Tuesday, 21 January 2020
Earlier this week the Government introduced its long-awaited Agriculture Bill in what is seen as the most significant reform of farming policy in decades. In this article we look at the key features of the Bill and what it might mean for farmers.
The legislation aims to help industry boost productivity and reward farmers for environmental improvements post-Brexit. It sets out how farmers will be rewarded with public money for public goods – such as better air and water quality, higher welfare standards, improved access to the countryside or measures to reduce flooding. The new system will replace direct payments, gradually introduced over a seven-year transition period starting in 2021.
The Bill also gives Government the power to collect data from the food supply chain in order to improve transparency and fairness. The aim is to strengthen the farmer’s negotiating position at the farm gate.
Have we been here before?
A lot of this might sound familiar, and that’s because most of the Bill is consistent with the Agriculture Bill brought to Parliament back in September 2019.
Anything new this time around?
Among the familiar content are some new features, including:
- Food security reporting – new requirement for the UK Government to regularly report on food security to Parliament. Interesting to see food security mentioned although the requirement here is to only produce a report once every five years.
- At a time when farmers are experiencing significant weather-related challenges, many will be interested in the powers to provide financial assistance when there are ‘exceptional market conditions’. Defra said it will provide assistance schemes and evaluation so Parliament can scrutinise how well they work.
- Soil quality – the Government has made sure soil is specifically named in the Bill, so financial assistance will be available to farmers who protect or improve its quality. AHDB’s GREAT soils project includes useful information and resources in this area: https://ahdb.org.uk/greatsoils
- An animal traceability service – the Bill puts powers into place that allows for improvement in the collection and management of information relating to the identification, movement and health of animals. AHDB are running this programme with Government, details can be accessed here: https://ahdb.org.uk/LIP
- Fertiliser regulation – the power to effectively regulate this industry as the UK leaves the EU, including updating the definition of a fertiliser to take account of the latest technological advances.
- Organics regulation – powers to tailor regulation to ensure the UK can continue to trade organic produce around the world.
It is clear change is coming. Farmers can expect to see their direct payments reduce from 2021 onwards. The importance these payments have in supporting farm profitability is clear. On average, they accounted for 54% of profitability measured via farm business income in England in 2018/19 (Defra, Total Income from Farming). This figure rises to 154% in the grazing livestock sector (less favoured areas/ LFA).
Farmers should be looking at how they can manage this change. Many may be able to partially offset future direct payment losses by doing more environmental work on farm such as through the new Environmental Land Management scheme (ELMs). Others may focus on improved efficiency for better returns from the market.
What is clear is the need to prepare for the changes ahead. AHDB has various tools and analysis that can aid the planning process of the loss of direct payments which can be accessed here: https://ahdb.org.uk/brexit
The Bill, which has had its first reading, will go through further stages of parliamentary scrutiny before going to the House of Lords and is expected to pass into law in the spring.