland in particular, which is why I have written to you and said I am keen to come up to Shetland next month, or indeed in December. Under the current terms it is obviously a reciprocal relationship between the UK and Norway, therefore Norwegian vessels can come into UK waters and vice versa. I am conscious of the balance and we will obviously continue to engage with stakeholders on these issues to make sure UK interests are at the heart.

Chair

This is something that is under review in this round of negotiations, is it not?

Stephen Morgan

The current arrangements will be, yes.

Gareth Baynham-Hughes

There was something placed in the written—

Chair

We are looking for something that is better than what we have, are we not?

Gareth Baynham-Hughes

There is an overall balance, as the Minister said, within the reciprocal access. For some parts of the fleet that access is working really well; for others there is the imbalance you have talked about. Our interests, working with the sector and with the Scottish Government, will be to find the best UK position and then to try to secure the best outcome with Norway. We met with the sector at official level yesterday, and they wrote to the Minister to follow up and to thank officials for the engagement.

Chair

What about the best position from the point of view of conservation of stocks?

Gareth Baynham-Hughes

All those access agreements reflect the separate total allowable catch setting process that includes taking the scientific advice as part of it.

Chair

Let us go to saithe, specifically.

Gareth Baynham-Hughes

To saithe, yes.

Chair

You heard me speak about the Norwegian fishing trawler, the Havstrand, which is a 70-metre refrigerated trawler that catches 787 tonnes of saithe in one trip. Putting that into its context, that is 50% of the entire Shetland fleet catch for a whole year, and 12% of the UK quota for saithe in the North sea. Bad though these statistics are, if you drill down the catch apps suggest that in fact the majority of that catch is smaller-sized saithe, which we should really be leaving in the sea, should we not? According to ICES, saithe is a species that is under biological pressure, so it is subject to overall TAC reductions this year. Do you think the deal that you did last year helps or hinders that?

Gareth Baynham-Hughes

I do not know that I have a specific answer on it; obviously, we are aware of the overall statistics.

Chair

There are two options here, Gareth: does it help or does it hinder?

Gareth Baynham-Hughes

I do not know that I would have phrased the question in that way. The way that we take forward the negotiations is to secure outcomes that are backed by and reflect the science, and that includes things such as catch composition and the state of the stock by year class; we have a good understanding of that. That is what goes into the overall TAC agreements, and then through the negotiations on access, that does not undermine that science.

Chair

Are you content that the bulk of that fishing effort should be in the north-north-east of UK waters, specifically around Shetland?

Gareth Baynham-Hughes

I am sorry, but I do not have enough information to hand about any particular pressures for that stock beyond the overall stock level. What I can say is these are all issues that we have been talking through. We had the Shetland Fishermen’s Association yesterday; they have followed up with the Minister. All these things are exactly what goes on the table to try to get a good outcome, noting that there are more interests than just saithe in the UK-Norway access arrangements. Overall, in these things there is access to other stocks that might be of interest to other parts of the fleet.

Chair

What are we getting from the north-north-east then?

Gareth Baynham-Hughes

I do not have the full details of the full arrangement. As you say, it is up to 30,000 tonnes, and there are different elements of the fleet that are interested in different parts of it. In fact, the Shetland Fishermen’s Association’s letter to the Minister is explicit that for some parts of the sector the agreement is working well, but they are worried about all the issues you have been raising around saithe, large vessels, large catches, and small fish. All those are live issues in discussion.

Chair

We get something back; we are just not sure what it is?

Gareth Baynham-Hughes

It is obviously based on a prediction. It is not that we sit down and agree it with the sector, but the whole purpose of these quota and access deals in particular is to support fishing businesses in the way they want to operate the business, which is different from the science advice.

Chair

The difficulty I have here, Gareth, is you give us a response that says you are content with the engagement between the Government and the sector, and then we get outcomes such as this.

Gareth Baynham-Hughes

Last year the sector was not unhappy with the prospect of that agreement, and then what has happened this year is there is a change in the pattern; that is the sort of thing that you would then think about reflecting in the next negotiating position. As I say, the sector wrote to the Minister yesterday and they were specific about feeling confident they are working with officials to develop these positions that we can take into negotiations. There will be a balance; at the end the Minister will have to agree a balance in those access arrangements.

Stephen Morgan

As I mentioned at the outset, I am very keen to engage more with the sector, which is why I have made it a priority since my appointment.

Chair

Two final very quick questions. Fuel costs: we are hearing of boats actually leaving active fishing because they simply cannot afford to go to sea. What are you doing to help them?

Stephen Morgan

That is a message I have heard loud and clear from my visits to Newlyn, Weymouth and other ports across the country. I absolutely recognise the pressures that the industry is under. There is obviously support for fuel via our existing tax system, and we are monitoring the situation very closely to understand the pressures that fishermen are facing.

Chair

That is stuff that was there before the current spike. What are you doing to help them with the current spike?

Stephen Morgan

We are keen to continue to engage with the sector to understand the issues and challenges that they face. We are alive to some of the challenges that they are facing.

Chair

They are talking now about stopping going to sea. Do you have a hard proposal to help them, to keep them going to sea?

Stephen Morgan

We have heard the message around using the coastal growth fund as an option. I am very keen—

Chair

That is not what the coastal growth fund is there for. The coastal growth fund was in place before the spike in prices.

Stephen Morgan

Indeed, but there have been calls to use that fund for this purpose. What I am saying to you, Chair, is that obviously there is existing fuel support via taxation policy. We have heard the message loud and clear from the sector and we are looking at options for the future.

Chair

As a consequence of decisions that were taken by the previous Government and then baked in for another 12 years by this Government, our fishermen are competing with fishing industries in other European countries. We have press notices here, “Commission approves €15 million Irish state aid for fishing and agriculture companies facing increased fuel prices.” “Commission approves €25 million Spanish state aid for fishing companies.” “Commission approves €4.5 million German state aid for fishing and aquaculture companies.” These are the people who we are expected to compete against; they are helping, so why are we not helping our industry?

Stephen Morgan

That is another reminder why there is probably a need for a strategy to support our fishing communities. I would not want you to mischaracterise what I said earlier, Chair, in terms of not wanting a strategy, I just want to work it through with the APPG and do it in partnership with the sector.

Chair

Yes, and in terms of pounds and pence, what is there going to be for the industry?

Stephen Morgan

Gareth, can you chip in on that question?

Gareth Baynham-Hughes

Sorry, Chair, could you repeat the question?

Chair

These European countries are all giving their boats help with fuel costs. We are not. Are you going to? Otherwise they might as well just tie up now. There is no point in giving them false hope.

Gareth Baynham-Hughes

That is not a decision for me, obviously. As the Minister says, at his request we are looking at options, not least because the sector has asked us to reallocate that funding. It has specifically said, “We understand there might not be new funding, can we reallocate that funding?” In its own right, that raises questions about whether that is possible.

Chair

One final question around the SPS agreement. We know that you are not going to be able to answer any questions about the SPS agreement because nobody knows what is in it; you probably are as much in the dark as we are. Can you give me some assurance that you would not sign up to an SPS agreement that would bring fisheries management issues into the field of play?

Stephen Morgan

More broadly, I welcome the Government’s reset with the European Union. I was in Paris last week at the G7 and then SIAL—the largest food and drink expo in the world—talking with industry.

Chair

I appreciate this. You are the one who has the pressure of time here, so I am trying to keep it very tight. Is there going to be a read-across between SPS and fisheries management or not? Is that something that you would be prepared to have?

