Category: Policy & Business

Defra has released its latest Report on the UK’s Food Security.  This is done every three years and is a requirement under the Agriculture Act.  Between each Food Security Report an annual Food Security Index is now published.  The first of these, produced in July, can be found here – https://www.gov.uk/government/publications/uk-food-security-index-2024/uk-food-security-index-2024.

The Food Security Report 2024 is at pains to point out that food security is about more than just self-sufficiency.  It is structured around five ‘themes’ as set out below;

• Global Food Availability – since the last report in 2021, there has been stable growth in world food production (despite a number of geo-political and climate shocks).  However, climate change, nature loss and water insecurity pose long-term threats to production.  This is amplified by low productivity growth in global agriculture.  The number of undernourished people in the world is increasing.
• UK Food Supply – domestic production and balance of trade is broadly stable with self-sufficiency (production-to-supply ratio) at 62% for all foods and 75% for indigenous foods.  The UK remains very dependent on imports in certain food categories – fruit, vegetables and seafood.  Extreme weather is causing increasing problems for UK production
• Food Supply Chain Resilience – Russia’s invasion of Ukraine highlighted the impact input prices can have (notably fertiliser and energy).  The food supply chain is also at risk from ‘single points of failure’ where key inputs come from a very small number of suppliers.  Labour shortages remain a signifcant problem for the sector.
• Household Food Security – most households in the UK are food secure but there has been a rise in the number of food-insecure households.  This is largely due to rises in food prices since 2021.  This affects low income families disproportionately.  Most people in the UK do not meet Government dietary recommendations – especially on the consumption of fruit and vegetables
• Consumer Confidence and Food Safety – most consumers are confident in food safety and regulation.  The statistics on food hygiene and food pathogens are broadly stable.

Given the complexity of the topic, the report does not reduce the analysis down to a single numercial score, a traffic-light colour, or even a summary paragraph (e.g. ‘we are doing OK….’).  However, reading between the lines, it can be concluded that the UK’s food security is relatively good, but with some areas of concern – especially around climate change.   

The full report is at – https://www.gov.uk/government/statistics/united-kingdom-food-security-report-2024.

The Government has made further policy changes on Planning and Renewables as part of its aim to boost economic growth.

Planning

A new National Planning Policy Framework (NPPF) was issued for England on the 12th December.  This increases house-building targets for Local Authorities to help deliver the 1.5 million extra homes promised by Labour over the next 5 years.  The presumption will be to use brownfield sites if possible, but development on the Green Belt will be made easier through the re-classification of parts of it as ‘Grey Belt’.

The key mechanism will be Local Plans.  These will set out where development is to be permitted and must align with the house-building targets.  It is claimed that this will allow local views to be heard – however it seems largely a question of managing how development takes place rather than if it happens.  Many Local Authorities have been slow in producing Local Plans (or, if they are in place, they may now need revising).  Those with land they believe is suitable for development may have a window of opportunity for getting the land ‘zoned’ for development.  If land is included in the Local Plan for development there will be a strong presumption that Planning Permission will be granted.  If no Local Plan is put in place, Ministers may step in, and there could also be limited grounds for Local Authorities to refuse speculative Planning applications.

Details of the NPPF can be found at https://www.gov.uk/government/publications/national-planning-policy-framework–2 .  A Planning and Infrastructure Bill is also planned for next year.  Furthermore, the Government has published a White Paper proposing a shake-up of Local Government in England (see https://www.gov.uk/government/publications/english-devolution-white-paper-power-and-partnership-foundations-for-growth).  This would see District Councils disappear, as the ‘default’ model would become Unitary Authorities.  There would also be a drive towards more directly-elected Mayors who would have responsibility for some Planning matters.  All this would appear to take decisions on Planning further away from the local level. 

Renewables

The Clean Power 2030 Action Plan aims to decarbonise electricity production in Great Britain by 2030.  This foresees;

• offshore wind capacity to rise to 43-50 GW
• onshore wind to double from the current 14 GW to around 28 GW
• solar to increase from around 17 GW currently to up to 47 GW in 2030.

