Rural Economy Strategy 2011-2015 - Report - 14 October 2010

Economic Affairs Scrutiny Panel

Rural Economy Strategy Sub-Panel

Rural Economy Strategy 2011 - 2015

Presented to the States on 14th October 2010

S.R.11/2010

Contents

Chairman's Foreword.........................................................................................................3

1. Terms of Reference ....................................................................................................5

1. Sub-Panel Membership .......................................................................................5
2. Main Panel Membership......................................................................................5
3. Expert Adviser......................................................................................................5

2. Glossary......................................................................................................................6

3. Executive Summary....................................................................................................8
4. Key Findings .............................................................................................................10

5. Recommendations....................................................................................................15
6. Introduction...............................................................................................................20
7. Development of the Rural Economy Strategy 2011 – 2015 ......................................22

1. Reviewing the Rural Economy Strategy 2005 - 2010.........................................22
2. Political Representation.....................................................................................25
3. Scope, Structure and Consultation ....................................................................28
4. Lack of financial Information to support RES options and proposals.................30

8. Use of Agricultural Land and Protecting the Environment.........................................32

1. Safeguarding the agricultural land bank.............................................................32

8.1.1   The legal context ........................................................................................32

8.1.5   Changes proposed by the Draft White Paper .............................................32

8.1.7   Is the 1974 law appropriate, effective and enforceable?.............................33

8.1.16  Equine use of land......................................................................................35

8.1.24 Domestic curtilage.........................................................................................37

8.1.29   Food security...........................................................................................38

2. Land classification to assist land use planning ..................................................39

3. Derelict and redundant glasshouses..................................................................42
4. Environmental issues.........................................................................................45

8.4.1  Increased environmental regulation and cross compliance ........................45

8.4.10   Nutrient Budgeting and green waste compost.........................................47

9. Subsidies and Financial Support...............................................................................50

9.1   The case for government financial support for the Rural Economy Strategy.....50

9.1.7   Single Area Payment (SAP)........................................................................51

9.1.18   Rural Initiative Scheme ...........................................................................54

9.1.30   Countryside Renewal Scheme................................................................56

9.1.40 Dairy Services / Dairy Industry Costing Scheme (DICS)...............................59

9.1.53  Quality Milk Payment (QMP).......................................................................61

9.1.66  Jersey Enterprise........................................................................................66

9.1.73  Risk management.......................................................................................67

9.1.83  Research & Development...........................................................................69

10. Support for Jersey Produce...................................................................................72

1. Genuine Jersey..................................................................................................72
2. Supermarket Licensing...................................................................................75
3. Problems with export (harbour dues).................................................................76

11. Community and Skills............................................................................................77

1. Engaging the Community...................................................................................77

11.1.1 Community Supported Agriculture ................................................................77

11.1.10 Access to the countryside ...........................................................................78

11.1.18 Allotments ..................................................................................................80

2. Succession, training and skills in the rural sector...........................................82

11.2.9   Succession planning...............................................................................84

11.2.18   Anomaly in higher education funding post-16 .........................................86

12. Conclusion.............................................................................................................88

13. Evidence gathering................................................................................................89
14. Appendix ...............................................................................................................93

Chairman's Foreword

To many of us, the Jersey countryside represents a vital part of the Island's heritage and cultural identity. Throughout history it has been a major contributor to the Island's economy as well as supporting other sectors through the maintenance of a picturesque and idyllic landscape. Indeed, the Jersey countryside is famed the world over for its rural icons, the Jersey Cow and the Jersey Royal Potato.

The Rural Economy Strategy governs the way we manage one of our key assets in order to maximise productivity whilst minimising impact. It is therefore of prime importance to Jersey's economy and warrants the extra level of scrutiny afforded it by our Review.

We were delighted to discover a great deal of optimism within the sector. The fact that the industry in Jersey looks to have relatively robustly weathered the effects of the economic downturn thus far should not be underestimated, and is testament to the resilience of the sector and the attitude of its businesses and human capital. Indeed, in 2009 the agriculture sector recorded real term growth of 5% and has now seen five consecutive years of real term growth in GVA (Gross Value Added). This measurement does not fully cover the wider benefits of the sector including tractor sales, harbour dues, staff employed at the dairy and other directly related areas.

Due to changes in global markets, in common with other sectors, the rural economy of Jersey faces change. With this uncertainty in mind, whilst applauding much of the content of the proposed strategy, we feel it is time to provide the sector with a greater degree of long term direction. This is necessary in order to rise up to face the shifting challenges of today's world: climate change, the energy gap, food security and ever increasing competition from global markets. We propose the holding by the Rural Economy Section of an annual conference with the sector to discuss, debate, draft and update a long term vision for the rural economy of Jersey. The focus of the workshops shall be on the universal issues impacting upon all with the Rural Economy Strategies detailing policy for five year periods under the umbrella of an agreed long term vision.

Our goal remains a resilient and profitable rural economy as we believe that the best custodians of the Jersey countryside are profitable farms and holdings.

In presenting this report, the Sub-Panel would like to thanks all those who contributed to the review including the staff of the Rural Economy Section, and, as Chairman, my thanks go particularly to Deputies Le Hérissier and Wimberley.

Deputy Carolyn Labey

Chairman, Rural Economy Strategy 2011 - 2015 Sub-Panel

1.  Terms of Reference

1. To consider the performance of the Rural Economy Strategy 2005 – 2010.
2. To review the proposals for the Rural Economy Strategy 2011 - 2015.
3. To consider the implications of the introduction of the Rural Economy Strategy 2011 – 2015 for all stakeholders.
4. To examine any further issues relating to the topic that may arise in the course of the Scrutiny Review and which the Panel considers relevant.

1. Sub-Panel Membership

For the purposes of this review, the Economic Affairs Scrutiny Panel established the following Sub-Panel:

Deputy C F Labey , Chairman

Deputy R G Le Hérissier, Vice-Chairman Deputy D J A Wimberley

2. Main Panel Membership

The Economic Affairs Scrutiny Panel itself comprised the following members: Deputy M R Higgins, Chairman

Deputy C F Labey , Vice-Chairman Deputy S Pitman

Deputy D J A Wimberley

Deputy J M Maçon

3. Expert Adviser

The Economic Affairs Panel appointed the following expert adviser:

Dr James Jones

Principal Lecturer and Head of Farm Management, the Royal Agricultural College

2. Glossary

Abbreviations and explanation of terms used frequently in the report, in alphabetical order: CGAEP  Codes of Good Agricultural and

Environmental Practice

CRS   Countryside Renewal Scheme CSA   Community Supported

Agriculture

DEFRA  Department for Environment, Food and Rural

Affairs (UK)

Draft White Paper  Rural Economy Strategy 2011 –

2015 White Paper

EDD   Economic Development

Department

EU  European Union

Green Paper   Rural Economy Strategy 2011 -

2015 Issues and Options Paper (Green Paper)

GVA   Gross Value Added

JD  Jersey Dairy

JFU  Jersey Farmers' Union JMMB  Jersey Milk Marketing Board

JPPL   Jersey Product Promotions  

Limited

QMP   Quality Milk Payment

RES   Rural Economy Strategy RIS  Rural Initiative Scheme

RJA & HS  Royal Jersey Agricultural &  

Horticultural Society

SAP   Single Area Payment SLA   Service Level Agreement UK  United Kingdom

3. Executive Summary

1. The Rural Economy Strategy Sub-Panel welcomes much of the proposed Rural Economy Strategy 2011 – 2015. We were pleased to find a vibrant industry that has achieved 5% growth in GVA in 2009 and was optimistic about the future. Overall the Rural Economy Section conducted an effective consultation exercise, with open communication with the broad range of stakeholders. That said, there were certain failings with the development of the Rural Economy Strategy 2011 – 2015 that need to be addressed. There was, for instance, a distinct lack of detailed financial information and transparency of funding schemes such as the Rural Initiative Scheme supplied at Green and White Paper stages, which made it difficult for stakeholders to comment with any degree of certainty. Another exception to the generally satisfactory consultation process was the failure to draw the marine and fisheries industry into the process.
2. Amongst the key issues that we covered was the protection of agricultural land. We found that there is continued and mounting pressure to take land out of agricultural production with potentially detrimental consequences for the appearance of the countryside, the economic potential for Jersey agriculture and the degree of food security the Island enjoys. It is therefore of paramount concern to us that there are inadequacies, widely acknowledged, in the key piece of legislation that is supposed to protect that land. Consequently we welcome the proposed review of the legislation but encourage the Department to widen the scope of it to encompass both equine use of land and loss of land to domestic cartilage, both of which are contentious uses of agricultural land.
3. The proposal in the Draft White Paper to establish a system of land classification for agricultural land has not been well received by the industry. This may be down to the fact that many stakeholders appeared confused by its purpose having failed to be convinced of its merits by the Ministers responsible. As a result, we recommend that the proposed system of land classification should not be included within the Rural Economy Strategy 2011 – 2015.