Stephen Morgan

Obviously we need to protect British interests. I heard loud and clear in Paris last week the benefits an SPS agreement will bring in terms of cheaper, easier exports to other countries and the benefits it will bring our seafish industry, as I also heard loud and clear on my visit to Newlyn. I obviously cannot go into any detail about the negotiations because we have the summit coming up on 20 November.

Chair

Are there no undertakings on fisheries management then?

Stephen Morgan

Do you want to add anything on SPS?

Gareth Baynham-Hughes

I am not worrying about our future ability to operate a sovereign fishing policy since we left the common fisheries policy.

Chair

That is a brief statement. We shall possibly revisit that at some point in the future. For the moment we are going on to questions around biosecurity and animal welfare. We have quite a lot to cover here. Sarah, do you want to lead our questioning on that?

Sarah Dyke

Good morning. This year has been an exceptionally difficult year for farmers. We have had drought, the chaos around SFI and the worst bluetongue outbreak on record; the south-west has been particularly badly hit. On top of the immediate costs of the bluetongue vaccination, veterinary treatment, and fallen stock, fallen stock collections in the south-west ran at three to four times the normal levels this summer, with charges of up to £35 per sheep and over £160 per cattle. Disposal is obviously a legal requirement, and it is vital for disease control. When we are looking at this, many farmers are not only concerned with those costs that are impacting their farm businesses but also about the longer-term losses from reduced fertility and birth defects. What support will the Government provide to those farmers who have been so badly affected by outbreaks this year?

Stephen Morgan

Thank you for the question, Sarah. I absolutely understand how incredibly difficult it has been for farmers across our country. I have met with the National Sheep Association and the NFU, and I have been talking directly to farmers about the challenges that they face on top of other issues around input costs, drought, wildfires, and so on. It is worth saying that as of yesterday there are 3,445 confirmed cases across the United Kingdom. It has obviously been a significant outbreak this year. I was very keen to get on the farm, engaging in these issues early on, which is why I visited Cornwall to talk to a farmer who had been affected, alongside Tom Bradshaw, the NFU president. I absolutely recognise the real challenges that farmers have faced, and that is why I have made it a priority to work through options for further improvement. That is why we worked with industry to support the vaccine supply, reduced some admin burdens that farmers have had to face, supported on-farm veterinary support, and enhanced testing capability. I have been to APHA and the Pirbright Institute to see directly what the scientists have been doing in terms of testing capability and, more specifically, on fallen stock. We are working with industry on future options and monitoring the situation closely. It is worth me also saying that when we had an urgent question in the House as well, there were particular issues that were raised around maps, and we have improved the heat maps so we know where the confirmed cases are across the country. We have done a range of things based on the engagement we have had with farmers but there is always more we can do, which is why it is worth just stressing as well that I am keen to learn lessons from the outbreak this year. I have already started that process with my officials to make sure what we have learned from this year does not get repeated in future years.

Sarah Dyke

Some European countries are subsidising bluetongue vaccinations. Is this something you would consider?

Stephen Morgan

My understanding is that is not something that we would consider at the moment; whether you take up the vaccine or not is obviously a decision for a farm alongside their vet. The current situation is we do not believe that there is a case for mandatory vaccination or the subsidising of vaccines. The costs are obviously between £2.50 and £3 in most cases. What is key is the communication to encourage farms to make sure that they do take up the vaccine.

Sarah Dyke

The communication is something I want to touch on because some farmers and industry representatives have argued that the Government communications were not sufficiently timely or proactive as the outbreak spread so quickly. One Devon farmer and councillor, Cheryl Cottle-Hunkin, criticised DEFRA’s handling of communications during the emergence of cases in the south-west. She was incredibly vocal about this, having outbreaks on her own farm, arguing that the farmers were not adequately alerted to suspected local cases or increasing disease risks. She suggested that delays in communication left some farmers feeling they had lost the opportunity to take proactive action at an early stage. Who was ultimately responsible for getting the message across to farmers about the urgency of getting those vaccinations done?

Stephen Morgan

On outbreaks such as these, DEFRA uses tried and tested approaches to work with the sector to make sure information is spread across to the relevant agencies. There are always lessons we can learn from our approach, which is why this lessons learned exercise is really important. What strikes me is that DEFRA did a number of things that were successful. There were a series of webinars that were well attended; 1,000 farmers attended one. Obviously we used various different portals and blogs to get information out to the community. I am very grateful for the work the NFU has done on communication as well. I would say it is a partnership approach; everyone can play their part in making sure the messages get across to farmers—APHA, Pirbright, the NFU and other farming organisations, with DEFRA at the heart of all of that.

Sarah Dyke

Obviously the NFU did a great job in getting the message out, but do you think it is not down to a membership body such as the NFU to get the message out, that ultimately it is the responsibility of DEFRA and the APHA to do that job?

Stephen Morgan

It is a partnership approach headed by DEFRA. That is why I am proud of some of the things the Department did in terms of the webinars and the regular communication with farmers. There is always more we can do and we will take on board the feedback we have learned from farmers this year to make sure we improve it for next year.

Sarah Dyke

Vaccine take-up was slow at the start of the outbreak. Do you feel that that is something that we have to learn from very quickly as we face future outbreaks?

Stephen Morgan

I am keen to learn any lessons but, as I mentioned, we worked really hard to improve the supply coming into the country, working with industry to make that happen. I am not aware of any particular challenges around vaccine currently.

Sarah Dyke

I just want to move on to TB. The previous farming Minister said in June that the Government would respond at pace to the new bovine TB control strategy for England. When will the Government respond to these recommendations?

Stephen Morgan

Thank you for that question. Obviously, there is the TB control strategy that came out in June of this year following extensive stakeholder engagement and co-design with the sector. We have agreed to adopt the strategy, but obviously we are looking to publish the next stage of that process, which I can confirm will be out before Christmas.

Sarah Dyke

I have personal experience of TB. Two cows were culled after reacting to a TB test on my family farm this month. When the results came back after slaughter, both animals were clear of TB. This is not the first time; it happens all the time. It has happened to my neighbouring farms, friends and family, so I know firsthand how heartbreaking this is for farming families. Bovine TB costs the taxpayer over £100 million a year in England, and healthy animals are being lost along the way. What is DEFRA doing to improve the accuracy of the testing so that cattle are not slaughtered unnecessarily? With the previous Minister admitting the SPS work was delaying cattle vaccine trials because of the capacity problems, will the 2030 target for cattle vaccination be met?

Stephen Morgan

There is a lot in there, but it is worth saying that I hear your concerns. I heard that loud and clear from spending a day on a farm in Cumbria with James Robinson and working through with him a very similar experience of being in touch with the VMD and with APHA. In terms of vaccines we are continuing to develop the cattle vaccination and skin testing. There is obviously the rollout of the badger vaccination in priority areas, and we are collecting found dead badgers as well. I might just turn to Mike to add anything further with regard to TB.

Mike Rowe

That covers it, Minister. It is obviously a devastating disease for the farms that contract it, and while it is not under my personal responsibilities, it is something that the teams working on it in the Department are trying to look at every tool in the toolbox in terms of how we can get a grip on the disease. There is work that is being done to make use of privately funded TB blood testing to support better risk-based disease management. Longer term, our approach on a number of issues that are facing the sector is to try to think how we build long-term resilience into the farming sector so that we can be better at equipping farmers with the tools they need to manage multiple risks. Some of that can be done through peer-to-peer learning in terms of trying to get best practice to be common practice across farms.

