Category: Policy & Business

Defra has opened another round of the Countryside Stewardship Facilitation Fund on the 5th August.  £2.5m is to be made available to fund a person or organisation (the facilitator) to help groups of farmers and other land managers work together to apply for the CS and deliver benefits at a ‘landscape’ rather than single-farm scale.  Applications close on the 4th October.  Successful groups will be notified in time for individual farms to apply for the CS in spring 2020 in time for a 1st January 2021 agreement start date.  The Facilitation Fund has already led to the creation of 98 facilitation groups established across England since 2015 . The groups have supported and endorsed 1,200 new Countryside Stewardship agreements (i.e. an average of 12 farms in each group). 

It is reported that the Government is planning a £500m scheme to buy-up finished livestock in the event of a No-Deal Brexit.  The Times has stated that the scheme, being drawn-up by Michael Gove as part of No Deal preparations would see the Government step in and buy finished lambs and cattle if prices collapsed due to tariffs being imposed on UK exports to the EU.  There are no details available on how any such scheme might work in practice.  The leak, perhaps not coincidently, came the same day as the Prime Minister, Boris Johnson, visited farms in Wales and promised to protect the agricultural sector.  He is quoted as saying “I will always back Britain’s great farmers and as we leave the EU we need to make sure that Brexit works for them”.

Over the last few days Sterling has weakened against the Euro as fears of a No-Deal Brexit have increased.  The Pound has fallen to €1 = 90p (£1 = €1.11) for the first time since the turn of the year.  In the short-term, a weak currency is good for UK farming (although it tends to push input costs up).  However, if the trade-off for this is a No-Deal Brexit then, as outlined elsewhere in this Bulletin, it is unlikely to result in a positive long-term outcome. 

The Government plans to introduce legislation to create conservation covenants in England.  This announcement came in a Policy Statement to give an update on the progress on the Environment Bill, and especially the results of various consultations that were undertaken as part of the legislative process.

As we wrote in February, conservation covenants could open up a new opportunity for landowners.  At present it is possible to put legal covenants over land, but only to stop certain things happening (e.g. not being able to build on it).  There is currently no mechanism in law to enforce positive action on the owner of land (e.g. maintaining trees) that is binding on future owners.  Existing agri-environmental agreements are simply a contract between Government and the occupier for a set period of time.  Conservation covenants would bind the occupiers of the land for the long-term or perhaps even perpetuity – the timescales that many environmental actions work over.  A payment would have to be offered to the landowner for them to sign-up to such an agreement.  These payments may have to be significant, and it is likely that some sort of market would develop for them. 

One source of demand for conservation covenants is likely to be bio-diversity offsetting.  Where land is being developed, compensating habitats are established elsewhere.  The covenants would provide a mechanism to ensure these habitats are maintained.  The Policy Statement also contained a pledge to  require developers to demonstrate a 10% net gain in habitat value for wildlife compared with the baseline situation prior to development.  (It is a little unclear how such a gain in ‘habitat value’ might be measured, however.)   Therefore, developers may well be looking for land onto which the bio-diversity offsetting can take place.

The full Government Policy Statement can be found at https://www.gov.uk/government/publications/draft-environment-principles-and-governance-bill-2018/environment-bill-summer-policy-statement-july-2019).

Scottish farmers will once again receive an advance on their BPS payments.  The Scottish Government has announced that loans of 95% of the expected 2019 Basic Payment will be offered to farmers under a National Basic Payment Support Scheme.  Loan letters will be issued in early September with farmers having to opt-into the scheme.  Payments are scheduled to begin in early October – this is two months earlier than payments could start under the normal BPS timetable of 1st December.  The loan percentage received has increased from the 90% seen in previous years of the loan scheme.

The measure is being ‘spun’ as the Government getting payments out to farmers early to provide ‘vital financial support to Scottish farmers in advance of Brexit’.  However, with the ongoing (and seemingly intractable) problems of the payments IT system, this may well just be making the best of a bad job, with little change of the system being capable of making ‘proper’ BPS payments by the 1st December.

A new report has recently been published making recommendations on how food, farming and the countryside need to change to meet the challenges of the future.  The report ‘Our Future in the Land’ was commissioned be the RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce).  It was set up in November 2017 under the chairmanship of Sir Ian Cheshire and has taken evidence from a range of sources.  Among the 15 recommendations made are that there should be a ten-year transition plan to a sustainable, ‘agroecological’ farming by 2030, increased innovation to unleash a fourth agricultural revolution, greater advice for farmers, and more emphasis on cooperation and collaboration.  The full report can be found at – https://www.thersa.org/discover/publications-and-articles/reports/future-land

Defra has a new leader in the form of Theresa Villiers.  Following his appointment as Prime Minister on the 24th July, Boris Johnson was quick to radically reshape the Cabinet.  This included moving Michael Gove to the Cabinet Office (his formal title being Chancellor of the Duchy of Lancaster) where he will oversee much of the planning for Brexit – including preparations for a ‘No Deal’.

Ms Villiers is somewhat of an unknown quantity when it comes to farming and rural matters.  She has been MP for the solidly urban seat of Chipping Barnet in London since 2005 (with a slim majority of 353 in the 2017 election).  She grew up in London and had a career as a barrister and lecturer before going into politics.  Ms Villiers has previously served as the Transport Minister and was then Northern Ireland secretary from 2012 to 2016 under David Cameron – a position in which she was not regarded as a great success.

