Category: Policy & Business

EU Proposals on NI Protocol Flexibilities

On 15th June, the EU Commission published two position papers fleshing out its October proposals (click here for more detail) on the additional flexibilities that it could offer on the operation of the NI Protocol.  In a widely expected move, the Commission simultaneously announced that it was unfreezing legal proceedings that it had initiated against the UK last year but halted in July 2021 to facilitate further negotiations on the Protocol.

The Commission’s position papers are aimed at providing solutions to key aspects of the impasse surrounding the operation of the NI Protocol on the movement of goods from GB to NI.  These papers focus on Customs and Sanitary and Phytosanitary (SPS) rules respectively.

Customs Flexibilities

The Commission’s proposals seek to dramatically reduce customs formalities and costs for goods deemed not at risk of being subsequently moved into the (European) Union.  Here, the EU proposes to widen the scope of the previously proposed Trusted Traders Scheme (UK Traders Scheme) to encompass more companies, including SMEs.  This means that such traders would be regarded as shipping goods ‘not at risk’ of entering the single market.

The Commission also proposes that such traders could avail of a ‘super-reduced data set’.  They claim that this would reduce the number of data elements on a customs declaration falling from 80 to 21.  This would also include simplifying commodity code requirements (i.e, entries would be based on 8-digits as opposed to 10-digits).  The need for supplementary declarations would also be abolished for such traders.

In addition, the Commission is also open to looking at added flexibilities where there is evidence that traders have been adversely affected by the implementation of the Protocol as well as further flexibilities for NI firms processing GB inputs.

SPS Rules

The Commission paper proposes that a much reduced regime of controls would be available to ‘authorised retailers’ operating in NI and their GB-based suppliers.  These would be available to traders regardless of size and would be expanded to include the hospitality sector, schools, canteens, and supermarket distribution centres, on the proviso that the food would be packed and labelled for end consumers in Northern Ireland.

One notable proposal is that of a ‘single simplified official certificate’ being required for each lorry load of mixed retail goods.  This certificate would be signed by a UK Competent Authority and would replace the potentially numerous official certificates that would be required for such loads if the Protocol was fully implemented in its current form.  The Commission also claims that documentary checks could be performed electronically and that identity and physical checks could be reduced by 80%.

The Commission has claimed that these flexibilities will require changes to EU laws, including its sensitive food safety regulations.  This would be subject to some preconditions and safeguards implemented on the UK side.

UK Government Reaction

Given the publication of its NI Protocol Bill a couple of days beforehand which effectively supplants the existing NI Protocol, it was unsurprising that the Government’s initial reaction was negative.  It claimed that the implementation of the EU’s proposals would mean a worsening of the current trading situation (note: grace periods are still in place for some agri-food products). Also, despite the EU’s proposed facilitations for products such as chilled mince or sausages, Veterinary Certificates would still be required.  Instead, the UK wants EU Member States to give the Commission a mandate to renegotiate the entire Protocol – something that the EU side is adamant will not happen.

Overall, whilst the EU Commission’s positions papers represent some movement, its latest flexibilities are still predicated on the October 2021 proposals.  It is apparent that they do not go far enough for the UK side.  Also, NI business groups, whilst seeing these position papers as a basis for further discussions, would like to see more flexibility from the EU side.  The EU Commission has emphasised that it stands ready to re-engage in negotiations with the UK Government to solve the remaining Protocol issues.   What is clear is that the basis of a ‘landing zone’ is visible. There is common ground between the UK Government’s green lane proposals in the NI Protocol Bill and the EU’s express lane approach, initially put forward last October. But, much more work is needed for both sides to reach common ground across all issues. 

The EU Commission’s position papers are accessible via the links below;

 

Scotland’s Transition to Net Zero

Increased funding for peatland and woodland restoration in Scotland has been announced.  The plans have been published in the Scottish Government’s latest Resource Spending Review, as Net Zero Secretary, Michael, Matheson, pledges to maximise the use of public funding to accelerate the delivery of plans to tackle climate change.  As well as increasing spending on delivering the Heat in Building Strategy and active travel, up to £95m has been committed towards meeting woodland creation targets of 18,000 by 2024/25.  A further £12m has been committed to peatland restoration, to double the current rate.

