The Agriculture Bill sets out how farmers and land managers will in future be paid for “public goods,” such as better air and water quality, improved soil health, higher animal welfare standards, public access to the countryside and measures to reduce flooding.
This will replace the current subsidy system of Direct Payments, which the government says is ineffective and pays farmers based on the total amount of land farmed. These payments, it argues, are skewed towards the largest landowners and are not linked to any specific public benefits. The top 10% of recipients currently receive almost 50% of total payments, while the bottom 20% receive just 2%.
Environmental Land Management
In its place, a new Environmental Land Management system will start from next year. The government will work with farmers to design, develop and trial the new approach. Under the new system, farmers and land managers who provide the greatest environmental benefits will secure the largest rewards, laying the foundations for a Green Brexit.
The Bill will also be underpinned by measures to increase productivity and invest in R&D.
For example, there will be funding for farmers to come together to develop and get the research projects that they want and need, for example on soil health or sustainable livestock farming, which the government argues will lead to practical gains for farmers that help them become more profitable and reduce their environmental footprint.
The government will also be able to make payments during the seven-year transition period, as the UK leaves the EU’s CAP (Common Agricultural Policy), for famers to invest in new technologies and methods that boost productivity.
Delivering Green Brexit
Environment Secretary Michael Gove said, “The introduction of the Agriculture Bill is an historic moment as we leave the EU and move towards a brighter future for farming.
“After nearly 50 years of being tied to burdensome and outdated EU rules, we have an opportunity to deliver a Green Brexit. This Bill will allow us to reward farmers who protect our environment, leaving the countryside in a cleaner, greener and healthier state for future generations.
“Critically, we will also provide the smooth and gradual transition that farmers and land managers need to plan ahead.”
Direct payments phase-out
For 2019, Direct Payments will be made on the same basis as now, subject to simplifications where possible. Direct Payments for 2020 will also be made in much the same way as now. Simplifications will be made as soon as possible, subject to the terms of the overall Brexit implementation period. There will then be an agricultural transition period in England between 2021 and 2027 as payments are gradually phased out.
During consultation, the government said, there was support for applying reductions to Direct Payments more widely. Most farmers will see some reduction to their payments during the transition, although those who receive the highest payments will see bigger reductions initially. This will free up funds to invest in public goods.
To help new entrants get into the sector and give farmers flexibility to plan for the future, Direct Payments during the agricultural transition period up until 2027 will be “delinked” from the requirement to farm the land.
These payments, which may be calculated according to money received in previous years, can be used by farmers to invest in their business, diversify their activities or retire from farming and give way for new people to enter.
The Bill also sets out how the government will strengthen transparency in the supply chain to help farmers get a better deal in the marketplace.
By collecting data from across the supply chain, the government says it will help food producers strengthen their negotiating position at the farm gate and seek a fairer return.
Devolution
The introduction of the Agriculture Bill means that all the necessary measures will be in place for the start of the agricultural transition in 2021, delivering a smooth transition to the new domestic policy, the government believes.
Agriculture policy is devolved, and so the Agriculture Bill sets out primary legislation mostly for England. Following close engagement with the devolved administrations the Bill will provide powers for Welsh Government Ministers to pursue their own reforms, and extend provisions to Northern Ireland, until primary legislation is taken through their own legislatures. The Scottish Government is not taking powers in the Bill.
The Agriculture Bill sets the framework for Defra’s future Environmental Land Management Policy, moving towards a system where public money is spent on public goods, in particular protecting and enhancing our environment. This will be the centerpiece of the Government’s new approach to farm payments.
Public goods which the government will pay for include:
• Improving air and water quality and soil health – e.g. reducing ammonia emissions or soil erosion
• Providing habitats for wildlife – e.g. maintaining hedgerows, nectar plots for pollinators or food sources for farmland birds
• Reducing flood risk – e.g. planting trees and hedges
• Preventing climate change – e.g. through peatland restoration to protect the existing carbon store and reduce emissions of CO2
• Improving public access to the countryside – e.g. replacing access structures such as gates
• Protecting iconic features of the countryside – e.g. maintaining drystone walks or other historic features
NFU response
The National Farmers’ Union (NFU) president, Minette Batters, in response to the launch of the bill, said, “The NFU alongside, the whole food supply chain, has been absolutely clear about the essential ingredients for a progressive, profitable, and sustainable food and farming sector post Brexit.
These include comprehensive measures to improve the environment and productivity and tackle volatility alongside free and frictionless trade and access to a competent and reliable workforce. The Bill, as described in the announcement, falls short of our aspirations in these regards.”
Batters added, “It is vital that in the future British farmers can continue to meet the food needs of a growing population. A future agricultural policy that ignores food production will be damaging for farmers and the public alike. The public demand and deserve safe, high-quality, traceable affordable food, whatever their income. And moreover they want British farms to supply that food.”
Farmers across the UK will be very concerned that the Bill provides only a short term commitment to improve their competitiveness, the NFU said, adding it is not possible to future-proof farming businesses based on the ‘time-limited’ initiatives outlined in the announcement.
“Along with other farmers I will also be looking to the Bill to set out means to address the clear market failure in food chain that means farmers are not rewarded fairly for the risk and investment they make,” Batters said.
Trade deal critical
“British farmers will need to compete with farmers all over the world, nearly all of whom are supported financially to produce food. If British farmers are to underpin the nation’s food security, then they will need the right financial and policy framework to do so in a competitive and volatile global marketplace.”
Batters said the NFU would ‘look closely’ at the proposals for a seven-year transition period, to ensure the organization would be satisfied this will be sufficient.
“We are entering an historic period for farming with legislation setting the path for the next generation of farmers and the countryside. With critical decisions still to be taken in the months and years ahead it would be foolhardy for the Government to embark on such a path without knowing trading environment in which it will be set. A free and frictionless trade deal with our biggest trading partner, the EU, is absolutely critical to the farming industry,” Batters concluded.
NFU report
On the same day of the bill announcement, the NFU delivered its food report to all British politicians.
The report, UK: A Nation United by Food, is intended to provide a breakdown of some of the main areas of debate surrounding future food policy.
Focusing on four key areas – moral imperative, health and nutrition, integrity and standards and working with nature – the document questions what the UK needs for a thriving domestic food industry.
Batters is encouraging MPs to use the report to broaden the conversation about the future of British food to include consumers, producers, processors, retailers and policy makers.
Arla response
Ash Amirahmadi, managing director, Arla Foods UK, said, “We welcome the Government’s announcement of a new regime for British farming and are pleased that the Government has agreed to a seven year transition period to the new regime.
“This is what we called for in our submission to the Government consultation which preceded today’s announcement and will give certainty to farmers, allowing them to plan for the new environment. It is fantastic that so many of our farmer owners have contributed to the consultation and had their say.
“We believe that properly structured farming policies and supports can deliver benefits for the environment and increase profitability and productivity in farming; therefore we are especially encouraged by the Government’s recognition that the overall objective of the new regime should be to secure “practical gains for farmers that help them become more profitable and reduce their environmental footprint.”
Arla said it will be important that the new Environmental Land Management system does not lead to incentives that only deliver public goods whilst neglecting innovation and increased productivity. The company added it was keen to understand the “measures to increase productivity and invest in R&D” that the Government has proposed.