Category: Policy & Business

Gove and Future Farm Support

Speaking at the Oxford Farming Conference, the DEFRA Secretary, Michael Gove, has provided some clarity around the future of farm support.

It is becoming increasingly clear that, as we speculated last month, whilst the UK is in the (two year) ‘transition period’ the rules of the CAP will continue to apply.  Therefore, assuming that the transition is agreed and we do not simply crash-out of the EU on the 30th March 2019, the BPS will continue to apply in the UK for both the 2019 and 2020 year.

The 2021 year seems a grey area.  A full two-year transition would take the timing into March 2021 and it is likely that the BPS would apply once more.  However, there are noises within the EU that the transition should end on 30th December 2020 to fit in with the EU Budget periods.  If this is the case, the UK might move to a domestic agricultural policy at this point.

Whilst operating under the rules of the CAP, there is little scope for the UK to change the support system in the short term.  However, MR Gove has indicated that he wants to see BPS payments to the largest recipients ‘capped’ (which is allowed under existing EU rules).  This would not happen for the 2019 year, but would be introduced for 2020 onwards.  Of course, the devil is in the detail when it comes to capping – thresholds and rates have not been set.  A cap at the equivalent of €300,000 (as currently operates Wales) would not affect many claimants, but one set at the National Living Wage certainly would.  A ‘Command Paper’ will be published ‘later this spring’ which should set out the proposed plans for farm support and be subject to consultation.  Note that the level of capping is a devolved matter so this proposal only applies to the English BPS.

Mr Gove stated that there should be a ‘five year period’ after BPS 2019 to allow farmers to adjust to a new regime.  This suggest a BPS-like area payment would continue until 2024 and after that, any payment would only be for ‘public goods’.  However, claimants should not necessarily conclude that the BPS in its current form, and at its current level will be around until 2024.  Firstly, MR Gove indicated that, once outside of the restrictions of the CAP (2021 or 2022) rules such a Greening and Cross-compliance could be ditched.  Against this positive, we believe that payment rates will taper down in the period 2021 to 2024 in order to ‘wean’ farmers off direct payments, and to free-up funds for other programmes.  To summarise all this (assuming a transition deal with Europe is agreed);

  • 2019: BPS – same rules as now
  • 2020:  BPS, but with capping – detailed rules awaited
  • 2021: likely to be as per 2020, but could first year of British Agricultural Policy
  • 2022: almost certainly BAP (unless transition period is extended) – phasing down of Direct Payments likely to start (capping still in place)
  • 2023 and 2024: phasing continues as new ‘public goods’ schemes begin to be rolled-out
  • 2025: no more direct support

Other headline points from the speech include;

  • a guarantee that no one entering into the existing Countryside Stewardship Scheme will be unfairly disadvantaged in any transition to new arrangements
  • a commitment to simplify the CSS application process so that it can be completed in a working day
  • a new food standards measure to promote best practice and assist in marketing UK produce at home and abroad
  • changing procurement rules to help get more British food into public institutions and improving diets to reduce health issues

The full text of Mr Gove’s speech can be found at – https://www.gov.uk/government/speeches/farming-for-the-next-generation

BPS Updates for England

Payments

Michael Gove has reported that 91% of claimants received their 2017 BPS payment by the end of December.  We do, however, know that due to outstanding issues with 2015 and 2016 claims a number of 2017 payments will also be incorrect.  Added to that, the Proactive Land Change Detection (PLCD) mapping updates that the RPA has been carrying out may also mean that payments are not correct and therefore must be checked carefully.

