Category: Policy & Business

In one of her final acts as Prime Minister, Theresa May has set down an ambitious new climate change target for the UK.  The goal is for the country to produce  zero net carbon emissions by 2050.  The new, legally binding target, will be enacted through a Statutory Instrument amending the Climate Change Act – meaning the change does not require a vote in Parliament.  Currently, under the Climate Change Act, the UK is targeting an 80% reduction in emissions by 2050 against a 1990 baseline.  The announcement means the UK is the first country in the G7 group of industrialised nations to legislate for net zero emissions – although some countries have gone for dates earlier than 2050 – for example Norway (2030) and Finland (2035).

Reaching the target does not require the UK to cease all Greenhouse Gas (GHG) emissions – some sectors will be very hard to ‘decarbonise’ completely.  Net zero requires any residual emissions to be offset by taking carbon out of the atmosphere – for example by tree planting.  This leads on to farming’s role in meeting the zero target.  Currently, according to Defra, agricultural GHG emissions are 10% of total UK emissions (and a rough calculation is that 60% of these come from livestock in some form).  The NFU has set out a target that agriculture should have net zero emissions by 2040.  Whilst technology and efficiency will go some way, it seems unlikely that these targets can be met without a change (perhaps a substantial one) in peoples’ diets.  This is usually summarised as less meat and dairy products and more plant-based food (such a change on a global scale is set out in this report – https://eatforum.org/eat-lancet-commission/eat-lancet-commission-summary-report/).  Such a shift would have big implications for UK farming over the long-term.

Prices for nitrogen fertiliser have opened the new season around £30 per tonne higher than in 2018.  Ammonium nitrate for June/July is in the £250-£260 range.  Last year it was between £220 and £230 (in 2017, the figure was £180 – so a 40% increase in two years).  The high world price of fertiliser (especially urea) and an unfavourable exchange rate are being blamed for the increase.  These early-season prices tend to be the lowest of the year in order to generate business during a slack period for demand.  Prices often then climb through the autumn and into the spring.  However, this pattern is not guaranteed with the fertiliser market subject to volatility just like other commodity markets.

Environmental Stewardship (ES) and Countryside Stewardship (CS) payment delays continue.  Some claimants have still not received their 2017 ES payments.  The main reasons for the delays is due to the inspections carried out that year and also the large scale mapping update.  Many will recall the Proactive Land Change Detection (PLCD) exercise caused many problems and delays with Basic Payment claims in 2018, but it seems this is still having a knock-on-effect to ES payments.  Bridging payments were made last autumn for ES 2017 claims.  RPA has said it is on track to make final payments to 95% by 31st July 2019.  This will still leave in the region of 1,250 claimants having still not received their final 2017 payment.  The RPA is not giving any timescale for when this will be completed.

The ES computer system will not allow 2018 payments to be made until a claimant’s 2017 payment has been completed.  This, together with the fact that the majority of resources have been concentrated on completing 2017 payments, means very few 2018 payments have been made.  Under normal circumstances, those claiming 2018 ES revenue payments should have received an advanced payment (75%) last autumn and the final payment this spring.  To date there have not been any bridging payments made for outstanding 2018 payments and no timescale given by the RPA when it expects any payments to be made.

With regards to 2018 Country Stewardship payments, those who had not received an advance payment by 31st March 2019 (supposed to have been made in autumn 2018) should have received a bridging payment in early April.  Once again the RPA has said it is on track to have made 95% of 2018 CS final payments by 31st July 2019, this will leave just over 400 agreement holders with their final payment still outstanding.

2019 advance payments (75%) should be made this autumn, but with the CS claim submission process not working correctly, some had to make their claims on blank forms meaning additional manual inputting work for the RPA, which doesn’t bode well for payments being made on time.

One of the issues with agri-environmental scheme payments is they are based on income foregone, meaning the claimant will be out of pocket and for some this may be many thousands of pounds and can hit cashflow.  In many cases, anecdotal evidence shows payments are so far behind and so fragmented agreement holders have lost track of what they should receive, have received and what is still due.  In addition, inspection results take so long to come through that, if there is a problem, it can be very difficult to challenge because it may be over a year since the issue was found.

