The English Environmental Stewardship Entry Level Scheme (ELS) Dr. Stephen Chaplin, Natural England mailto:email@example.com g.uk Background • Environmental Stewardship (ES) - new agri-environment scheme launched in mid- 2005, scheme operating for nearly 3 years. • Replaced previous English agri-environment schemes. • Has entry-level (ELS) and higher-level (HLS) elements – focus here on ELS component. Entry-level also has an organic strand. • ELS Payment for public goods based on income foregone. Currently funded through the RDPE mainly under Article 39 of 1698/2005 • Just completed a review to: – Check that ES is delivering its stated objectives – Ensure that it delivers good value for money – Take account of emerging new policy priorities ELS and HLS Compared ELS HLS Untargeted non-competitive scheme which aims Discretionary, more complex management, for a high level of uptake across the country. targeted towards specific types of landscape and Land managers receive payment for simple features which are considered particularly effective environmental management valuable. 5 yr agreements 10 year agreements, sit above an ELS agreement Intensity £30ha/yr Intensity ~£200ha/yr No Capital works Capital works programmes Coverage - Budget for ~7m ha Coverage – Budget for ~1.9m ha Predominantly maintenance of existing Considerable scope for major change in features/management practice and minor management and restoration of features. adjustments to management practice Environmental Stewardship in the wider context Environmental benefit & HLS Environmental complexity Stewardship (NE) ELS/OELS Single Good Agricultural and Environmental Condition (GAEC) Payment as a cross-compliance condition Scheme of Single Payment Scheme (RPA) Number of agreements ELS – How it works Over 60 options to choose • Each management option has a points from divided into groups: allocation (per ha/per m) based on the income foregone calculation, for • Boundary Management example: • Trees and Woodland • Historic and Landscape Features • Buffer strips and field margins • Arable Land • Range of crop types • Soil Protection • Lowland Grassland • Uplands • Each farm is given a total points target based on 30 points per hectare. • They then have a free choice from the list of options to achieve their target. Scheme Effectiveness Overall the ELS scheme has: • High level of uptake - ELS currently 4,394,466 ha (~51% agricultural land) • Good set of generic options, that are widely accessible geographically/by farm type etc where the relevant feature/management practice exists. • Option egs. • Evidence from initial evaluation suggests most options are delivering the environmental benefits that were intended, but limited additionality in some cases. Scheme Targeting • ELS is largely untargeted geographically (unlike HLS). Geographically specific guidance is provided to try and influence option choice, but not requirement of the scheme. • This has resulted in: – Significant sectoral (and associated geographical) variations in level of ELS Agreement Uptake. – Low uptake of certain options. – A significant proportion of agreement holders are choosing a very limited number of options, resulting in imbalanced agreements (particularly balance between field boundary and in-field options, but also balance across scheme objectives) – The choice of options often doesn’t match well with the identified priority options for a given area • More detail on subsequent slides. Sectoral (and associated geographical) variations in level of ELS Agreement Uptake Particularly Important because: • UELS predicated on ELS membership – Geographical Variations in ELS uptake (by JCA) low level of uptake in uplands • Classic Scheme Renewals – often in uplands • Commodity prices – potential impact on high uptake areas Sectoral Variations in ELS Uptake Large (>150ha) Medium (50- 149ha) Small (<50ha) Other Horticulture Specialist Poultry Lowland Beef and Sheep Upland Livestock Specialist Pigs Dairy Mixed General Cropping Cereals 0 10 20 30 40 50 60 % Area Balance of options within ELS agreements Analysis shows that many ELS agreements are focused around a very limited number of options: – The 6 most popular options in the scheme (including the compulsory FER) account for 49% of all points scored. The 20 most popular options account for 90% of all the points scored within the scheme. The remaining 42 options account for only 10% of the points scored within the scheme. – 15% of all ELS agreements score more than 70% of their points from lowland grassland options, with 9% scoring over 90% of their points from this option group. – 6% of all ELS agreements score 70% or more of their points from boundary options. – Combining boundary and lowland grassland options together - 40% of all ELS agreements score more than 70% of their points from boundary and lowland grassland options alone, including almost 20% who score in excess of 90% of their points from these two option groups. – Following ELS option maps adjacent farms in the same JCA. What would the effect be on the effectiveness of ELS and HLS if there was no SPS (1)? • Recent modelling work of CAP Reform scenarios based on English farm business survey data (FADN) suggested the following: – Many positive environmental consequences – However, significant changes to farming systems – eg rotation simplification, livestock extensification and associated implications especially for landscape that would require additional interventions through the schemes (ELS higher intensity, HLS higher coverage) – Also significant risk of ‘land out of production’ both in uplands and lowlands – although lowlands could see reintroduction of extensive livestock. What would