4. Looking ahead, it is clear that although there are grounds for optimism regarding succession planning within the agriculture sector at present, the situation should be monitored and new entrants actively encouraged. With this in mind we encourage the Ministers for Economic Development and Planning & Environment to liaise with the Minister for Education, Sport and Culture in order to address the anomaly in funding that we identified for 16-18 years olds to attend agricultural college, for which at present there is no automatic funding.
5. Although we acknowledge the need for an operational five-year plan, we believe it is now necessary to provide the agriculture sector with the long term vision to face the major challenges that cannot be adequately addressed within such a time-limited framework. These issues include: climate change; the energy gap; food security; and ever increasing global competition. We encourage the Ministers to establish an annual conference with the sector to discuss, debate and draft a long term vision for the rural economy of Jersey.

4. Key Findings

4.1 There was inadequate review / evaluation by the Rural Economy Section of the performance against the measures of progress' of the Rural Economy Strategy 2006 - 2010. 7.1.8

4.2 The document made available to the Sub-Panel detailing performance against the measures of progress was incomplete. Furthermore, this information was not made available to the public. 7.1.9

4.3 There are two Ministers with primary political responsibility for the rural economy, the Minister for Economic Development (economic matters) and the Minister for Planning

& Environment (environmental aspects). However, it is clear that a significant number of stakeholders feel the agricultural industry and the rural interest lack a political champion'. 7.2.7

4.4 The Minister for Economic Development believes that all elected States Members are champions of Jersey's key industries including agriculture. 7.2.8

4.5 Although not strictly part of the Rural Economy Strategy Review, issues were identified given the lack of a clear separation between administration and regulation. 7.2.10

4.6 Overall the Rural Economy Section conducted an effective consultation exercise and communicated effectively with the Sub-Panel in support of the Scrutiny process, in development of the Rural Economy Strategy 2011 - 2015. 7.3.5

4.7 As a result of the way the Draft Rural Economy Strategy 2011 – 2015 was constructed, the marine and fisheries industry was not drawn into the consultation process. 7.3.6

4.8 There was limited financial information supplied at Green and Draft White Paper stages, which has made it very difficult for stakeholders to comment with any degree of certainty on the measures proposed. 7.4.5

4.9 There is continued and mounting pressure to take land out of agricultural production with potentially detrimental consequences for the appearance of the countryside, the economic potential for Jersey agriculture and the degree of food security the Island enjoys. 8.1.13

10. There is wide acknowledgment of certain inadequacies of the  Agricultural  Land (Control of Sales and Leases) (Jersey) Law 1974 to the extent that it will be extensively reviewed as part of the Rural Economy Strategy 2011 – 2015. 8.1.14
11. Equine use of agricultural land as a bona fide agricultural activity is a highly contentious issue, with some regarding the loss of land from production as unacceptable and others defending its legitimacy as an economic activity in its own right. 8.1.22
12. The increasing loss of agricultural land to domestic curtilage is of major concern to the agricultural sector. 8.1.27
13. There is insufficient attention and detail given to the issue of food security within the Draft White Paper. 8.1.34
14. There appears to be some confusion amongst stakeholders, from the evidence received, about the purpose of the proposal to classify land. 8.2.10
15. The Ministers responsible have failed to convince many stakeholders of the need for a system of land classification as outlined in the Draft White Paper. 8.2.11
16. The glasshouse industry remains mainly in a state of under-development or neglect brought on by a lack of support for continued production on the one hand and the hope of potential gain by redevelopment on the other. 8.3.11
17. The Rural Economy Strategy 2011 – 2015 seeks to increase the regulation and recording of farming practices affecting the environment. 8.4.7
18. Opposition to the proposals to introduce Codes of Good Agricultural and Environmental Practice (CGAEP) and Environment Plans was largely on the grounds of the overlap with (more demanding) standards applied by major commercial purchasers of farm produce. 8.4.8

19. Farmers are paid by the Transport and Technical Services Department to receive its green waste for use as a fertiliser and soil conditioner. 8.4.17
20. Opinions are divided as to whether farmers should be funded by the States to accept its green waste. 8.4.18
21. There is concern amongst the agricultural sector as to the compliance issues arising from using the green waste produced by the Transport and Technical Services Department. 8.4.19
22. The present method of disposing of green waste is a cost to the public purse. 8.4.20
23. The Sub-Panel acknowledges the argument in favour of parity in both the level of and nature of support given to farmers in the EU and Jersey, and consequently it appears logical to maintain an area based decoupled payment. 9.1.14
24. A major concern about the Rural Initiative Scheme is its apparent lack of transparency. In addition, there are concerns about scheme administration. 9.1.27
25. The effectiveness and value of the Countryside Renewal Scheme can only be judged in the context of funding proposals that are not made available in the White Paper. 9.1.36
26. Promoting efficiency in dairy production by directly subsidising animal breeding, costings and milk recording has been useful in achieving goals set out in the Roadmap vision for the future of the dairy industry in Jersey. 9.1.48
27. The results of performance recording are used to provide comparative data for farmers and for use by industry representatives and by government. 9.1.50
28. The viability of dairy production in Jersey depends on maintaining throughput at the new dairy at least at current levels. This means that almost total current farmer loyalty to the Jersey Milk Marketing Board and the supply of at least current levels of fresh milk from the new dairy is a prerequisite of the Jersey Milk Marketing Board's business plan. 9.1.61

29. Wholesale and retail milk prices in Jersey are well above those in France or the UK. The Jersey Milk Marketing Board could seek to increase prices to substitute for the loss of Quality Milk Payment, but this carries with it certain risks for Jersey Dairy including possible calls for the importation of fresh milk. 9.1.62
30. There is overlap in function between the Rural Economy Section administering the Rural Initiative Scheme and Jersey Enterprise providing general support and business advice for Small to Medium Enterprises (SMEs). 9.1.70
31. There is little or no demand from the agricultural industry for formal adoption of risk management planning. 9.1.78
32. The management of disease risk by the use of appropriate regulatory measures by government is in the interests of the whole of the agricultural industry and consumers. 9.1.80
33. The States of Jersey has neither the resources nor the need to sponsor stand alone agricultural research unless the problems under investigation are specific to the Island. 9.1.90
34. The proposed withdrawal of Jersey Product Promotions Limited (JPPL) funding from 2013 as outlined in the Draft White Paper has been much criticised, and the success of JPPL and Genuine Jersey appear to have provided a solid case for continued funding. 10.1.11
35. Licensing supermarkets operating in Jersey by seeking to control their sourcing of product is neither feasible nor desirable in the context of offering free consumer choice. 10.2.3
36. The costs of import and export were raised as an area of concern for the agriculture sector. 10.3.4
37. Awareness of agriculture and wildlife is important in maintaining public appreciation of the value of the countryside. Farmer's groups, schools and organisations such as the Royal Jersey Agricultural & Horticultural Society, Jersey Farmer's Union and National Trust for Jersey can all play their part in continually raising awareness. 11.1.8

38. There is a tension between organisations that see public access as being necessarily as of right and farmers and landowners who prefer it to be on a discretionary basis. 11.1.17
39. There is some disagreement amongst stakeholders regarding where, and by which organisations, allotments should be managed. 11.1.26
40. The Draft White Paper identifies succession planning within the rural economy as an area for concern but this view was not shared by some key industry stakeholders. 11.2.15
41. Whilst there is some concern about an ageing farm population and lack of successors on farms there is confidence amongst the farming organisations that whilst the industry remains buoyant and profitable young people will come forward. 11.2.16
42. There is an anomaly in the absence of States of Jersey funding to support young people wishing to study at agricultural college overseas post-16 years of age and pre- University. 11.2.22

5. Recommendations

1. The performance of the Rural Economy Strategy 2010 – 2015 against published Key Performance Indicators (KPIs) should be monitored annually. The annual results should be made available publicly, be well publicised and discussed with all stakeholders at an annual conference. 7.1.10
2. An annual full stakeholder conference should be established by the Rural Economy Section to discuss, debate, draft and update a long term vision for the rural economy of Jersey and to discuss and resolve ongoing and emerging issues. 7.1.11
3. The Ministers for Economic Development and Planning & Environment must present a clear signal to the agricultural industry that they are championing its cause within the States Assembly. 7.2.9
4. Consideration should be given by the responsible Ministers to establishing a clear separation between administrative and regulatory functions. 7.2.11
5. Jersey's marine and fisheries industry should not be included within the Rural Economy Strategy. It warrants its own comprehensive strategy which should be developed by January 2012. 7.3.7
6. Indicative financial information should be provided alongside content to illustrate White Paper proposals. 7.4.6
7. The Sub-Panel welcomes the Review of  Agricultural Land (Control of Sales and Leases) (Jersey) Law 1974, which should include the effectiveness and equity of the application of the legislation with the aim of broadening its scope and tightening definitions of what constitutes non-agricultural use. 8.1.15
8. The responsible Ministers must thoroughly examine the use of agricultural land for equine use and, although no evidence was received on the matter, leisure and sport use, as part of its Review of Agricultural Land (Control of Sales and Leases) (Jersey) Law 1974 and considered in future strategies. This Review must include an evaluation of the case for the introduction of a Register of horses and a Register of land used for equine purposes. 8.1.23

