Category: Policy & Business

The Government is to effectively scrap the rules on Nutrient Neutrality in England.  These rules restrict new housebuilding in certain catchments unless developers can prove that water pollution (chiefly nitrates and phosphates) will not increases as a result of the new houses.  This has led to a market developing, with farmers ‘offsetting’ nutrients by decreasing the intensity of their land use, allowing housing to be ‘unlocked’.

The Government has decided that the Nutrient Neutrality (NN) rules are too restrictive.  It claims that removing them will result in an extra 100,000 homes being built by 2030.  Up to 74 Local Planning Authority areas are potentially affected by NN.  The rules are a legacy of EU environmental law which has been incorporated into UK law, post-Brexit.  There is also a view that the way Natural England has interprested the rules has been over-zealous.  The law will be changed via an amendment to the Levelling Up and Regeneration Bill currently in the House of Lords.

The Government is at pains to highlight that it is still committed to improving water quality.  It has announced a package of measures which include;

• the expansion and amendment of the Nutrient Mitigation Scheme run by Natural England.  This is the Government-run offsetting scheme.  The details are somewhat vague, but it seems that the onus for nutrient offsetting will move from individual housebuilders to Natural England.  However, it is stated that ‘the Government intends to work with the house building industry to ensure that larger developers make an appropriate and fair contribution to this scheme’.  There may still be opportunities for farmers to offer land in return for payments through this scheme, but the implication is that it will be more targetted in the past – with alternative measures to offsetting being used.  Therefore, the opportunies may be reduced. 
• increasing grants for slurry storage.  Although it is never easy to work out whether funding is new or ‘re-announced’, it appears that an extra £166m will be made available for this.  Further rounds of the Slurry Investment Scheme should therefore be expected.
• £25m to help farmers manage plant and soil nutrients (again, not clear if this is new funding or not).

The full announcement can be found at – https://www.gov.uk/government/news/100000-more-homes-to-be-built-via-reform-of-defective-eu-laws

Owners of short-term let properties in Scotland have until 1st October 2023 to apply for a short-term lets licence.  All Landlords in Scotland must have a licence, but those that were in operation prior to October 2022 have been able to continue to operate whilst they wait for their licence to be approved.  However, the deadline for these operators to apply for a licence is 1st October 2023.  Owners must apply for a licence with the Local Authority in which their property is located.  Local Authorities are required to process applications by 1st October 2024.  This is likely to affect many farm businesses which will have diversified into holiday lets.  More information can be found via https://www.mygov.scot/short-term-let-licences 

SFI 2023 will open for applications from 18th September 2023, with farmers being able to register their interest in the scheme from 30th August.  Pre-registration will be via farmers’ online Rural Payments account and aims to ensure all online maps, land use and cover details are correct ahead of the application date.  The announcement from Defra has come amid a backlash from industry representives saying farm businesses are being affected by delays, lack of information, and uncertainty over the schemes.

The Welsh Rural Affairs Minister has also announced a new scheme, the Strategic Innovation Scheme, to provide business support to food and drink businesses across Wales.  As part of this, Project Helix, which offers technical and commercial support to the Welsh food and drink industry, will continue until March 2025.  Project Helix, was launched back in 2016, and since then has provided £355 million to the industry.  More than 700 businesses have been supported through the scheme and almost 2,100 new food and drink products developed.  The announcement comes on the back of a report showing that Welsh Food and Drink exports increased by £157m between 2021 and 2022, a 24.5% rise.  This compares with the UK as a whole which also grew but by a lesser amount, 21.6%.  In Wales the categories with the highest export values were meat and meat products, at £265m they were up by 42% compared with 2021.  Cereal and ceral preparations increased by 16% to £160m.

The Agriculture (Wales) Act received Royal Assent on Friday 17th August 2023.  This is the first ever Welsh Agriculture Act and provides Welsh Ministers with the powers to provide future farm support; it replaces the limited powers in the Agriculture Act 2020 which are due to expire in 2024.  Whilst the main focus of the Act will be to allow delivery of the new Sustainable Farming Scheme (SFS), the Act also allows for the banning of snares and glue traps and provides tenant farmers with a route to dispute resolution to ensure they are not unfairly restricted from accessing financial assistance i.e SFS.  The Act also gives Natural Resources Wales the powers to amend, suspend or revoke felling licences if these would contradict other environmental legislation.

The deadline for submitting applications to the Mid-Tier of the Countryside Stewardship (CS) has been extended to the 15th September.  The closing date for applying to the scheme, for agreements starting 1st January 2023, was originally to be 18th August.  However, a number of potential applicants have had issues with making applications this year – particularly with the slow processing of RLE1s to update land details and also when moving from older Environmental Stewardship agreements.  The extension of the deadline is to give time for these issues to be resolved.

