Landmark Agriculture Bill to deliver a green brexit

Wednesday, 12 September 2018 00:01

Michael Gove sets out major post-Brexit policy to invest in the environment and take back control for farmers after almost 50 years under EU rules New system of “public money for public goods” will support a Green Brexit and deliver better environmental outcomes Seven year agricultural transition period gives farmers time to adjust as they plan for the future Legislation to deliver a cleaner and healthier environment for future...Request free trial

Michael Gove sets out major post-Brexit policy to invest in the environment and take back control for farmers after almost 50 years under EU rules
New system of “public money for public goods” will support a Green Brexit and deliver better environmental outcomes
Seven year agricultural transition period gives farmers time to adjust as they plan for the future

Legislation to deliver a cleaner and healthier environment for future generations after nearly half a century under EU rules is being introduced into Parliament today (12 September).

The Agriculture Bill sets out how farmers and land managers will in future be paid for “public goods”, such as better air and water quality, improved soil health, higher animal welfare standards, public access to the countryside and measures to reduce flooding.

This will replace the current subsidy system of Direct Payments, which is ineffective and pays farmers based on the total amount of land farmed. These payments are skewed towards the largest landowners and are not linked to any specific public benefits. The top 10% of recipients currently receive almost 50% of total payments, while the bottom 20% receive just 2%.

In its place, a new Environmental Land Management system will start from next year. The government will work together with farmers to design, develop and trial the new approach. Under the new system, farmers and land managers who provide the greatest environmental benefits will secure the largest rewards, laying the foundations for a Green Brexit.

The Bill will also be underpinned by measures to increase productivity and invest in R&D.

For example, there will be funding available for farmers to come together to develop and get the research projects that they want and need, whether that be on soil health or sustainable livestock farming . This will lead to practical gains for farmers that help them become more profitable and reduce their environmental footprint.

The government will also be able to make payments during the seven year transition period for famers to invest in new technologies and methods that boost productivity.

Environment Secretary Michael Gove said:

“The introduction of the Agriculture Bill is an historic moment as we leave the EU and move towards a brighter future for farming.

“After nearly 50 years of being tied to burdensome and outdated EU rules, we have an opportunity to deliver a Green Brexit.

“This Bill will allow us to reward farmers who protect our environment, leaving the countryside in a cleaner, greener and healthier state for future generations.

“Critically, we will also provide the smooth and gradual transition that farmers and land managers need to plan ahead.”

Farmers will be supported over a seven year transition period as we as leave the EU’s Common Agricultural Policy (CAP).

For 2019, Direct Payments will be made on the same basis as now, subject to simplifications where possible. Direct Payments for 2020 will also be made in much the same way as now. Simplifications will be made as soon as possible, subject to the terms of the overall Brexit implementation period. There will then be an agricultural transition period in England between 2021 and 2027 as payments are gradually phased out.

During consultation, there was a widespread support for applying reductions to Direct Payments more widely. Most farmers will therefore see some reduction to their payments during the transition, although those who receive the highest payments will see bigger reductions initially. This will free up funds to invest in public goods.

To help new entrants get into the sector and give farmers flexibility to plan for the future, Direct Payments during the agricultural transition period up until 2027 will be “delinked” from the requirement to farm the land.

These payments, which may be calculated according to money received in previous years, can be used by farmers to invest in their business, diversify their activities or else retire from farming and give way for new people to enter.

The Bill also sets out how the government will strengthen transparency in the supply chain to help farmers get a better deal in the marketplace.

By collecting data from across the supply chain, the government will help food producers strengthen their negotiating position at the farm gate and seek a fairer return.

The introduction of the Agriculture Bill now means that all the necessary measures will be in place for the start of the agricultural transition in 2021, delivering a smooth transition to the new domestic policy.