Like almost all of Mr Johnson’s Cabinet, Theresa Villiers is a committed Brexiteer.  She has argued that the UK should be prepared to leave the EU without a deal if the Northern Irish backstop cannot be renegotiated.  She would be happy to see trade conducted on WTO terms.  Ms Villiers has been a strong advocate of animal welfare, but supports the badger cull to control bTB.  She has backed fracking in the past, and supports HS2.

For the majority of farmers, the most important question will be Theresa Villiers views on future farm policy, and particularly farm support.  Will she continue the process set out by Mr Gove (‘public money for public goods’), or strike out in a new direction?  It is worth remembering that the Agriculture Bill is still stuck in Parliament, so could be amended.  And, more importantly, the Bill only provides Defra with the powers to implement a new farm policy – it does not ‘hard wire’ into legislation what that policy will be.  The future direction of support – BPS phase-out to 2028, ELMs etc. – was only contained in a ‘Policy Paper’ which could be changed almost at will. 

Whilst Mr Gove was not everyone’s cup-of-tea it made a refreshing change to have a heavyweight – both in political and intellectual terms – at the head of Defra.   Theresa Villiers becomes the sixth Defra Secretary since 2010 – the rapid turnover of Ministers does not seem to be a receipe for informed and sensible policy-making. 

George Eustice also makes a return to Defra after resigning in February over the issue of Brexit.  He is Minister of State alongside the retained Therese Coffey.  Lord Gardiner of Kimble and David Rutley also remain on the Defra Ministerial team.

Ursula von der Leyen has been appointed as the new President of the EU Commission – one of the most powerful jobs in Europe.  She will replace the outgoing head, Claude Juncker, on 1st November.  Although that is (theoretically) the day after Brexit, as President-elect, Ms von der Leyen will have a big influence on any withdrawal negotiations during the autumn.  She has already stated that she would support a further extension of the UK’s withdrawal date “should more time be required for a good reason”.  Whilst the Commission is only the EU’s ‘Civil Service’, it has a far more powerful role than that title might suggest.  It proposes and drafts all EU legislation, enforces EU rules across Member States, and negotiates treaties (such as that with the UK).   Ms von der Leyen gained the role after a tortuous process that involved a delicate compromise between Member States and the European Parliament.  She is currently German Defence Minister and a close ally of Angela Merkel.

The Welsh farming industry has another chance to comment on post-Brexit support policy.  As we wrote last month, a further consultation has been launched on the design of the Sustainable Farming Scheme.  The consultation, ‘Sustainable Farming and Our Land’, will run until 30th October 2019.

Details of the scheme are obviously still being worked-out; as well as the consultation, a process of ‘co-design’ with farmers, foresters, advisors and academics is scheduled to start in the autumn.  However, some key features are likely to be included in whatever emerges.

A ‘Sustainable Farming Payment’ will effectively replace the BPS and Glastir.  This will be an annual payment to land managers that rewards ‘sustainable farming practices’.  This will be based on four principles;

• it provides a meaningful and stable income stream.  There will be multi-year contracts with fixed payment rates which will help offset market volatility.  Payment rates will not be constrained by the ‘income foregone’ calculation, and there is an indication that the scheme will be set up so that the SFP can be a significant income stream into farm businesses.
• it rewards outcomes in a fair way.  It is clear that the support will not simply be available ‘as of right’ like the BPS.  Farmers (and foresters) will be required to deliver ‘outcomes that are not rewarded by the market’.  As there is a market for food production, this will not be specifically supported under the scheme.  However, the provision of public goods will be rewarded.  Note the focus on ‘outcomes’ – it may not be enough to simply follow defined practices, it may be necessary to show that these are actually having the desired effect.
• it pays for both new and existing sustainable practices.  Criticism of past agri-environment schemes was that they paid land managers for changing from harmful practices, but did not reward those already ‘doing the right thing’.  The SFP looks to change this.
• it can be flexibly applied to every type of farm.  If the SFP is to be a realistic replacement to the BPS there is an acknowledgement that all farms must have a realistic chance of getting into the scheme and it not be restricted to certain geographies or farm types.

In addition to the annual payments under the SFP, there will also be significant business support.  This will focus on advice, capital investment and skills development.

In terms of advice, it is envisaged that entry to the scheme will be conditional on a Farm Sustainability Review that produces a Farm Sustainability Plan.  The farmer would put this together with an accredited advisor and it would set out what the farm could do to receive annual payments under the SFP and what business support would be useful.  Business support would come in three mains forms: business capacity and skills, capital investment to enhance sustainability, and knowledge transfer and specialist skills.

The capital investment strand could work in a similar way to the current Farm Business Grant.  Business capacity, skills and knowledge transfer will build on best practice from existing advisory services – for example the Farming Connect advisory service and Glastir contract managers.

The transition to the new support arrangements has not been set out due to the continued uncertainty over Brexit timing and future funding levels.  Likewise, detailed scheme eligibility and payment levels will not be decided on until later.

The consultation can be found at – https://gov.wales/revised-proposals-supporting-welsh-farmers-after-brexit