9. The responsible Ministers must thoroughly examine the use of agricultural land for domestic curtilage as part of its Review of Agricultural Land (Control of Sales and Leases) (Jersey) Law 1974. 8.1.28
10. The responsible Ministers need to address the issue of food security and produce a strategy and long-term vision for Jersey in consultation with the industry and the public by January 2012. 8.1.35
11. The proposed system of universal land classification should not be included within the Rural Economy Strategy 2011 – 2015. 8.2.12
12. The Rural Economy Strategy should not be advocating partial or enabling development until all other options have been exhausted. 8.3.12
13. A set of minimum standards for environmental compliance by all Island agricultural producers should be developed by the Rural Economy Section, taking into account those standards demanded by commercial purchasers of farm produce so as to avoid unnecessary duplication and the expense of developing the standard and enforcing compliance. 8.4.9
14. The Rural Economy Section should liaise with Transport and Technical Services Department to ascertain whether improvements could be made, and the necessary analysis undertaken, to make green waste more acceptable to the agriculture industry. The results of this should be publicised and shared with the industry. 8.4.21
15. The Rural Economy Section, Transport and Technical Services Department and the agriculture sector should work together to make the best use of this valuable resource (green waste). 8.4.22
16. The Sub-Panel supports the Draft White Paper recommendation to undertake a review of rural sector funding in Jersey, vis á vis the EU in general and Single Area Payments in particular. 9.1.15
17. The States of Jersey should continue with Single Area Payments but the relevant Ministers should seriously consider whether the mechanism of the payment provides the best use of funds in supporting the Jersey farmer. This Review should consider whether applying equivalent, if not exactly identical, support to EU counterparts is a

better mechanism than following CAP policy instruments just in order to achieve parity. The work should be undertaken in full consultation with the industry and a Report published by August 2013 in time for inclusion in the Rural Economy Strategy 2016 – 2020. 9.1.16

18. The Sub-Panel welcomes the proposed continuation and widening of the remit of the Rural Initiative Scheme, but with stricter funding allocation, greater transparency, a need to clarify criteria for eligibility for potential applicants and the publication of an Annual Report. 9.1.28
19. The Sub-Panel supports the continuation of the Countryside Renewal Scheme but agrees that the proposed Review is required. The Review should include proposals on how to introduce greater transparency on funding proposals and allocation. 9.1.37
20. As with the Rural Initiative Scheme, an Annual Report of the Countryside Renewal Scheme should be published detailing the grants made and the reasons for these. 9.1.38
21. In order to be justifiable, dairy services should become self-financing. 9.1.49
22. Recording of certain financial information from the dairy industry should still be supported by Government in order that performance in the industry can be evaluated against targets towards the industry becoming self-supporting under the Roadmap plan. However, milk recording and cattle breeding services should cease to be subsidised as recommended by the Draft White Paper. 9.1.51
23. The Sub-Panel considers there is merit in phasing out the Quality Milk Payment. Consideration should be given, by the Ministers responsible, to creating a cut off point in terms of the number of cows eligible and progressively reducing this over time rather than progressively reducing the level of payment per cow (as proposed in the Draft White Paper). This has the merit of protecting the most vulnerable smaller producers from the full effect of the cuts whilst at the same time placing emphasis on milk production rather than cow numbers as a means of maximising returns. 9.1.63
24. The Sub-Panel accepts that a phased withdrawal of the Quality Milk Payment is desirable but believes that as a priority proper analysis should be undertaken as to

the implications and to ensure that performance improvements necessary to substitute for the payment are realistic and achievable. 9.1.64

25. The Sub-Panel supports the Draft White Paper's call for a review of business advice and suggests that business advice should be consolidated and more clearly demarcated. 9.1.71
26. The Draft White Paper proposal (PR31) to provide evidence of use of risk management measures as a condition of receipt of grants and subsidies is unnecessarily prescriptive and should be removed from the Rural Economy Strategy. 9.1.79
27. Animal diseases are far more containable in Jersey than would be the case either in Continental Europe or in the UK, making an exceptionally high health status a realistic and worthwhile aim. The Rural Economy Section should ensure that the maintenance of exceptionally high health status is a priority goal thus benefiting the marketing of Jersey produce. 9.1.81
28. The Sub-Panel supports the Draft White Paper's recommendations to provide some support for the Plant Health Laboratory and a Priorities Board to focus small scale research funding, but with the remit to address specific cases of need in Jersey. 9.1.91
29. The Ministers should undertake a Review of the benefits and disadvantages, from a farmer's perspective, of Jersey formally entering the European Union. 9.1.92
30. Jersey Product Promotions Limited funding should not be withdrawn by the Rural Economy Strategy 2011 - 2015. 10.1.12
31. Sourcing of local produce should be achieved based on availability, quality and promotion rather than restriction through licensing. Local supermarkets should be actively encouraged by the relevant Ministers to source from Jersey and support the Genuine Jersey marque. 10.2.4
32. The relevant Ministers should consult all parts of the agriculture industry regarding its concerns with the problems associated with importing and exporting goods and publish their findings. 10.3.4

32. The Sub-Panel supports the Draft White Paper recommendation to promote Community Supported Agriculture and other schemes to raise awareness and understanding of the rural economy but suggests that formal measures may not be necessary to meet the broad aims. 11.1.9
33. The provision of allotments should be encouraged by Government but the management of provision should be left to non-Governmental organisations and interest groups. 11.1.27
34. Although there are grounds for optimism regarding succession planning within the agriculture sector at present, the situation should be monitored and new entrants actively encouraged. 11.2.17
35. The relevant Ministers should formally approach the Minister for Education, Sport and Culture with a view to addressing the student funding anomaly. 11.2.23

6. Introduction

1. Jersey's countryside is widely acknowledged to be a vital asset. The importance of Jersey's unique rural environment, both directly and indirectly, to its economy, culture and heritage should not be underestimated. However it is a dynamic working countryside which has to respond to economic and social pressures, some of which may conflict with each other and some of which may just provide benefits for private individuals or companies without being in the wider public interest. As a result the Rural Economy Strategy aims to influence the way the rural economy develops to maximise the benefits for all recognising that the choices we make today will shape the character of the Jersey countryside for tomorrow.
2. The Rural Economy Strategy (RES) is a five-year strategy with the aim of growing the rural economy in line with the objectives of the States Strategic Plan, whilst protecting and enhancing Jersey's countryside. The RES was adopted as States policy in June 2005 and implemented on 1st January 2006 for a five year period ending 31st December 2010. Most significantly, the RES 2005 - 2010 marked a significant shift away from production-based agricultural and horticultural subsidies to a system of support where production is decoupled' from the receipt of subsidy payments. As part of this process support was also targeted at diversifying farming business income through adding value to farm produce and encouraging non-agricultural activities. Funds were also directed towards encouraging farmers to provide public benefits by undertaking measures aimed at, for example, improving public access to the countryside or benefiting wildlife. This shift in emphasis away from production support towards decoupled forms of support mirrored changes taking place in the EU and other parts of the world.
3. The RES 2011 – 2015 is due to come into effect on 1st January 2011 subject to States approval. The Issue and Options Green Paper was launched for public consultation in March 2010 followed by the release of the Draft White Paper in July 2010. The Final White Paper is scheduled for lodging in late October 2010. The RES 2011 – 2015 seeks to build upon the previous RES and, in general, attempts to reduce the sectors reliance upon Government financial support whilst enhancing alternative forms of States assistance. It represents in general a continuance and an extension of the decoupled and broadened approach to agricultural and rural policy of the 2005 - 2010 RES.
4. The Economic Affairs Panel agreed in January 2010 to form a Sub-Panel to examine the performance of the Rural Economy Strategy 2005 – 2010 and to assess the proposals for

the Rural Economy Strategy 2010 – 2015. Deputy R G Le Hérissier agreed to join the Sub- Panel with Deputies C F Labey and D J A Wimberley.

5. The Sub-Panel commenced its Review in March 2010, and set about gathering the views of stakeholders and the public, starting with an advertising campaign in the Jersey Evening Post. The Sub-Panel wrote directly to stakeholders of the rural economy for their views using a list supplied by the Rural Economy Division. Public Hearings were held with the Minister for Economic Development and the Assistant Minister for Planning and Environment, as well as with the Jersey Farmers' Union, National Trust for Jersey, Jersey Product Promotion Limited, Albert Bartlett Limited, Royal Jersey Agricultural & Horticultural Society and Jersey Milk Marketing Board, Channel Islands' Co-operative Society, Mr D.Richardson of Morville Farm, Jersey Royal Company Limited, and Skills Jersey. The Sub- Panel undertook site visits to: DEFRA, Albert Bartlett Limited, Jersey Dairy, Classic Herd Limited, Field Farm, Me and the Farmer Limited, and Holme Grown.
6. All of the evidence that the Sub-Panel has gathered and considered; the background information, the public hearing transcripts and written submissions that led to its findings and recommendations outlined below can be viewed on the Scrutiny website at www.scrutiny.gov.je or by contacting the Scrutiny Office.

