Brexit has weighed on confidence for all UK businesses over the past three and a half years but farmers have endured added uncertainty.
There is yet little clarity on what are likely to be wholesale changes to subsidies and other industry policies once the UK leaves the European Union, making it difficult to plan for the future.
The Agriculture Bill 2017-19 was introduced in its first reading in the House at Commons in September 2018 but failed to make its passage through Parliament. A new Agriculture Bill 2019-20 was then announced in the Queen’s Speech in October this year.
What does the bill say?
While the 2019-20 Bill has been announced, there are very few specifics at this stage, although we know its aims will be closely aligned to the Agriculture Bill 2017-19. A briefing document on the announcement of the new bill discusses a ‘reform’ of UK agriculture policy to put the interests of farmers, land managers, the environment and taxpayers at its core.
It also promises a fairer supply chain through powers to set common marketing standards, recognition of Producer Organisations and ensuring World Trade Organisation compliance.
What does this mean?
The Bill would replace the current subsidy system, moving from a land-based payment to a package rewarding farmers for enhancing the environment and producing food more sustainably.
It will also include a framework for a new Environmental Land Management scheme, with a focus on ‘payment of public money for public goods’. This could include improving water quality and biodiversity.
The move to a new subsidy system will be achieved through a seven-year transition period to gradually reduce current direct payments. There will also be programmes designed to prompt investment in new equipment and technology during this period.
Why does the Government want to change subsidies?
The prospect of changes to subsidies to a focus on environmental stewardship has been around for as long as the concept of Brexit itself. With EU subsidies making up around 60% of farm profits on average, this is arguably the most significant proposed change.
UK farmers currently receive £3.2bn in CAP payments from the EU. Following Brexit, that bill will be footed by the UK Government, which experts believe will be a hard sell without strong evidence of a direct benefit to the UK taxpayer.
The Government has also argued that current farm subsidies, which are largely dependent on the amount of land farmers own, stifle competitiveness. It cites the fact that currently 50% of subsidies are paid to 10% of farmers.
What other changes might we expect?
The Bill is expected to have the same overall aims as the previous 2017-2019 Bill. Some key features of that included:
- New powers to aid data collection and sharing in the food supply chain to improve market transparency, animal and plant health and risk management
- Powers to enable the Government to provide financial assistance to farmers in exceptional adverse market conditions
- Allowances for the Government to change standards including carcass classifications and composition of dairy milk
So what happens now?
There’s a process for the Bill to travel through Parliament which will bring more clarity to the changes farmers can expect. Defra secretary Theresa Villiers has indicated she wishes to progress the bill faster than its previous incarnation.
In the meantime, there’s a general election, with labour likely to make changes to post-Brexit agricultural policy if they form a Government. Earlier this year, Jeremy Corbyn was reported as demanding changes to the original bill as part of cross-party talks over a Brexit compromise.
We don’t know the exact details of the changes to agricultural policy but we know they will affect your holding and your business