Where a payment is believed to be incorrect because of issues that have already been reported to the RPA for 2015 and 2016 it should not be necessary to raise these again; the 2017 payment should be looked at as part of the outstanding Post Payment Adjustment work.  But if the issue is just for 2017, a Payment Query Form should be submitted.  Claim Statements, once again, will not contain individual parcel information and it is therefore difficult to check where the differences are.  But if Applicants or Agents log onto the Rural Payments online service and scroll down to ‘Basic Payment Scheme Applications’ and then click on ‘View a Previous BPS Claim’ and generate a new summary, this will show the most update land and entitlement information and that which the RPA has used to generate the payment.  If this is used to compare with a copy of the submitted claim it should show up any differences.

Entitlements and Land Transfers

The online entitlement and land transfer functionality is expected to be available from the end of January/beginning of February.  It is of course possible to carry out these transfers using a paper RLE1 form, but if possible it is better to wait until the online transfer facility is re-opened.  This is because RLE1s are not always processed until after the claim deadline, whereas the online functionality is practically done in real-time and you receive an acknowledgement.  The deadline for entitlements to be transferred for use in the 2018 scheme year is 15th May 2018.

Welsh BPS Updates

Changes to Land

In Wales, the Field Management (FM4) paper forms used to to report changes to land have been replaced.  ‘Manage My Land’ on the RPW Online system should now be used instead of the paper forms.  Any changes to land should be submitted via ‘Manage My Land’ within 30 days of the change taking place.

Entitlements

The transfer of BPS entitlements can be made via the forms available on applicants’ RPW Online account.  The notification deadline of transfers for entitlements to be available for the 2018 scheme year is 30th April in Wales.

Woodland Creation Grant

The Countryside Stewardship Woodland Creation Grant is now open for applications.  This is a standalone capital grant under the CSS.  Applicants can choose from a range of capital items.  TE4 – the supply and planting of trees (£1.28 per tree) is mandatory.  Other items associated with protecting the trees are optional.  Farmers and landowners can apply for a one off payment of up to £6,800 per hectare.  They then have two years to carry out all the capital items.  There is also the possibility of a Maintenance Grant of £200/Ha for a further 10 years.  Although with Brexit it is not entirely clear how this will work, as you cannot apply for the Maintenance Grant until the final claim has been paid for the Woodland Creation Capital Agreement.  This Maintenance Grant is applied for through the Higher Tier of the Countryside Stewardship.

The closing date for initial applications is 16th February 2018.  This gives the Forestry Commission time to make a site visit and make any adjustments to the application before the final deadline of 31st May 2018.  Agreements should be offered from July 2018 onward.  Further information can be found in the latest manual at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/645380/cs-woodland-creation-manual-2018.pdf

Brexit Sector Analyses

The House of Commons Brexit Committee has finally published impact assessments on how 39 sectors of the UK economy will be affected by leaving the EU.  Readers may recall a large fuss about whether the studies actually existed (David Davies seemed to change his mind on this a few times) and whether they should be published.   Although they are now in the public domain, it probably wasn’t worth waiting for.  If the agriculture and food paper (which can be found at – https://www.parliament.uk/documents/commons-committees/Exiting-the-European-Union/17-19/Sectoral%20Analyses/2-Sectoral-Analyses-Agriculture-Report.pdf) is anything to go by, they are merely a compilation of existing statistics and summaries of the current situation.  Any detail on how the sector will actually be impacted by Brexit is either redacted or has not been produced.

 

BPS Payment Update

The RPA has announced that, as at the 20th December, 84% of claimants had received their 2017 BPS.  This equates to around 71,000 businesses receiving some £1.3bn.  Payments will continue to be made through to the end of the month, with the target still to get 90% of claims paid by this point.

BPS 2017 Payment Progress

The RPA has announced it paid 63% of eligible BPS claimants in England between 1st and 6th of December.  The announcement was not made until 7th December; usually a statement is made within a couple of days.  Interestingly the RPA is not quoting payments in terms of total funds which makes the sceptics among us think that payments have been made to smaller claimants.  Certainly many Agents, who tend to deal with larger claims, don’t recognise the 60% figure among their client base.   But the RPA has said payments have been made to a range of claim types; different sizes as well as those that have been inspected and those with Common Land.  It appears this year that payments will be made at more regular intervals throughout the month, which may explain why the first announcement was covering a few days, rather than just day one.  The agency remains committed to pay at least 90% of eligible claimants by the end of December.