Sarah Dyke

I have seen TB testing on farm; the inaccuracies are incredible. The calliper system has been in place for 40-odd years now. We should be doing this much better. Cattle that test positive on a non-statutory test face compulsory slaughter at present. Resolved inconclusive reactors can already be kept on farm under a lifetime restriction, sold only direct to slaughter. When will the Department create an equivalent responder category for non-statutory test positives, so farmers and vets can manage these animals in a way that is best for their herd?

Stephen Morgan

Thank you for that, I will certainly take those concerns back to the Department. It obviously just reminds us how important the next stage of the strategy is. It is worth noting that we are developing a new industry-government strategy board to drive the recommendations from the strategy. I will certainly feed that back and take it forward in terms of the work that I am doing alongside Baroness Hayman, who is the Minister responsible for biosecurity.

Sarah Dyke

Thank you. My final question is that the current guidance only allows non-statutory tests in OTF herds that have already had gamma testing, and stops further testing the moment OTF status has been regained. That means farmers cannot keep checking for hidden infection once a herd is clear. I have heard that on my own farm. We also heard that when we visited Gatcombe farm down in Devon; they found that exact example when they were reinfected back in 2023. Will you allow these tests in OTF herds without affecting their status? How will the Government make sure the SPS agreement does not restrict this activity going forward?

Stephen Morgan

I recognise those challenges. I will certainly take it back to the Department and explore the points that you raise further. Mike, do you have anything further you wanted to add to Sarah’s question?

Mike Rowe

It is right, Minister, that that is something we can look at in the strategy. I know that there is expansion of Government-funded mandatory interferon-gamma blood testing to help try to detect infection sooner and reduce breakdown duration. I do not know enough about the issue to know if that specifically addresses your question, but it is definitely something we can pick up with the teams in DEFRA.

Sarah Dyke

Yes, it would be great if you could follow that up.

Chair

It would be a lot of stuff to bring back to the Department; we will maybe follow up in correspondence. It would be good if we could get an answer by the end of the month, does that seem reasonable?

Stephen Morgan

I will see what we can do.

Henry Tufnell

Minister, we have the current policy and we have the strategy in respect of TB. I am just worried about the SPS. I know you cannot comment on negotiations, but are you worried about the difference between what our strategy and our policy says in this country and the European rules, and the divergence between the two?

Stephen Morgan

We obviously take these issues extremely seriously. Protecting biosecurity of our country is vital. That is why I work really closely with Baroness Hayman who leads on both the SPS and biosecurity issues, and those are at the forefront of our mind in the negotiations.

Henry Tufnell

The EU is not permitting us to vaccinate cattle; it has extending testing regimes. Are you worried about that in terms of combating TB, and our fight against TB to have official TB status by 2038?

Stephen Morgan

Lots of things that we do are world-leading in this space, which is why I was keen to see what Pirbright and APHA are doing. We can obviously get back to you on the specifics in terms of the response that Sarah has asked for, and I am very happy to do so.

Josh Newbury

I just wanted to pick up on the consultation that was released yesterday on the CO2 stunning of pigs. I am very much with the Government on the animal welfare agenda; the strategy is a visionary document, but obviously to actually achieve welfare gains we need to make sure anything we do is based on robust evidence. The statement released by DEFRA yesterday stated, Minimising distress during handling and slaughter is an important part of safeguarding pig welfare, and that both argon and electric stunning are proven to substantially reduce animal suffering. But if you then dive into the Animal Welfare Committee’s opinion, it notes that “exposure to argon still causes vocalisations and sometimes escape attempts.” It takes longer for pigs to lose consciousness, which could have welfare implications and would certainly have commercial impacts for abattoirs. It then goes on to say that the CCTV the Committee saw was not in the gas system itself, so it was inadequate to properly assess their welfare. On automated electric stunning we know that in a pig stunning trial as much as one-fifth of pigs showed signs of consciousness after they had gone through the process. By that point they are hoisted up by their rear trotters, so they would have to get the pigs down, re-stun them and put them back up again, which again could have terrible welfare implications. Pigs are big beasts, so potentially that could pose a risk to staff as well, further exacerbating labour shortages that abattoirs are already facing. Given all that, can you, hand on heart, at this point say that the evidence base is strong enough to bring that consultation forward?

Stephen Morgan

We have engaged with industry in advance of going out to public consultation. You will know that the commitment to do so is very much from our animal welfare strategy, which Baroness Hayman and the Government launched last December. It is really important that we have that engagement with industry and obviously encourage people to respond to the consultation, opened only yesterday with a deadline of December. I am very keen to make sure we deliver on our manifesto commitments as we set out at the election, but also to work with industry around mitigating the risks and challenges. Mike, do you have anything further you wanted to add in terms of the specifics of Josh’s question?

Mike Rowe

Only that the consultation provides an opportunity for some of those issues that you have raised about argon and how suitable it might be as a replacement method. This is about gathering the evidence so that Ministers can then take decisions on the back of that consultation. We are keen to hear views about all aspects of the document that has been out.

Josh Newbury

Written responses to a consultation are clearly not the same as a full industry-led trial with independent oversight, which seems to me to be what we really need. Even the Animal Welfare Committee is not saying argon or electric stunning is certainly better, there are definitely reservations there. There are clearly huge gaps in the evidence. My question is, should that not have been gathered before the consultation was released?

Stephen Morgan

My understanding is the proposal would have significant improvement to pig welfare at the time of killing. As I said, we have been talking to industry and I hope those issues are teased out in the consultation period, which I encourage people to contribute to.

Josh Newbury

Lastly, I hosted a drop-in on CO2 use for the National Pig Association just yesterday; I did not know the consultation was going to be coming out yesterday, but it was quite timely. It told me that it has had many meetings with DEFRA officials and it has raised these concerns and many others, and yet none of that seems to have had any bearing whatsoever on what is in the consultation document. It does not see any of those nuances even reflected. Will you be engaging with pig producers and abattoirs going forward? We can see that their concerns are only going to grow louder and louder in the coming weeks. There is a lot going on in the industry and this is another thing that they feel is being heaped on them.

Stephen Morgan

Yes, I absolutely understand the pressures that the sector is facing. That is why I have met with the National Pig Association early on, and why I have met with pig farmers directly on farm. I am committed to having a summit with industry, processors and others to recognise the challenges that the sector is facing and to work through what the options might be to provide further support.

Josh Newbury

Were they telling you that the evidence is not there?

Stephen Morgan

Not at any particular meetings I have had so far, but I will commit to seeing the sector further to get into that detail and make sure that everyone has contributed to the consultation.

Chair

They are telling me that there have been no proper trials done in the use of argon. Are they not telling you that?

Stephen Morgan

Baroness Hayman leads on these areas, of course, but I will certainly follow up with them on the points you have raised today.

Chair

Mike, you have started the consultation but you are consulting on stuff that you have not properly trialled. Is that not putting the cart before the horse?

Mike Rowe

I have to be clear that it is not my policy area, but my understanding is that the Animal Welfare Committee report that was published in 2025 recommended, for all the reasons set out in that report, phasing out the current methods—CO2—and that there are other methods that the committee suggested in their report. What we are trying to do now is gather information and evidence from the industry about the implications of moving from the current methods to those new methods.

Chair

What other countries are doing this? Denmark? The Netherlands?

Mike Rowe

I do not have that information, I am afraid.

Josh Newbury

There is no mention in the EU whatsoever, and America is only looking to move to CO2 and is baffled that we are looking to move away from it because the evidence base is not there.