 

 

 

Sustainable Farming Scheme Wales

The Welsh Government is asking farmers and other members of the rural community to help with co-designing the Sustainable Farming Scheme (SFS).  Phase 1 has already been completed, the next phase of co-design will be launched some time over the summer and those interested are being asked to register now.  Registration can be made via https://gov.wales/co-design-sustainable-farming-scheme-wales   The SFS will be the main farm support in Wales in the future, replacing the current BPS and Glastir.

 

Welsh Residential Tenancies

Changes to Welsh residential tenancy legislation has been delayed.  The (long awaited) Renting Homes (Wales) Act 2016 should have come into force on 15th July 2022, but has now been postponed until 1st December 2022.  Our article of 25th April (see https://abcbooks.co.uk/welsh-residential-tenancies/) outlined the changes the Act will introduce, the main one being the replacement of Assured Shorthold Tenancies.  But following representations from Landlords, citing pressures from Covid recovery and supporting those fleeing the war in Ukraine, in a Written Statement, the Minister for Climate Change has said this type of change is ‘perhaps once in a generation’ and ‘I want to do all I can to ensure Landlords have adequate time to make the necessary preparations to comply with the requirements of the Act’.  The title of the legislation ‘…..2016’ gives away how long we have been ‘talking’ about this Act (!)

Government Food Strategy

The Government’s much-delayed Food Strategy has been met with a mixed reception on its eventual release.  The White Paper responds to the recommendations made by Henry Dimbleby in his independent review of the food sector (see https://www.gov.uk/government/publications/national-food-strategy-for-england).  Not all of Mr Dimbleby’s recommendations have been accepted.  Notably, more contentious proposals such as a salt and sugar tax, expansion of free school meals, and a 30% target to reduce meat consumption have been shelved.  Henry Dimbleby himself has commented – “It’s not a strategy.”  “It doesn’t set out a clear vision as to why we have the problems we have now and it doesn’t set out what needs to be done.”

The Strategy mainly relates to England, as food policy is devolved.  It has three broad objectives.  These are to deliver;

  • a prosperous agri-food and seafood sector that ensures a secure food supply in an unpredictable world and contributes to the levelling up agenda through good quality jobs around the country
  • a sustainable, nature positive, affordable food system that provides choice and access to high quality products that support healthier and home-grown diets for all
  • trade that provides export opportunities and consumer choice through imports, without compromising our regulatory standards for food, whether produced domestically or imported

Each is looked at in turn below, with some of the key policy measures highlighted.

Secure Food Supply

The report highlights that the UK produces around three-quarters of the indigenous food (i.e. that which can be grown in the UK) which is consumed here.  The Strategy commits to ‘broadly maintain the current level of food we produce domestically’.  This rather vague assertion is not backed-up by any specific policy action, although there is to be a focus on boosting the horticulture and seafood sectors (see below).  Other policies under this heading include;

  • there is a restatement that the Agricultural Transition, including ELMs and productivity measures will deliver sufficient production whilst also meeting environmental goals.  Effectively, nothing in the Food Strategy changes the direction of English farm policy – there is no turn away from environmental polices which some believed the current global food crisis warrants
  • buried within the Strategy is the phrase that ELM funding will be ‘responsive to farmer demand’.  This is widely taken to mean that the funding split between the three parts of ELM will no longer be broadly equal, with more being channeled via the SFI (largely at the expense of Landscape Recovery)
  • next year, the Government intends to publish a Land Use Framework for England, setting out how land can be best used to meet the many policy pressures it faces
  • there will be funding for farming innovation programmes.  Also, the AHDB will be tasked with setting up a ‘What Works Centre’ to share best practice across the farming industry.
  • skills in farming will be boosted by the formal launch in 2023 of the new Institute for Agriculture and Horticulture (TIAH)
  • the Strategy would like to see a boost in what it calls ‘industrial horticulture’ – large-scale glasshouses.  To this end it will be considered alongside other manufacturing sectors in decisions on industrial energy policy.  The Planning process will also be reviewed to support new developments and there will be incentives to use surplus heat and CO2
  • any growth in horticulture will be dependent on having adequate labour.   In the short-term, it has been announced that the extra 10,000 places (on top of the basic 30,000) under the Seasonal Workers Scheme will be made available for 2022.  There will be a review of the way the Shortage Occupation List works under the visa regime by the Migration Advisory Committee (MAC).  However, the Strategy states that ‘the [food] sector cannot sustainably rely on migrant labour’ – an independent review will shortly be commissioned to look at labour shortages in the food supply chain.

