Category: Policy & Business

On 30th January, the DUP endorsed UK Government proposals to restore power-sharing in Northern Ireland (NI).  Central to these proposals were changes to how the Windsor Framework (the UK-EU deal on implementing the NI Protocol) is to be operated.  From an agri-food perspective, these key changes include;

• ‘Not-for-EU’ labelling: the original Windsor Framework envisaged that this would apply in NI only, insofar that goods (e.g. pizzas, cheese etc.) shipped from GB to NI, and intended for final use in NI, would carry this label.  The Government now proposes that this be extended across GB also (from October 2024) and has initiated a consultation on this.  This will add some additional labelling costs for UK agri-food processors, but it was a key for the DUP which views anything that it perceives as undermining Northern Ireland’s integral place within the UK, very negatively.
• Unfettered access for qualifying NI goods: changing the UK Internal Market Act (IMA) to reinforce the policy of unfettered access for qualifying NI goods (e.g. beef) onto the GB market.
• Qualifying Northern Ireland goods rules: tightening the definitions to help to ensure that only NI traders benefitted from unfettered access to the UK and that traders from elsewhere (e.g. Republic of Ireland) would not simply re-route goods through Northern Ireland to avoid border checks which are in the process of being introduced under the UK Border Target Operating Model.
• Internal market system for goods entering NI: this would replace the ‘green lane’ system under the original Windsor Framework agreement and aims to further reduce burdens and formalities for goods entering NI from GB.  The details are yet to be announced but the UK Government is seeking an EU agreement to expand the list of agri-food goods that can enter NI (from GB) via this lane.
• Intertrade UK: a new body will be established to promote trade within the UK.
• Legal obligations when introducing new primary legislation: ministers will be required to consider whether any new primary legislation would affect trade between Northern Ireland and other parts of the UK because of future divergence from EU rules.

In addition to the points above, there were also amendments designed to assuage DUP concerns around NI’s constitutional position within the UK.  Furthermore, the UK Government has committed to provide an extra £3.3 billion in funding for the NI Executive to help to stabilise NI’s public finances and to tackle issues like healthcare.

Coincidentally, the latest proposals also includes the intention to complete the devolution of Corporation Tax to Northern Ireland.  This will effectively give NI scope to reduce its rate to the same level as the Republic of Ireland (currently at 12.5% for small companies and 15% for large companies with annual turnover exceeding €750m).  This would be an important step in making NI more competitive for inward investment and could bolster the NI economy.  Some, however, would claim that it smacks of ‘cakeism’ on the DUP’s part – on the one hand it does not want Northern Ireland to be any different than the rest of the UK, but when it suits, it is happy for NI to have a lower Corporation Tax rate.  That said, it is a relatively small price to pay and it might help to reduce NI’s reliance on Westminster public funding in the longer term.  What is key now is that the NI Executive gets down to work and delivers for the people of Northern Ireland, not just in agriculture, but across the economy generally. 

A reminder that claimants in England have until midnight on 29th February 2024 to query any Delinked Payment decisions.  Furthermore, any BPS payment decisions notified to claimants before 1st January 2024, but which have not been queried with RPA yet, also have until 29th February to raise a query.

From now on, BPS claimants will simply have 60 days in which to make a query as a new fixed 60 day deadline has been implemented.  The 60 days starts on the ‘date of notification’.  This is the date the RPA emails or writes to claimants giving notification of a payment decision – for example, a payment remittance or even a response to a previous payment query.

If claimants are unhappy with a decision they are encouraged to follow the 3-step complaints procedure – Query, Complaint, Appeal.  Further information including links to the relevant query forms can be found via https://www.gov.uk/government/organisations/rural-payments-agency/about/complaints-procedure.

 

On 3rd February, the Northern Ireland Assembly returned after being suspended for two years following a DUP boycott.  Its return is historic as, for the first time, there is a Nationalist First Minister (Sinn Féin’s Michelle O’Neill). The appointment of Andrew Muir as the Agriculture Minister is also historic as it is the first time that the Alliance Party has headed up the Department of Agriculture, Environment and Rural Affairs (DAERA).  The Alliance Party is liberal, centrist and non-aligned (i.e. neither Nationalist nor Unionist).

