After a short delay, the online application window is now open in England. If applicants log onto Rural Payments, scroll down to ‘Basic Payment Scheme Applications’ and click on ‘Apply for BPS’ they will now see ‘create a new Direct Payments application’ in green. In addition all the scheme rules and guidance are now available at https://www.gov.uk/guidance/bps-2019
Those in England who are raring to get their BPS 2019 application season started, may have to wait a little longer. The online application window which was supposed to be open today (13th) is not quite ready. If applicants click on ‘Apply for BPS’ it still says ‘no data found’. This will change once the functionality is ready. The delay is not expected to be long and it may even be open later today (13th). We will keep readers informed. It is still possible to view land, transfer entitlements & land and also input 2019 land use.
Farm profits fell across most farm types in the 2018/19 year. This is the finding of the first forecasts of Farm Business Income (FBI) to be published from the Farm Business Survey. Although titled ‘income’ what the series shows is average profit at the farm level for a typical farm in each sector. The period runs to Feb/March 2019 and includes the 2018 harvest and Basic Payment. The current figures are initial forecasts, derived from information collected up to February 2019. Updated results will be published in October.
As can be seen from the table below, profit fell for all farm types apart from Cereals. Whilst the weather during 2018 was one of the contributors to the drop, rising costs were another important factor. This is especially true in the livestock sector where higher grain prices resulted in increased animal feed costs. In the pig sector, combined with lower selling prices, this has resulted in profit almost being wiped-out. Dairy and poultry farms were also hard hit by higher feed prices.
The only farm type to buck-the-trend of falling profits was Cereals. Although physical output was lower than in previous years, this was more than compensated by higher prices. General Cropping farms did not fare so well as yields for crops such as potatoes, sugar beet and pulses were more adversely affected by the wet spring and summer drought.
| Farm Business Income (England) – source Farm Business Survey | |||||
| Real terms, 2018/19 Prices | 2015/16 | 2016/17 | 2017/18 | 2018/19 | Change 18 to 19 |
| CEREALS |
37,800 |
45,000 | 65,500 | 73,000 |
11% |
| GEN. CROPPING |
66,700 |
73,200 | 95,200 | 85,000 |
-10% |
| DAIRY |
46,800 |
52,100 | 122,200 | 93,000 |
-24% |
| GRAZING L’STOCK (L/L) |
12,800 |
16,800 | 22,300 | 16,000 |
-30% |
| GRAZING L’STOCK (LFA) |
20,200 |
28,100 | 28,900 | 24,000 |
-19% |
| PIGS |
23,000 |
60,300 | 31,900 | 1,000 |
-96% |
| POULTRY |
113,500 |
56,500 | 98,000 | 53,000 |
-46% |
2018/19 Data is Provisional
According to a Freedom of Information request, Defra has recruited 2,700 extra staff to deal with Brexit.
Following the resignation of George Eustice, Robert Goodwill has been appointed as Minister of State for Agriculture, Fisheries and Food. Mr Goodwill has a a degree in agriculture from the University of Newcastle and farms 250 acres near Malton, which has been in his family since 1850. He is also managing director of Mowthorpe Ltd which offers environmentally friendly burials.
Mr Goodwill’s political career began in 1999 when he was elected as a Member of the European Parliament. Goodwill was elected to the House of Commons at the 2005 General Election for Scarborough and Whitby and appointed as a Government Whip in 2006, being promoted to the post of Shadow Roads Minister in the transport team in 2007. After being re-elected at the 2010 general election he was appointed to the Government as a Whip for HM Treasury and Defra. Mr Goodwill, who supported Remain in the 2016 Referendum even though he describes himself as a ‘staunch Eurosceptic’, was dropped from his post as Children’s Minister in the Department for Education during the Prime Minister’s reshuffle of January 2018.
The Farming Minister, George Eustice, resigned his position on the 28th February in protest at the Government’s handling of Brexit. A strong pro-Brexiteer, Mr Eustice was angered by Theresa May agreeing to a possible extension to the Article 50 deadline of 29th March. He stated that such a delay would be the ‘final humiliation of our country’. Mr Eustice has been at Defra since 2013 and in his current role as Farming Minister since 2015, serving under four Ministers. He is widely regarded as having done a solid job. No announcement of his replacement had been made at the time of writing.
Politically, it has been yet another tumultuous month regarding Brexit, but from an agri-food perspective, there have been relatively few developments of note and the Brexit fatigue factor has also been raised another few notches.
Last week Westminster witnessed the emergence of a new political group (The Independent Group) partly due to dissatisfaction with the Brexit policies of Labour and the Conservatives. Yet again, the Prime Minister has decided to delay the ‘meaningful vote’ on the negotiated deal, which is now due to come before Parliament by 12th March. This is in order to give the Attorney General more time to achieve clarifications from the EU, potentially permitting him to change his legal opinion on the indefinite nature of the backstop.
