Farming after Brexit

Sally McFadden of Thomson & Bancks Solicitors looks into what impact Brexit will have on agricultural policy

On 12th September 2018, the Government published the Agriculture Bill setting out its planned agricultural policy following Brexit and the UK leaving the Common Agricultural Policy. The 62-page document sets out the Government’s plans to move away from the Basic Payment Scheme (BPS) and introduces its new Environmental land Management System (ELM). The Bill is split into 9 different sections and there are several key areas central to the new policy.

Direct payments under the Basic Payment Scheme (BPS) will be simplified and finally phased out by 2027. During 2019, Direct Payments will continue on the current basis, but subject to simplifications which will be rolled out further in 2020.

What is the Agricultural Transition period?

Over seven years, from 2021 to 2017, BPS payments will be gradually phased out as the UK leaves the EU's Common Agricultural Policy (CAP).

The Bill outlines the policy under which direct BPS payments will be stopped and how focus will be shifted towards rewarding farmers adopting positive environmental measures. Direct Payments during this transition period up until 2027 will be ‘delinked’ from the requirement to farm the land.

The Government believes removing or ‘delinking’ payments from the farming requirement will help to increase productivity and fund investment in research and development – and provide practical gains for farmers to help improve profitability whilst reducing their environmental footprint.

The Bill proposes that under the new scheme investment may be available for a wide range of areas and could assist farmers with diversification and retirement plans. It proposes government support for investment in sustainable and green technologies and methods that help farmers reduce the use of fertilisers and pesticides, while maintaining or increasing production.

Rather than a payment scheme, support may be in the form of grants, loans, loan guarantees or capital allowances.

What is the Environmental Land Management system (ELM)?

From 2019, the government will work with farmers to design, develop and trial ELM and reward those providing the greatest environmental benefits. It is similar to Stewardship and is intended to be fully in place by the time Direct Payments stop.

Environmental measures which will be rewarded include: improvements to soil, air and water quality; protecting and enhancing wildlife habitats; providing public access to the countryside; protecting the rural environment; flood-risk mitigation and carbon reduction.

What are the implications for the supply chain?

It proposes strengthening transparency in the supply chain to help farmers get a better deal in the marketplace. It is hoped that better collection and sharing of data will enable food producers to respond more effectively to market signals, strengthen their negotiating position get a better return.

As well as encouraging collaborative working, the government plans to publish, maintain and enforce statutory codes of practice and provide for mandatory contract terms between farmers and suppliers. These are likely to be combined with new marketing standards.

The Bill sets out a framework of marketing standards aiming to protect farmers and consumers, and could include grading of eggs and/or classification of carcasses in slaughterhouses. Food provenance could also be considered.

How does the Bill deal with agricultural market problems?

The Government are granted powers to intervene in markets but only in times of extreme market disturbance. This could be by way of loans, guarantees or other payments.

How will the government support agriculture going forward?

The government has pledged to support innovation to improve productivity; improve investment in farming equipment, technology and infrastructure, and facilitate collaboration and pioneer the use of more innovative and efficient farming techniques.

Whilst the Agriculture Bill provides the framework and powers for the government to allocate funds to agriculture, this only sets out the framework and the detail will still need to be fleshed out with supplemental legislation. We are keeping our eyes and ears open - so watch this space!

Sally McFadden is an Associate Solicitor in the Business Services Team at Thomson & Bancks LLP dealing with all commercial property matters for a mix of business, agricultural and not-for-profit clients. She also has niche specialist experience on agricultural matters and energy and renewables. To speak to Sally call 01684 299633 or visit www.tbsolicitors.co.uk