An extra 30 GW of solar would require significant areas of land (some may be mounted on roofs, but it is likely to be a relatively small proportion).  The rule-of-thumb seems to be around 2,000 to 2,500 hectares per GW of solar PV.  This would suggest circa 65,000 hectares of farmland moving into this land use by 2030.  This may not be lost to farming completely – grazing would still be possible around the panels.  There is also a growing move towards ‘agri-PV’, where the installations are sited to allow more intensive farming to continue.  Whilst solar PV tends to be very noticeable in the landscape, the actual net loss of productive farmland is quite small in percentage terms.  Even if 65,000 hectares were used, this would be less than 0.4% of the UK’s utilisable agricultural area.        

The Plan also sees the growth of electricity storage capacity to deal with the intermitent supply from renewables.  There will also have to be significant upgrades in the transmission infrastructure – meaning new poles and pylons in the countryside.  The Government is streamlining the Planning process for these.  The NPPF (see above) also brings all onshore wind and solar developments over 0.1 GW into the Nationally Significant Infrastructure Projects (NSIP) regime.  This means that Ministers can intervene to over-ride local Planning objections.

The Clean Power Action Plan can be found at – https://www.gov.uk/government/publications/clean-power-2030-action-plan.

There will be an increase in the Rural Affairs budget for 2025/26 following the Welsh Government’s spending announcement on the 10th December.

The Department of Climate Change and Rural Affairs will see its revenue spending increase by 6.6% (£36.4m) in nominal terms, whilst capital spending will go up by 31% (£72.0m).  The amount allocated for the Basic Payment in 2025 will be maintained at the current level of £238m – although inflation will decrease the real-terms value of this compared to past years.

The full budget can be found at – https://www.gov.wales/draft-budget-2025-2026.

The revised Countryside Stewardship Higher Tier (CSHT) offering will not be available until next summer.  This news comes as part of a wider Defra announcement on the future of the scheme.  Readers may recall CSHT was supposed to have been opening in autumn 2024 to allow claimants to ‘draw-up’ applications ready for an early 2025 start date.

General

Countryside Stewardship is the second ‘tier’ of the Environmental Land Management (ELM) programme.  It provides payments for land managers who wish to do more intensive environmental work than under the SFI.  With the expanded SFI 2024 effectively taking over almost all previous CS Mid Tier options (see https://abcbooks.co.uk/expanded-sfi-offer-for-2024/), the CS is now Higher Tier only.  It is focused on the most environmentally significant sites (such as SSSIs) and woodlands which require more long-term and complex management.

The new CSHT offer includes 132 actions and 145 capital items (including 25 new options), plus a further 6 capital items to fund the preparation of plans that may be required to support an application (see below).  Defra is trying to improve the offer to encourage more people to apply with the aim of 1,200 new High Tier agreements by March 2026.

The details of all the actions, supplements and capital items, including payment rates can be found via https://www.gov.uk/government/publications/countryside-stewardship-higher-tier-get-ready-to-apply .  Note this is only ‘preview’ guidance; it sets out what can be done now to prepare and the funding available, the full guidance will be published before applications open in ‘summer 2025’.

Controlled Roll-Out

Similar to the SFI, CSHT will be rolled-out ‘gradually’.  The first applications will be by invitation only, these businesses will be contacted by RPA from 6th January 2025.  Natural England (NE) and the Forestry Commission (FC) will identify who is invited initially.  This will include;

• those with an existing CSHT agreement that expires at the end of 2025

• those with an approved woodland management plan already in place

• those who want to apply for an agri-environment agreement and have an approved plan in place so are ready to develop an application.

‘Invitations’ will be sent out monthly, to those in the above criteria, to receive ‘pre-application’ advice.  Those that do not fall within the criteria above will be able to contact RPA to let them know they are interested in applying.  More details on this process will be available in February and RPA has asked that customers do not contact them until then (!).