On 26th February, Theresa May offered MPs the chance to have two separate votes if her negotiated deal fails to pass on the 12th;
Whilst the PM still claims to be intent on securing a Brexit deal and the UK’s EU withdrawal on 29th March, the prospect of a short extension of Article 50 to the end of June have increased considerably. Of course, such an extension would also require the approval of the EU. However, noises from Brussels suggest a positive reaction to such a request. Any request to extend Article 50 beyond the end of June would require the UK to participate in European Parliamentary elections in May, something which the Government has very little appetite for. Last week, there were also claims in Brussels that the UK’s exit could be extended until 2021 which would coincide with the end of the current EU budgetary period. However, there has since been a rebuttal of such claims in Brussels. This approach appears to suggest that the PM is seeking to cajole the Brexiteers within the European Research Group (ERG) into accepting her negotiated deal with the EU. If Parliament votes to rule out No-Deal, then what remains is likely to be a choice between the Government’s negotiated deal or No Brexit at all.
Meanwhile, Labour has also been making noises about changing its Brexit position. On 25th February, it claimed that if Labour’s preferred Brexit option (encompassing a UK-EU Customs Union) was rejected, then it would advocate a second Referendum. However, given the PM’s latest announcement, it is currently unclear when there would be a vote on its preferred Brexit option in the next few days.
Just when one thought that the Brexit process had run out of road and the precipice of a cliff-edge Brexit was becoming a real possibility, it looks like the Government has managed to kick the can yet again. All the while, the agri-food industry is none-the-wiser as to how it can manage Brexit-related uncertainties. Such paralysis is have a material impact on investment decisions and productivity across the industry.
The UK Government continues to update its No-Deal Brexit notices (https://www.gov.uk/government/collections/how-to-prepare-if-the-uk-leaves-the-eu-with-no-deal). The Irish Government has now also taken its No-Deal planning to another level with the publication of a Bill covering 15 topics 9including agri-food) to try and mitigate the worst effects should the UK leave without a deal (see https://www.dfa.ie/brexit/news/news-archive/withdrawal-of-the-united-kingdom-from-the-european-union-bill-2019-and-explanatory-memo.php).
Whilst the Irish Government’s planning is detailed in a number of areas (e.g. financial services, Common Travel Area, EU funding programmes etc.), notably there was relatively scant information on post-Brexit arrangements concerning border inspection of agri-food products. What is perhaps more significant is that last week, Ireland’s Department for Agriculture issued a tender for the provision of Border Inspection Post (BIP) and Veterinary Inspection Services post-Brexit. The tender document, accessible via: https://irl.eu-supply.com/ctm/Supplier/PublicTenders/ViewNotice/212690, mentioned that there are currently 3 approved BIPs in Ireland (Dublin Port, Dublin Airport and Shannon Airport) and that another BIP will be in place at Rosslare Port in time for Brexit. However, it also reveals that it may be that “other BIPs in other locations may need to be established on foot of the restructuring of business that is inevitable post Brexit.” This suggests that preparations are being quietly made for some form of Border control along the 500km land border with Northern Ireland although the Irish Government remains keen to state that there would be no physical infrastructure along the border in the event of a No Deal. Exactly how this will be achieved remains to be seen. That said, as pointed out last month, temporary measures of some form, similar to what Ireland put in place during the 2001 foot-and-mouth crisis, remains a possibility.
The level of tariffs that the UK will levy after Brexit is due to be published shortly. It has been rumoured for some weeks that the publication was ‘imminent’. However, like many things regarding Brexit, it has been delayed. The level of these tariffs is crucial for the agri-food sector, especially in a No-Deal scenario, as they will determine the level of protection UK producers have from low-cost global imports. The amount of Tariff Rate Quotas granted to importers, another vital issue, should also be proposed at the same time.
In his recent speech at the recent NFU conference, the Defra Secretary mentioned that the UK’s “valuable domestic production” in areas such as sheep meat, beef, dairy products, pig meat and poultry would continue to be safeguarded when the UK announces its new tariffs. However, what went unsaid, is the prospect of increased levels of tariff-free quotas in areas like beef which would approximate the UK’s annual import requirement (circa 300Kt) which was reported shortly after Michael Gove’s speech. This could potentially open a significant proportion of the UK market to imports from countries such as Brazil, Argentina, Australia, as well as EU Member States such as Ireland and would therefore have a negative effect on prices, although British producers would still benefit from the Red Tractor branding premium.
Mr. Gove also reiterated a commitment that the UK would not lower its food standards in order to secure free trade deals. That said, it will be important to pay attention to the nuances underneath such statements. It could be argued for instance that a standard could continue to be upheld if the intended outcome is the same as before. However, most of the focus on standards in the context of trade negotiations is on the processes (methodologies) underpinning those standards. If these diverge, or are relaxed in some fashion, then it is likely to be viewed by the EU as a lowering of standards, even if the UK argues that the same outcome is being achieved.
These points highlight the need to pay close attention to detail in the coming weeks and months. It is often what is left unsaid is more telling than what is set-out in keynote speeches.
The Government plans to give new powers to Police and Local Authorities to deal with illegal traveller sites (see https://www.gov.uk/government/news/government-announces-plans-to-tackle-illegal-traveller-sites). It will also consider making it a criminal offence to set up such camps. At present, it is treated as trespass, a civil offence, forcing landowners to obtain a court order before action can be taken to remove those camped illegally.