Chair

You are content to go on this? Okay, we will maybe raise this with Baroness Hayman, she is coming in later. Stephen, you mentioned your summit there. It is a fact that the pig sector is going to have too many pigs on farm between now and Christmas, they are not going to be on a contract and there is going to be no way for them to get to market. That is going to lead to a back-up of stock on farm, which in itself then becomes an animal welfare issue. Is that something that your summit is going to address?

Stephen Morgan

More generally, obviously, I want to drive more profitable, productive farming.

Chair

I have given you a specific question, we are all agreed on the generals.

Stephen Morgan

That is why I am really keen to work with the sectors to drive growth in the sector. You will know from your experience that it tends to be boom and bust in the pig sector, and therefore a key point that I would want to get across in the summit is about market monitoring and forecasting, working with industry and what the options are for growth for the future.

Chair

Does that mean that you are going to be addressing the specific concern of the industry that between now and Christmas you are going to have this animal welfare problem because you are going to have too many pigs on farm that you cannot get off to slaughter?

Stephen Morgan

If I am going to convene industry, I am keen to hear their views and concerns to see what Government can do to build resilience and growth in the sector.

Chair

Are you hearing it from me for the first time? Have you not heard this? You must have ongoing dialogue with the NPA, NFUS, NFU and others.

Stephen Morgan

I mentioned I have already met with them, been on farms, talked to them. I am very happy to engage further.

Chair

Have they told you that this is their concern? If that is their concern, surely it should go on to the agenda for your summit, should it not?

Stephen Morgan

The way that I operate working with the sector is to ask what issues they want to discuss with me, then we work through those. It is a partnership approach to then improve outcomes for our farming community, very much in the spirit of the “Farming Roadmap”. I am very happy to explore issues they would such as to raise with me when we have that summit.

Chair

Are you telling me that will be on the agenda?

Stephen Morgan

I am very happy to discuss any issues that industry wants to talk about.

Chair

Okay.

Charlie Dewhirst

I should refer to my wider register of interests submitted to the Committee in relation to my family connections with the industry. Just going back to Josh’s point here, it is quite well established within the industry that electrical stunning can lead to worse welfare outcomes. The use of argon and nitrogen when we have CO2 readily available presents another issue because I would ask, which countries would you expect to import the argon or nitrogen from?

Stephen Morgan

We will have to get back to you on those specific points.

Charlie Dewhirst

Okay. I can tell you that Russia is the major producer of those gasses, and that would mean that our domestic food security is further compromised by relying on a Russian import. That in itself would seem to be the wrong way to go about it. As the Chair just alluded to, we already have 15,000 pigs backed up on farm. The transition period in this consultation around the use of CO2 talks about two to three years. That would require shutting down the abattoirs for a conversion. These are abattoirs that are running at full capacity trying to deal with the situation in the market as it is. Two to three years would be unworkable and would create additional welfare problems on farm because there would not be the throughput in the abattoirs to get the pigs that we are already producing. That does really need to be considered when you are looking at this. Would you agree with that?

Stephen Morgan

Thank you for that. I know that you speak with real authority on these issues, having worked for the National Pig Association in the past. It is really important that as many people as possible contribute to the consultation, and I am very happy to meet any Member on these issues to make sure that their views are fed into the consultation.

Ben Goldsborough

From pigs to poultry, in my circumstance. The trial of the avian influenza vaccine has just come to an end within Norfolk. We are very proud of what our local poultry producers have been doing to work with the Animal and Plant Health Agency on that. I had a meeting with the APHA on Friday of last week to talk about this. The findings are now obviously coming to a conclusion, but one of the things that was raised with me is that the vaccine itself has to be administered through a travelling process using liquid nitrogen, which makes it quite a costly process. Will that be taken into account when recommendations are given on whether this vaccine is given approval going forward?

Stephen Morgan

Thank you for that. I can give you assurance that we will certainly look at those options.

Ben Goldsborough

In terms of the next steps for this, obviously if we look at other counterparts around the world, Australia, for example, has had its first cases of avian influenza this summer, in August. It has done a mass rollout scheme for wild birds at a cost of around A$230 million, so it is doable in terms of if the Government puts their mind to it. What do you believe is going to be the next steps for the Government in terms of AI approaching us as the season has now started?

Stephen Morgan

Thank you for that. Again, these issues are for Baroness Hayman to answer, and I work really closely with her. More broadly on biosecurity issues, we obviously take these issues extremely seriously and I will certainly take back your views and ideas to the Department.

Ben Goldsborough

In terms of moving away from Baroness Hayman’s portfolio towards yours, obviously one of the issues that we have within the poultry sector is the lack of insurance that is now available. I raised this with former Minister Daniel Zeichner in a Westminster Hall debate. There does not seem to be any action that has come from DEFRA since that point, in terms of the support divergence and increasing the number of insurance providers. Is this something that you are aware of at all, Minister?

Stephen Morgan

Thank you for raising this. You will know we published our “Farming Roadmap” earlier this year and established a farming and food partnership board. There are a number of sector growth plans that we are taking forward; there is one around horticulture and one around poultry. I met representatives from the poultry sector at the partnership board yesterday. We want to make sure we have a really good plan to build resilience and a sustainable sector for the future. All those issues that you described around insurance and other matters will be brought out in the plan so that we can ensure growth for the sector for the future.

Ben Goldsborough

When you say it will be brought out in further detail, have you had any conversations with NFU Mutual, for example, on this issue, or the only other provider of insurance?

Stephen Morgan

I have met with representatives of the poultry sector. I have not had that particular point raised with me directly yet, but I am very happy to follow through on those as we work out the sector growth plan for the future. Mike, do you want to chip in more broadly around support for the poultry sector?

Mike Rowe

As the Minister mentioned, we are trying to make sure the sector growth plans are industry-led. They were commissioned by the farming and food partnership board; we are expecting the poultry one to be submitted back to the board within the next six months. As the Minister said, these sorts of issues alongside others—we are aware that there are issues in the planning system, for example—are holding back growth in the sector. We are trying to look across the board at the systematic challenges that need to be addressed in order to enable the sector to grow, and I would expect this to feature in that plan somewhere.

Helena Dollimore

Minister, I wanted to ask you about the issue of local abattoir provision, something that has been vastly eroding in recent years; in Sussex—where my constituency is—we have just one abattoir left in the entire county. At a national level we had 2,500 abattoirs in the 1970s; we now have just 200 in the whole country. It is a really big issue for local farmers because it means they have to transport animals much further for slaughter, which can have animal welfare considerations. It also impacts their ability to sell meat locally and reduce food miles when we lose abattoirs. This week the NFU published a letter with 150 organisations saying that the sector is in crisis and needs support from Government. Given that DEFRA put a huge amount of money into supporting the farming industry in this country, is it not right that we also think about protecting this vital national infrastructure of abattoirs? Do you recognise local abattoirs and the network of them as vital national infrastructure and can you say anything about how DEFRA can support them and make sure we do not lose more abattoirs in the future?

Stephen Morgan

It is an issue that has come up on the engagement that I have had through agricultural shows and visits across the country over the summer. I am aware of the coalition’s letter led by the NFU and 150 different organisations. DEFRA works really closely with an abattoir working group and a task and finish group to work through the options for the future. I have met with Susan at the FSA to look at what options can be done around regulation and visits. It is worth saying that we have seen about a 2.5% reduction in local abattoirs across the country; I do not recognise the 10% reduction. They are hugely important to food resilience, which is why I am pleased there is work going on with industry and my officials to monitor the situation and see what further action can be taken.

Helena Dollimore

Can that working group look at setting up a dedicated fund to support local abattoirs? If we are putting £2 billion a year into supporting farming in this country, it would make sense that we put a small amount of money into that local infrastructure that the farming is dependent on.

