Category: Policy & Business

Anyone who has struggled to submit their 2018 BPS forms over the past few weeks will not need reminding of the shortfalls of the Rural Payments Agency.  However, the performance of the Agency has been criticised once again in a report from the Environment, Food and Rural Affairs (EFRA) Select Committee of Parliament.

The Committee found that it was ‘unacceptable’ that over 3,000 claimants were still waiting for their 2017 payments by March 2018.  The report went on to highlight ‘poor communications and complaints handling’, errors from mapping updates, and incorrect payments.  Concern was raised over the RPA’s ability to take on the administration of Countryside Stewardship schemes from this autumn.  The report makes a number of recommendations for improvements to the service offered;

• a more ‘stretching’ payment target for 2018 of 98% of payments made by the end of March
• developing a system to allow farmers to make mapping changes directly onto the online mapping system
• set out a strategy for improving communication and complaints handling.  This should include changing the helpline so claimants have a single point of contact with the RPA (i.e. a dedicated Case Worker)
• publish an ambitious set of key performance indicators for delivering the Countryside Stewardship scheme
• be fully involved in ant Brexit discussions to ensure that ‘operational practicalities are properly reflected in policy development’.  The Committee states that ‘the RPA’s history of failing to deliver workable payment systems does not fill us with confidence that it has either the capacity or expertise to deliver a seamless Brexit transition’

The full report can be accessed via; https://www.parliament.uk/business/committees/committees-a-z/commons-select/environment-food-and-rural-affairs-committee/inquiries/parliament-2017/work-of-the-rural-payments-agency-17-19/

The Welsh Government has launched a new £6m initiative to encourage young people into farming.  The Young People into Agriculture (YPiA) scheme will be available to those under 40, who have started up as head of a holding in the 12 months prior to 1st April 2018, or intend to set up before 1st September 2018.  The support will be in the form of a capital grant worth £40,000, payable in three equal tranches in January 2019, July 2019 and January 2020.  Expressions of Interest will be accepted from 10th May to 12th June.  The top 150 candidates will then be asked to submit a full application including a business plan with key performance indicators.  A formal offer of grant should be made in September.  It is intended that this scheme will be a one-off.  The implication being that new schemes will operate under the Welsh domestic farm policy from 2020.

The Welsh Government will consult on its plans for farm support after Brexit in July.  The Welsh Cabinet Secretary for Energy, Planning and Rural Affairs, Lesley Griffiths has confirmed that the BPS in Wales will continue to operate as under the current system for the 2019 year.  The plan is then to have a new domestic policy in place for 2020, with a five year transition to a new suite of schemes completed by 2025.  What those new schemes might look like should become clearer when the Welsh Government issues the consultation in July.

DEFRA has published the Terms of Reference for the Farm Inspection and Regulation Review.  This was announced by Michael Gove at the NFU Conference in February.  It is to be led by Dame Glenys Stacey and aims to opportunities to improve farming-related regulation and enforcement, including farm inspections, in England.  It is due to report in December 2018.  The Terms of Reference can be found at – https://www.gov.uk/government/publications/farm-inspection-and-regulation-review?utm_source=93e6868c-0f42-4320-a2ae-d056f139c559&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

DEFRA is consulting on the contents of a new Environmental Principles and Governance Bill.  Currently much of UK environmental law is set by EU legislation, with the EU Commission holding the UK to account.  After Brexit, new legislation is required to set out the environmental principles to be followed by UK law (such as ‘polluter pays’) and also to set up a new body to oversee environmental policy.   The consultation can be found at – https://consult.defra.gov.uk/eu/environmental-principles-and-governance/

The deadline for claims under the Countryside Stewardship Scheme has been extended a month to the 15th June.  This is a result of the backlog of agreements that were meant to be in place from the 1st January 2018.  Natural England is still sending these out, and the annual revenue claim cannot be made until the agreement has been approved.  However, the extension applies to all CSS annual claims, not just those for agreements starting this year.  Claims under Environmental Stewardship (i.e. HLS) still need to be made by 15th May.

A reminder that anyone who is thinking of applying to enter the CSS Mid-tier for a 1st January 2019 start date has to request an application pack by the 31st May, with a deadline for submissions of 31st July.

All those who applied under the first round of the Countryside Productivity Small Grants Scheme should now have been contacted by the RPA to say whether they have been successful or not.  Those who have not received an e-mail should, firstly, check their junk mail folder and then contact the RPA.  Those that have been successful are reminded that items included in an application must be purchased and claimed within 150 days.  There are concerns that some (larger) items have significant lead-times for delivery, which may make this target hard to meet.  DEFRA is looking at possible solutions. 

DEFRA has received 44,000 responses to it ‘Health and Harmony’ consultation which closed on the 8th May.  The Department will now consider the submissions before making a response.  The findings will also feed into the new Agriculture Bill which is expected to be published in the autumn.

The 2017 calendar year was the most profitable year for UK farming since 1996 according to the latest Total Income From Farming (TIFF) figures released by DEFRA.  Revised estimates published on the 3rd May show aggregate profits for the year at £5,743m.  This is the best real-terms performance for over 20 years.  The 2017 figure has been increased substantially compared to the first estimate released in February, when TIFF for the year was put at £5,345m

The 2017 figure now shows a 41% real-terms increase on 2016 (up £1,683m).  This is actually down a bit compared to the earlier February estimate (+45%), but this is because the final figure for 2016 has also been revised upwards substantially as well (up from the previous £3,682m to £4,060m).

The reason behind the much-improved performance was largely higher sales.  Farm output rose 10% overall (a combination of both better prices and higher volumes).  This was made up of a 12% rise in crop revenue, a 7% increase in meat value, and a 24% surge in livestock products (mainly milk).  Whilst the cost of inputs (intermediate consumption) rose by 5%, this was not enough to dent the overall performance.  A higher level of Basic Payment (up 2%) also helped profits.

Proposals outlined for the next EU budget suggest funding for the Common Agricultural Policy (CAP) will fall by 5%.  The EU Commission set out its proposals for the next Multi-Annual Financial Framework (MFF) on the 2nd May for the period 2021-2027.  (This will pay for the 2020 BPS onwards.)  The budget suggests that overall spending on the CAP will drop by around 5%, with a cut in direct payments of just under 4%.  All the figures are expressed in current prices – the actual, real-terms, reductions will be much larger, depending on the inflation rate through to 2027. 

Funding for ‘cohesion’ (i.e. regional and structural funds) also takes a similar fall in the new budget.  Money is being diverted to new priority areas such as counter-terrorism, border security, research, defence, and social programmes.  Also a factor is Brexit, which leaves a €12bn per year hole in the EU budget.  The plan is for the budget to be adopted in early 2019, before the European Parliament elections.  However, with the subject of money being so contentious, the negotiations may well drag-on through 2019 and even beyond.  With indicative funding levels now set, the EU Farm Commissioner, Phil Hogan, is set to unveil legislative proposals on the detail of CAP reform in late May or early June this year. 

Although funding levels (and rules) of the CAP are no longer directly relevant to the UK, they are still of more than passing interest.  They show how our closest competitors’ farming sectors are being funded.  There is an argument that if the UK Government (i.e. Treasury) sees support levels in the EU dropping, this gives greater justification to drop UK funding.