Category: Policy & Business

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

The Country Landowners and Business Association (CLA) has set out its proposal for Land Management Contracts to be a central part of any post-Brexit farming policy.  As the name suggests, they would be an agreement between famers and the public (in the form of government) to deliver benefits to society that the market doesn’t pay for.

As well as the familiar environmental payments, the contracts would also encompass carbon storage, soil and water quality, public access, flood mitigation and heritage.  It is envisaged that contracts would be long-term (10 years minimum) with clearly set out targets and measurable impacts.  The scheme would be voluntary but open to all farmers.  The Contracts are part of a broader policy framework that includes two other headings;

• Profitable Farming – including advice, skills, capital grants, loans, succession schemes, food promotion and resilience funds
• Rural Economy – business and diversification advice, capital grants, tourism marketing

The CLA sees no room forthe continuation of BPS-like direct payments in the new regime.  It acknowledges though that there would have to be a transition to the new framework, and suggests the existing system should be maintained for 5 years.  More details on Land Management Contracts can be found at – http://www.cla.org.uk/sites/default/files/HowTo_LMC_Doc2.pdf?utm_source=emailmarketing&utm_medium=email&utm_campaign=weekly_news_20_july&utm_content=2017-07-24

It is perhaps worthwhile recapping where the other farming membership organisations are in terms of policy.  The NFU proposals outlined before Christmas (see https://www.nfuonline.com/assets/94690, and also our November Bulletin) are arguing for the continuation of direct payments.  It has also structured its proposals around three themes – Productivity, Environment and Volatility.  The TFA’s proposals (see http://www.tfa.org.uk/wp-content/uploads/2016/04/16-June-30-Post-Brexit-Agricultural-Policy.pdf) are based on three (surprise) strands of;

• an improved agri-environment scheme (with specific measures for hill support)
• a Farm Business Development Scheme to provide annual grants of up to £25,000 per year for investment in the business
• a ‘competitiveness’ strand that covers research and development, knowledge transfer and food promotion initiatives.

There is obviously a certain amount of overlap between what is being proposed by the different organisation.  (Not least the fact that policymakers won’t be able to hold more than three ideas in their heads at once.)  However, there are also significant differences.  It seems a wasted opportunity that the farming industry cannot get together and speak with ‘one voice’ to government.  A detailed, fully-costed policy proposal with widespread industry backing, clearly setting out the benefits it would provide to society, would set the terms of the debate.    

A new report warns of chaos in the UK food system as a result of Brexit.  Authored by respected academics including Professor Tim Lang of the University of London, it highlights issues in a number of areas.  These include border controls, legislation and inspection agencies to replace EU structures, labour issues in the food chain, and food standards.  It suggests that the UK needs a clear integrated plan for food.  It concludes that leaving the European Union poses serious risks to consumer interests, public health, businesses and workers in the food sector.  The report can be found at – http://www.sussex.ac.uk/broadcast/read/40848.

Harper Adams University and Keele University are looking at the feasibility of jointly establishing a new vet school.  Students would be taught at both sites with the aim of a 5-year degree.  At present, there are currently eight veterinary schools in the UK which award degrees approved by the RCVS – Glasgow, Edinburgh, Liverpool, Nottingham, Bristol, Cambridge, Surrey (approval pending) and London (the Royal Veterinary College).  Aberystwyth University has also investigated the possibility of offering veterinary degrees.  Like almost everything now, there is a Brexit angle to the story.  It is feared that, if free movement from the EU is halted, there will be a shortage of vets in the UK – especially those wishing to work in large-animal practice.

Member States voted, on 4^th July, in favour of the European Commission’s draft criteria to define endocrine disruptors with regards to PPPs (Plant Protection Products).  The criteria are based on the World Health Organisation (WHO) definitions and identify known and presumed endocrine disruptors (chemicals that affect hormones).  They also ‘specify that the identification of an endocrine disruptor should be carried out by taking into account all relevant scientific evidence including animal, in-vitro or in-silico studies, and using a weight of evidence-based approach’.  The same criteria will be adopted for biocides.  The ‘hazard-based’ approach of the overall Pesticides Regulation will be maintained, meaning that substances are banned on the basis of hazard, without taking into account the level of exposure to the substance.