Stephen Morgan

My understanding is the letter calls for a dedicated funding stream to support that. I want to look at what other measures we can take at this stage in terms of reducing some regulatory and vets’ inspection burdens on abattoirs and then see if there is anything further we can do to deliver on the commitments we have made.

Sarah Dyke

It is a really important point that the small and medium-sized abattoirs are closing at a rate that there simply will not be any left in 10 years. That is really important for the local supply chain, rare and native breeds and organic farmers. Recently—in September 2024—the Smaller Abattoir Fund was closed and has not been replaced. Will you be looking at bringing in a replacement for that? How are we going to stem these closures?

Stephen Morgan

In my answer to the previous question I mentioned the support we are providing around regulatory visits and vets’ activities.

Sarah Dyke

We are talking about the small abattoirs.

Stephen Morgan

Indeed, and it is about how we can make that more proportionate. I will certainly take away the suggestion around additional support.

Chair

I am going to move on to questions around water and heat resilience.

Terry Jermy

Apologies, I am leading a Westminster Hall debate at 11 am so I shall ask a couple of quick questions and run away; I do not run that fast. I wanted to ask about water resilience. It has been an incredibly tough year when it comes to drought; it has been like this for a number of years now in places such as Norfolk. If you follow the news it seems we are not out of the woods yet; there is potentially more to come. Water is obviously crucial and critical to the operations of farms. I welcome the £15 million in grants for on-farm reservoirs. The core problem—farmers tell me this all the time—is getting the necessary licences and planning permissions. I understand that this cuts across different Departments, including MHCLG, and different briefs. When can farmers expect progress on the process of getting licences and planning permissions to be made easier?

Stephen Morgan

Just to echo what you have said I absolutely agree with how difficult it has been for farmers across the country this year. I heard about the value of reservoirs loud and clear on a farm visit with Tom Bradshaw to his own farm. We are obviously funding the water management grant of £15 million, the detail of which will come out next month. There is a range of things that I am keen to do across Government. Yesterday there was a discussion at the farming and food partnership board with representatives from across Government—including MHCLG—working through some options for the future. Obviously the Prime Minister has taken this issue extremely seriously, hence the announcement in August of the additional £15 million when he was on a potato farm in Cornwall. There is a range of things we want to do around abstractions and working with the Environment Agency and speeding up the planning process to deliver the change that we need. I mentioned there was a very healthy discussion about these issues and working with the sector at the partnership board yesterday and we have set some clear milestones to take forward further action. Mike, is there anything specific you want to add about abstraction planning or funding finance?

Mike Rowe

We are trying to take a system-wide look at the barriers, some of which might be in the planning system; hence we had colleagues from MHCLG in a meeting yesterday that the Minister referred to. We know there are issues with abstraction and if you have to have an environmental impact assessment there can be issues with the Natural England screening of that. We had both those organisations represented in the room and are trying to crack this in a group way as well as looking at the role that finance can play. Yesterday we agreed a plan of action with the sector and those other bits of Government—as I mentioned—to try to work through some things. Smart abstraction may well be one thing—it is being trialled at the moment—but currently farmers would need to apply to the Environment Agency in order to get abstraction licences. Are there ways in which we can use technology for automatic monitoring of river levels so that we can take that out of the loop? That is one example of the changes we are looking at but we totally get the urgency. We started this work just before we experienced the extreme drought and it is something that Ministers are committed to resolving.

Stephen Morgan

Obviously you want to build more reservoirs and make it easier for people to build reservoirs. The national planning policy framework—which has come out recently—is helpful; it is about prioritising food production and the work of farmers. It is a really helpful strategic document that should drive the change that we need.

Terry Jermy

I am glad you appreciate the urgency, particularly around abstraction licences. As you will be aware, last week I held a farming conference in south-west Norfolk with 70 farmers and landowners. I have numerous farmers whose abstraction licences are up for renewal next March. They need to be putting seed orders in now but they do not know if they are going to have the water available. It is risky enough; we need to de-risk where possible. Do you think the current arrangements for abstraction licences properly prioritise food production and support for farmers? You have indicated that perhaps they do not and that is what we are looking to reform.

Stephen Morgan

More generally we obviously want to make it easier to build reservoirs. We want to review and update the planning guidance and remove some unnecessary barriers that exist. I have heard those messages loud and clear from parliamentarians but also on farm visits. Mike, is there anything further you want to cover in terms of those issues that Terry described?

Mike Rowe

Clearly there will always be a lead-in time for getting a reservoir from obtaining the permissions through to then building it. We obviously need to factor in any health and safety considerations with regard to the HSE aspect in this. Following the actions that we agreed yesterday with other partners around the table, we are hoping that they would see some benefit in terms of the construction of reservoirs next year. Obviously with the summer we have had, we would all prefer that to be quicker but equally this is a challenge that has been left unresolved for too long and we are trying to grip it now.

Helena Dollimore

I want to continue Terry’s questions but also delve into the wider issue of the very hot summer that we have had and the impact for farmers. Just to follow up on Terry’s question, in August the Government announced £50 million of funding would be reallocated to SFI to help farmers adapt to the risk of future droughts. Can you comment on how DEFRA has ensured that this money is ring-fenced for drought resilience?

Stephen Morgan

We have had £50 million allocated; when we did similar schemes before it was a slightly smaller amount and it supported about 70 reservoirs across the country. We will set up the specifics of the application opportunity when we publish it next month. This is alongside broader work the Government are doing around private investment going into the water sector to improve water management issues, which I know you are very passionate about and do lots of work on.

Mike Rowe

Just on the specifics we decided not to try to ring-fence that extra £50 million within SFI for certain drought-specific measures. At the time the windows were opened we put out communications around the actions that were available under SFI.

Helena Dollimore

Why did you not ring-fence it?

Mike Rowe

Given the speed that we would have needed to try to get the changes through we would have needed system changes to enable some sort of ring-fencing for that money. We decided to prioritise opening the scheme over pausing and getting those system changes done.

Helena Dollimore

Are you reconsidering that for next year?

Mike Rowe

It is one of many options that we are looking at for next year in light of the experience we have had this year.

Helena Dollimore

On the broader issue of the very hot summer that we have just had we also saw a number of wildfires, which is something the Committee has been looking at. In Stourbridge particularly, farmers played a critical role in getting those wildfires under control by creating firebreaks. When thinking about this issue in my own constituency we actually asked the local council whether it is in touch with local farmers in preparedness for any wildfires and there is no such link, database or connection. In light of all the work going on in Government about wildfire preparedness, what role does DEFRA see for farmers? Are you doing any thinking about how we can further upskill local farmers and support them in that role and the fact that they own land that can be used in response to wildfires?

Stephen Morgan

I just want to pay tribute to the tremendous activity of farmers over the summer. Obviously this demonstrates again the resilience that we see from our farming sector. You will be aware that the Prime Minister hosted a wildfire summit last week on these very issues. I was able to secure the NFU representation at that important summit so that the farmers’ voices are heard in decisions around what we might do differently in the future. More generally you mentioned the firebreaks, which was a new flexibility announced by the Environment Agency in August when the Prime Minister was in attendance. There is more work we can do around preparedness, which is why working directly with the sector is really important to learn lessons and make sure that we have a robust system for the future.

Helena Dollimore

Just making sure the local council knows who the local farmers are in a situation such as that is important; you do not want to be gathering those names and phone numbers at the time.

Stephen Morgan

The work of the local resilience forums is also key here. It plays more broadly into the wider work that the Government are doing around resilience and the work of partners to make sure we are more resilient to some threats and concerns.