ENDS

Notes to Editors:

The Agriculture Bill sets the framework for Defra’s future Environmental Land Management Policy, moving towards a system where public money is spent on public goods, in particular protecting and enhancing our environment. This will be the centrepiece of the Government’s new approach to farm payments. Public goods which the government will pay for include:

Improving air and water quality and soil health – e.g. reducing ammonia emissions or soil erosion
Providing habitats for wildlife – e.g. maintaining hedgerows, nectar plots for pollinators or food sources for farmland birds
Reducing flood risk – e.g. planting trees and hedges
Preventing climate change – e.g. through peatland restoration to protect the existing carbon store and reduce emissions of CO2e
Improving public access to our countryside – e.g. replacing access structures such as gates
Protecting iconic features of our countryside – e.g. maintaining drystone walks or other historic features

The agriculture sector currently imposes costs on the environment. The annual external cost to farmers from soil erosion and compaction from agriculture was estimated at £305m in 2010 for England and Wales (Defra analysis in £2017 prices using figures from Defra Science Project (2018) / total costs of soil degradation in England and Wales (SP1606)).
There are already examples where this ambitious environmental focus for farmers is already working, such as the ‘Exmoor Ambition’ – a post-Brexit plan for upland hill farming in the region, developed by the Exmoor Hill Farming Network and Exmoor National Park Authority.
Agriculture policy is devolved, and so the Agriculture Bill sets out primary legislation mostly for England. Following close engagement with the devolved administrations the Bill will provide powers for Welsh Government Ministers to pursue their own reforms, and extend provisions to Northern Ireland, until primary legislation is taken through their own legislatures. The Scottish Government is not taking powers in the Bill.
There will be some UK-wide clauses in the Bill for policies reserved to the UK government. The UK government is continuing discussions with the devolved administrations to find common approaches for agriculture that work for all of the UK where legislation is not required.

Timeline for the phasing out of Direct Payments and introduction of the new system:

Year	CAP and CAP legacy	Future arrangements	Transitional Support
2019	Direct Paymentscontinue on the same basis as now with minor simplifications Countryside Stewardship (CS)agreements continue to be signed and Higher Level Stewardship (HLS)agreements extended as required	Tests and trials for Environmental Land Management (ELM)
2020	Direct Paymentscontinue with further simplifications, where possible CS agreements continue to be signed and HLSagreements extended as required	Tests and trials for ELM Higher animal welfarestandard defined, industry leadership role for animal health and welfareagreed
2021	First year of progressive reductions to Direct Payments CS agreements continue to be signed but number becomes dependent on ELM. HLS agreements extended as required	First pilots and ongoing tests and trials for ELM Welfare pilots begin and animal healthinterventions agreed with industry UK Shared Prosperity Fund starts Targeted investment inR&D and innovation	Transitional supportschemes to build farm capability to manage risk, improve productivity and deliver public goods will be offered, including: Enabling on-farm investment in equipment and technology to deliver public goods Supporting new entrants to get into farming Measures to improve resilience - prevention of plant pests and diseases Initiatives to support new relationship between government and land managers
2022- 2024	Progressive reductions to Direct Payments continue Final CS agreements start (number dependent on ELM) and HLSagreements extended as required	ELM pilots, tests and trials. Welfare pilots continue and animal healthinterventions on offer Targeted investment inR&D and innovation
2025		ELM fully up and running Measures to promote animal health and welfare fully up and running Targeted investment inR&D and innovation (up to 2029)
2026
2027	End of 7 year transition period (last year Direct Payments)
2028 and beyond	No Direct Payments

ENDS

NOT FOR REPORTING – FOR BACKGROUND

AGRICULTURE BILL BRIEFING NOTE

Agricultural Transition: moving from the old system to the new

Overall approach

The system of agriculture support in England will start to change as we move to a new system of land management contracts. We will help the farming sector adapt to a post-Common Agricultural Policy (CAP) world by phasing out Direct Payments over a 7 year transition period, starting in 2021. This will free up funding to reinvest into the delivery of public goods. We will introduce the new land management system gradually, as part of a planned and controlled transition.

Simplifying the CAP (2019 to 2020)

We will pay Direct Payments for the 2019 scheme year on the same basis as now. The EU rules for the Basic Payment Scheme, greening and young farmer payment will apply throughout the whole of 2019.

We also plan to allocate the money paid in Direct Payments for 2020 in much the same way that we do now. We will, however, look to make simplifications to make it easier to apply for and administer Direct Payments to increase value for money. We will do this as soon as we can, and in line with the terms of the implementation period.

We will simplify the 2019 Countryside Stewardship application process in England, within the rules of the implementation period.

The Agricultural Transition (2021 to 2027)

We will phase out Direct Payments in England, giving time for farmers to adjust. We plan to start reducing payments in 2021. We aim to phase out Direct Payments completely by the end of the transition, with the last payments being made for the 2027 scheme year.