The agreed text will now be sent to the Council and the European Parliament.  They will have three months to examine it before final adoption by the Commission.  The text will enter into force 20 days after its publication in the Official Journal and be applicable six months after this.  In response, the European Crop Protection Association (ECPA) is calling on the Council and EP to veto the proposal, describing the criteria as ‘fundamentally flawed’ saying ‘the criteria provide no additional protection for the health and the environment and only serve to have a disproportionate and discriminatory impact on European farmers’.

As we wrote back in May, this is quite technical, but very important for the EU’s farming sector.  Studies have suggested that up to 30 currently-approved pesticides could fail to gain reauthorisation due to the imposition of these new criteria. 

The EU and Japan reached an agreement in principle on the main elements of an EU-Japan Economic Partnership Agreement.  Phil Hogan, Agriculture Commissioner, has said ‘this is a win-win for both parties, but a big win for rural Europe, describing the trade deal as ‘the most significant and far-reaching ever concluded in agriculture’.  The agreement will see gains for European exporters of beef, pork, cheese and wine in return for increased market access for Japanese automobile and car parts.  The talks commenced in 2013, but drive to reach a conclusion was given a boost by the withdrawal of the US from the proposed Trans-Pacific Partnership which included Japan and other Asian nations.  This deal is seen partly as an alternative, and it was pointedly announced just before the G20 Summit in Hamburg on the 6^th July.  It is claimed to be the biggest bilateral trade agreement ever struck by the European Union, covering about a quarter of the global economy.  Whilst a ‘political deal’ has been announced, there is still some detail to thrash out, and the final agreement also needs to be ratified.

In other trade news both EU and Mecosur leaders have reiterated a desire to conclude a trade deal by the end of this year.  Mecosur is the South American trading block including both Brazil and Argentina.  The provisions of the EU-Canada trade deal, known as CETA, should start to apply from 21^st September.

In the UK, of course, all trade issues are refracted through the prism of Brexit.  Each new trade deal the EU strikes is just one more agreement the UK will have to try and replicate on Brexit, simply to remain in the same place.  This is before we try and do deals with additional nations.  There is also the question of how keen other countries will be to do a deal with the UK (population 65 million) versus the EU (circa 450 million, minus the UK).  Given its size, it could be argued that the EU also has more clout in any negotiations and can get a better deal. 

The CAAV’s Annual Survey of Tenanted Land in England and Wales shows the average length of Farm Business Tenancies has increased significantly.  The survey which covered nearly 88,000 Ha in 2016, found that the average let was four and half years, eight months longer than in 2015 and nine months more than the eight-year average.  The resultsonly cover one year and therefore it is too early to tell whether it is just a blip or a long term trend, but it is a notable increase.

The average covers all arrangements from seasonal grazing lets through to fully equipped farms with dwellings.  The survey shows that holdings which have a house and buildings are on average let for more than 14 years, with larger, better equipped holdings in general being let for longer terms.  The results also found that 94% of FBTs which came to an end were re-let and also nearly 86% of 1986 Act tenancies which finished without a successor were re-let as FBTs with an average term of 10 years and 3 months.  The area of land in the tenanted sector increased by just 476 acres, which is somewhat lower than in previous years, between 2012 and 2015 it has been increasing annually by between 2,000 and 3,000 acres.

The news is not so good for Scotland.  In 2016 only 35% of Agreements which came to an end were re-let, with the remaining either taken back in-hand, sold or entered into contracting agreements or other arrangements giving owners more control over the land.  In 2016 the area of let land in Scotland fell by nearly 28,000 acres, over the past five years it has reduced by just over 87,000 acres.

Scotland’s Tenant Farming Commissioner has issued the Code of Practice for the Amnesty on Tenant’s Improvements.  This is the first Code of Practice to be published by the Commissioner, since being introduced under the Land Reform (Scotland) Act 2016 (see article written in May 2016) The full code can be found at http://landcommission.gov.scot/wp-content/uploads/2017/06/AMNESTY-CODE_website.pdf

The merger between LEAF and FACE was announced on 29t^h June and took effect from 30^th June.  Readers will recall we wrote about this back in April.  The new organisation aims to create even more opportunities for educating and engaging the general public in farming, food production and the environment.