Mr Muir does not have direct experience of farming and the Alliance Party sees agriculture as being on an equal footing to the environmental and rural affairs aspects of the DAERA remit.  Its 2022 election manifesto placed an emphasis on supporting sustainable agriculture in Northern Ireland.  It included implementing mandatory carbon audits on farms, every five years, to reduce greenhouse gas emissions and promote environmental practices.  It also suggested a ‘Green New Deal’ to promote sustainable agriculture and associated economic growth, including plans to develop anaerobic digestion to tackle ammonia emissions and to encourage habitat restoration and biodiversity.

Northern Ireland’s agricultural policy has evolved since 2022 with the publication of DAERA’s plans in June 2023.  DAERA’s plans include an area-based Farm Sustainability Payment which will provide a basic safety net and is, in many respects, a continuation of the BPS in the short-term.  Coupled payments for the beef sector, contingent on environmental and productivity improvements (reducing calving intervals and age at slaughter), also featured.  Longer term, there are plans for DAERA’s Farming with Nature and Farming for Carbon agri-environment schemes to become the centre-piece of NI agricultural policy, although these plans have to be developed.

It would appear that Mr. Muir is likely to place a heavier emphasis on the environmental aspects of NI agricultural policy, although many of the Alliance Party’s manifesto objectives could be achieved within the policy framework laid-out by DAERA in June 2023.  That said, the new DAERA Minister is also aware of the wider food security issues across the UK which implies an acceptance that maintaining a balance between food production and the environment will be critical to success in his role.  Further information on the latest DAERA proposals for future NI agricultural policy is accessible via: https://www.daera-ni.gov.uk/sites/default/files/publications/daera/Future%20Agricultural%20Policy%20Decisions%20for%20Northern%20Ireland%20%28Final%29%20%28002%29.pdf

 

Defra has announced that the Farming Equipment and Technology Fund (FETF) will be opening shortly.  To help applicants prepare, it has released the guidance for this year’s scheme; this is at https://www.gov.uk/government/publications/farming-equipment-and-technology-fund-2024/apply-for-the-farming-equipment-and-technology-fund-fetf-2024.

Scheme Rules

To re-cap, the FETF provides funding towards items that have been pre-identified by Defra to help improve the sustainability and productivity of farm businesses.  Applicants are able to ‘choose’ from a set list of available items.  This year funding is available under three ‘themes’ and applicants can apply under each theme;

• Productivity – grants of between £1,000 and £50,000
  
• Slurry management – grants of between £1,000 and £50,000
  
• Animal health and welfare – grants of between £1,000 and £25,000
  

Defra aims to have three rounds open in 2024 and it seems that each theme will be available in every application window.  Applicants can, if they wish, apply under all three themes in a single application window, but will only be able to apply for a grant once under each theme in 2024 – i.e if you apply for a productivity grant in the first window, and are successful, it will not be possible to apply for another productivity grant in 2024.  The scheme is competitive and each application is scored, some applications may not receive all or any of the funding asked for.

The amount of grant and the way it is calculated has changed slightly this year.  The RPA has calculated an expected average cost for each item, based on costs from a cross-section of suppliers.   It will pay successful applicants a grant amount of either 50% or 60% (an increase from 40% last year), depending on the item, based on the lower of these two figures;

•  the average cost of the item – if an item costs the same or more than the expected average cost in the item lists, or
•  the actual cost paid for the item – if an item costs less than the expected average cost in the item lists  (this was not the case in previous years; if an item cost less than the average cost, successful applicants still received the set grant based on the average cost of an item)
  

Applications this year will be via a new online Farming Investment Fund application service.  This is separate to the Rural Payments service and will require a new registration when the service is launched.  Applications to more than one theme will need to be submited seaparately. 

Productivity Theme

In 2024 farmers, foresters, contractors and horticulturalists can apply for 85 different items of productivity equipment this includes 24 new items such as: 

• tractor powered electric desiccator for weed and plant control
• combine mounted weed seed reduction system
• drone for spraying whitewash on to glasshouses
• closed transfer system for sprayers for containers 
• solar powered water pump
• mobile tractor powered livestock total feed ration mixer
• forestry harvesting head with bark stripping

Popular items from previous rounds remain available including direct drill with fertiliser placement, robotic silage pusher, robotic drill and guided hoe, inter row hoes and weeders, camera guided inter row sprayers, rainwater harvesting tanks and automatic tree planter,

The full list of items available under the Productivity theme, including specificaton and grant aid can be found at https://www.gov.uk/government/publications/farming-equipment-and-technology-fund-2024/productivity-items-and-specifications-farming-equipment-and-technology-fund-fetf-2024.

