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Defra unveils post-Brexit domestic agricultural policy framework

Plan sees shift away from direct payments to funding for environmentally beneficial outcomes

A new Agriculture Bill setting out the policy framework for farming in England post-Brexit will be introduced in the UK parliament today (September 12), with an emphasis on support for public goods and the delivery of outcomes that protect and enhance the environment.

The Secretary of State for the Environment, Michael Gove, has unveiled a plan that will see a complete movement away from the current direct subsidy scheme, as employed by the EU’s Common Agricultural Policy, over a seven-year period beginning in 2021 (follow this link for the full text of the Bill).

In its place will be a new Environmental Land Management (ELM) system, which will officially start next year. Under the new system, farmers will be paid to deliver ‘public goods’ such as improved soil health, better quality air and water, higher animal welfare standards and measures to reduce flooding, among other things.

“The government will work together with farmers to design, develop and trial the new approach,” the Department for Food and Rural Affairs (Defra) said in a statement.

“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 Agriculture Bill will also include measures to invest in research and development and to increase productivity, Defra said, as well as setting 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,” it said.

As agricultural policy is devolved, the 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,” Defra said. 

Direct payment phase-out

The system of direct payments will remain intact for 2019 and 2020, subject to simplifications where possible. The UK is expected to remain within the CAP for this time period as part of the proposed transitional arrangements expected to be agreed with the EU.

It will be over the period 2021-27 that direct payments will gradually be phased out, with those receiving the highest payments to see the biggest reductions in the initial years. The intention is to free up around £150 million in state funding to reinvest in the delivery of public goods, including piloting new schemes and providing transitional support for farmers.

In the first year of the transition period, 2021, those farm businesses receiving £150,000 or more in direct payments annually will have their subsidy reduced by 25%, while those earning up to £30,000 will receive a 5% cut (full details in table below).

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

 

Delinking payments

In order 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 which, Defra claims, will give farmers greater freedom over how they use the funding they receive.

This could, for example, mean that farmers use the payment to contribute to their retirement, and this could in turn increase the opportunities for new entrants, or farmers wishing to expand, to acquire new land. Alternatively, farmers could use the money to invest in their businesses.

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

“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.”

 

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Northern Ireland seeks to maintain direct payments until 2021
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