7. Development of the Rural Economy Strategy 2011 – 2015

1. Reviewing the Rural Economy Strategy 2005 - 2010

1. The Rural Economy Strategy 2005 - 2010 contained a list of measurements of progress against which the performance of the strategy could be assessed. Accompanying this list was a commitment to conduct a full review of the strategy in 2009 to ascertain if the outcomes outlined had been achieved.

1

2. Following its request the Sub-Panel was supplied with a breakdown of performance against the measures of progress' from the 2005 RES (See Appendix), which covered a number of the measurements. However, it was not comprehensive and, more importantly, was not publicly  available  as  the  Sub-Panel  would  have  expected  given  its  importance  for

1 Rural Economy Strategy: Growing the Rural Economy 2005

stakeholders to be able to judge the current policy's effectiveness during consultation on the draft proposals for 2011 and beyond.[2]

3. In terms of the Department's view of the impact of the RES 2005 we heard from the Minister for Economic Development who, after acknowledging that there is always room for improvement, pointed out the positive economic impact that he felt could be attributed to the RES 2005:

If you look, for example, at G.V.A. (Gross Valued Added), you see a year on year increase over the period 2005 to date and I think that is an encouraging point and there are a number of other indicators which show that perhaps the strategy, as I would have hoped, and I believe, is going to deliver.'[3]

4. We heard from a number of stakeholders that the RES 2005 was largely felt to have been a positive step for the industry.[4] These included the President of the Jersey Farmers' Union who told us that:

I think it has generally been successful in as much as we still have a very vibrant farming industry. There is a lot of optimism in the growing sector. Rentals for land have increased so there is obviously a demand for land and the industry is moving forward. So I think you could say it has been a success. There are always areas where it could be improved.'[5]

5. In addition we also heard from the Chief Executive Officer, R.J.A.&H.S who informed us that there was a lot about the Rural Economy Strategy 2005 - 2010 that was very good and which represented quite a major shift away from the previous policy. He concluded:

I think the industry was a bit circumspect about some of these shifts. But in hindsight they have not been bad, so there are a lot of good things in the current strategy.'[6]

6. It was, however, of some concern to us that whilst there was general satisfaction with the impact of the RES 2006 – 2010, this did not seem to be based upon the achievement against the performance measures because this information had not been made public in a clear, single source format. Rather they were based upon individuals' broad perceptions which, although indicitative, is not sufficient enough validation upon which to confidently plan a further five year strategy.
7. Furthermore the specific comments about satisfaction with the RES 2006 – 2010 seem to be  based  largely  on  the  improved  fortunes  of  agriculture  as  evidenced  by  increased competition for land, land rentals etc. which may not be something that the RES 2006 – 2010 should be taking the credit for. This prosperity may be caused as much by the efforts of farmers and the organisations who have sought to expand the market for Jersey farm produce  rather  than  any  specific  cause  and  effect  with  RES  measures.  However competition by farmers for land is also not the only criteria on which the success of the policy should be judged. But we were short of detailed analysis of performance against measures of success of the previous strategy.

7.1.8

Key Finding:

There  was  inadequate  review  /  evaluation  by  the  Rural  Economy  Section  of  the performance against the measures of progress' of the Rural Economy Strategy 2006 - 2010.

7.1.9

7.1.10

7.1.11

Recommendation:

An  annual  full  stakeholder  conference  should  be  established  by  the  Rural  Economy Section to discuss, debate, draft and update a long term vision for the rural economy of Jersey and to discuss and resolve ongoing and emerging issues.

2. Political Representation

1. The  Sub-Panel  learnt  that  within  the  agricultural  industry  there  is  a  split  in  political responsibility between the Minister for Economic Development (economic matters) and the Minister for  Planning  &  Environment,  who  has  ultimate  responsibility  for  environmental aspects. In addition the Transport and Technical Services Department is responsible for the abattoir.  At  a  political  level,  the  Ministers  for  Economic  Development  and  Planning  & Environment have delegated responsibilities to Assistant Ministers. The logic behind this split was explained by the Assistant Minister for Planning & Environment, Deputy R.C. Duhamel:

I think that is absolutely right. We have to realise that agriculture is a business and agriculture has to take place in the countryside and there are environmental considerations for that business so it is a bipartite function.'[7]

2. The Minister for Economic Development was asked when making decisions what kind of liaison there was between the two departments:

we view the importance of agriculture not purely in economic terms. That is why what I describe as the partnership that exists between Economic Development and Planning and Environment as key and there are ongoing discussions on areas where there is obvious crossover in decision-making which impacts environmental issues with economic impact and vice versa.'[8]

3. The Sub-Panel asked stakeholders whether they viewed as adequate the level of political championing of rural issues within the States. The President, Jersey Farmers' Union said:

Absolutely not. That is no disrespect to the present Assistant Minister ... There is nobody championing our cause whatsoever in the States. If there was, somebody would be having a go at vehicle registration duty, for example. When it first came in it was the President of the Committee of Agriculture who proposed a refund.'[9]

4. In addition the Chief Executive, National Trust for Jersey told us:

I am not aware that there is a leading light or champion.'[10]

5. He continued to explain that, in his view, rural affairs needed a bit more of a voice in government, which he thought it probably lacked at the present time. The Sub-Panel heard a different view from the Director, Jersey Royal Company, who, when asked whether the sector had a champion within the States, responded by questioning the need for one.[11]
6. The Sub-Panel asked the Minister for Economic Development whether he considered there to be a champion for agriculture within the States Assembly:

"Champion" is a word that is used a lot in many different industries. Yes.

The Deputy of Grouville :

Who would that be within Government?

Senator A.J.H. Maclean:

I would first of all hope that all elected Members of the States were the champions of our key industries and I think that is demonstrated by the obvious support we have seen, for example, in recent debates with regard to tourism. It was clear to me that discussions that went on within the House showed that many Members feel very strongly and I feel little doubt that the same applies to agriculture.

The Deputy of Grouville :

So 53 champions for agriculture?

Senator A.J.H. Maclean:

I would hope that there would be a significant number of elected States Members that would see the value, not just - and this is the key issue - of the economic input of agriculture to the economy but also the environmental and social aspects, which are so important. That is an underpinning factor as to why we pay certain grants and subsidies. It is not just for the economic return. It is also because it is essential that we have the countryside as an integral social part of what makes Jersey special.'[12]

7.2.7

7.2.8

Key Finding:

The Minister for Economic Development believes that all elected States Members are champions of Jersey's key industries including agriculture.

7.2.9

Recommendation:

The Ministers for Economic Development and Planning & Environment must present a clear signal to the agricultural industry that they are championing its cause within the States Assembly.

7.2.10

Finding:

Although not strictly part of the Rural Economy Strategy Review, issues were identified given the lack of a clear separation between administration and regulation.

7.2.11

Recommendation:

Consideration  should  be  given  by  the  responsible  Ministers  to  establishing  a  clear separation between administrative and regulatory functions.

3. Scope, Structure and Consultation

1. The Rural Economy is defined as the cumulative revenues from business activity derived from the use of agricultural land and the countryside'.[13] The RES 2011 – 2015 Draft White Paper is divided into three sections – Profit, People, and Environment. Matters covered within Profit include: Subsidies, development of local markets, and support for business growth  and  development.  The  section  on  People,  amongst  others,  addresses:  Skills development, Community Supported Agriculture (CSA), and access to the countryside. The Environment heading incorporates: land classification, legal protection of agricultural land, and proposals for glasshouses.
2. The two Assistant Ministers with delegated responsibility for rural affairs explained  that  the RES needs to enhance the economic, environmental and social value of the land  in  which the majority of rural economic activity is undertaken. They added that it must also take into account the needs and requirements of those who use, live and work in the countryside: rural policy must continue to take full account of society's expectations. In addition, they emphasised the point that profitability is essential to all businesses, however, the RES must move away from simply gauging its success in terms of costs, output and income. They argue that success needs to be based on increasing productivity in its broadest sense, with measures of environmental and social performance as well as financial indicators. As such:

sustainable  development  in  the  countryside  requires  rural  businesses  and government to consider a triple bottom line' – profit, people and environment.[14]

3. Given the definition given to the Rural Economy by the RES 2010 – 2015 Draft White Paper (see 7.3.1) the Sub-Panel was surprised to discover proposals covering fisheries and the marine environment. This point was also made by the Chief Executive, National Trust for Jersey who told us that:

It is quite odd, I suppose in some ways, that you have the fisheries in there, because that is the marine environment as opposed to the rural environment. So it seems  to  me  a  bit  of  an  odd  title  to  give  to  it,  when  really  its  focus  is  on agriculture... It just does not seem to tie up really.'[15]