Slurry Management Theme

There are now 17 different items of slurry equipment to help improve the collection and spreading of slurry.  Following feedback from farmers, Defra has widened the specification for slurry separators to allow screw press, screen press and mobile separators.  Popular items of slurry equipment that continue to be eligible for a grant include robotic slurry collectors, flow rate monitoring equipment and low emission slurry spreaders, such as dribble bars.

The full list of items available under the Slurry Management theme can be found at https://www.gov.uk/government/publications/farming-equipment-and-technology-fund-2024/slurry-items-and-specifications-farming-equipment-and-technology-fund-fetf-2024.

Animal Health & Welfare Theme

There are more than 130 animal health & welfare items available in 2024, including 29 new items.  These are available to commercial farmers who keep pigs, sheep, dairy and beef cattle and layer and broiler chickens.  Applications for animal health & welfare items are scored on their contribution towards the Animal Health and Welfare Pathway priorities.  This year, it is possible for livestock keepers to increase their application score by 20% if they can show evidence that the items being applied for have been selected in conjunction with their vet.  Keepers are reminded that they can get an Annual Health and Welfare review to have these types of discussions with their vets, for more information see https://www.gov.uk/guidance/sfi-annual-health-and-welfare-review. 

The full list of items available under the Animal Health and Welfare theme, including specificaton and grant aid can be found at https://www.gov.uk/government/publications/farming-equipment-and-technology-fund-2024/animal-health-and-welfare-items-and-specifications-farming-equipment-and-technology-fund-fetf-2024.

The Prime Minister, Rishi Sunak, spoke at the NFU Conference on the 20th February – the first Prime Minister to attend the event for 16 years.  Mr Sunak used the occasion to set out a number of policy initatives as detailed below.

Grants and Schemes

It was reiterated by the Prime Minister that the £2.4bn annual budget for English farm support would be distributed in full to agriculture.  With deep cuts to BPS now taking place, there is a large amount of funding being generated for ‘redistribution’.  The slow start to ELMs has apparently resulted in Defra struggling to spend all of this.  This seems part of the reason for the policy announcements on capital grants and SFI management payments – see below.  

SFI:  The Management Payment will be doubled to £2,000 for the first year of all agreements starting by March 2025 (this applies to existing agreements as well as new ones).  It is not clear how this will work, but we are assuming it will be £40 per Ha (rather than £20) for the first 50 Ha of an agreement.  It is also unclear whether this is a one-off just for 2024/25 or whether all first-year agreements will get a higher rate in the future.  We suspect it will be the former.  

The Managment Payment will be extended to Mid-Tier CS applications when the combined application ‘portal’ with the SFI opens in the summer.  This is very much in line with the direction-of-travel for these ELMs schemes.  It is clear that SFI will eventually subsume all of the ‘lower level’ CS options – things that have been in Mid-tier agreements up to now.  Over time, CS will become focused on more demanding land-management as per the current Higher-level schemes.

Defra states that, as at February 20th, they had received 11,000 applications for the SFI.

Capital Grants:  The funding for capital grants, and especially, ‘productivity’ grants is to be increased for the 2024/25 year – again, a way to ‘mop-up’ some of the budget.  The overall spend is put at £427m for the year.  This breaks down as follows;

• £70m for the Farm Equipment and Technology Fund (FETF).  This scheme is to re-open soon – see the following article
• £70m for the Farming Innovation Programme.  This funds innovation, research and
  development.  Whilst this should (hopefully) benefit farmers in the long run it has always seemed to us a bit of sleight-of-hand on the part of the Government.  It ends up using funds that used to go direct to farmers under the CAP to fund R & D activities instead
• £50m for the Improving Farm Productivity Fund.  This is for robotics & automation plus barn-top solar grants (open at the moment)
• £15 million for the Adding Value Grant – for processing, packing, and retailing
• £15 million for Water Management Grants for reservoirs and irrigation
• £116 million on the Slurry Infrastructure Grant Scheme
• £91 million on the Animal Health and Welfare Pathway – including grants for animal housing (calf housing was supported last year – other species may be covered in future).