Mike Rowe

As part of the announcements made last week following the summit, there are some new actions that we are looking to bring into our suite of environmental land management schemes that are specifically designed to help counter wildfires.

Helena Dollimore

You slightly led into my next question: is the Department outside ELMs looking at other ways to support more nature-friendly farming and climate resilience?

Mike Rowe

Absolutely. The ELMs budget is £2.3 billion a year but there is also work on local nature restoration strategies and work that can be factored in from biodiversity net gain. Only yesterday it was announced that the Government have partly contributed funding to secure the Rothbury Estate, for example, in order to try to get extra funding into more nature-resilient farming on important landscapes. There is a range of measures specifically on wildfires. We also made those announcements regarding new actions in ELMs last week.

Chair

We have had the starter; we have had the fish course. Now we come to the main course: sustainable farming incentive and the 2026 application window 2. Sarah, you are going to lead our questioning on this.

Sarah Bool

Minister, I am a big fan of your enthusiasm with the lists of the farms that you have been visiting and all the lists that you have done. Given that farmer confidence in DEFRA has been devastated by the shambles—as it has been said by farmers themselves—of SFI window 2, we really need to drill into some details. Can I take us back to 21 September, the day before the launch of actual window 2? What estimate did DEFRA have of the number of eligible farm businesses likely to apply compared to the budget?

Stephen Morgan

Just to start by saying that obviously earlier this year we redesigned SFI based on feedback from the previous year. That was about making sure that the funding was more fairly distributed and targeted more effectively to farmers as much as possible, which is why we introduced the two windows of opportunity. The first window opened earlier this year and then obviously the second window in September. I am really keen to learn lessons from what happened this year. The system held up despite huge demand, which is why I have started conversations with the sector to see how we design the scheme for the future.

Sarah Bool

Specifically on that question, how many farms did DEFRA expect and what was the budget?

Stephen Morgan

We were modelling high demand.

Sarah Bool

What does high demand mean?

Stephen Morgan

Significant contribution—

Sarah Bool

What does significant mean?

Stephen Morgan

Perhaps Mike can get into some detail of the modelling that was undertaken. Obviously we saw a very difficult summer for the farming community and therefore some saw this as an opportunity to support them.

Chair

If we do not get this right at the start we are going to be here talking about this for the rest of the day. Sarah has asked you a very direct question here. How many applications did you expect to receive? I do not know if either of you or neither of you knows the answer. That is the question that has been asked; unless we get the right answer to that, nothing else is going to make sense.

Mike Rowe

Our best estimates—noting that we had made some changes to the scheme compared to the previous iterations—were that we had in excess of 20,000 expiring agreements, some of which we would have expected to come into SFI. We clearly had window 1 that was open for people without an existing ELM agreement. Obviously we do not know who might have started an application the following day because of the speed at which it closed. As I think you know, for window 2 we secured 12,200 applications. Our best guess is that north of 10,000 would have potentially missed out who wanted to come in but could not.

Chair

Are you saying you were expecting 20,000?

Mike Rowe

We knew that we had in excess of 20,000 agreements expiring but we could not always guarantee—given the changes that we have made to the scheme—whether people would want to go into the new scheme noting that we had removed some actions and changed some payment rates or whether they would want to go into other schemes. Clearly what we saw over the summer was an exceptional spike in demand as a result of those applications.

Chair

Sorry for interrupting, Sarah.

Sarah Bool

That is okay because it is really important. There is a lot of expectation on farmers to be able to forward plan and part of forward planning is to know exactly whether they can or cannot get into these schemes. If there were 20,000 expiring and you said 12,200 submitted—we think it was 12,500—that means 12,500 were unable to. What was the budget and how was it going to be allocated? Basically you went in knowing that farmers would not be able to get it.

Mike Rowe

We made a number of changes to the scheme to try to make the money go as far as possible such as reducing those actions from 102 to 71; we capped agreements for the first time at 100,000; we reduced the three most popular payment rates; we brought some actions under a cap so that you are holding for a certain hectare and we removed the management payment. Against that backdrop we were not comparing like for like in terms of those old agreements. Equally some expiring agreements are mid-tier, which are the legacy agreements that are halfway between what we would describe as SFI or higher tier, for example, and we did not know who might want to go up into higher tier versus down. This is all modelling, estimates and forecasting. We knew that the budget was going to be heavily oversubscribed hence why we made all the changes that we did to try to make it go as far as possible. Right at the last minute we were able to secure an agreement to first put that extra £50 million in that was announced in August and then an extra £20 million and a residual £3 million. Having published that the budget would be £180 million earlier in the year when we said what date the scheme would open, we were then able to put an extra £73 million on top of that: around a 40% increase. Clearly in light of the experience we had that was not enough because the demand was as high as it was. We knew we were going to have high demand and the budget that we had was finite, which is why we made that suite of changes in consultation with stakeholders around this time a year ago.

Stephen Morgan

It took the budget to £253 million.

Sarah Bool

On that basis why did you make it first come, first served? You knew demand would be higher. DEFRA did its own survey; 60% could not get the application in on time. One farmer left a funeral to try to get the application in on time. Are you setting farmers up to fail?

Stephen Morgan

I have committed to move away from first come, first served; we refined the scheme this year. You will appreciate that was before my time in the Department but I am very keen to learn lessons from this year. I have heard heartbreaking stories of the impact it has had and how stressful it has been for farmers across the country. That is why I welcome the survey that you have undertaken to capture views and concerns that we will feed into the co-design for next year.

Sarah Bool

The NFU believes that the value of the expiring agreements that we were talking about exceeds £520 million, and the budget for the 2 SFI windows in total is about £310 million. First, do you recognise those figures? Is the NFU right on that? Secondly, can you explain where that difference of £210 million has gone?

Mike Rowe

The NFU’s assumption would be that everyone in an expiring agreement would all go downwards into SFI rather than upwards in the hierarchy of schemes within the ELM suite, for example, if everyone who had an expiring mid-tier all went and looked at SFI rather than up at a higher tier. I recognise those numbers and they are in the ballpark of what our expectations were.

Sarah Bool

What is going to happen in terms of that missing £210 million? Again you are committing to having this longer-term vision and that there is funding there but there is an open gap here.

Mike Rowe

I do not accept the characterisation that there is missing money. The Department set out the full details of the spending review settlement that was secured nearly two years ago. At headline level that includes £2.3 billion for the farming budget, of which roughly £1.9 billion is for environmental land management schemes. As per what we set out in our “Farming Roadmap”, over time we are seeing money that had previously been earmarked for SFI being applied to higher tier and landscape recovery. As I say, I do not recognise this notion of missing money but in our “Farming Roadmap” we have been publicly recognising that money within the farming budget is going to be tight. Therefore over time we expect that higher tier and landscape recovery will take a bigger share of it. That said SFI is still the largest scheme that we have at the moment, and we estimate spend this year will be about £851 million on those legacy agreements that we already have. Clearly in window 2 and window 1 that we saw this summer, we committed £310 million; because these are three-year agreements that is a further £930 million that has been signed up to in applications that we have received.

Sarah Bool

From what I understand so far, DEFRA knew very well it was going to be completely oversubscribed. There was no sufficient funding to allow this and farmers were not given any indication. They were not told exactly when the window would open so many were staying up throughout the night. It opened at 10 am and shut just under six hours later. Minister, I know you said you are going to learn lessons but how are you going to stop this happening again? This is numbers and banding around but how could farmers have possibly known? This is a repeat offence for the last two years of the carpet being swept away from under their feet. How could they have known that they had to be there and get through?