Healthier Food System

It is probably in this area that Mr Dimbleby will be the most disappointed.   He devoted a large amount of his independent report to the causes of poor diet, the effects on individuals and society, and what should be done about it.  The Government has largely avoided any hard (i.e. potentially unpopular) decisions.  Some of the key measures include;

  • over the next three years there will be a series of randomised control trials of interventions in the food system to encourage and enable healthier and more sustainable diets for all.  This programme aims to build a suite of evidence-based and value for money interventions that can be developed into full scale policy
  • schools will be targeted to both provide healthier meals and also teach children about better food choices
  • a Food Data Transparency Partnership will be set up to help people make informed choices about their food.  This will firstly involve the development metrics to objectively measure the health, environmental sustainability, and animal welfare impacts of food.  Food companies will then have to report against these
  • public procurement of food will be amended with an aspiration that 50% of ‘Government’ food expenditure is on food produced locally or to higher environmental production standards

Food Trade

The Government states that open markets are the best way to mitigate food shortages on a global scale.

The Strategy aims to maximise the export opportunities for the food and drink sector now that the UK is free to negotiate its own trade policy.  Ten agri-food attachés will be appointed across the world to support UK food and drink exporters.

The Strategy restates the Government’s commitment to protecting the environment, animal welfare and food standards in any Free Trade Agreements.  It will shortly be publishing a statement on an animal health and production regime – this will set out the requirements for those wishing to access the UK market.

The full Strategy can be found at – https://www.gov.uk/government/publications/government-food-strategy/government-food-strategy

Farming Transformation Fund

Further to our article published on 25th May (see https://abcbooks.co.uk/farming-transformation-fund/) the Adding Value theme of the Farming Transformation Fund is now open for applications.  As in previous rounds of the Fund, it is a two-stage process, with the initial stage an online checker which can be found at https://check-farming-transformation-fund.defra.gov.uk/adding-value/start.   A reminder that the manual is available online via https://www.gov.uk/government/publications/adding-value-grant-for-farmers-to-improve-crops-or-livestock

The online checker will remain open until 21st July, after which those projects which score high enough will be invited to submit a full application.  Applicants will have until 31st January 2024 to submit their application in full.  Under this theme, £30 million will be available to support farmers and growers to process, diversify and add-value to their products.  It will offer grants of between £25,000 and £300,000 for up to 40% of eligible project costs.  

Farm Practices

Defra has released the results from its latest Farm Practices Survey (FPS).  The Survey, run in February 2022, focused on practices relating to greenhouse gas mitigation.  The key findings for the eight different topics in the survey are;

