Michael Gove has indicated that the Agriculture Bill will not now be published before the summer recess. Speaking to the Environmental Audit Committee of Parliament, Mr Gove indicated it would be published ‘in the second half of the year’. This is to give time for all the responses to DEFRA’s ‘Health and Harmony’ consultation (see February article) to be considered. The deadline for responses to the consultation is 8th May.
Farm rents continue to rise; this is the findings of the latest statistics released by DEFRA. The average rental value under Agricultural Holdings Act (AHA) tenancies rose marginally by 1% between 2015/16 and 2016/17 to £181 per hectare. For Farm Business Tenancies (FBTs) the average figure increased more, by 4% (compared to just 1% last year) to £219 per hectare. The averages do however mask some large variations between farm types, as the table below shows. The data is collected via the Farm Business Survey. It is rather historic as the Survey takes some time to undertake. The latest figures are for the 2016/17 year (roughly Feb to Feb). They are shown as ‘2016’ in the table below.
| FARM RENTS IN ENGLAND – Source: DEFRA | ||||||
| £ per Ha |
FULL AGRIC. TENANCY |
FARM BUSINESS TENANCY |
||||
|
2014 |
2015 |
2016 | 2014 | 2015 | 2016 | |
| Cereals |
192 |
194 |
197 | 231 | 234 | 259 |
| General Cropping |
200 |
204 |
216 | 309 | 277 | 280 |
| Dairy |
201 |
193 |
193 | 218 | 231 | 238 |
| Cattle & Sheep (LFA) |
73 |
79 | 69 | 79 | 78 | 69 |
| Cattle & Sheep (L’land) |
152 |
160 | 170 | 134 | 142 | 157 |
| All Farms |
176 |
179 | 181 | 207 | 210 | 219 |
General Cropping rents remain the highest for both AHA tenancies and FBTs; these will include a large number of short term potato and vegetable growers who will be prepared to pay high rents. FBT Cereal rents and Lowland Cattle and Sheep rents have seen the largest increase (both by 10%) probably reflecting the better commodity prices being obtained in these sectors since mid 2016. However, Lowland Cattle and Sheep rents are much lower than for Cereal land. LFA Cattle & Sheep FBT and AHA rents have both seen significant declines, by about 12%. The average rent paid under Seasonal Agreements (likely to be largely grass lettings) in 2016 was £149 per Ha compared to £162 per Ha in 2015. Full results can be found at https://www.gov.uk/government/statistics/farm-rents
The results from this survey show the amounts actually being paid by farm businesses in England. This will include some lettings that are not at full market value – for example, lettings within families. Therefore, the figures may not correspond to some of the ‘headline’ rates often quoted. These usually relate to situations where new land is being let, or there is a review. The historic nature of the survey means that current trends are not always picked up. Tender rents, especially in the cropping sector, still often remain above levels that can be economically justified.
On 4th April, the Commons Select Committee for Exiting the European Union (Brexit Committee) published its report on the future UK-EU relationship. It contains 15 criteria (key tests) by which it will judge any future deal agreed between the UK and EU negotiators. The key tests which are of relevance to agriculture include;
The report also stated that should the negotiations on a deep and special partnership between the UK and the EU not prove successful, then EFTA/EEA membership should remain an alternative and would have the advantage of continuity of access for UK services. However, as mentioned previously, it must be emphasised that such an EFTA/EEA arrangement would not automatically cover agriculture and would, therefore, be insufficient to avoid a hard border on the island of Ireland.
It must also be highlighted that the Brexit Committee is deeply divided over this report and those objecting to its conclusions include the high-profile Jacob Rees-Mogg who has claimed that the report seeks to “thwart Brexit by stealth”.