Following the sudden withdrawal of the General Licences for controlling wild birds back in April, Natural England (NE) and Defra have now issued new ones.  As from 14th June, six new General Licences are now available, NE issued three licences back in late April to:

• kill or take Canada geese to preserve public health and safety (GL28)
• kill or take carrion crows to prevent serious damage to livestock (GL26)
• kill or take woodpigeons to prevent serious damage to crops (GL31)

But following a recent call for evidence, Defra has now issued 3 more general licences to :

• kill or take wild birds to conserve wild birds and to conserve flora and fauna (GL34)
• kill or take wild birds to preserve public health or public safety (GL35)
• kill or take wild birds to prevent serious damage to livestock, foodstuffs for livestock, crops, vegetables, fruit, growing timber, fisheries or inland waters (GL36)

The new Defra licences increase the number of bird species which can be shot compared to the NE ones and also the range of circumstances under which this is allowed.  Under GL36, the licence most  applicable to farmers, 10 species are now allowed to be shot, these include carrion crow, jackdaw, magpie, feral pigeon, rook, woodpigeon, Canada goose, Egyptian goose, monk parakeet and ring-necked parakeet.  This compares to 13 species under the original General Licences which were suddenly revoked.

Before using the new licence, ‘reasonable endeavours must have been made to achieve the purpose in question using lawful methods not covered by this licence’ and  ‘must continue to be made’.

If circumstances are not covered by the General Licence, individual licences will need to be applied for.  All details can be found on Defra’s website at https://www.gov.uk/government/collections/bird-licences

However, this does not seem to be the end of the saga, as Wild Justice (the campaign group responsible for the original withdrawal) has already started a fresh challenge to Natural England’s new licences (GL26, GL28 & GL31).  It is not happy with the way NE assesses whether all suitable non-lethal methods of control have been exhausted before shooting is allowed.  The campaign group says NE is still leaving it up to the individual to decide, whereas, by law, NE itself should be satisfied.  It is likely that a similar challenge will be also be launched against the new Defra licenses as the wording (‘reasonable endeavours’) is similar.

An independent report commissioned for the Labour Party makes some radical suggestions for policy on land use and ownership.  With George Monbiot as editor, the general thrust of the report can probably be guessed.  Whilst not adopted as official Labour Party policy, many of the ideas may find their way into government, should be party come to power.  The full report can be found at – https://landforthemany.uk/.  Some of the key recommendations include; greater transparency on who owns land, land transactions and support payments; an explicit goal to reduce house price inflation; restrictions on the private rented sector including security of tenure and caps on rent levels; reform of the tax regime to include a replacement for the Council Tax, a review of the tax exemptions on farmland and the abolition of Inheritance tax to be replaced by a lifetime gifts tax; reforms to the Planning regime including the possible extension of planning control to farming changes; a Community right-to-buy, a boost to County farms, and the creation of the right-to-roam.

Defra has published the latest version of its compendium of farming statistics – ‘Agriculture in the UK’.  The 2018 edition can be found via – https://www.gov.uk/government/collections/agriculture-in-the-united-kingdom

The National Audit Office (NAO) has raised concerns over Defra’s ability to deliver its post-Brexit policy plans.  The Government watchdog has just published a report into the Department’s ‘Future Farming and Countryside Programme’ which is designed to deliver the new agricultural policy in England. 

The Programme includes support for animal health and welfare, farm productivity, and the rural aspects of the new Shared Prosperity Fund (a replacement for EU structural funds).  However the largest element, and the focus of the NAO’s report, is the transition from the BPS to the new Environmental Land Management Scheme (ELMS).  Some key findings of the report are summarised below;

