Future funding for farmers across the Home Nations – part 1

Wednesday, 21 November 2018

In the first of two articles, we look at Government plans for agricultural funding. As well as summarising the key aspects of evolving farm policy across the nations of the UK, we’ll outline some important issues which will be considered. This article is a summary of the direction of travel on agricultural policy.

Preparing for change

Once the UK leaves the EU, it will be able to form its own agriculture policy for the first time in nearly fifty years. On 12 September 2018, the Agricultural Bill was introduced, setting out the legal framework for farming policy post Brexit. Direct payments will continue, with simplifications, under the current basis in 2019 and 2020. Defra have released policy statements alongside the bill which outline that beyond 2020, in England there will be;

  • a reduction in direct payments from 2021–2027, with no Direct Payments from 2028
  • funding for farmers via public money for public goods – rewarding farmers for environmental land management, such as improving soils, air and water quality, as well as animal welfare standards

The Scottish Government published a consultation paper in June 2018. It sets out proposals for an agricultural transition period up until 2024, including:

  • continued basic payments in 2020–23 for current recipients of CAP funding (although there may be some changes such as capping of payment and streamlining applications)
  • continuation of many of the schemes under the Scottish Rural Development Programme, although under CAP rules, the less favoured area support scheme (LFASS) funding will decline in 2019 and 2020. The LFASS is likely to change beyond 2021, but no further information is provided

The consultation closed in mid-August but results have not yet been published. The Scottish Government has stated it has no plans for an agricultural bill in 2018/19. At present, there are no proposals for Scottish agricultural policy from 2024 onwards.

In the Welsh Government’s consultation document, between 2020 and 2023, it is proposed to;

  • Have a phased withdrawal of basic payments
  • Introduce new schemes via funded pilot projects to allow a phased transition
  • Exit the Welsh rural development programmes, Glastir

From 2024, the Welsh Government has envisaged a new land management programme, comprising an Economic Resilience Scheme (improving resilience and productivity) and a Public Goods scheme. The consultation closed on 30 October.

Northern Ireland’s consultation paper on the country’s agricultural policy post-Brexit was released in August 2018 and closed to responses on 10 October. The paper proposes to:

  • Maintain the direct payment scheme, as exists under EU rules, in 2020 and 2021, with limited simplification
  • Remove area-based funding from 2022 onwards and replace with other options, such as environmental payments, farm income insurance measures and interventions for collaboration and cooperation within the supply chain

Regardless of where you farm in the UK, the policy framework is about to change – even if we don’t have the full picture yet. A starting point to assess the potential impact of moving away from CAP and direct payments is to look back at your historical income levels and the relative reliance on CAP receipts. Then, think about how you can get your business ready for the change – our publication on the characteristics of the top performing farms can help with this.

In the second of these two articles, we’ll look at how agricultural funding may be divided amongst the Home Nations in the future.

Amandeep Kaur Purewal
Senior Analyst – MI Strategic Insight