  • Nutrient Management – in 2022, 54% of holdings had a nutrient management plan.  However, this is the lowest percentage in the last 10 years – over 60% reported having a management plan in 2012.  It seems quite odd that this figure is going backwards. 
  • Anaerobic Digestion – perhaps not too surprising, but the majority of farms do not process slurries, crops or other feedstock by AD.  Just 8.3% of holdings were found to be doing so in 2022, slightly down from 8.9% in 2021.
  • Emissions – the proportion of farmers considering greenhouse gases to be either fairly or very important when taking decisions about their land, crops and livestock is 64% in 2022; a decrease from 67% in 2021.   In 2022, 58% of farmers said that they were currently taking action to reduce GHG emissions from their farm.  Of those taking action, the three most common actions are recycling waste materials from the farm (82%), improving energy efficiency (78%) and improving nitrogen fertiliser application accuracy (63%).  The largest change in actions seen between 2013 (when these questions were first asked) and 2022 was an increase in the number of farmers improving efficiency of their manure & slurry management and application.  This has risen from 28% of holdings in 2013 to 52% in 2022.
  • Fertiliser, Manure and Slurry Spreaders – just over three quarters of holdings (78%) spread manure or slurry on their grass or arable land in 2022 and 85% spread fertilisers.  Rather worryingly, on 43% of holdings where the farmer spreads at least some manure or slurry themselves, the manure or slurry spreader is never calibrated.
  • Manure and Slurry Storage – the most common storage facility for solid manure continues to be temporary heaps in fields with 72% of farmers using this type of storage in 2022.  The most common facilities for slurry storage are tanks (16%) followed by lagoons without a strainer (10%).  Slurry in a tank is far more likely to have a cover than any other type of store.  In 2022, 21% of livestock farmers planned to make changes to their manure or slurry storage facilities.  Of these, 20% planned to make the changes within the next year and a further 58% in the next 1 to 3 years.
  • Livestock Health Planning and Biosecurity – in 2022, 73% of livestock farms had a Farm Health Plan, compared with 71% in 2021.  Of those holdings with a FHP in 2022, 83% had created the plan with assistance from a vet or advisor, down from 87% in 2021, although the proportion using a vet or adviser has risen steadily from 60% in 2009 when the survey was first undertaken. This has probably been influenced by Farm Assurance scheme requirements.
  • Grassland and Grazing – in 2022, 73% of livestock holdings indicated that a proportion of their temporary grassland had been sown with a clover mix, down from 76% in 2021, with 19% having sown all of their temporary grassland with a clover mix.  High sugar grasses were sown on 59% of livestock holdings with temporary grassland.
  • Livestock Feeding Regimes and Breeding Practices – the number of holdings using a ration formulation program or expert nutritional advice was 67% in 2022, but has been steadily falling since 2018.  Those who reported ‘always’ using a program or expert advice was over 20% in 2018, but in the latest survey is now below this level.  In 2022, 49% of commercial dairy holdings breeding dairy cows always used bulls with a high Profitable Lifetime Index (PLI).  This has increased from 40% in 2020.  In 2022 bulls with high Estimated Breeding Values (EBV) were always used by 14% of Grazing Livestock LFA holdings breeding beef cattle and 16% of Grazing Livestock (Lowland) holdings breeding beef cattle.  Rams with high Estimated Breeding Values (EBV) were always used by 7% of Grazing Livestock LFA holdings breeding lambs and 10% of Grazing Livestock Lowland holdings breeding lambs.  However, in 2022, the holdings using bulls and rams with high EBVs at least some of the time accounted for 46% of beef cattle and 43% of lambs at June 2021.

The full release can be found via https://www.gov.uk/government/statistics/farm-practices-survey-february-2022-greenhouse-gas-mitigation-practices 

 

Scotland’s Rural Land Market & Values

Scottish farmland values increased by more than 30% in 2021 according to a recently published report.  Values for the poorest quality grazing land increased by even more as purchasers looked for land for new forestry plantations.

These findings come from a study undertaken on behalf of the Scottish Land Commission (see https://www.landcommission.gov.scot/downloads/62546512f4179_Land%20Market%20Summary_FINAL.pdf for details).  The aim of the project was to see what are the current drivers in the Scottish land market.  Some key findings were;

  • farmland values rose 31% in 2021 (the UK average increase was estimated at 6%)
  • hill ground suitable for tree planting rose in value by 60% during 2021
  • more land sales are being conducted ‘off-market’
  • the amount of land being offered for sale has remained broadly the same in recent years, but at the same time demand has risen (hence the increase in prices)
  • basis for valuing land is changing from a focus on agricultural and sporting value towards natural capital value and forestry potential
  • there is growing demand for both large rural estates and small ‘lifestyle’ holdings

The report concludes that the Scottish land market is likely to continue to experience strong growth in the foreseeable future.

Local Nature Recovery Info

Defra has provided a little more detail on the upcoming Local Nature Recovery (LNR) scheme.  In a post on its Future Farming Blog (see https://defrafarming.blog.gov.uk/2022/05/27/local-nature-recovery-in-2022/) the Department sets out the broad areas the LNR will fund.  In general, these are quite similar to the areas that the existing Countryside Stewardship focuses on – LNR is due to replace the CS from 2024.  Defra is also looking to recruit farmers and land managers to help in the ‘co-design’ of the LNR.

SFI: Full Guidance

Defra has now published the full (and final) guidance for SFI 2022.  This can be accessed at https://www.gov.uk/government/collections/sustainable-farming-incentive-guidance.  As has been previously written, the Sustainable Farming Incentive this year covers three land Standards – Arable & Horticultural Soils, Improved Grassland Soils and Moorland.  The updated guidance provides more detail on the working of each Standard and what farmers will have to do.  The opening date for the scheme has still not been given – the latest guidance states ‘late June’.