RPA Log-in Update

Our article on 4th March (see https://abcbooks.co.uk/rpa-log-in/) reported on problems Agents were having when trying to access Clients’ BPS accounts on Rural Payments.  It seems following the RPA’s downtime on Wednesday the issue has now been resolved.  Agents who do not have ‘full permissions’ should now be able to log-on as previously.  However, it does look like those who do hold ‘full permissions’ for the account will still be asked to check the details, but this is not now denying access to the account.  Whether this is just a short term fix is not clear.  It is possible the situation will arise again, but hopefully with some prior notice and not just before the system’s busiest time of the year.

Farmer Opinions

Defra has released its latest information from the Farmer Opinion Tracker.  This asks farmers for their views on issues such as business planning, relationships with farming organisations (including Defra), new schemes, and the future of farming.  The survey first commenced in autumn 2019 and is usually undertaken in April and October, with these results coming from the October 2021 survey.

Worryingly, when asked if they understood Defra’s vision for farming the percentage of respondents which said ‘no’ but would be interested to know more was the highest since the Tracker began, at 36%; up from 29% in April 2021 and also 29% in autumn 2019.  Those who said ‘yes’ had increased from 5% to 7%, but those who ‘roughly knew’ had declined from 62% in April to 54% in the latest survey.  In addition, when asked if they had the information they required for business planning the percentage that had ‘all the information’ or ‘most of the information’ had declined from 40% in April to 37% in October.

One of the biggest changes since the survey began just three years ago, is the proportion of holdings that responded saying they needed to make changes to their business in the ‘next 3-5 years’, up from 52% in 2019 to 64% in October 2021 (perhaps an indication that now we have entered the Agricultural Transition, the loss of BPS is starting to ‘concentrate the minds’ of many).   Of these, the majority (53%) said they intended to stay in farming, but diversify into non-farming areas.  However, 9% said they planned to either retire or pass on the farm to the next generation with a further 3% saying they would be leaving for ‘other reasons’.

Farmers on 80% of holdings said that Defra paying for environmental outcomes was currently ‘very important’ (47%) or ‘moderately important’ (33%) to their holding, with the proportion believing it to be ‘very important’ increasing to 67% in the future.

A lack of optimism and confidence in the future of the industry is indicated by just 1% of all respondents being ‘very confident’ that changes to the schemes and regulations will lead to a successful future in farming, with the majority (68%) ‘not confident at all’.  Another worrying outcome was that 2/3rds of all farms were ‘not confident’ in Defra and Defra Agencies’ abilities to work together to deliver changes to schemes or regulations.  With only 3% ‘very confident’ and 33% ‘somewhat confident’ that their relationship with Defra will develop positively in the future, down from 4% and 42% respectively in April.  Just 36% felt ‘very positive’ (4%) or ‘somewhat positive’ (32%) about the future of farming.  The full survey can be found at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1056800/Opinion_Tracker_Oct_2021_24feb22.odt

 

National Reserve

It has been confirmed that Young Farmers and New Entrants will not be able to apply for entitlements from the National Reserve in England this year, except in respect of land which was leased, bought, or gifted prior to 17th May 2021.  Confirmation comes as the Direct Payments to Farmers (Allocation of Payment Entitlements from the National Reserve) (England) Regulations 2022 SI 200 come into force.  With De-linking of entitlements expected to take place 2024 this is just another step in drawing the BPS to a close.

Scottish Farm Policy

Direct payments will remain central to Scotland’s future farm support.  This is the conclusion drawn from the Scottish Government’s latest ‘vision’ for the agricultural sector.  It is largely a re-statement of previous policies and does not provide that much more information on detailed scheme requirements.  However, it does add a little to the emerging picture of future Scottish Farm Policy.

The Vision and Timetable can be found at –  www.gov.scot/isbn/9781804351154.  It sets out the following values and principles for future farm support;

  • ensure that Scotland’s people are able to live and work sustainably on our land
  • remain committed to supporting active farming and food production with direct payments
  • seek to create a diverse, flourishing industry
  • integrate enhanced conditionality of at least half of all funding for farming and crofting by 2025
  • as part of this conditionality, expect recipients of support to deliver on targeted outcomes for biodiversity gain and low emissions production
  • develop policy, regulatory and support mechanisms which deliver emissions reductions in line with our climate targets, and contribute to wider government objectives and priorities, particularly in relation to our net zero ambitions
  • design those mechanisms to support outcomes that restore nature, benefit our natural capital and promote the natural economy
  • ensure those mechanisms are flexible enough to be adapted in delivery to accommodate emerging evidence, science, technology and tools
  • adopt an evidence-based, holistic, whole farm approach, including learning from and applying practice and experience from other nations
  • adopt a natural capital and just transition approach to land use change
  • where practicable, stay aligned with new EU measures and policy developments

Although much of this is vague and aspirational, there is some ‘meat’ to be found in it.  The continuation of direct payments is clearly stated, along with the shift towards more ‘conditionality’ on these.  It is also clear that climate change will be a big driver of farm policy (as we have written previously) and there is a desire to keep policy aligned with the Common Agricultural Policy as much as possible.