Applications will be made online via Rural Payments.  However, whilst those that will be invited can start to prepare their application from January, it will not be possible to submit an application until ‘summer’ 2025.   Similar again to SFI, once an agreement has been offered and accepted, the first payment will be made 4 months after and then quarterly thereafter.  CSHT agreements will last for 5, 10, 15 or 20 years, depending on the length of the longest action in the agreement.  Once fully opened, RPA will introduce rolling applications, so it will be possible to apply all year round with monthly start dates.  From summer 2025 applications will open up to a wider range of customers who will be ‘identified and invited’ to prepare an application – further information on this will be provided at a later date.

Defra is also making more ‘tools’ available to applicants for planning their proposals.  These include Implementation Plans, Woodland Management Plans, Agroforestry Plans, Species Rich Management Plans and Feasibility Studies with the aim of reducing the need for intensive pre-application advice from ‘arm’s length bodies’ cutting down on lengthy negotiations.  Furthermore, advice will focus on the actions available under CSHT where previously advice from NE and FC covered the entire holding.

Higher Tier & HLS Extensions

Following news that the Countryside Stewardship Higher Tier scheme will not be open for applications until next summer Defra has confirmed it will be offering ‘Mirror agreements’ and ‘extensions’ for existing Countryside Stewardship Higher Tier (CSHT) agreements and Higher Level Stewardship (HLS) agreements which will be expiring in 2024.

This means for some CSHT agreement holders RPA will be contacting them to offer a duplicate (mirror) of their expiring agreement, this includes the length ie. 5 or 10 years and all the exisiting options.  Agreements which originally included woodland will not be offered an extension because landowners won’t be able to carry out a mirror agreement on that same land.

For those with an HLS which has expired or is due to expire by the end of December 2024, they will be offered a 2 year extension and RPA will contact them accordingly.  For HLS agreements expiring in 2025, Natural England is reviewing each case and will recommend either a 1-year or 2-year extension.

The delay in the opening of the Countryside Stewardship Higher Tier is very frustrating.  It could also pose a difficult decision for those with expiring agreements.  Applicants must decide whether to wait for the new scheme to open, and hope they will be invited and given an agreement, and there aren’t too many (further) delays.  Or they could accept an extension or mirror agreement now.  However, this could lock-them-in for an extended period.  And payment rates are generally not as good under ‘old’ agreements as they are under the new ones.  We have been assured for a long time that it will be possible to end agreements and Defra are even saying ‘If you choose to extend your HLS agreement or accept a CSHT mirror agreement, over time you’ll have the option to end your extended or mirror agreement early if you want to apply for the new CSHT scheme once it becomes available.’  But what does ‘over time’ mean?  Up to now, it has been a very difficult process to end any agreement to go into a new offer.  We were told more information would be made available in September; but nothing has arrived.  Defra is currently saying ‘under the terms and conditions of your HLS agreement it is possible for you to end your agreement early to apply for a new SFI agreement’. However it goes on to say ‘Due to the complexity of closing agreements early, it may take some time to end your agreement and could result in a period of some months between one agreement ending and a new agreement starting. We will provide more information about how to close your agreement soon‘.  It will be well worth those in this situation having a good look at the new offer and making a few calculations. 

Some with existing CS or HLS agreements may decide to let them expire and simply enter into the SFI.  This may result in the land having a ‘lower level’ of environmental management – the opposite of what Defra might desire.  But, from the appplicant’s perspective, it is a more certain, risk-free and flexible approach.     

Andersons has released its annual publication looking at the prospects for farming for the coming year and beyond.  ‘Outlook 2025’ can be downloaded from – https://theandersonscentre.co.uk/publications/outlook/ .

The Land Use Framework for England has been delayed again.  It was originally due to be published in 2023 but has suffered repeated postponements.  Steve Reed, the Defra Secretary, stated in October that it would be published, and a consultation started, ‘before Christmas’.  However, speaking in the Lords at the end of November, the Defra junior Minister, Baroness Hayman, said that “We expect the green paper to be published for consultation in the New Year”.