A small point, but the last five schemes outlined above, offering large-scale grants, used to be grouped under the umbrella of the ‘Farming Transformation Fund’.  This name seems to have been dropped by Defra and they are now all individual schemes (along with the FETF) under the Farming Investment Fund (FIF).  In other re-naming news, the stand-alone Countryside Stewardship Capital Grants Scheme seems to have shed the ‘CS’ title – presumably to make it clearer it is open to anyone and not just CS applicants.  

Of the £427m outlined above, £220m is defined by Defra as ‘productivity schemes’ – basically, everything apart from slurry grants and animal health & welfare.  This was previously due to receive £91m, so is a recipient of a sizeable uplift in spend.

Food Security

It is already a legal requirement under the Agriculture Act that Defra has to prepare a UK Food Security Report every three years.  This will now be supplemented by an annual Food Security Index.

The Farm-to-Fork Summit that took place at 10 Downing Street last year will become an annual event.  This year’s Summit is due to take place in May.

Other Issues

Other announcements made include;

• The rules on Permitted Development rights under the Planning regime will be altered, with legislation being intoroduced in April.  This should allow easier conversion of farm buildings into rural offices, farm shops and sports venues.  This is a partial response to a consultation last autumn on various Planning changes  (see https://www.gov.uk/government/consultations/permitted-development-rights/consultation-on-additional-flexibilities-to-support-housing-delivery-the-agricultural-sector-businesses-high-streets-and-open-prisons-and-a-call-f#scope-of-the-consultation)
• Regulations to ensure fair contracts in the dairy sector have now been put before Parliament.  Similar rules for the pig sector are to follow later in the year with the egg sector after that.  There is to be a review of supply chain fairness in the poultrymeat sector and the Govenment will consult on whether something similar is needed for beef and sheep.
• A £15m fund will support the redistribution of surplus food.  Details of how this scheme will operate have not yet been set out.
• £500,000 has been pledged to support projects to boost mental health in farming.  It was indicated that this was to be distributed via the Future Farm Resilience Fund (FFRF).  Over 19,000 farm businesses have been helped by the FFRF so far. 

The NFU Conference also saw Minette Batters stand down after six years as President of the Union.  She will be suceeded by Tom Bradshaw who steps up from Deputy President.  The new Deputy will be David Exwood whilst the Vice-President will be Rachel Hallos.

The Agri-Environment Climate Scheme (AECS) is now open for applications in Scotland.  The application windows for the different elements are;

• Slurry Stores: 15th February 2024 – 19th April 2024
• Stand-alone Water Use Efficiency Irrigation Lagoon: 15th February 2024 – 19th April 2024
• Stand-alone Organic Conversion and Maintenance: 1st February 2024 – 31st July 2024
• Agri-environment: 1st February 2024 – 10th June 2024

However, applications for Organic Conversion and Maintenance as part of an application with Agri-Environment must be submitted by the 10th June 2024 deadline.  Similarly, combined applications for Irrigation Lagoon capital items alongside other AECS management options, must be submitted in the main Agri-Environment application window of 1st February to 10th June 2024.

This year there is an expanded range of options. There is also a focus on organic conversion.  The following have been reintroduced for 2024:

• Chemical & Mechanical Treatment of Bracken
• Heather Cutting
• Restoring of Drystone or Flagstone Dykes
• Pond Creation & Restoration (limited to 2000m2 per application)
• Capital Grants to Improve Slurry Stores.

In addition, the Creation of Hedgerow option has had its limit raised from 500m to 1,000m.

Detailed information can be found via https://www.ruralpayments.org/topics/all-schemes/agri-environment-climate-scheme/

Payment Information Statements

Payment Information Statements were sent out in December.  The Statements will show the ‘Reference Data’; this is based on BPS payments received in the ‘Reference Period’ – 2020, 2021 and 2022 BPS years.  The Reference Data determines the ‘Reference Amount’, basically the average yearly payment received over the three years.  This will be then be paid in each of the years from 2024 to 2027 to those that are eligible, minus the progressive % reductions for that year.  Businesses should ensure they have checked the Reference Data in the Statement against the figures on their BPS Claim Statement for the relevant year(s).  If, after checking, claimants do not agree with the values Defra has used, they need to fill in and return a Basic Payment Scheme: Payment Query Form (see https://www.gov.uk/government/publications/basic-payment-scheme-payment-query-form).  This needs to be completed by the 29th February 2024. 