In terms of what ‘conditionality’ looks like, some key themes are outlined;

  • greenhouse gas (GHG) emission reductions
  • biodiversity audits (and improvement)
  • soil testing
  • nutrient and forage plans
  • animal health and welfare plans

In short, farmers will be expected to do some of the above in order to get their full BPS.  Interestingly, on GHG emissions, the Scottish Government states that it wants to see the same amount of agricultural production with fewer emissions, rather than more production with the same emissions.  

In terms of timing, a full consultation on a future Agricultural Bill will be undertaken this summer with a view to enacting legislation in 2023.  However, the replacement support framework under this will only be implemented from 2026.  Therefore, the ‘legacy’ CAP schemes will continue until 2025, albeit with some changes.  In the shorter-term, a ‘National Test Programme’ will commence this spring.  This will have two ‘tracks’;

  • Track 1 (Baselining):  this will be an offer to all farmers to start collecting information on their farming business (e.g. around GHG emissions and biodiversity).  This ‘baseline’ information can then be used to measure improvements in the future.  It is not yet clear whether there will be any element of compulsion to take part in 2022 or whether, at the outset, it will be voluntary.  There will be an initial focus on those parts of farming with the highest emissions – e.g. livestock.  The suckler beef sector has previously been highlighted in this regard and there may be some conditions on the Scottish Suckled Beef Support Scheme (SSBSS) either this year or in the near future.
  • Track 2: (Development):  this will aim to develop tools, processes and support structures that will deliver the goals of the vision.  It can perhaps be seen as a test-and-trials approach.  Recruitment of farmers to take part will commence shortly.  The development of policy will continue to be overseen by the Agriculture Reform Implementation Oversight Board (ARIOB).

This ‘announcement’ continues the pattern of limited and partial policies being announced by the Scottish Government.  It would no doubt argue that it is progressing steadily, with a desire to minimise disruption and take the industry with it in designing a new farm support system.  Alternatively, it could just be described as ‘slow’.  Much of the farming sector would just like more clarity on future support arrangements.  We will continue to report on developments.     

UK/New Zealand Trade Deal Signed

On 28th February, the UK and New Zealand signed the UK-New Zealand Free Trade Agreement (FTA), formalising the agreement-in-principle which was announced in October 2021 (see https://abcbooks.co.uk/uk-new-zealand-trade-deal/).  The FTA is similar in nature to the UK-Australia FTA announced in December.  The deal is seen by the UK Government as another important step towards joining the Comprehensive and Progressive agreement for Trans-Pacific Partnership (CPTPP).  The agreement will now be laid before Parliament for scrutiny.

The key points are;

  • Tariffs: upon entry into force, 100% of tariffs on UK goods exports to NZ will be removed whilst tariffs on 99.5% of goods imports into the UK from NZ will immediately be removed.
  • Tariff Rate Quotas (TRQs): will remain for the most sensitive product being imported into the UK including:
    • Beef: access would be limited by tariff rate quota (TRQ) in the first 10 years. This would commence with access to a duty-free transitional quota of 12,000 tonnes in year 1, rising in equal instalments to 38,820 tonnes in year 10.  Any beef imports above the annual TRQ allowance would be subject to the UK Global Tariff (UKGT).  In the subsequent 5 years (year 11-15 after entry into force) a product-specific safeguard will be applied on any beef imports exceeding a further volume threshold rising in equal instalments from just over 40,000 tonnes in year 11 to 60,000 tonnes in year 15. All TRQ allowances are on a product weight basis. All tariffs would be eliminated from year 16 onwards. 
    • Lamb: access would operate in a similar manner to beef, although tariff-free TRQ access would be managed in a series of step-changes as opposed to annual incremental increases and the allowances are calculated on a carcase-weight basis which is somewhat more limited than a product weight basis.  In years 1-5, an additional 35,000 tonnes per year could be imported tariff-free.  This, of course, is in addition to the 114,000 tonnes of the WTO TRQ that New Zealand has historically had available.  During years 5-15, the tariff-free access will increase to 50,000 tonnes per annum followed by unlimited access in year 16.  Importantly, trade via the FTA TRQ can only commence once utilisation of the WTO TRQ has reached 90%.  Any imports exceeding the FTA TRQ will be subject to the UKGT tariff rate. 
    • Dairy: similar structures will also operate for dairy products with unlimited access being phased in over 5 years.
      • Butter: initial duty-free TRQ of 7,000 tonnes rising to 15,000 tonnes in year 5.
      • Cheese: there will be an initial duty-free TRQ of 24,000 tonnes in year 1, increasing incrementally to 48,000 tonnes in year 5.
    • Fresh Apples: given the seasonal nature of production in both countries, tariffs on imports into the UK from 1st January to 31st July would be eliminated as soon as the deal comes into force.  Imports during August to December will be liberalised over 3 years.  During this time, there will be a tariff-free TRQ of 20,000 tonnes per year.  All fresh apple imports from NZ would then be tariff-free and quota-free from year 4 onwards. 