4. Further questions were raised during the Draft White Paper consultation by the Jersey Aquaculture Association (JAA) that give further weight to this argument. The JAA claimed that, not only were policies regarding aquaculture that subsequently appeared in the Draft White Paper not included at all in the Green Paper, but that the industry had not been consulted at any stage during the strategy's development. Furthermore, the JAA has said that the Jersey Aquaculture Strategy (JAS) report to which some of the proposed policy makes reference, has yet to be seen by the industry, despite having been submitted to the Department by its consultants five months previously. In their view any policy commitment based on that report must be done with industry consultation and on an informed basis. To continue without doing so would not be acceptable to the Association's members.[16]

7.3.5

7.3.6

7.3.7

4. Lack of financial Information to support RES options and proposals

1. The Sub-Panel heard that the view of a substantial number of stakeholders was that the consultation process on the RES Green Paper was flawed because it did not include details of any financial information. The President, Jersey Farmers' Union acknowledged that it was normal States practice to develop a strategy but it seemed to him, particularly in this present climate, that some kind of financial information on what those options cost should have been included.[17] This point was reiterated by the Crop Agronomy Consultant working for Albert Bartlett Ltd:

There is no funding mentioned in the Green Paper, perhaps purposely, looking at the Economic Development Department's 2012 Business Plan. They are looking to slice another chunk off the rural economy budget.'[18]

2. The President, R.J.A.&H.S explained that in his view more financial information was critical to be able to comment on the Green Paper. For example, he cited the example of PR11 – Rural Initiative Scheme, saying that it was hard to comment on some £2.5 million of expenditure without more supporting information.[19]
3. When questioned about the distinct lack of financial information contained within the Green Paper the Minister for Economic Development responded:

My view is that with the Green Paper it was important to get as much out in the open as possible and have a meaningful and open debate. If you start costing things you start immediately people concentrating on the cost rather than the other benefits. I think the priorities then are not seen as appropriately and correctly as they should be. The White Paper is a time when you need to attach costs. At that point, clearly, it is going to be a far more meaningful process as we could afford.

The Deputy of Grouville :

So the White Paper will be costed?

Senator A.J.H. Maclean: Yes.'[20]

4. Despite these specific assurances the Sub-Panel has been frustrated at the continued lack of financial information in the draft White Paper. The Sub-Panel anticipated a breakdown of costings attached to each policy rather than having to wait for the inadequate Indicative Budget Forecast to appear on the final two pages of the document. We say inadequate because there is insufficient detail provided, breakdowns of previous grants awarded are not included, and the distinct lack of clarity regarding support programmes such as Countryside Renewal Scheme (CRS) when read in tandem with the relevant sections.

7.4.5

Key Finding:

There was limited financial information supplied at Green and Draft White Paper stages, which has made it very difficult for stakeholders to comment with any degree of certainty on the measures proposed.

7.4.6

Recommendation:

Indicative financial information should be provided alongside content to illustrate White Paper proposals.

8. Use of Agricultural Land and Protecting the Environment

1. Safeguarding the agricultural land bank

1. The legal context
2. There are essentially two main areas of Jersey law which cover the usage of agricultural land; planning legislation (e.g. the Island Plan) and specifically in relation to safeguarding the agricultural land bank The Agricultural Land (Control of Sales and Leases)(Jersey) Law, 1974.
3. The Island Plan (2002) provides a framework of policies and proposals for land-use planning for Jersey incorporating many relating to agriculture and the countryside generally. For instance, the areas (including agricultural land) designated as Green Zone are given a high level of protection with a general presumption against all forms of new development for whatever purpose, with the exception of enabling or linked development. Whilst the Island Plan offers a certain level of safeguards for agricultural land it should be seen in conjunction with the specific safeguarding provided by  The Agricultural Land (Control of Sales and Leases)(Jersey) Law, 1974.
4. Under The Agricultural Land (Control of Sales and Leases)(Jersey) Law, 1974 landowners are prevented from selling or letting the land for non-agricultural purposes, or to non-bona fide agriculturalists or smallholders. Agricultural land is defined under this law as land, including land under glass, used or capable of being used for any purpose of agriculture or horticulture, but does not include any dwelling house or outbuilding'. There are fewer controls on the activities which can take place on the remaining agricultural land falling outside the scope of the 1974 law nor any requirement for it to be occupied by an agriculturalist, merely for it to remain available' for agricultural use.
5. Changes proposed by the Draft White Paper
6. The RES outlines:

• Maintaining The Agricultural Land (Control of Sales and Leases)(Jersey) Law, 1974 in its present form
• The Agricultural Land (Control of Sales and Leases) (Jersey) Law 1974 will be

enforced through the Land Controls and Development Section, through routine monitoring of land use with appropriate action being taken where the law is

not being complied with. In addition, the criteria for smallholder and bona

fide agriculturalists will be reviewed including the right for ex bona fide agriculturalists and smallholders to continue to occupy agricultural land.

• The States of Jersey will investigate the possibility of extending The Agricultural

Land (Control of Sales and Leases) (Jersey) Law 1974 to incorporate all agricultural land currently not subject to the 1974 Law.

7. Is the 1974 law appropriate, effective and enforceable?
8. Concerns were expressed to us by a number of stakeholders regarding how appropriate, effective and enforceable the Agricultural Land (Control of Sales and Leases) (Jersey) Law 1974 is. The Chief Executive Officer, R.J.A.&H.S told us there has been a relaxation of that policy to enable landowners not necessarily to let land to bona fide agriculturists at all. He explained that:

... the 1974 Control of Sale of Leases Law is a clumsy piece of legislation and basically inherited land falls outside of its scope. It does not cover all of the agricultural land in the Island, which is why you can get this anomaly where on the agricultural returns the department can establish that there is an increase in agricultural land, which sounds counterintuitive but it does make sense because what is happening is more land is coming into the net of being controlled. It is not an increase in land ... it does not take a rocket scientist to wander around the Island and realise that land is coming out of agricultural production.'[21]

9. The Chairman, Jersey Milk Marketing Board explained;

I think it is fair to say that that particular law is now unenforceable and the question is should it be replaced with another piece of legislation or regulation.'[22]

10. We also heard from The Chief Executive, National Trust for Jersey:

you have a system in place to control your land usage, which does not apply to all land. So, until you sort that out you are going to have trouble safeguarding your land bank for agricultural usage.'[23]

11. The President, Jersey Farmers' Union summarised the industry's concerns:

We are concerned at the continual erosion of the land bank, if you like, the workable agricultural land which has been lost to all sorts of things. Building is one, amenity use is another, and domestic curtilages increasing in size, and it is frightening to see how much land is being lost. It is also being lost to horses, it is being lost to orchards which are considered commercial but in actual fact they are really put there to protect the property owner's land, so he has basically got an orchard as a garden. Yes, they harvest a crop of apples for La Mare vineyards or whoever but in actual fact it is not really farming and the economic activity from it is not what it would be as if it was in mainstream farming.'[24]

12. Given those concerns we asked the Assistant Minister, Planning & Environment whether the law needs updating:

I think the difficulty is that laws are not able to be applied retrospectively to certain conditions that did not apply previously.

The Deputy of Grouville : Should it be looked at now?

Deputy R.G. Le Hérissier:

Is your department pushing for an update of the law?

Deputy R.C. Duhamel: I do not know.'[25]

8.1.13

8.1.14

8.1.15

16. Equine use of land
17. In particular the Sub-Panel heard from a number of stakeholders who raised the issue of the increasing use of agricultural land for equine activities. The Chairman, Jersey Milk Marketing Board explained that there has been an acceleration in land being used for supposedly temporary occupation for horses but that the quality of fencing and stabling suggests a degree of permanence. He continued to articulate the effect on the rental price of agricultural land:

It is such a waste. It really is. It is forcing up rents, coupled with the competition for potato land between the two marketing groups, and the dairy industry has been left piggy in the middle. The worst thing of all, is that while we have got traceability of our cows, we have got traceability of sheep, we have got traceability of pigs, we have got traceability in our chickens, we are pretty close to having traceability of bees, but there is no traceability on horses.'

