20 May 2020

Developments in UK agricultural policy

There is almost certainly no one now working in the agricultural departments of the UK that has direct experience of designing a farm support system. The last time the UK set its own rules on agricultural policy was before it joined the EEC, as it then was, in 1973. Since that point, civil servants have largely been confined to implementing the rules agreed in Brussels under the Common Agricultural Policy – with a few tweaks here and there to tailor it to national circumstances. With Brexit, the four administrations in the UK effectively have a blank sheet of paper. Richard King, Head of Business Research at the Andersons Centre, provides a brief overview of what they are currently thinking.

Money

What is possible is always limited by the budget available. Farming might consider itself lucky in that it has received a ‘funding guarantee’. This promises to ‘match the current budget available to farmers in every year of this Parliament’ – due to end in 2024. The form of words also allows for a variety of interpretations – for example, does the phrase ‘available to farmers’ only mean current Basic Payment Scheme (BPS) funding is guaranteed and not Rural Development money? Time will tell. It certainly seems likely that funding to 2024 will only be guaranteed at current prices – i.e. it will not be increased in line with inflation. After 2024, there may well be a sharp squeeze on budgets as farming competes with other Government priorities such as the NHS, schools, social care etc. In the short term, though, the administrations can plan their future schemes with reasonable clarity on funding.

Public Goods v Direct Payments

One of the biggest tensions in UK farm policy is how much and how fast to change. This is illustrated by the balance between continuing to pay an ‘income support’ to farmers in the form of a direct payment (i.e. son-of-BPS), versus a move to ‘public goods’ payments. The latter involves the Government buying services from land managers where there is no market for them. This includes traditional agri-environmental targets such as wildlife and habitats, but the new schemes will go much further into areas such as soil health, greenhouse gas (GHG) emissions, flood prevention, public access and more.

Scotland is very much in the camp of little change – it is proposing only limited alterations to the present suite of schemes such as BPS, Less Favoured Area Support Scheme (LFASS) and Agri-Environment Climate Scheme (AECS) until 2024. At the other extreme is England where an ‘agricultural transition’ is planned to start in 2021 with the BPS completely phased out by 2028 and replaced by a public goods-based Environmental Land Management (ELM) scheme.

Both Wales and Northern Ireland have delayed any major changes until after 2021. Wales will then also transition (over a period yet to be decided) to public goods type of support. However, the Welsh Government may well maintain a greater focus on productive agriculture in its support system (e.g. grants for infrastructure). The plans in Northern Ireland are somewhat less advanced due to the suspension of the Assembly. However, an element of income support, like the BPS, could form part of the eventual policy mix.

Productivity, Training, Welfare

Defra and the devolved agricultural departments have a clear goal to make farming ‘better’. Part of this is making the industry more efficient and productive – the international comparisons on farm productivity are not flattering to the UK. This is likely to see investment across the UK in research but, crucially, also more emphasis on knowledge transfer onto farm. Part of the package is likely to be capital grants. These will be mainly for equipment – especially that seen as ‘high-tech’, as Ministers like to be seen as supporting cutting edge technology. But there may also be infrastructure grants. Improving the skills of farmers themselves will form part of future farm policy. There will be training made available and also subsidised advice. In England, for example, this advice will be linked to helping famers move from the old support regime to the new one and making best use of the ELM scheme. It may be mandatory to have training or advice to get access to grants under the new arrangements. No UK administration quite looks ready to introduce compulsory Continuous Professional Development (CPD) for farmers (e.g. a minimum amount of training per year as a ‘licence to farm’), but it may not be many years away.

Animal welfare will be a feature of future policy. High standards is seen as one of the unique selling points of UK food

Lastly, animal welfare will also be a feature of future policy. Having high standards is seen as one of the unique selling points of UK food and is seen by Government as a key weapon in selling produce to both domestic and international consumers. Any monetary support will be for measures that go beyond the existing legal baseline.

Trees

The past General Election campaign saw a bidding war in terms of tree planting commitments in party manifestos. As well as the traditional drivers such as timber production, habitats, landscapes and amenity, the new factor of carbon capture has boosted the drive for more trees. There is likely to be continued support in the form of planting grants, but also additional ongoing payments to recognise the carbon being locked-up.

Conclusion

The EU’s Common Agricultural Policy meant that all parts of the UK followed broadly similar farm policies. With devolution and then Brexit each country is free to adopt their own plans. This should allow policy to be more closely tailored to the circumstances of the farming industry in that nation – although it makes the farm support ‘landscape’ far more complex in the UK. Over time, as each country does different things, it may provide a ‘laboratory’ in terms of what works and what doesn’t. In any event, the farming industry will have to get used to a very different policy environment to that seen for the past 40 years.

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