The Agriculture Bill 2017-2019 – What it means for farmers.
A seven-year transitional period has been proposed, starting in 2021 and running through to 2027. Thus, guaranteeing support payments – albeit reduced ones – for another 9 years across England. This is security which has rarely been seen in the past. However, the Bill states that by regulations the Secretary of State can extend this transitional period multiple times if need be. Moreover, the Bill states that if after 2027 market conditions are deemed exceptional, financial assistance can be given to producers in England whose incomes are being adversely affected.
All farmers will see a reduction in their support payments from 2021, however, those that receive the highest payments will see the biggest reductions. The idea of this is to free up funds to re-invest into public goods through new environmental land management contracts and other measures. A 5% reduction in payment will be applied to those whose direct payment totals up to £30,000, a 10% reduction will be applied to payments of a value up to £50,000. A 20% reduction will be applied to payments up to £150,000, and a 25% reduction will be applied to payments over £150,000. This does give the impression that larger farms are being penalised for simply being large, and doesn’t provide a level playing field. For example, a farm receiving a direct payment of £25,000 will see a reduction of £1,250, however if a direct payment of £170,000 was being received, there will be a reduction of £42,500.
During the seven-year transition period, direct payments will be ‘de-linked’ from the requirement to farm the land. The Government hopes that this will help new entrants get into the sector and give farmers more flexibility to plan for the future by providing greater freedom over how they spend the funding that they receive. For example, the funding can be used by farmers to diversify their business, to invest in their business or to even stop farming all together, and use the funding to contribute to their retirement.
Under the proposed bill, after the seven-year transition period, financial assistance will be given to those who:
- Manage land or water in a way that protects or improves the environment
- Support public access and enjoyment of the countryside, farmland and woodland and better understanding of the environment
- Manage land and water in a way that maintains, restores or enhances cultural heritage or natural heritage
- Mitigate or adapt to climate change
- Prevent, reduce or protect from environmental hazards
- Protect or improve the health or welfare of livestock
- Protect or improve the health of plants
This echoes Michael Gove’s ‘public money for public goods’ vision.
It is worth noting that the Agriculture Bill has only had its first reading in the House of Commons, it is yet to pass through a second reading on the 10th October, followed by a committee stage – where amendments can be made – then a report stage followed by a third reading, before it can be passed on to the House of Lords to be scrutinised under the same process, once both the House of Commons and the House of Lords agree on the Bill, only then can it go for Royal Assent, where it will become an Act of Parliament – hopefully this will happen by 2021, when the proposed transitional period will begin. Therefore, due to the bill needing to be agreed by both houses it is likely that a number of changes will be made to the bill before it is passed.
It is important to note that the Bill only completely covers England, with parts extending to cover Northern Ireland and Wales as well. Scotland has not been included in the Bill, as Agriculture is devolved to the Scottish Government. Scottish farmers will continue to receive the current level of funding until the end of the current Parliament in 2022. Therefore, the Scottish Government needs to act to decide on the future of Agricultural Policy in Scotland.