18. He went on to outline the frustration regarding the lack of protection under the existing legal framework:

I find it absolutely staggering that people can willy-nilly, on the basis of perceived wealth, just take over land and put a couple of horses on it.'[26]

19. The JMMB and R.J.A.& H.S called for the re-classification of equine use as non- agricultural.[27]
20. In contrast, the Sub-Panel received positive comments from members of the public regarding the occupation of agricultural land for equine activity. It was welcomed as an example of diversification of agricultural land use as well as forming an essential part of Jersey's heritage. Other benefits were outlined including:

• Helping to keep Jersey countryside green'
• Equine grazing produces natural' fertiliser which does not have the adverse effect on Jersey's water supply which results from the use of chemical fertilisers in intensive crop production
• Horses do not create an excess of demand for water, unlike, for example, the growing of potatoes where spraying has an adverse effect on water supplies at the most vulnerable time of year
• Horses bring pleasure to thousands of people on the Island, as evidenced by the popularity of the Race Club and Jersey Drag Hunt and other riding associations
• An insurance policy should the traditional farming industry suffer economic difficulty
• Complementarity with other business activities e.g. tourism
• Creation of local employment opportunities as compared with the heavy dependence of the farming industry on cheap foreign labour
• Creation of revenue generating businesses [28]

21. The Sub-Panel heard that the matter of equine use had arisen during lean times for the farming industry, when people were granted permission to erect stables and keep horses on agricultural land as demand for the land by farmers was low. However, it is questionable whether given the present health of the agricultural industry that arguments for equine to fill

the vacuum left by the retreat of agriculture really carry much weight. There was support for a register of horses and for a register of land used for equine purposes.[29]

8.1.22

8.1.23

24. Domestic curtilage
25. The Sub-Panel was informed of issues relating to the extension of domestic curtilage onto agricultural land. Amongst several concerns heard regarding the loss of agricultural land to domestic curtilage, the Vice-President, R.J.A & H.S explained that he saw:  

a lot of land going out of agriculture when properties are exchanged, when people buy houses they are paying a lot of money for propertiesand the last thing they want to do is farmers to be farming in the fields adjacent to where they are so. People are planting apple trees and it is not because they want to have apple trees there or that they have got a use for the apple trees. They just want to keep us away from their properties.'[30]

26. The  Assistant  Minister  for  Planning  &  Environment  acknowledged  that  the  Planning Department receives a lot of applications to extend their domestic curtilage from wealthy

individuals who want to incorporate the surrounding fields, fields which would then be lost to the sector.[31]

8.1.27

8.1.28

29. Food security
30. The Draft White Paper briefly outlines measures to address food security: continuation to support innovation within the Rural Initiative Scheme, conducting a processing infrastructure survey to encourage the reduction in useable waste, the provision of a high quality abattoir, and the establishment of a Jersey Food and Farming Partnership (JF&FP).
31. The Minister for Economic Development explained that the Department gives food security a high priority and the focus of the RES is to see more locally-grown produce available. However  it  is  necessary  to  remember  that  the  shift  away  from  supporting  agricultural production towards decoupled support has removed much of the financial incentive that could be applied to maintaining production. Therefore without questioning the sincerity of the Minister's support for food security and the availability of locally-grown produce the means at his disposal to ensure that this happens may not be all that powerful.[32]
32. We heard from stakeholders who identified food security as a pivotal issue to Jersey and expressed disappointment at the lack of attention given to an area of such importance within

the Draft White Paper. The Chairman, Jersey Milk Marketing Board, told the Sub-Panel that Jersey needs to decide whether it wants the capability to feed itself in the future.[33]

33. The Chief Executive, Co-operative Society explained that:

our food security at this moment in time is totally dependent on the U.K. In the context of that, I think it is incumbent on Government to recognise the vulnerability that  is  thereI  have  attended  sessions  with  the  Minister  for  Planning  and Environmentand you do not get any real sort of sense that there is any urgency or there is joined-up government, that there is any thought being put into that.'[34]

8.1.34

8.1.35

2. Land classification to assist land use planning

1. Jersey's soil and agricultural land has no classification system other than a subjective poor' or good' to identify the most productive areas. This is set to change under proposals in the Draft White Paper to introduce a land classification scheme. Amongst other things this will enable the identification of land suitable for commercial agriculture and can be used in conjunction with the Agricultural Land (Control of Sales and Leases) (Jersey) Law 1974.  
2. The Director, Environmental Management and Rural Economy stressed the importance of this proposed policy:

The land classificationis absolutely fundamental. If you do not know what the land is beyond the face value determination and what is the most appropriate use on an Island where you have to optimise land use ... and I think we are operating a little bit blindlyfarmers are resisting change a little bit and I think we already have some kind of very, very basic land classification system but it is nowhere near contemporary enough to deliver our management decisions.'[35]

3. The Department outlined that the purpose of the land classification system was to identify land and soil quality in Jersey, so that informed decisions can be made regarding the best use of one of the Island's primary non-renewable resources. Based on discussions with the National Soil Research Institute at Cranfield University the one-off project would be completed within twelve months at a cost of approximately £150,000.[36]
4. The introduction of a land classification system received support from the Chief Executive, National Trust for Jersey. He explained that planning applications are already passed for comment to agriculture advisers at Planning & Environment and it would be more appropriate and less subjective for those judgements to be made with reference to a classification system. He added that the Countryside Character Appraisal scheme already classifies Jersey land in terms of character, but he emphasised that the main advantage of a comprehensive land classification system was the introduction of a greater degree of rigour in controlling land usage.[37]
5. The Sub-Panel heard from a number of stakeholders who were opposed to the introduction of a system to classify all agricultural, environmental and amenity land. The JMMB & R.J.A.&H.S. described the land classification scheme as being not needed and additional, unnecessary bureaucracy.[38] The Director, Jersey Royal Company, when asked about the merits of a land classification scheme, said:

Why would you need a pile of bureaucrats to go around rating land? I mean, you can basically know what is good and what is not by virtue of what has worked and

what has not. You know, I think if somebody is mad enough to put a crop in it...there must be some return coming from it or it would not be done.'[39]

6. The Crop Agronomy Consultant, Albert Bartlett Limited, explained that the rental market for agricultural land already serves as an adequate classification scheme as it provides an excellent indicator of how land is valued and rated by the industry.[40]
7. The JFU in its submission outlined their total opposition to this pointless proposition' as they had not encountered anyone in favour or a valid reason for undertaking the work. They expressed surprise that the proposal was raised at all.[41]
8. The Sub-Panel understands that all agricultural land is valued and that the Department's proposed system is simply a scientific study of land quality to assist practitioners to make better informed decisions regarding use of land. However, further concerns were raised about the potential dangers of classifying agricultural land as it was felt this would lead to the unintended consequence of varying degrees of usefulness' being informally applied. In essence, explicitly identifying one piece of land as being of lesser quality than another may increase pressure to develop upon less useful' agricultural land with the consequence of the permanent  loss  of the  land  to  agriculture.[42]  It  was  felt  that  the  introduction  of  a  land classification scheme in the context of current pressures to develop would have a negative effect upon the retention of agricultural land for use by the industry.
9. Furthermore, the Sub-Panel also heard that the recently established website to promote the availability of agricultural land (replacing the system requiring landowners to advertise in the local newspaper) should be more widely promoted and allowed to prove itself. It was felt that this would further negate the necessity of introducing a land classification scheme.[43]

8.2.10

8.2.11

8.2.12

3. Derelict and redundant glasshouses

1. As a result of decisions taken by the industry and supported by the Rural Economy Strategy 2005, a number of glasshouses are now empty giving rise to potentially redundant sites. There  are  also  areas  of  dilapidated  glass  which  are  seen  as  having  potential  for development. However, it is essential that before glasshouses are allowed to be removed or developed,  consideration  should  be  given  to  the  needs  of  any  future  rural  economic enterprises.[44]
2. The Draft White Paper stipulates that modern glasshouses should be (in order of priority):

• Kept as production units
• Be given planning permission for other agricultural use
• Be returned to a green field site

3. Derelict or non-viable glasshouses should be (in order of priority):

• Given planning permission for other agricultural use
• Considered for partial development to fund the cost of returning to a green field site
• Returned to a green field site

4. The Minister for Economic Development told the Sub-Panel:

I think that in many respects people look at a glasshouse site ... and we do sadly see them around the Island falling into disrepair, because the owners feel that it is one step towards moving it to building. I do not think you should necessarily view it as such. They were given originally planning permission to put the glasshouse up

on agricultural land as an agricultural entity and it should be returned where possible to agricultural use.'[45]

5. We also heard from the Assistant Minister for Planning & Environment who told us that, although he had not seen very many that had been returned to agriculture, it did not follow that the Department was not of that mind. He informed us that, personally, he thought that all glass that had been used for agricultural purposes possessed a further economic value which may well be related to agriculture:

I would much rather pursue a course of action that kept the structures as glasshouses and allowed a semi-agricultural or light industrial use to take place within those structures rather than putting them into residential complexes or something else.'[46]

6. The Department received support for its proposals regarding modern and derelict / non- viable glasshouses from, amongst others, the JMMB / R.J.A & H.S. and the JFU on the proviso that land was returned to agriculture. However, the JFU made the point that it felt the States had been somewhat short-sighted in withdrawing support for the glasshouse sector.[47]
7. This view was backed up by a number of stakeholders including both Beauvoir Nurseries ( Grouville ) Limited and Fauvic Nurseries Limited who were both highly critical of what they regarded as the catastrophic impact the previous RES had upon the glasshouse sector.[48] Indeed, whilst speaking of the mutilation' of the sector, Beauvoir Nurseries told the Sub- Panel they did not hold out much hope with the Department's approach in 2010:

Having studied the Green Paper, it is quite obvious that you have totally deserted the Glasshouse Industry in its entirety. There are only TWO references to the Glasshouse Industry in the whole document, and they are not very good at all. You only talk of derelict and redundant glasshouses! There is no positive direction for the glasshouse industry stated'.'[49]

8. An example of glasshouse regeneration that it might be argued demonstrates that the retention of glasshouses is not a lost cause, was provided to the Sub-Panel by the Chief Executive, Channel Islands Co-operative Society. Talking about a grower who had lost a contract to supply a UK supermarket with tomatoes, he said:

He then had a problem with fairly significant, reasonably good quality and fairly modern greenhouses: "What do I do with them?" So he wandered into my office one dayHe sat down and he said: "Can I grow you a few strawberries, Jim?" I said: "Well, yeah." I said: "We have got an outdoor strawberry producer that supplies us. As long as it complements what he is doing, you can grow us a few strawberries." This was probably in the autumn in October time or something like that. He phoned me up just before Easter and he said: "Do you want to come up and see your strawberries?"we went upand he had two greenhouses there the size of football pitches full of strawberry plants"What the hell have you done? I mean, you have cornered the world strawberry jam market. There is no way under the sun we are going to clear all these strawberries." But we did.'