Finally, the report mentions the EU’s Association Agreements with Ukraine, Georgia and Moldova which cover most of the Internal Market rules and also provide for selective participation in many of the EU’s agencies and programmes whilst not including free movement of people. However, it acknowledged that binding arbitration is provided for dispute resolution and referrals to the Court of Justice of the EU are limited to interpretations of EU law. The Committee also noted the recent EU Parliament’s support of the Association Agreement option. It appears that the Association Agreement option is gaining traction as it offers greater flexibility than other ‘off-the-shelf’ models frequently cited. Ultimately, the future UK-EU relationship will need to have its own distinct model, particularly considering the commitments of both parties with respect to the Irish border. It is now time for the UK and the EU negotiators to put some ‘meat on the bones’ of a future relationship deal. Only then can any future deal be fairly judged.
The report is accessible via: https://publications.parliament.uk/pa/cm201719/cmselect/cmexeu/935/935.pdf
The RPA has published new guidance on how to check and change hedge information, this can be found at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/696039/How_to_check_and_change_your_hedge_information.pdf. The guidance is important where hedges will form part of an application or claim under the Basic Payment Scheme or Countryside Stewardship Scheme (not Environmental Stewardship).
As previously reported, there is a new ‘Hedge Layer’ on applicants’ Rural Payments accounts, which maps out the hedges in each land parcel. This can be viewed in the ‘Land Viewer’. Also, where hedges have been used to satisfy EFA requirements previously, these have been pre-populated in the Land-Use screen. In both cases, there appear to be a lot of inaccuracies and the new guidance shows claimants when and how to correct this information.
If claimants disagree with the hedge information on their digital maps or a hedge is not shown, they only need to correct this if they will be using the hedge for:
To correct hedge information an RLE1 form and sketch map needs to be submitted. Complete the form at Part D. Fill in columns D1, D4 and D5. The code (at D4) should be H and the Effective date of change (at D5) should be 01/01/2018 or later. Annotate a sketch map showing the length and location of hedges as on the ground. It is possible to take a ‘screen shot’ of the Hedges information from the Land Viewer to mark on the correct hedges. If the gap between hedges is less than 20m, the hedge should be shown as a continual length.
Where hedge information has been incorrectly pre-populated in the Land Use section this can be updated. If this disagrees with the digital maps an RLE1 will need to be submitted as above. Where there are multiple hedge entries in the Land Use for one land parcel it is possible to delete the individual entries, add up all the lengths and insert one entry.
Note, the RPA is saying that the RLE1 does not form part of the BPS or CS application and therefore claimants should make sure in the first instance their application is submitted on time, is accurate and reflects what is on the ground. RLE1s and sketch maps can then be completed and returned to the RPA by 6th July. But, in practice it is often easier to complete sketch maps at the time of making an application.
Countrywide Farmers, which went into administration at the beginning of March, has made its first redundancies. 32 out of over 700 employees have been made redundant so far to reduce costs in order to keep the business trading to realise stock and encourage interest from potential buyers for its stores. The rural and agricultural retailer is mainly farmer-owned and has 48 retail sites across England and Wales. The company’s Liquefied Petroleum Gas (LPG) business was sold on 1st March 2018. Mole Valley is interested in buying the retail business and looked like providing a lifeline, but the Competition and Markets Authority (CMA) is concerned that there would be insufficient competition in the South and South West of the country and has launched an investigation. Countrywide sold its crop protection and cereal business to agronomists Hutchinsons and its grain marketing operation to Openfield back in 2014 to concentrate on the retail side of the business.
Agricultural employers are reminded that minimum wage rates increase as from 1st April. In England the Agricultural Wages Board was abolished and minimum agricultural wages are now the same as for all other employees. The table below shows the new rates of the National Minimum Wage (NMW) and National Living Wage (NLW). In all the other regions of the UK, farming wages are still negotiated by Agricultural Wages Boards.