Furthermore, the deadline for submission of an ‘Intention to Move Form’ has also been extended to 18th August **TODAY**.  Previously this was 1st July, but Defra has said it understands this deadline date was not very well communicated.  It is unclear whether this date will be pushed back further due to the above announcement.  The Intention to Move Form lets Defra know that an agreement holder would like to leave their current agreement early and apply for a new scheme.  The existing scheme will remain in place unless a new one is offered by Defra and accepted by the applicant.  The new agreement must offer equivalent or greater environmental benefits than the current agreement.

Defra has announced some changes to the SFI 2023 option rules and has also published some voluntary guidance on how to carry out the actions.  The key changes include;

• NUM3 (legume fallow) is now rotational
• AHL1 (pollen and nectar flower mix) is now rotational
  
• SAM3 (herbal leys) can now be done on the same land as Countryside Stewardship options OT1 and OR1 (relating to organic land) 
• it is no longer necessary to have hedges recorded on the RPA online digital maps for the SFI actions for hedgerows (HRW1, HRW2 or HRW3)

There are also some clarifications to the wording in the Handbook, which has been updated to include the changes; these are shown in blue text and highlighted yellow so can be found easily.  In addition, there is a separate leaflet showing just the updates, both can be found via https://www.gov.uk/government/publications/sfi-handbook-for-the-sfi-2023-offer .  This further set of changes to the SFI has unsettled many farmers and their advisors.  SFI only started last June and all these agreements are in the process of being terminated and we have now had a change to the latest set of rules.  The changes are in response to farmer feedback and Defra say it is possible for them to be able to respond quickly and can be more ‘agile and nimble’ now that we are out of the EU.  However, it has been suggested that constant amendments could put some farmers off from entering for fear of more rule changes.  In response Defra has said it is making these changes because the controlled rollout of the 2023 offer has not yet started.  Once the controlled rollout starts from later this month, it ‘will minimise any further changes to the SFI Handbook, to provide stability, give certainty to farmers and agents, and save them the trouble of having to keep up to date with changes’.

Defra has also published ‘How to do the SFI Actions‘ guidance, there is one for each of the 23 Actions.  This new guidance is voluntary.  It is there to help and doesn’t have to be followed.  The aim of the SFI is to be less prescriptive, and Defra’s overarching guidance on completing actions remains ‘it is up to you how to complete this action as long as you do it in a way that can be reasonably expected to achieve this action’s aim’.   However, some claimants are concerned whether they are doing the right thing.  Therefore, the new guidance provides suggestions on how land owners might choose to do the actions in the SFI Handbook.  It is there to give ‘reassurance’.  It is likely to be particularly relevant to the ‘plans’ under the SFI.  It can be found at https://www.gov.uk/government/collections/sustainable-farming-incentive-guidance#further-information-to-help-you-

In terms of when the SFI 2023 will be open for applications, Defra has said, later this month farmers should be able to submit an Expression of Interest (EOI) and the RPA will contact them in a ‘controlled’ manner.  This is to ensure the system is working before it is then scaled-up.

It seems likely that the UK Government will, again, delay checks on food coming into the UK from the EU.  The ‘Border Target Operating Model’ was due to start phasing-in from the 31st October.  This would have seen certain food and feed products require health certificates, with other checks being introduced next year.  It is reported that the UK Government is looking to delay their introduction (for the fifth time) amid concerns that adding to import costs will push food prices even higher.  All UK exports to the EU have been subject to the full range of checks since the end of the Brexit Transition period in January 2021.  UK producers point out that there is not currently a level playing field for them and EU competitors, with checks only operating in one direction.   

CF Industries has announced that it is to permanently close its ammonia production facility at its Billingham fertiliser plant.  The company will continue to manufacture ammonium nitrate (AN) fertiliser in the UK, but this will produced from imported ammonia rather than from a natural gas feedstock.  The ammonia plant on Teesside had already been mothballed for the past 10 months, as rocketing natural gas prices in the wake of the Ukraine invasion made production uneconomic.  Gas prices are much cheaper in the US and other markets, so it makes sense for the company to import ammonia (which is relatively energy-dense).  There have been concerns expressed that this move will reduce the long-term food security of the UK – now having to rely on imports for nitrogen fertiliser.  It has been announced that buyers of AN fertiliser will need to provide photo ID as of the 1st October.   This measure is being brought-in as AN can be used as a precursor to home-made explosives.  If fertiliser is not being ordered in person (e.g. orders placed over the phone) then proof of identity will need to have been provided beforehand.  The ID will need to be updated at 18 month intervals.