9. He continued:

The lesson in that is that, you know, that was a crop where, previously, we had probably bought about 10 per cent of our annual demand locally. He now supplies probably 70 per cent of our total annual demand. We exported strawberries to Guernsey. We bring mushrooms, for instance, in from Guernsey to Jersey so it is a 2-way trafficHe had to invest some capital and he also had to invest a lot of time and effort to learn how to grow strawberries because he had never done it before but we sell the best and the freshest strawberries in the world now and we sell them in vast quantities. He makes a good profit out of it and my customers get a first class deal.'[50]

10. We heard from the National Trust for Jersey which is generally opposed to partial or enabling development, such as that proposed for derelict or non-viable glasshouses. Commenting generally about partial or enabling development the National Trust for Jersey told us that:

The Trust is unable to support this policy given the potential implications for the rural environment. It is also difficult to understand how this policy is compatible with the ethos of the agricultural industry being custodians of the countryside.

The Trust believes that over the years the agricultural industry has benefited from several planning concessions and it remains unclear as to whether this has truly helped to secure the long term future of the industry and by default protect Jersey's countryside i.e. the rural asset. The Trust would therefore suggest that a review should be undertaken to assess what has been achieved to date before any further concessions are granted.[51]

8.3.11

8.3.12

4. Environmental issues

1. Increased environmental regulation and cross compliance
2. In order to protect the natural environment and biodiversity of Jersey, as well as to honour international commitments, the Draft White Paper proposes the development of a range of measures including Codes of Good Agricultural and Environmental Practice (CGEAP) and individual Environment Plans for farms.
3. Codes of Good Agricultural and Environmental Practice (CGEAP) are practical guides to help farmers and growers meet their legal obligations. They explain the legislation and provide advice on best practice. Implementing the advice contained within CGEAP ensures that environmental impact is minimised whilst allowing agricultural development to continue. It is proposed that documentary evidence of compliance with CGEAP is made compulsory

for those receiving States financial support.[52] The key features of the proposed Environment Plan are detailed in Section 8.4.12.

4. The proposals to reduce the effects of farming upon the environment through CGEAP and Environment Plans have been greeted favourably by the Jersey Farmers' Union. They emphasized that farmers were aware of the need to reduce to a minimum their effect on the environment  and  were  fully  in  agreement  with  the  introduction  of  Environment  Plans. Nevertheless, they wanted to ensure that farmers could continue to access the Countryside Renewal Scheme (CRS) to assist compliance with such measures.[53]
5. The Sub-Panel encountered some resistance to the introduction of further environmental measures with the JMMB / R.J.A. & H.S. suggesting that suppliers were already subject to industry-leading standards demanded of them by, for instance, large UK supermarkets. Any attempt by Jersey to introduce its own system of standards would be seen as unnecessary duplication:

If you sell your produce to a multiple retailer or through any form of marketing scheme, if you have your farms ... it is not "if", we all have to have our farms inspected to various protocols, and I think we could deliver a lot of the cross compliance objectives through that form of inspection rather than having to go through yet another system of bureaucracy.'[54]

6. The view that Jersey could simply adopt industry standards rather than re-inventing the wheel at taxpayer's expense was raised by the Jersey Royal Company.[55]

8.4.7

8.4.8

8.4.9

10. Nutrient Budgeting and green waste compost
11. Green waste is composted garden waste and is produced by an open windrow system at La Collette. Farmland is often viewed as a place of disposal for organic manures. There is little evidence of organic manures being taken into account by Jersey farmers when undertaking nutrient budgeting, which could lead to unnecessary fertiliser use.
12. The Draft White Paper indicates that the States of Jersey will support the voluntary use of green  waste  compost,  promote  best  practice  and  introduce  nutrient  budgeting  and management planning into the proposed Environment Plans to ensure:

• That the nutrient value of wastes and manures are correctly calculated to reduce the risk of diffuse pollution  
• That waste is turned into a useful material i.e. a fertiliser  
• Improved soil structure (soil conditioner)  
• Nutrient availability (low risk of pollution compared with slurry used as fertiliser)  
• Less environmental impact (lower leeching if applied at correct time to maximise the use of nutrients)  
• Disease suppression  
• Less artificial fertiliser imported

13. The  Director,  Environmental  Management  and  Rural  Economy,  explained  that  the Department had consulted the industry on the issue of green waste.[56]
14. The Sub-Panel heard broad support for the principle of green waste but concerns were expressed  regarding  its  suitability  for  agricultural  use  as  it  does  not  possess  the accreditation for compost demanded by a lot of the industry's customers.[57]
15. The Sub-Panel received a submission to its Call for Evidence from the Environment Scrutiny Panel who regarded paying farmers to accept green waste as a subsidy to the agricultural industry. They suggested consideration should be given to linking use of green waste to receipt of single area payments.[58]
16. This view was countered by the Director, Environmental Management and Rural Economy, who suggested that payments to farmers for accepting the green waste were a cost effective way of waste disposal. He acknowledged that the benefits were not universally accepted and outlined his view that the Department should not be insisting it was used by farmers.[59]

8.4.17

8.4.18

8.4.19

8.4.20

8.4.21

8.4.22

9. Subsidies and Financial Support

9.1  The case for government financial support for the Rural Economy Strategy

1. Although neither part of the United Kingdom, or the European Union, Jersey does have a relationship with the EU which is governed by Protocol 3 to the UK's Act of Accession 1972. In practice this means that whilst Jersey remains outside the EU and, therefore, the Common Agricultural Policy, the Island is regarded as being inside for the purposes of trade in goods.
2. Consequently, all subsidies and programmes to support agriculture are provided by the States of Jersey. The States of Jersey provides a wide range of subsidies and programmes to support its agricultural sector, many of these programmes were designed to mirror' those provided within the EU e.g. Single Area Payment (SAP), whilst others are reactions to local circumstances e.g. Quality Milk Payment (QMP). The type of payments and their amount parallels developments in the Common Agricultural Policy and its application in the UK, partly in order to ensure that Jersey farmers do not find themselves at a competitive disadvantage to those in what is the main market for Jersey produce. This is for practical reasons and to honour an understanding arrived at on UK accession in 1973. The competitiveness argument, and the need for parity, forms the most important part of the case for the financial support behind many of the measures included within the RES 2010 – 2015.
3. The application of the Common Agricultural Policy varies considerably between EU Member States and even within EU Member States. The UK and France are at opposing ends of a spectrum in their desire to implement reforms of the CAP. Consequently, France has retained a number of support elements that are still linked to production. The UK has taken the decoupling process as far as it was permitted. The UK has made agri-environment its main priority under Pillar 2 (the Rural Development part of the CAP). In France there is less emphasis on this but more on measures to assist the competitiveness of agriculture and extracting greater added value to farm produce. It would seem that that Jersey has chosen to most closely mirror its approach on that taken in the UK. But to the extent that support such as the Quality Milk Payment does still exist and there is a desire to promote the brand image of Jersey produce and capture more value from processing and marketing, Jersey has, consciously or sub-consciously, taken on some of what might be seen as French'

priorities. Given the good geographical access to both markets taking something from each as an influence on how agriculture is supported may make good sense.