• implementing the new agricultural policy will be ‘complex, difficult, and high risk’.
• Defra’s estimates for uptake of ELMS look ambitious, with 82,500 farmers and land managers expected to be enrolled by 2028 (similar to current BPS claimant numbers).
• it is not clear how the move from BPS to ELMS will achieve the aim of a ‘thriving farming industry’ when the BPS forms such a large component of profit on the average farm.  The report infers that Defra is placing too much weight on productivity improvements to make up the shortfall from the BPS, although it notes that a pilot study will be undertaken in 2019-20 on how business support can be given to the most vulnerable businesses such as grazing farms. 
• the farming sector is being given little time to prepare for participation in the pilot as the payment methodology is only being set in March 2020, payment rates in June 2020, and the first pilots due to start in late 2021.
• it is not clear that the pilot (which has reduced it’s first year target from 5,000 to 1,250 agreements) will provide sufficiently robust evidence to inform the future development of the scheme
• Defra has already started to specify its digital requirements for the Programme before key decisions have been made.  This increases the risk of significant technology changes late in the Programme.  Defra state that they are using ‘agile’ systems that allow ongoing changes as well as re-using elements of existing systems, and this will reduce risks.  Those that have experienced Defra/RPA computer systems in the past may not be completely reassured by this. 

The latest organic statistics from Defra show that the area managed under this system continues to fall.  Total land both ‘in conversion’ and fully organic fell between 2017 and 2018 by 8.4% to 474,000 Ha.  This means that around 2.7% of the land on UK farms is being managed organically.  The figures continue a long-term trend.  The organic area peaked at over 700 thousand hectares in 2008.  The number of organic producers and processors in the UK fell by 6% year-on-year to 6,188.  For more detail see – https://www.gov.uk/government/statistics/organic-farming-statistics-2018

 

 

 

Farmers in Wales will be supported by a single scheme once the BPS is phased-out.  The Welsh Government has produced a formal response to the ‘Brexit and Our Land’ consultation that was launched last summer (see July Bulletin).

In the original consultation it proposed that there would be a two-strand replacement for the BPS – an Economic Resilience Scheme would support economic activity in Welsh farming whilst a Public Goods Scheme would reward land managers for providing certain outcomes for the wider society.  However, it now proposes that all support will come under a ‘Sustainable Farming Scheme’.  This is in response to replies to the consultation that farms would be artificially split between ‘food producing’ land and ‘public goods’ land. 

The response (see https://gov.wales/brexit-and-our-land-our-response) makes it quite clear that the BPS, or something like it, will not continue – ‘the Welsh Government considers universal income support decoupled from outcomes does not provide an effective way to support farmers’.  The new system will be based on ‘outcome-targeted payments’.   The scheme will be based on ‘Sustainable Farming Payments’ – these will be annual revenue payments in return for providing public goods.  Although, the Welsh Government specifically states that it does not see food production as a public good, it hopes to design the scheme so that ‘the production of food and the production of public goods is mutually reinforcing’.  Within the document it is proposed that ‘payments are set at a level that contributes positively to net farm profits’ – this suggests that they may well be more generous than past ‘income foregone’ agri-environment payments and include an element of margin.

In addition to the annual payments, the scheme also aims to drive ‘business development’.  Support for on-farm investment appears to be a key element of this, although much focus is also on business support, skills and training.  Indeed, there is an implication that farmers will not be able to access grant funding unless they can demonstrate they have the business skills to make good use of it. 

No specific timetable for the introduction of the new scheme (and the phase-out of the BPS) is given.  The previous completion date for reform of 2025 is referred to, but this is now described as ‘ambitious’; perhaps indicating a longer transition.  The next steps of the process will be a further consultation launched in July.  Then there will be a process of ‘co-design’ of the new scheme, starting in the autumn which will involve farmers, foresters, advisors, academics and other stakeholders.

UK landowners look to be getting ‘ahead of the curve’ on climate change.  The predicted warmer summers make domestic wine production less of a marginal activity (indeed, some current famous wine-growing regions may become too hot and dry to grow grapes).  Latest figures from the trade body, WineGB, show there has been a surge in UK vine plantings.  An extra 690 Ha (1,700 acres) were planted last year (this is equivalent to 3 million vines).  This is a 24% increase in the total area under vines, to over 3,500 Ha.  Whilst still a niche land use, it is estimated that 35,000 Ha of the UK might be suitable for wine production.