As Direct Payments are phased out, funds will be released so that the new environmental land management contracts and other measures to incentivise public goods can be introduced gradually. During the transition we will also offer time-limited initiatives that enable farmers to invest in equipment, technology, and infrastructure that will help them to deliver public goods, improve their productivity, and put them in a strong position to take up offers through the new environmental land management system.

Simplified versions of Countryside Stewardship will continue to be open to new applicants. We will also consider whether any current Higher Level Scheme agreements should be extended. This will be in parallel to the introduction of new environmental land management contracts. This means that an established scheme will continue to be available as we test and refine the new arrangements.

This approach will help farm businesses become increasingly resilient, internationally competitive and better equipped to protect our environment.
From 2021, payment reductions will be applied in a fair way, with higher reductions initially applied to amounts in higher payment bands. For the first year of the transition, 2021, we will reduce farmers’ Direct Payments by up to the following percentages, which could free up to around £150m to reinvest into the delivery of public goods - piloting new schemes, investing in research & development and providing support for farmers during the transition:

Direct Payment band ¹	Reduction percentage
Up to £30,000	5%
£30,000 - £50,000	10%
£50,000 - £150,000	20%
£150,000 or more	25%

These percentage reductions will be increased over the transition until the final payments are made for the 2027 scheme year. We will maintain the same cash total funding for the sector until the end of this parliament, expected in 2022.

Delinking of Direct Payments

To help new entrants get into the sector and give farmers flexibility to plan for the future, Direct Payments will be “delinked” from the requirement to farm the land. This will give farmers much greater freedom over how they use the funding they receive from Direct payments.

Some farmers could use the money to invest in their business without having to worry about the bureaucratic paperwork that accompanies the Basic Payment Scheme. Others may choose to use the money to diversify their activities or decide to stop farming altogether and use the payment to contribute to their retirement. It should increase the ease with which new entrants, and those existing farmers wishing to expand, could acquire land.

This approach best meets the widespread desire for simplification. It gives farmers the greatest flexibility on how they use the money received. We will also look to give farmers the option of taking a one-off lump sum payment in place of all their annual Direct Payments.

Delinking will also remove the requirement to follow existing EU rules, as well as the system of payment deductions that enforces them. This change will help us to improve on some of the more onerous and ineffective requirements in place today; but all farmers must continue to comply with good land management and husbandry standards. We are committed to maintaining a strong regulatory baseline, with enforcement mechanisms that are proportionate and effective. Alternative enforcement mechanisms will be introduced before Direct Payments are delinked so that we can maintain agricultural and environmental best practice.

Environmental land management

As we phase out Direct Payments, we will invest in the delivery of public goods. Improvements in soil health, water quality, air quality, biodiversity and carbon reduction have the potential to make us healthier, protect our natural capital, tackle climate change and preserve our heritage and beautiful landscapes.

The government will work with farmers and land managers who wish to improve the environment by entering into environmental land management contracts, which could span several years.

These contracts will make sure that the environmental benefits farmers help deliver, but which cannot be sold or bought, are reimbursed by the public purse. These will include:

Helping to deliver improved air and water quality;
protecting and enhancing biodiversity on their land, by providing habitats for wildlife,
preventing, reducing and adapting to climate change and other environmental hazards like flooding and drought;
providing public access to their land and contributing to the public’s understanding and enjoyment of nature; and
protecting our historic rural environment and our distinctive landscape features.

These contracts will be based on a land management plan developed by the farmer or land manager. Farmers and land managers will be able to join the scheme using a simple application process throughout the year. They will be able to decide for themselves how they can deliver environmental benefits from their business and their land, and how they integrate this into their food, timber or other commercial activities.

Plans will be adaptable and encourage local solutions. They will be rooted in strong evidence and best practice, encouraging farmers and land managers to review and revise approaches throughout the year to deliver the best results.

Current agri-environment schemes base the return to the farmer on the costs incurred and income foregone from the delivery of environmental goods. We will explore how to encourage greater participation where this may be needed to help deliver our environmental aims, valuing environmental benefits appropriately while respecting our international obligations and ensuring we maximise value for money. Funding from the government could comprise multi-annual payments, capital grants, and/or payments for collaboration and for local engagement.

We will work with potential participants to design, test and trial elements before piloting it widely and then rolling it out nationally. We will implement the new scheme in phases. This will allow for flexibility as we develop the scheme, and enable us to deliver a system that is valued and participated in by farmers and land managers.