Transfers

Readers will recall we wrote in November that from 15th February to 10th May 2024 it will be possible for a business, under certain circumstances, to transfer their Reference Data to another business.  Defra has now released further information on how to do this.   Our article of 6th November (see https://abcbooks.co.uk/delinked-payments/) explains the situations under which it is possible to transfer payments – for example mergers, scissions, where land has changed hands, or if the business just wishes to sell their ‘entitlement to the future support’.  Importantly, to receive a Delinked Payment the business must have made a BPS claim in 2023.  This means in the case of transfers the business receiving the payments must have made a claim (except under inheritance).  Furthermore, a business that holds Reference Data from the qualifying years 2020, 2021 and 2022, but did not make a claim in 2023 (e.g ceased trading) will not be able to receive the Delinked payment, but may wish to transfer their entitlement to future support.

In most cases the transfer can be undertaken (fairly simply) via the Rural Payments account of the business transferring the Reference Data.  On Rural Payments under the Basic Payment Scheme tab there is now a Delinked Payments section with a View and Transfer Reference Data tab.  This will take users to a Make a Transfer screen, where the SBI of the business receiving the Reference Data can be entered along with the Reference Data to be transferred – remember this is in £s not entitlements; users should refer to the Payment Information Statements (see above) for the correct figure.  Further guidance can be found via https://www.gov.uk/government/publications/how-to-make-a-delinked-payments-reference-data-transfer-request.

In certain circumstances it may not be possible to make the transfer using Rural Payments.  For instance, in inheritance cases where a business is ‘locked’/has an inactive SBI, or where a business has ceased trading, or if there are unresolved issues affecting the BPS 2020, 2021 and 2022 Reference Data.  Under these circumstances it will be necessary to complete a Transfer Request Form.  This can be found via https://www.gov.uk/government/publications/delinked-payments-transfer-request-form.   Note, it will only be possible to use this form during the transfer period, from 15th February to 10th May 2024.  The only exception to this is in cases of inherited land, where this form will be available until the end of 2027.

Further information on Delinked payment, including worked examples, can be found at https://www.gov.uk/guidance/delinked-payments-replacing-the-basic-payment-scheme

The Scottish Government has pledged that 70% of future rural funding will go direct to farmers under Tiers 1 and 2 of the new support scheme.  The announcment was made by the First Minister, Humza Yousaf, speaking at the NFU Scotland Conference.  No guide was given as to the split between the two Tiers.  Tier 1 is the ‘Base Payment’ that farmers will recieve as long as they meet ‘Essential Standards’ – Greening, Cross-compliance, Whole-Farm plan, Active Farmer rules etc.  Tier 2 is ‘Enhanced Support’ where farmers will get additional funds for implementing Measures that go beyond the baseline.  The overall budget for rural funding is also not known as this is set by the Westminister Government.

Mr Yousaf also announced that there would be a replacement for the LFASS – this had been left vague in previous announcements.  This will now be delivered through Tier 2 once the replacement scheme had been designed.  There would be an aspiration to use a further 10% of the budget (on top of the core 70%) to support LFA farming.  The First Minister also reiterated the Government’s support for livestock farming, stating “I don’t want us to be producing any less food. I want us to be producing more good quality Scottish food. Maintaining food production is at the very heart of our agricultural policy.”  However, he also stressed that the sector needed to find ways to reduce carbon emissions.

The second round of the Improving Farm Productivity Grant is now open.  The application is a two stage process and the Online Checker (the first stage) is available until 21st March 2024.  This round includes grants for the installation of solar equipment for the first time as well as support for automated and robotic equipment.  Our article in December gives more detail (see https://abcbooks.co.uk/improving-farm-productivity-grants-2/).  The full guidance and how to apply can be found at https://www.gov.uk/government/publications/improving-farm-productivity-grant-round-2-applicant-guidance 

The AHDB has published updates to its ‘Characteristics of Top Performing Farms’ reports.  Produced by The Andersons Centre, these look at the traits that set the best businesses apart from the average.  There are three reports that focus on dairy, cropping, and beef & sheep (although only the first two have so far been published).  They can be found via https://ahdb.org.uk/knowledge-library/characteristics-of-top-performing-farms-2024 .