Sources: UK Government and Andersons

  • Customs Procedures: the deal is ambitious with respect to minimising customs procedures and the promotion of e-certification.
  • Rules of Origin (RoO): are set to remain standard for agri-food – i.e. a threshold of 15% of products traded can be non-originating from the country of origin (i.e. UK or NZ) in order to gain tariff-free access.  The RoO for automotive vehicles (25% originating materials as opposed to the standard 55% threshold) will become much more liberalised.  This is seen as a big gain for the UK, given the extent of its integration with EU supply-chains. 
  • Sanitary and Phytosanitary (SPS) Measures: the The FTA seeks to minimise barriers in the area.  Both countries are to recognise equivalence where both countries have similar standards and the deal will function in parallel with the existing UK-NZ Sanitary (Veterinary) agreement.  The UK Government is also keen to emphasise that the deal “does not create any new permissions or authorisations for imports from New Zealand and does not compromise on our high environmental protection, animal welfare, plant health, and food standards.”
  • Animal Welfare: has a dedicated chapter in the agreement which includes non-regression and non-derogation clauses which the Government intends that neither country will lower its animal welfare requirements in a manner which impacts trade. There is also an ambition to work together internationally to encourage greater animal welfare standards and research cooperation on animal welfare issues. 

Overall, the main thrust of the UK-NZ FTA is very similar to the previous agreement-in-principle and is quite similar to the FTA that the UK has agreed with Australia.  As such, it creates another precedent for future trade deals.  It is clear that the UK has offered enhanced market access for NZ agri-food suppliers in return for greater access to the NZ automotive and services sectors.  The cumulative impact of these trade deals is also important.  Whilst there is a 15-year transition period for beef, by year 14, the combined Australian and NZ TRQs (~214Kt) access will have surpassed recent years’ annual imports from Ireland (204Kt).  That said, just because TRQ access is available, it does not mean that it will be fulfilled as Asia-Pacific will remain very important to Antipodean suppliers. 

Finally, in the case of NZ, it must be acknowledged that whilst there are some differences in its standards versus the UK, its standards are very closely aligned.  Something that the EU also acknowledges in its veterinary agreement with NZ.  Therefore, whilst the competitive pressure will increase, the playing field is quite level in this instance.  What UK farming needs needs to do is to focus much more on improving its market orientation (i.e. focus on satisfying consumer needs profitably and sustainably) and to improve its value proposition and marketing generally, both at home and abroad.  That is its best chance to successfully competing with the likes of NZ in the long-term.

More information on the UK-NZ FTA is available via: https://www.gov.uk/government/collections/uk-new-zealand-free-trade-agreement

RPA Log-In

There have been problems accessing the RPA’s computer systems for many Agents over the last few days.   Those logging-on to undertake BPS or agri-environment work for their clients may have noticed that the usual ‘View business’ hyperlink is not available.  Due to data protection reasons, online access is being restricted to accounts until somebody holding ‘full business permissions’ for the business logs-in and confirms the relevant information.

This is causing a problem as not many Agents will hold ‘full business permissions’ for their clients, just permissions to allow them to update and make claims for the relevant schemes (BPS, CS).  This means accounts are effectively locked until somebody who does have such permission logs-in and confirms the details.  The problem further escalates as, in many instances, those who have got the relevant permissions (the business owners, partners etc.) may not have actually logged on for many years, leaving it to their Agent and will not even know their log in details, meaning many phone calls to the RPA helpline to retrieve lost log-in details.

Apparently the RPA is looking into solutions and we will try and keep readers up-to-date if there are any changes, but in the meantime, if access is required, the RPA has said the only solution is for an individual holding full business permission to access the business online and confirm the data and permissions.

The situation has arisen because a year ago, under pressure from the Government Digital Service as part of ensuring data security, the RPA put in a system which now requires RPA customers to log-in and confirm their business details on an annual basis.