4. The Director, Environmental Management and Rural Economy explained that the Rural Economy Strategy 2006 – 2010 was the first attempt to realign Government's relationship with the agriculture sector. He outlined the need to understand the differences between Jersey and the UK in terms of rural development and agri-environment programmes.

where we have got to so far is we have got a similar scheme to the single farm payment in the U.K. We have got a similar scheme to the environmental stewardship in the U.K. We have got a similar set of schemes around rural initiative and business development and innovation within the U.K.'[60]

5. He went on to explain that the overriding basis for justifying support payment schemes is that they must provide a range of benefits not simply a contribution to Gross Value Added (GVA).
6. Single Area Payment (SAP)
7. The Draft White Paper maintains that the Single Area Payment (SAP) underpins farming activity in Jersey and attempts to ensure that the unique character of the countryside is maintained, by purchasing public goods and services'. Introduced by the RES 2005, it replaced production led subsidies, decoupling production from subsidy, in order to discourage crops being grown for the subsidy they attracted. This is seen to encourage market led diversification into crops and livestock, some of which previously received no subsidy.
8. The SAP is comparable with area payments under the Single Payment Scheme (SPS) within the UK.
9. Receipt of the SAP is conditional on farmers meeting certain standards and levels of environmental performance including: Codes of Good Agricultural and Environmental Practice (CGAEP), the provision of annual financial returns and the submission of an annual Farm Manure and Waste Management Plan.

10. The stated aim of the Single Area Payment is to:

• Purchase, on behalf of the public, a baseline level of environmental protection for soil, water and key habitats
• Underpin a minimum level of agricultural activity, in recognition that the way the rural landscape and countryside looks is in large part a by-product of farming activity and that there would be a higher cost in providing this benefit by other means
• Encourage farmers to produce products that are required by the market and in doing so, reduce the need for public support
• Provide an area payment that is similar to that received by EU and UK farmers, so that Jersey farmers are not put at a competitive disadvantage in their export markets.[61]

11. The Draft White Paper seeks to extend cross compliance measures necessary to receive SAP to include the requirement to produce an Environment Plan. The Environment Plan will include mandatory items such as:

• Resource Protection plans, implementing the provisions of the Water, Soil, and Air Codes
• Implementing Animal Welfare Codes
• Producing an annually updated Farm Manure and Waste Management Plan
• Producing an annual crop nutrient budget
• Completing a map of the holding identifying important environmental features and a record of their current condition
• Energy audits[62]

12. In addition, the States of Jersey will undertake to compare rural sector funding in Jersey with support available within the European Union. This review will include:

• The rationale and benefits of a Single Area Payment in Jersey
• Options for modulation of area payments into broader rural development measures
• Levels of environmental compliance

• Industry assurance schemes to audit levels of environmental performance with a view to, where possible, avoiding duplication in the Environment Plan

13. The Chief Executive, National Trust for Jersey emphasised the importance of the Single Area Payment being used to support the overall strategic objectives of the Department for the  agriculture  sector.  He  commented  on  the  impact  of  the  SAP  on  land  rental  and questioned whether the States should be subsidising profitable industries:

I think it is important that the Single Area Payment supports the overall objectives of the Environment Department in terms of its agricultural strategy and we are not just ... and then we do not just end up simply paying for someone to do a certain type of farming, which actually could stand well on its own two feet, and what it simply does that payment is that then it just gets fed into the rental figures, and the land rental figures simply increase and you are not really getting any benefits. I think  Single  Area  Payment  has  to  be  seen to  be  supporting  elements  of  the industry, which justify needing support.'[63]

9.1.14

9.1.15

9.1.16

17. Rural Initiative Scheme
18. The  Rural  Initiative  Scheme  is  designed  to  promote  growth  in  the  rural  economy  by supporting diversification, enterprise, energy efficiency and innovation. Before 2005 there had been declines in both the use of agricultural land and land rental values resulting in low levels  of  profitability  within  the  entire  industry.  Hence  there  was  a  perceived  need  to encourage additional income earning by adding value to farm produce and by integrating non-agricultural enterprises.
19. It was identified that new ventures would be crucial in reversing the decline in use of agricultural land. It was also identified that agricultural businesses attempting to diversify would represent a high investment risk for banks, be hampered by a high level of debt due to poor levels of profitability, and have insufficient equity against which to secure borrowing.
20. In order to secure grant funding, new and existing businesses must submit business plans which demonstrate how they will:

• Develop new markets and services
• Add value and reduce costs
• Improve productivity
• Enhance employment and improve skills
• Not displace existing Jersey businesses
• Not have an adverse impact on the environment[64]

21. The RES 2011 – 2015 proposes to develop the Rural Initiative Scheme in order to take into account the new challenges facing the rural economy, including the provision for the development of new markets, vocational training and grants to promote the development of best practice. It also commits to the publication of an annual report detailing approved RIS grants.
22. We heard from the Crop Agronomy Consultant from Albert Bartlett Limited who queried whether it was possible for the Rural Initiative Scheme to meet its objectives without the original levels of funding allocated to it:

this fund (RIS) could be introduced at around about £800,000 a year. The next paper came out and the £800,000 was £500,000. The £500,000 now has been used to ... part of it has been used to subsidise the school milk scheme, so that is £200,000-odd out of that, and now it looks like that might disappear as well. So, originally here we have a strategic policy which says Rural Initiative Scheme, great idea, it is going to help the industry £800,000 and now we are looking at maybe £300,000 left in the pot. So is that policy going to achieve what it set out to do without the funding?'[65]

23. The President, Jersey Farmers' Union raised concerns regarding the allocation of RIS funding and suggested that it had not always been utilised effectively, to the detriment of worthy projects:

The Rural Initiative Scheme and the Countryside Renewal Scheme, we think the funding has sometimes not gone to the areas where it should have gone. We would like to think in the future that will be addressed; for example school milk, we do not think that is a rural initiative budget. People were applying to the Rural Initiative Scheme for projects which warranted funding but there was not enough funding there because of the use of the money for school milk.'[66]

24. We heard how there was felt to be a lack of transparency with regard to the Rural Initiative Scheme, from the President, R.J.A.&H.S:

There is a lot of money spent with R.I.S. and I do not see a lot of transparency. So we are asked at various times to comment on our opinion on how it has worked.

We do not have the detail so we cannot comment. We just cannot comment on it because we do not know really what it has been spent on.'[67]

25. The Managing Director, Farm Fuels Limited explained how in his experience the processes behind the RIS were misleading:

I cannot receive grant funding from the Rural Initiative Scheme because I have too many assets, which I find extraordinary that I did not get told this until the very end of the whole process, rather than being told at the very beginning. So, again, a lot of hopes are raised, a lot of effort is put in and at the end of the day nothing is achieved.'

26. He continued:

I have been on a merry-go-round to get nothing with a case that is absolutely rock solid.' [68]

9.1.27

9.1.28

29. Countryside Renewal Scheme
30. The  objective  of  the  Countryside  Renewal  Scheme  is  to  conserve  and  enhance  the environment and landscape of Jersey. Specifically, it is there to support the maintenance and  improvement  of  biodiversity,  reduce  pollution,  promote  environmentally  sustainable farming and improve access to the countryside. The Scheme was launched in 2005 and offers grants to support voluntary environmental projects.

31. The scheme includes a range of specific activities, such as the provision of footpaths, planting hedges, managing grassland and heathland to promote biodiversity, as well as building new slurry stores to help prevent diffuse pollution. Applicants are also welcome to propose their own ideas for support.
32. It is proposed to conduct a detailed review of the Countryside Renewal Scheme. The review proposed by the Draft White Paper will cover the design, content, delivery and monitoring of the scheme. Furthermore, the review promises to ensure that grants are targeted towards enhancement measures identified by the Environment Plans, States of Jersey strategic plans (e.g. Biodiversity Strategy, Energy Policy) and are consistent with the delivery of international obligations under Jersey's existing suite of Multilateral Environmental Agreements (MEAs). In addition, the CRS will provide new components for encouraging the development of local businesses to provide independent advice, training and contract services in relation to CRS applications. In conjunction, the CRS will identify specific countryside enhancement projects that could be put out to tender, thereby creating a market for the delivery of environmental goods and services and encouraging the development of a local rural knowledge economy.[69]
33. The Chief Executive, National Trust for Jersey told the Sub-Panel of the importance of ensuring that funding levels are maintained for programmes with long term objectives:

I think it is crucial that levels of funding are clarified. The Countryside Renewal Scheme is important because it has to have long term objectives, if you suddenly slash the budget you are going to undermine the work that you may have done in the first couple of years quite severely. So you really, in some respects, might as well not have started in the first place. If you are going to have a Countryside Renewal Scheme, you have to have a long term commitment and you have to have a secure pot of funding.'

34. He continued to outline their positive experience of the programme:

 our direct experience of the Countryside Renewal Scheme has been a benefit to the National Trust in the work we do.' [70]

35. We then heard from the President, Jersey Farmers' Union, who described the misuse' of CRS grants for non-core activities:

The Deputy of St. Mary :

Can you give some examples of what you would term in brief misuse of C.R.S. (Countryside Renewal Scheme)?

President, Jersey Farmers' Union:

I know one of the schools had their school environmental project, a very worthwhile project, I have no problems with it, but at a similar time we had one grower who applied for organic conversion and there was no money left. So there is one instance of where money is going to non-core funding activities. I am obviously not privy to every application and I do not know where it all goes but we have always thought that money should be directed into mainstream farming activities for the betterment of the environment.'[71]