The Finance Secretary, Shona Robinson, delivered the Scottish Budget for 2025/26 on the 4th December.  Much like its UK counterpart, this saw farm support maintained in nominal terms, which equates to a real-terms cut once inflation is considered.

The block grant from the UK to Scotland for revenue items actually increases by 1% in real terms for 2025/26.  The capital allocation goes up by 7% in real terms.  It can therefore be seen that other areas of spending have been prioritised ahead of agriculture.

General policy announcements that will have relevance to farming include;

• the Income Tax thresholds for the two lowest bands will be increased.  The Starter band will rise from £2,306 p.a. to £2,827.  The Basic band from £13,991 to £14,921.  There are no changes to the bands for the Higher, Advanced and Top rates and also no changes to any of the tax rates.  The tweaking of the lowest bands has enable the Scottish Government to state that over half of taxpayers will pay less in Income Tax than if they were elsewhere in the UK
• the level of Business Rates will be frozen for 2025/26
• increased funding will go into the Rural Tourism Infrastructure Fund (RTIF) with the aim of boosting visitor numbers and their spending.

Focusing on farm funding, the Budget announcement stated ‘£660 million for support’ – this actually appears to be £657.3m in revenue payments.  This compares with £663m estimated for the current 2024/25 year and the actual of £626.2m for 2023/24.  Thus, around the same budget in nominal terms, with no uplift for inflation.  The budget lines for BPS, Greening, Coupled payments and LFASS are all the same for 2025/26 as in 2024/25.  Spending on Agri-environment is forecast to drop from £25m to £21.5m next year.

The £657.3m will be topped-up by £23m of capital spending under an ‘Agricultural Transformation programme’.  This is part of the £43m previously taken from the agricultural budget.  The remaining £20m is due to be returned in 2026/27.  It is not currently clear how the Agricultural Transformation progamme will operate or what it will fund.

There is also funding in the wider Scottish Budget for forestry, advice, animal health & veterinary, land reform, the Islands, marine, natural resources, and research & analysis.  The full breakdown of spending for Rural Affairs, Land Reform and the Islands can be found at – https://www.gov.scot/publications/scottish-budget-2025-2026/pages/11/ .

The Government’s Spending Review is likely to be delayed until June.  This will extend the uncertainty over the budget allocation for agriculture after 2025.  When the Autumn Budget was presented, it was suggested that Departmental spending totals for the three years from 2026/27 would be set in the spring.  It is now reported in the Financial Times that this process is likely be delayed until the early summer.  Defra’s budget has been set for 2025/26 and this, in turn, has allowed the £2.6bn for the ‘Farming and Countryside Programme’ (essentially the successor to the Common Agricultural Policy) for 25/26.  However, there is no guarantee on funding beyond that – i.e. in around 15 months time.

Denmark will become the first country in the world to tax greenhouse gas emissions from livestock.

A ‘Green Tripartite Agreement’ has been struck between the government, the farming industry and environmental organisations.  This will see a number of measures enacted to reduce the environmental impact of agriculture including;

• a world-first tax on emissions of methane from livestock.  This will be based on CO2 equivalents and will start at 300 Kroner per tonne CO2e (around £34 per tonne) in 2030.  By 2035 this will rise to 700 Kroner (£84).  However, there is to be a 60% deduction on the tax, so the effective rates for farmers will be much lower.  Funds raised through the tax will be returned to the faming sector through support for environmental practices
• an agreement to reduce nitrogen emissions from agriculture by 13,780 tonnes by 2027 in an effort to improve water quality
• setting of a target that 10% of the land area of Denmark should be ‘forest and nature’ by 2045.  As part of this 140,000 Ha of low-lying drained peatland will be taken out of agriculture.  240,000 Ha of new tree planting is promised.  This will be voluntary with farmers paid to make the land use change.

Danish agriculture is intensive and very focused on livestock production, especially pigs and cattle.  This has created a number of environmental issues which this plan aims to address.  It will be interesting to see if any other countries take-up the option of a livestock tax now that Denmark has led the way.