Farm Equipment Technology Fund

The deadline for accepting a Farm Equipment and Technology Fund Agreement has been extended until 1st April 2022; originally this was 4th March.  Successful applicants need to accept their Agreements via the dedicated FETF acceptance portal  – https://www.fetf.org.uk/acceptance_portal_intro/ . They then have until midnight on 31st October 2022 (also extended by one month) to buy and install the items and submit a claim for payment (see our article of 22nd February https://abcbooks.co.uk/farm-equipment-technology-fund/).

NI Trade Issues

Intra-Ireland Trade

Latest data from the Irish Central Statistics Office (CSO) show that total agri-food trade between Northern Ireland (NI) and the Republic of Ireland (ROI) has increased significantly (by 42%) in 2021 versus 2020.

NI agri-food imports from ROI have increased by 47% with regulatory controls imposed on GB to NI trade as a result of the NI Protocol being the primary driver. Corresponding NI exports to ROI have also risen by 38% over the same period, showing that increased all-island agri-food trade is happening in both directions.

Looking at individual product categories in more detail, the chart below shows substantial increases in dairy trade during 2021.  NI exports to ROI are estimated at nearly £284m in 2021; up from £202m in 2020.  Imports are up from £169m to nearly £314m over the same period, suggesting that NI retailers and the food services sector are procuring a greater proportion of inputs from ROI as a result of regulatory barriers on GB to NI trade.  Other product categories also show similar trends with NI imports from ROI showing strong growth across all sectors.

NI Protocol Negotiations

Talks to simplify post-Brexit trade between GB and NI as a result of the imposition of the NI Protocol are continuing but progress has been limited of late.  Despite some rumours of the UK Government contemplating the triggering of Article 16 to suspend some parts of the Protocol, discussions look set to continue particularly as both the UK and EU are keen to show a united front as tensions between Russia and Ukraine mount.  Whilst some progress has been achieved on simplifying customs formalities, significant gaps remain in terms of how checks on food, animals and plant products are managed.  With the NI Assembly election looming in May, it is likely that both the UK Government and the EU will be keen to give the Protocol negotiations a low profile until then.

ROI Trade with GB

The CSO data also reveal a 4% drop in total agri-food trade between ROI and Great Britain (GB) from £8.8bn to just over £8.4bn.  The key driver of this has been a 19% drop in ROI imports from GB as EU regulatory controls have been effective since January 2021.  Over the same period, there has been an 8% increase in the value of agri-food exports from ROI to GB.  Increased agri-food prices during 2021 are the major driver of this increase.  Whilst the UK Border Operating Model is not fully functional and Irish exports to GB face few regulatory barriers and this will also have supported continued Irish exports to GB.  That said, Irish exports of beef to GB (£753m) have declined by 4% in value terms during 2021 and by 23% in volume terms (decreasing from 193Kt to 149Kt). Irish dairy exports to GB have witnessed a more severe decline, down by 24% in value terms in 2021 and are now valued at just under £530m.

Sustainable Farming Incentive Pilot

The RPA has issued the first batch of quarterly payments under the Sustainable Farming Incentive (SFI) Pilot.  These have been made to those participants whose agreements commenced on November 1st 2021.  Not all applications had been processed by this initial start date, but offers have been sent out on a regular basis since.  As of 18th February, 826 agreements have been offered, with 769 accepted and a further 57 still awaiting acceptance.  There are also 73 applications still being processed.  Pilot participants are now able to apply for capital items, see Bulletin article https://abcbooks.co.uk/countryside-stewardship-6/

Farm Equipment & Technology Fund

Defra has started to send out Agreements for the first round of the Farming Equipment and Technology Fund (FETF).  Successful applicants need to accept their Agreements by midnight on 4th March, via the dedicated FETF acceptance portal.  They then have until midnight on 31st October 2022 (extended by one month) to buy and install the items and submit a claim for payment.

The FETF is part of the Farming Investment Fund (FIF) offering grants of between £2,000 and £25,000 towards the cost of specific capital items identified to improve farm productivity in a sustainable way.  The first round was significantly over subscribed.  Defra received 5,624 eligible applications worth a total value of just over £53.5m; three times the initial allocation for the fund.  Of these 4,376 have been offered Grant Fund Agreements (GFA) totalling over £48.5m.  The scheme is competitive and items in an application are scored on how they meet the following criteria:

  • productivity
  • animal health and welfare
  • environmental benefits, including biodiversity

Defra is encouraging those who were unsuccessful this time to apply in the next round, which is expected to open later this year.  Defra is  reviewing all the feedback from this round to help inform the design and operation of the next round.  In the coming weeks it will be asking  farmers and stakeholders for input in reviewing the list of items eligible for grant funding in future rounds.