Category: Policy & Business

The ban on the use of Plant Protection Products (PPPs) on Ecological Focus Areas (EFAs), and in particular, Nitrogen Fixing Crops (NFCs) has been confirmed and effectively will come into force this autumn.

The European Commission has published its updated greening rules for 2018.  This includes the complete ban on the use of PPPs on EFA fallow, EFA catch and cover crops and EFA nitrogen fixing crops.  The Commission has also confirmed the ban applies from the time of sowing the crop, even it this is before 1st January 2018, to harvesting.  The ban also applies to seed dressings.

This means for EFA Nitrogen Fixing Crops the PPP ban is for the entire growing period i.e for winter beans this will be from autumn 2017.  For EFA fallow the ban will be from 1st January to 30th June (confirmed fallow period, see below).  It now looks like it will no longer be possible to spray off fallow to control weeds, such as black grass, during this period which many have done in the past, although precise rules have not been made available yet.  For EFA catch and cover crops the ban will be for those planted in 2018, not those being established for BPS 2017 EFA requirements and it will be for the new periods being introduced from 2018 (see below).

The other main changes to the 2018 greening rules include:

• Field Margins – The EFA buffer strip option (available next to watercourses) has been extended to include field margins.  The minimum width will be 1m and the EFA value will be the same as that (currently) for buffer strips – every 1m in length is worth 9m² of EFA.  Although the devil can be in the detail, which we don’t have yet, we would expect, similar to buffer strips, the cross compliance strip can be used, therefore for those looking for some EFA to replace their NFC, hedges and field margins are looking promising.
• Catch & Cover Crops – These must now be maintained for a minimum of 8 weeks.  The existing cover crop period already adheres to this and will remain from 1st October to 15th January in the following year.  But the catch crop period will be extended so that it runs from 20th August to at least 14th October.  This applies to crops grown in the 2018 scheme year.
• Crop Diversification –  It will be possible to claim for very small areas (less than 0.01ha) of different crops next to each other as one mixed crop area.  Individually these would be less than the minimum parcel area of 0.01ha and would not be eligible.
• EFA Hedges – The definition has been extended to include trees in a line.  The EFA value remains the same – every 1m of hedge is worth 10m² of EFA as long as you have management of both side.
• EFA Nitrogen Fixing Crops – In addition to pure stands and mixtures of NFC, under the new rules mixtures of NFCs and other crops will be allowed, as long as over 50% is made up of NFCs.  This rule will apply to those crops sown in autumn 2017.  This should give some more flexibility, particularly to those who grow ‘pasture legumes’ such as clover, lucerne, sainfoin and trefoil.

The RPA has also confirmed that the Cropping Period for Crop Diversification will remain from 1st May to 30th June in England.  In addition the EFA fallow period will remain as 1st January to 30th June.  The RPA has only produced a summary of the changes, but more detailed guidance will be available in due course, but obviously some of these changes will affect cropping plans this autumn.

A number of farming organisations have come together to issue a joint statement calling on the UK Government to provide short-term certainty for the industry as we approach Brexit.  The organisations are calling for an initial transition period through which the ‘UK retains unfettered access to European markets, remaining within the Customs Union’,  with these arrangements being in place until the implementation of a Free Trade Agreement between the EU and the UK.  They also say they are committed to working with the UK, Welsh, Scottish and Northern Irish Governments to establish a ‘new and better agriculture and land policy’.  The organisations are also calling for:

• Maintenance of the UK’s high standards of quality, welfare and provenance
• A fully functioning immigration system
• Governments to work together and with them, to establish a collaborative policy framework and budget.

The full statement can be found at: http://www.tfa.org.uk/wp-content/uploads/2017/08/17-August-04-FINAL-Farming-Industry-Joint-Statement.pdf

The organisations include; British Poultry Council, Country Land and Business Association, Country Land and Business Association (Wales), National Beef Association, National Farmers Union, National Farmers Union of Wales, National Farmers Union of Scotland, National Federation of Young Farmers Clubs, National Pig Association, National Sheep Association, Royal Association of British Dairy Farmers, Scottish Land and Estates, The Soil Association, Tenant Farmers Association, Tenant farmers Association (Wales) and Ulster Farmers Union.

The second application window for the Farm Business Grant scheme in Wales opened on 2nd August and will close on 29th September 2017.  The grant provides 40% towards the cost of specific capital investments which have been identified to improve the economic and environmental performance of agricultural holdings.  There is a list of capital items available with standardised costs.  The minimum grant is £3,000 and the maximum grant is £12,000.  In total £40m worth of funding is available over 4 years, but only one application will be allowed per business over the lifetime of the scheme.

The next window for applications is due to run from 2nd January 2018 to 2nd March 2018.  Further scheme guidance and a list of capital items available can be found at http://gov.wales/topics/environmentcountryside/farmingandcountryside/cap/ruraldevelopment/wales-rural-development-programme-2014-2020/farm-business-grant-scheme/?lang=en

One of the best-known names in rural land agency has been acquired by a French bank.  Strutt and Parker, founded in 1885, is to be taken over by BNP Paribas Real Estate, a subsidiary of the banking giant.  The deal is set to complete in September, although no details of the price being paid have been released.  S & P is the second biggest player in the UK rural market and third in residential, with 60 offices.  Paribas has previously had little exposure to these markets in the UK, being focused on commercial property.  The Strutt and Parker brand will be retained for the rural, residential, development and planning teams, whilst all activities in commercial property will come under the BNP Paribas Real Estate brand.