In Wales, 91% of BPS claimants were paid on the first day of the payment window (1st December – 30th June) and RPA Wales has said it is committed to paying the remaining 9% as soon as possible.

In Scotland and Northern Ireland payments commenced earlier.  The Scottish Government has again made a National Loan Scheme available.  Loan offers have been made to nearly 17,500 farmers and crofters, with 13,129 being paid by 30th November.  The loan is worth approximately 70% of the estimated total claim; balance payments will be made between March and June.  For those who have not already taken up the loan offer, it is still possible to apply.  Northern Ireland took up the EU’s offer of making advanced payments and 91% of eligible claimants received 70% of their BPS claim value in October.  Balance or full payments are now being made and the commitment is to make full or balance payments to 95% of claimants by the end of December.

LFASS Payments

Farmers and crofters will receive more through LFASS payments for 2018 than expected.  The Scottish Government has confirmed that hill farmers will receive 100% of their 2017 payment in 2018 rather than the 80% that was previously announced.

Readers will recall that under EU rules 2017 was supposed to be the last year that the current LFASS  would have been able to operate, as the EU is moving to new ‘Areas with Natural Constraints’ classification.  However, the Scottish Government took up the option to keep the scheme and make ‘parachute payments’ which effectively allowed it to make payments of 80% of those received in 2017 for the 2018 year.  But following a decision by Brussels to defer any LFA changes until 2019, farmers and crofters will now receive 100% of their payment.

Cross Compliance Guidance

DEFRA has published the latest cross compliance guidance.  The ‘Guide to Cross Compliance in England 2018’ will not be sent out to farmers but can be read or downloaded from the DEFRA website at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/668684/Cross_Compliance_2018_guide_v1.0.pdf.   There are no new rules for 2018, however DEFRA has said the way RPA checks certain rules from 1st January 2018 will change:

• GAEC 5,  Minimising Soil Erosion – suitable measures to prevent soil and bankside erosion must be in place, and this can be shown during any inspection.

• SMR 7, Cattle Identification and Registration, and SMR8, Sheep and Goat Identification – all cattle and sheep are correctly identified, and that lost or damaged ear tags are replaced within the deadlines.  Applicants must also make sure that any cattle notifications they make to BCMS are made within the deadlines.  Although the guidance states that how these rules will be inspected will change for 2018, there is no detail on what is changing – not very helpful.  We will try and find more detail and publish these in future Bulletins.   

The rules are a calendar year requirement and must be met by those claiming under the Basic Payment Scheme, Countryside Stewardship Scheme, Environmental Stewardship Scheme or English Woodland Grant Scheme.  Failure to comply could result in penalties being applied to these scheme payments.

Welsh NVZs

It is looking increasingly likely that the whole of Wales will be designated as a Nitrate Vulnerable Zone (NVZ).  Lesley Griffiths, Cabinet Secretary for Energy, Planning and Rural Affairs has said she is ‘minded to introduce a whole Wales approach to tackling nitrate pollution from agriculture‘.  However, it is unclear what the new rules will be under the new designation and whether they will be as stringent as they currently are in the areas of Wales (and England) already designated as NVZs.  The Welsh Government has said over the coming months it will ‘work with stakeholders to get the right balance of regulatory measures, voluntary initiatives and investment’.  It has also said that it will explore options to provide flexibility, where the outcomes achieved are the same or better than via a regulatory approach.

The announcement comes following the Welsh Government’s consultation last year on the ‘Review of the Designated Areas and Action Programme to Tackle Nitrate Pollution in Wales’.  Just under 60% of responses supported a whole-Wales designation.  A summary of responses will be available in the New Year.