the effect be on the effectiveness of ELS and HLS if there was no SPS (2)? • Scenario A – Baseline (to 2015), incorporates know policy changes. • Scenario B – Removal of decoupled support. • Scenario C – Removal of tariff barriers and other trade restrictions • Scenario D – B and C together. • Reform scenario B would increase the cost of ELS agreements in SDA areas (by 2.1%) and would decrease the cost (by 0.3%) in non-SDA areas. Also, the unit cost of most HLS options would increase (by 1-9%). While the prices of many farm commodities is predicted to increase, the loss of the Single Payment would lead to extensive restructuring and a significant increase in ‘land out of agriculture’, with a resulting increase in the need for targeted HLS uptake. • Reform scenario C would reduce the cost of ELS agreements in SDA and non-SDA areas (by up to 3.3%) and also the unit cost of most HLS options (by 1-13%). Retention of the Single Payment limits the extent of restructuring with the increase in ‘land out of agriculture’ less than under Scenario B. However, the overall impact is expected to be an increase in the Pillar II budget requirement. • Reform scenario D would reduce the cost of ELS agreements in SDA and non-SDA areas (by 1.2-4.5%) and also the unit cost of most HLS options (by 1-36%). Loss of the Single Payment and lower commodity prices will lead to substantial restructuring with a significant increase in ‘land out of agriculture’ (15% in the lowlands and perhaps more in the LFA). As such, the overall impact is expected to be a significant increase in the Pillar II budget, despite the lower unit cost of options. Looking to the EU Budget Review – How appropriate is EU wide funding for AES? Looking to the EU Budget Review – How appropriate is EU wide funding for AES? Test ELS Is there a clear market failure? Yes Are there transboundary impacts on Most (but not all) ELS interventions are locally focused and arguably don’t require a scale that merits EU intervention co-ordinated EU wide intervention. What is the case that some form of EU, as opposed to domestic, level There is currently no explicit focus on providing the necessary connectivity across the action is needed to effectively EU to enable the natural environmental to effectively respond to locked-in climate conserve the natural environment in change impacts Europe? Level of Preferences – Would an Very limited evidence exists on ‘level of preference’ for the natural environment – i.e. individual MS provide the optimal to what extent do EU citizens value a high quality natural environment in England? level of the good or service? Proportionality – What and how What - ELS is incentive based mechanism. Could regulation or advice or other much EU level action is needed? Is mechanisms achieve this? Balance between different mechanisms. spending the right intervention? Proposing to increase advice provision within ELS. What are our expenditure requirements for the natural How much - There is insufficient funding for environmental land management environment ? objectives and the conservation and enhancement of the marine environment within the EU. For Financial Perspective 2007–2013, axis II needs estimated at circa £5 bn in England. Allocated funding was £2.9 bn. Still room for a ‘reform dividend’ if unproductive income support payments were to be discontinued. Allocations are not based on sound and objective criteria, e.g. Pillar II allocations based on historical receipts rather than on UAA or conservation need. Value for money – is the money ELS fixed price scheme, tendering/reverse auctions could be more efficient? that is being spent spent on the High (and increasingly volatile) commodity prices highlight limitations of an income right things and in the right way? foregone approach. Evidence base on environmental outcomes (and their associated value) is weak. Future Development of ELS • Changes to ELS options (revised options, prescriptions and new options) to improve option effectiveness. – about 25 changes to make existing options and prescriptions more demanding; – about 20 changes to make existing options and prescriptions more flexible; and – develop and introduce a number of new options. • Develop and pilot an ELS capital works proposal • A full scheme payment review is required. • The existing geographical targeting guidance for ELS should be reviewed to explore ways that it can be made more effective. • Develop a significantly enhanced, geographically differentiated, programme of advice to support ELS delivery. • Develop, test and implement a geographically differentiated single-split list approach based on a minimum specified proportion of agreement points coming from 1 or more options on the list. 3 recommendations for other MS • Low intensity high uptake schemes such as ELS have considerable potential to deliver benefits over large areas. • Schemes of this type have to strike a difficult balance between the complexity of management options/prescriptions required to achieve demonstrable environmental outcomes and secure high levels of scheme uptake. • Ensure that you have a comprehensive monitoring strategy in place, based on extensive agreement level research, to demonstrate that intended environmental outcomes are being achieved. More information • Scheme booklets can be found at http://www.defra.gov.uk/erdp/schemes/els/handbook/default.htm • mailto:firstname.lastname@example.org How it works (3) • Associated with each option is a management prescription: • Applicants draw their selected options on a base map that is provided as part of the application process and this forms the agreement. ELS – Agreements Example, Nr Bridlington, East Yorkshire. Holderness JCA.