Stephen Morgan

Obviously in terms of the design of the scheme for this year, that was set out quite early on in the year.

Sarah Bool

I do not think that detail was there earlier on in the year.

Stephen Morgan

We set out the overall design of the scheme early in the year through the farming conferences that took place, obviously before my time in the Department. The date of opening window 2 was announced at least three and a half weeks in advance. Obviously in terms of the time it opened—10 o’clock that morning—that was not public knowledge because RPA needed to run some tests before going live on the funding opportunity.

Sarah Bool

Would it not have been better to tell RPA not to rush and actually to have communicated that so everyone could have planned? Even land managers did not manage to get all their applications in, God forbid a farmer trying to when they were on farm.

Stephen Morgan

I have already said we are going to scrap the first-come, first-served approach. That means some trade-offs in terms of how we design the scheme for next year but we are already working in partnership with the NFU and others to design that scheme to get it right for the future. As Mike said earlier, NFU and others were involved in the design of the scheme for this year, but we need to work through what the options are for next year to make sure that people do not miss out on the opportunity.

Sarah Bool

I doubt NFU would be happy with you saying it helped with the design.

Chair

Can I just get a sense of what was happening inside the Department? You had the first window, and 25% of a much less pressured window was allocated on the first day. This fastest finger first approach should have been obvious to the Department at the end of June before you started the design for the second window. Is that a fair comment?

Mike Rowe

The only thing I snagged on there was design for the second window. As the Minister was saying, what we tried to do earlier in the year was set out the timetable for both windows.

Chair

You surely sought to learn from the experience of the first window.

Mike Rowe

Yes.

Chair

You saw what was happening, the big glut of early applications coming in, and then you have another window opening that is going to be under much greater pressure. Stephen, are you getting briefed on this?

Stephen Morgan

Yes and really leaning into the lessons.

Chair

Were you getting briefed on the extent to which the window was going to be oversubscribed? You are the Minister here; Mike is the official.

Stephen Morgan

We very much understood the level of demand. Lessons have to be learned for the future, as I have clearly got across today. On the day itself we were made aware of how it was going. That is why we certainly communicated that information via the DEFRA blog to make sure that applicants knew how much was being spent throughout the day.

Chair

Even these warnings—25%, 50% and 75%—were not being seen, according to the respondents to our survey.

Stephen Morgan

I am very keen to see the full findings of your survey and want to make sure that feeds into the co-design of the scheme.

Chair

The decision to carry on with a first-come, first-served allocation was made by yourself in knowledge that it was going to be oversubscribed.

Stephen Morgan

All the decisions around how the scheme would run this year were made before my appointment to the Department.

Chair

You were briefed. You knew that there was a problem coming down the track and you decided to carry on with it, nevertheless.

Stephen Morgan

The information about how the scheme would operate had all been published.

Chair

If you knew that you had published how it was going to be done and it was apparent to you—as Mike is telling us, it should have been apparent to you—it was always an option for you to turn around and say, “Look, this isn’t going to work. We need to pause and redesign it.” Why did you not do that?

Stephen Morgan

I hear the message loud and clear from farmers that they want consistency in their approach from DEFRA in the spirit of the roadmap. We understood the levels of demand, which is why I was pleased to help secure additional funding.

Chair

Even if you are wrong it is still important to be consistent.

Stephen Morgan

We understood the levels of demand, which is why I was pleased to make sure we secured the additional funding of the £50 million the Prime Minister announced in August and then the £20 million, which took the overall pot to £253 million.

Sarah Bool

When farmers talk about wanting a consistent approach they just want to know that they can actually apply to a scheme and that there will be money. They would much rather have had this paused and delayed further. What is another week at this point rather than the devastation this has caused? This is now shifting farm practices. It is going to have a far longer impact because they are going to have to put land back into production, diversify and look at the intensification on farming. I appreciate that plan was made before you came in but you are the Minister and you said earlier, “The decisions I make are based on the evidence before me.” The evidence was screaming to anyone that this was going to be a problem. Fundamentally the ministerial team and DEFRA have to go away and look at this because this cannot happen again; this is not the first time. I appreciate the scheme is changing but I have no faith that this will not be repeated in the future.

Stephen Morgan

I will politely remind you that this is a scheme inherited from the previous Government that had no budget control. We have refined and improved the scheme over the years since we have been in office. You have already heard me put across the key to designing a better scheme for the future, building on what has worked and what has not. That is what I am committed to doing and working with the sector to make it happen.

Chair

At its root the problem is the budget is just not big enough, is it? You cannot account for this £210 million that has been lost because the NFU figures—which come on a freedom of information request from the Department itself—say that those people who were coming out of schemes were getting £520 million. The window envelope for SFI26 was £310 million. We have lost £210 million and we do not know where.

Stephen Morgan

Mike has answered that point already.

Chair

Do you think that is going to come from future higher tier agreements?

Stephen Morgan

We obviously publish the annual report on farming grant schemes, with the most recent report coming out relatively recently. You will know that we are committed to £11.8 billion over the lifetime of this Parliament with an annual budget of £2.3 billion.

Chair

Do you not think the budget needs to increase?

Stephen Morgan

Obviously we are always keen to have more but we have to work within the spending envelope we are provided and the funding settlement that we are given from the Treasury colleagues.

Sarah Bool

I wish to say that this is farmers’ livelihoods here; it is not about political points. We very much try to keep the politics out of this room when we are discussing this. The Department has announced that there is a technical issues group, which will be expanded to allow farmers to report an issue up to one week after the window closes. Can I ask how many applicants are in this pool and will they be offered agreements?

Stephen Morgan

You are referring to the exceptions, which we announced following the closure of the scheme. RPA is working through those as we speak.

Mike Rowe

There are two groups. One is those that requested digital support and the other is those that reported—as you mentioned—that they had some system issues. RPA is working through all those cases and contacting individual farmers. It will depend on the individual circumstances of the farm. In some respects farmers might have felt there were system issues but it might have been the system performing as it was expected to in terms of applying the rules of the scheme. That is why RPA is committed to looking at every individual case within those groups.

Sarah Bool

I appreciate you are saying RPA is looking at it but given that that money is gone, where will the money come from for that?

Mike Rowe

We are not talking about large sums of money; lower than £5 million is our best estimate but it could be lower than that. It depends on RPA working through those on a case-by-case basis.

Chair

To what extent is the extra cost of administration of SFI eating up the budget compared to basic payments?

Mike Rowe

Unlike the basic payment scheme, SFI is not and never was intended to be a universal income support payment. It is a payment for the provision of public goods.

Chair

Do you know how much it costs to administer BPS?

Mike Rowe

I do not have that information before me.

Chair

Do you know how much it costs to administer SFI?

Mike Rowe

I do not have that information before me.

Chair

Can you get us that information? It should surely be available.

Mike Rowe

I can. A key part of that information is also looking at the benefit-to-cost ratios that we get from SFI compared to BPS. BPS was generally regarded as having zero or very modest benefit-to-cost ratio and was poor value for taxpayers’ money. SFI—depending on the actions, because some deliver more for the environment than others—had benefit-to-cost ratios of up to 5:1. We need to look at the benefit we get from the scheme as well as the cost of administration.

Chair

Farmers who are playing up to the edge of the field might see things differently now.

Josh Newbury

Fundamentally the two schemes have very different objectives do they not? Basic payments was fundamentally just designed to support farmers based on the amount of land they farm whereas SFI is clearly public money for public goods.

