After speculation throughout the summer, the Government finally published the 9-part Agriculture Bill 2018 last week. As anticipated, the Bill sets out the plan for UK agriculture outside the EU Common Agricultural Policy (CAP), and a reform of the agricultural subsidy regime in the years following Brexit. We expect the Bill to become law in the spring, following the passage of debate through Parliament.
As expected, there was a very green tone to the proposals, and it is clear that a new Environmental Land Management System is forefront in the plans, meaning a shift from farming to environmental subsidies. The largest benefits will accrue to landowners and farmers who provide the greatest environmental enhancement or protection. The Government hopes that the result will be cleaner air and water, better soil condition and higher standards of animal welfare. In addition, the expectation is that the public will enjoy improved access to the countryside and historic features of the British countryside will be preserved. The precise rules governing this are yet to be decided.
What is not clear at the time of writing (when a no-deal Brexit is a possibility) is which other regulatory and other changes farmers and landowners will need to deal with. These depend on the result of any negotiations with the EU.
The question on many people’s lips was what will happen to direct payments under the Basic Payment Scheme once the UK leaves the EU. It appears the Government wishes to avoid a sudden lurch to the new system by invoking a gradual transition period of 7 years until 2027. Payments will be phased out after 2019 and 2020 (during which the normal payments will apply). It is clear that recipients of the largest payments will receive the highest cuts. The link between the Basic Payment and requirement to farm land will be severed, but again, the precise details are not known at this stage. Instead, the Government hopes to work with farmers to develop the Environmental Land Management System mentioned above, where payments are linked to environmental protection and improvement. This does provide an opportunity to those who wish to cease active farming. At the same time, the Government has also stated its commitment to measures that increase productivity and investment in research and development, including farming innovation. We understand new grants and loans will become available, although for the time being the Rural Development Programmes will continue. There is also an intention to secure farmers a better deal in contracts with purchasers of their products, through transparency and a stronger negotiating position.
How this will affect farmers and landowners will depend very much on their attitude towards change and the nature of their own land. Uncertainty is uncomfortable and the Government will need to provide clarity on some of these proposals. It is evident that major change is in the air and current ways of life may need to be re-evaluated. However, many will have been through shifts before and will know that there are always opportunities for those that wish to seize them. Here at BHW, we will continue to keep you updated on the changes as they occur, and we are always here to provide advice.
To discuss any of the points raised in this article, contact Commercial Property Partner, Eleanor Rattay on 0116 281 6224 or email email@example.com.