The EU is starting the process of setting its budget for the period after 2020, and is grappling with the issue of a Brexit-sized hole in its finances.  As part of this process the EU Commission has published a ‘reflections’ paper setting out five broad options (see https://ec.europa.eu/commission/publications/reflection-paper-future-eu-finances_en).  The majority of the options point towards there being lower funding for the CAP, and support being more targeted where it is seen to have the most benefit.  This might be in remote areas, small farms, or tools that specifically address issue such as market volatility.  With a guarantee of funding for farm support in place until (possibly) 2022 in the UK, it perhaps slightly ironic that support levels in Europe might fall more quickly than here as a result of Brexit.

The rate of Pillar Transfer in England will remain at 12% for 2019 and 2020.  The DEFRA Secretary, Michael Gove, confirmed this in a statement to the House of Commons on the 20^th July.  It appears that the statement is referring to EU budget years, as the possibility of a rise in the Pillar Transfer rate was previously indicated for the 2018 BPS year and beyond.  Those with long memories may recall that, at the start of the BPS, it was possible to transfer some funds from Pillar 1 (BPS) to Pillar 2 (Rural Development).  The rate chosen in England was 12% of BPS funds, in order to allow greater funding of programmes like the Countryside Stewardship under Pillar 2.  But there was an option to increase the rate to 15%.  This has not been taken up.  Perhaps it is not that surprising with all the other changes in farm support going on, plus fairly limited uptake of the CSS, that putting extra funds into Pillar 2 is not seen as a priority right now.  The statement can be found at – http://hansard.parliament.uk/Commons/2017-07-20/debates/17072054000019/Inter-PillarTransferRateInEngland#contribution-99878721-0616-41BB-98A2-D4FC213E7224

The Government has announced a further £200m of funding under the Rural Development Programme for England (RDPE).  This includes ‘for the first time under the current scheme … significant amounts of funding to on-farm businesses to invest in new infrastructure such as new buildings and machinery’.  This appears to widen the scope of grant funding from what has been available in the past – but no details are yet available.  Also for the first time, the RDPE will be used to support rural broadband.

The £200m is made up of the following elements;

• £30m for rural broadband.  This is to provide connections of up to 30Mbps or faster where they would otherwise not be available.  The funds are in addition to existing broadband schemes
• £45m for rural businesses, including those in tourism and food production.  Although not specifically stated, this seems to be addition funds for the Growth Programme, as overseen by Local Enterprise Partnerships.
• £120m for farm productivity under the Countryside Productivity Scheme (CPS).

The CPS is now open for applications for water resource management and improving forestry productivity.   The minimum grant under both of these headings is £35,000, with grants up to 40% of eligible cost.  Therefore the projects being funded are likely to be quite large.  In terms of water, the following are eligible for funding – reservoirs (above or below-ground), abstraction points, pump or pipework to fill the reservoir; irrigation pump, controls and underground water distribution main; water metering equipment; best practice application equipment such as boom or trickle irrigation; software and sensors to optimise water application.  The deadline for applications is the 3^rd April 2018.  More details can be found at – https://www.gov.uk/guidance/countryside-productivity-scheme

Funds for broadband, rural business support, on-farm food processing, arable and horticultural productivity, resource efficiency and animal health & welfare will be made available later in the year.  It remains to be seen what spending will be eligible under the category of ‘arable and horticultural productivity’ but no doubt farmers will be very interested if there is funding for buildings and equipment.

Neil Parish, MP for Tiverton and Honiton, has been re-appointed the Chairman of the Environment, Food and Rural Affairs Committee in the new Parliament.  The Committee scrutinises the work of DEFRA and will have a substantial task ahead as the country negotiates Brexit.  Mr Parish beat challenges from Zac Goldsmith and Bill Wiggin.

UK farmers purchased 14% more tractors in the first half of 2017 than they did in the same period a year earlier.  In total 6,142 agricultural units of over 50 hp were sold.  In terms of horsepower, 1.002 million hp were sold in the Jan-June period, an increase of 17% against the same period in 2016.  Whilst the increase looks significant, these first-half sales were still the third lowest number of registrations for the period in the past 11 years.  There is an element of ‘catch-up’ after very low sales in both 2015 and 2016 (5,970 and 5,382 units respectively). 

Under a post-Brexit farm policy UK farmers will be expected to ‘earn’ support by providing public goods.  This was the clear message from the new DEFRA Secretary, Michael Gove, when he gave his first major policy speech.  Speaking at the World Wildlife Fund’s Living Planet Centre in Surrey he sketched-out a vision of a ‘green Brexit’ with policy-making freed from the shackles of the Common Agricultural Policy and driven by a science-led approach.

Not surprisingly, the speech did not go into any specifics of policy.  However, it did provide a clear indication of the Minister’s broad intentions.  Mr Gove stated that ‘support can only be argued for . . . if the environmental benefits of that spending are clear’.  He questioned payments being put ‘in the hands of the already wealthy’, suggesting some type of capping or tapering of payments to large businesses.  Mr Gove also mentioned the CAP holding back productivity, the need for increased tree planting, his desire to protect landscapes and communities in remote areas, and backed the idea of mechanisms that ‘smooth out the vicissitudes farmers face’.  Although DEFRA’s 25-year Environment Plan was mentioned, there was no reference to the much-delayed 25-Year Farming plan.  It is probably safe to say that this has now been quietly shelved.

Whilst short on details the building blocks of a farm policy can be clearly seen.  A focus on the environment, hill areas, competitiveness and risk management tools all seem at the forefront of DEFRA plans.  Whilst it seems likely that area payments will not disappear overnight, there seems little long-term future for direct support.  The full text of Mr Gove’s speech can be found at – https://www.gov.uk/government/speeches/the-unfrozen-moment-delivering-a-green-brexit