Mike Rowe

Yes.

Josh Newbury

When you are talking about value for the taxpayer you are comparing apples and pears there, are you not?

Mike Rowe

That is correct.

Josh Newbury

You cannot really say basic payments was a poor scheme with poor value for money on a cost-benefit ratio if you are looking at very different metrics from what you are saying there.

Mike Rowe

We still apply a common economic assessment to the use of public money that looks at the public money that used to be dispersed through basic payment scheme, which is very low, and the value for public money we get through SFI. As you go upwards into higher tier and landscape recovery, those assessments get bigger. Even though there might be different schemes, we still apply a common analytical methodology to look at the value for taxpayers’ money that they deliver.

Josh Newbury

As part of that are you going to look at the number of farms that are left with no public support whatsoever? Obviously, under basic payments that was zero. Now that we have had this second window that is going to be quite a substantial number of farms.

Mike Rowe

As the Minister has mentioned there are a range of options we can look at for how we can learn the lessons from this year, scrapping first come, first served is one, and look at what we might do in terms of the scheme next year. There are some stakeholder organisations that will be calling for the actions that we offer to be those that deliver most for the environment. We will have to balance both maintaining an attractive offer and respecting what is happening in the industry. I fully understand that farmers want certainty and planning predictability. That is why this year we tried to set out the details of the scheme as early as possible even though the budget turned out to not be enough. We are also in a highly dynamic environment; agriculture does not sit still. Three years ago, arable farmers in particular did not want to come into the scheme, so calibrations had to be made to make it more attractive. Now the arable sector is feeling a very different set of headwinds. Again there are discussions live with stakeholders at the moment. We need to think about what is going on in the sector and look at the uptake against various actions. Do we need to restrict the number of actions and look at payment rates again and the overall cap? These are all calibrations we can make to try to learn lessons from this year as we prepare the offer for next year. I am noting there is a real pressure to get clarity on this quickly but equally I am hearing quite a lot of demand for quite fundamental change.

Ben Goldsborough

Just extremely quickly on a point you raised there, Mike—I would be interested in the Minister’s reply to this as well—SFI does not focus on food production; it focuses on public good for public money. Obviously, without taking into account food production, do you not think that is fundamentally flawed for the future security of our nation?

Stephen Morgan

Obviously the “Farming Roadmap” sets out an ambition to at least maintain current levels of food production. The sector growth plans will drive that work, which is industry-led, as Mike said earlier. More broadly I want to see stronger, fairer, more sustainable funding streams for the sector. That is why I am coming in and looking at it with a fresh pair of eyes, looking at the various schemes and making sure we deliver on the commitments we have set out in the “Farming Roadmap”.

Mike Rowe

Just to directly address the point even further in addition to what the Minister said, we very much see SFI working in tandem with food production and not displacing it. Actually, in response to SFI24, in some cases we had made some payment rates so generous that whole fields were put into legume fallow or herbal leys, for example. We restricted the payment rates and the amount of land for some actions to try to make sure we were not inadvertently displacing food production. It is very much a land-sharing scheme whereas with some other schemes I mentioned you might be looking more at taking land out of production and landscape recovery if planting trees or restoring people is your aim.

Ben Goldsborough

It could be the best administered scheme in the world; the reason we have such a dash for people going for it is that there is no profitability in farming for the production of food. The Government and previous Governments have taken the opinion that there is not going to be a basic payment system now for the production of food so our farmers are going to consistently be disappointed by any process that we put in place. Is that something that you are considering in terms of reviewing the system going forward?

Stephen Morgan

Obviously we have responded to Minette Batters’s “Farming Profitability Review”, which is a really important piece of work that we commissioned in Government alongside the roadmap. We are very much keen to make sure we are driving productivity and profitability in the sector, which is why these growth plans and the work of the partnership board that I mentioned earlier are vital. We need to make sure the scheme matches the overall strategic ambitions as we have set out in the roadmap.

Ben Goldsborough

Are we really at risk here of just producing a lot of strategies, roadmaps and plans that only do good for the forestry sector and nothing else, and not actually putting any additional funding or looking at how we can streamline processes through either regulation or tax incentives to our farming communities for the production of food?

Stephen Morgan

I do not want strategies for strategy’s sake. It is really important that we set up what the strategic direction is or what we want to achieve around more profitable, productive, resilient farming practices. That is why that partnership approach is really important. I have certainly said to my officials it is really important that we use the roadmap as a framework for everything DEFRA does.

Ben Goldsborough

Would the Department ever consider including food in public good?

Mike Rowe

You would need a more specific proposition than that. Public goods is quite a strict economic definition.

Ben Goldsborough

Okay, food production: would the Department ever consider including food production in public good?

Mike Rowe

It is something that has wider societal benefits. The more food we can produce domestically the more it contributes to our national food security. I should confess—as I am probably displaying—I am not an economist on whether it would meet the strict definition; my instinct is probably not. That does not mean that food production is not important. In fact, in our “Land Use Framework” and the “Farming Roadmap” for the first time we committed strong wording about wanting domestic production to be at least maintained if not grown.

Chair

Sarah started by talking about the damage to DEFRA’s reputation and the standing among farmers. Imagine you were one of the farmers who did not get your application in so you do not know what you are going to do between now and the beginning of next year. You heard that at the biodiversity COP the Government announced something shy of £2 million to go into the purchase of the Rothbury Estate on top of £5 million of public money that has come from the National Lottery Community Fund. How do you think you would feel?

Stephen Morgan

Obviously I have heard frustrations from colleagues today and indeed from the farm visits I have done following the closure of the scheme. That is why being really clear on what our vision is around how we are supporting a profitable and productive farming sector is vital and the roadmap is a key document to drive the change we want to see in partnership with the sector.

Chair

Would you be happy to hear that £1.94 million was going into the purchase of an estate?

Stephen Morgan

Obviously we want to drive good food production alongside delivering on environmental outcomes.

Chair

Is that the purpose of the Rothbury Estate going forward in its new iteration?

Stephen Morgan

Obviously this is a discussion for my ministerial colleague, Jenny Riddell-Carpenter, who leads on these specific issues. Mike, do you want to chip in on that specific project?

Mike Rowe

This funding did not come from the farming budget; it was elsewhere in DEFRA’s resources and was an explicit commitment made with regard to the Government’s international commitments on 30by30. An issue that we will obviously be looking at closely is how this might affect the tenants on the estate because we want to make sure again that we are consistent with commitments.

Chair

Does it go with strings attached?

Mike Rowe

I genuinely do not know the detail beneath what I have just said but it is money that is co-funded alongside other sources of—

Chair

You are putting in almost £2 million; the entire purchase is something in the region of £17 million, just so somebody can go to the biodiversity COP and have a good news announcement. It is an expensive press release at that, is it not?

Mike Rowe

To the best of my knowledge this is work that the Northumberland Wildlife Trust had had in train for a long time.

Chair

DEFRA has done very well to get £17 million; I am not denying its interest in the Rothbury Estate. I am just asking whether this is a good signal to be sending at a time when farmer confidence in the Department is at an all-time low.

Stephen Morgan

I would refer you back to the £11.8 billion we are putting into farming over the lifetime of this Parliament. We are very keen to understand the frustrations and concerns that the farming community have and make sure that our schemes deliver for farmers across our country.

Chair

We will go on to countryside stewardship and landscape recovery.

Josh Newbury

We have just been talking at length about the need to make sure that publicly funded schemes deliver maximum benefits for both farmers and the environment. Do you believe that countryside stewardship, higher tier and landscape recovery are living up to those aims?