The Scottish Wages Board has aligned its rates with the NLW since its introduction. This means all qualifying workers (see Wages Order for details – http://www.gov.scot/Publications/2018/03/6565) should be paid £7.83 per hour and £11.75 for overtime. The Welsh Wages Order for 2018 has not yet been published – in 2017 it was delayed by some months. Employers should pay the NLW pending any announcement.
| England wage rates from April 2018 | ||
| Age |
Current Rate (£/hour) |
Previous Rate (£/hour) |
| National Living Wage (25+) |
7.83 |
7.50 |
| NMW (21-24) |
7.38 |
7.05 |
| NMW (18-20) |
5.90 |
5.60 |
| NMW (16-17) |
4.20 |
4.05 |
| Apprentice NMW |
3.70 |
3.50 |
On the topic of employment costs, those businesses affected should also note that contributions under auto-enrolment Workplace Pensions will rise to 2% (from the current 1%) from 6th April. Employees contributions will go up from 1% to 3%.
The process of agreeing the next reform of the Common Agricultural Policy continues within the EU. Although no longer directly relevant to UK farmers (barring a huge U-turn in policy), it is still important in respect of the support farmers in our closest competitors are likely to receive. As we have previously written, the current proposals foresee the continuation of direct payments in the form of the BPS, albeit with some simplification of the rules around Greening and Cross-compliance. The big unknown is the budget, with Brexit leaving a large hole. EU Member States (minus the UK) discussed the proposals in March. The Bulgarian Presidency was hoping to get a broad agreement (Council Conclusions) on the overall shape of reform. However, this proved impossible due to two main stumbling blocks – the continued use of coupled support within the CAP, and the harmonisation of BPS payment rates across all Member States.
Bayer has made a significant step closer towards finalising its acquisition of Monsanto after gaining EU approval. The $66 billion deal is conditional on a number of divestments which BASF is expected to purchase. The aim is still to have the takeover completed during the second half of 2018. With EU approval gained, the US Department of Justice is the most significant approval left to be obtained.
EU leaders agreed the negotiating guidelines for the next stage of talks in a matter of seconds at their summit on the 23rd March. These set out Europe’s position for the ‘future relationship’ talks that will set how the UK and EU trade with each other after the transition period. The EU is looking for comprehensive free-trade agreement on goods with a minimum level of standards. This would be combined with cooperation on security matters. The mandate is vague on the extent to which services might be included in any agreement.
The guidelines reiterate that ‘nothing is agreed until everything is agreed’, highlighting that the progress in negotiations achieved so far would count for little if outstanding issues (such as the Irish border) cannot be resolved. EU leaders will discuss progress at their June summit (28th and 29th June).
Bridging Payments are due to start being made on 4th April and will arrive in bank accounts from 6th. Readers will recall that all those who have not received a 2017 BPS payment in England by the end of March 2018 will receive an interim payment. The amount will be 75% of the estimated full payment. However, if land and entitlements are incorrect at the time the calculation is made the payment might not be the amount expected. The RPA has been sending out emails (or letters if an email is not registered) to all those affected from the 26th March. However full payments are still being made, so it may be possible to receive a bridging payment letter but be paid in full, before the end of March.
The RPA is already on Version 3 of the Basic Payment Scheme rules for 2018. The latest version can be found on Gov. UK at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/693100/BPS_2018_scheme_rules_v3.0.pdf
The new version amends the entitlement usage examples on pages 30 and 31. Already amended in Version 2 was a diagram on Page 44 and the Section starting on Page 57, where a duplicated paragraph and diagram on Pages 57 and 58 have been amended with the correct ones.
It appears that the new Hedge Layer has a lot of inaccuracies. The RPA is due to be sending out some updated guidance on how to deal with these issues. Only hedges that are being used for EFAs need to be mapped correctly. Currently where an EFA hedge is not mapped correctly the only way to correct this is for an RLE1 and map to be submitted to update the data, if this situation changes we will inform readers. The RPA is being pressed to alter the rules. In some cases hedges, have been pre-populated in the Land Use section (in addition to being on the Land Viewer). This is largely where they have been used for EFA in previous years (although there are some inconsistencies). Where an EFA hedge is incorrectly pre-populated in the Land Use section it is possible to change the length. Also note you do not have to have an individual line for each component part of the hedge, it is possible to add all the lengths together and input as one length. But if the length does not agree with the digital maps on the Land Viewer, an RLE1 and map must be submitted.
