Category: Policy & Business

Applicants to the Sustainable Agricultural Capital Grant Scheme in Scotland now have until 31st December 2021 to submit their claim.  This is the second time the deadline has been extended.  The original date was put back from 31st March until 30th September and now the Scottish Governement has announced claimants have until the end of the year to make a claim.  It appears there are issues over the supplies of certain items.  Completed claims and supporting documents should be emailed to a claimant’s local office.

Northern Ireland’s Agriculture Minister, Edwin Poots, has published a framework for future agricultural policy in the province.  The Future Agricultural Policy Framework Portfolio takes into account the views from a consultation undertaken in 2018.  That exercise focused on a vision for future agriculture in Northern Ireland based around four ‘desired’ outcomes; increased productivity, improved resilience, environmental sustainability and a responsive supply chain.  The Portfolio assesses the views on these key outcomes and sets out a framework on how they can be delivered:

• A simple, area based (resilience) measure – this will be set at a level to provide a ‘safety-net’ so that it does not ‘blunt’ innovation or productivity.  There will be minimum and maximum thresholds with recipients having to adhere to certain standards of farming activity and behaviour; similar to cross-compliance but targeted more towards NI’s issues.
• A headage sustainable measure – this will be for suckler cow and breeding ewe producers to support the ‘economic and environmental performance’ of these sectors.  The formation of a genetics and livestock data programme will also be explored.
• An Agri-environment package – will form a major part of future policy, but it is unlikely to be just one all-encompassing scheme as this is not seen as being able to deliver the multiple environmental issues that need addressing in NI.  The package is expected to ‘evolve and expand’.
• An investment measure – will be aimed at investments which drive innovation, productivity and result in better environmental outcomes, including reducing carbon, ammonia and nitrate emissions.
• Knowledge measures –  forming an important part of the policy portfolio, Continuous Professional Development (CPD) is seen as key to being able to deliver the objectives.  Following the success of the Business Development Group a knowledge measure will form a component in as many policy initiatives as possible.
• Generational Renewal – the view is that, by accelerating the transition down the generations, these will be better trained, more open to innovation and change and will help drive the desired policy outcomes.  But it is acknowledged that it will take more than just simple financial incentives and more work in developing this idea is being undertaken.
• Supply chain measures – it is acknowledged that this is an area where greater engagement locally is required.  The Independent Strategic Review of the Agri-Food Policy being led by Sir Peter Kendall is expected to feed into this area.

The ‘workstreams’ above are seen as the seven key components of the future support framework.  However there are other ‘cross-cutting’ elements that are seen as being required to fulfil the objectives, these are;

• Soil testing and LiDAR
• Livestock genetics and data initiatives
• Carbon reduction
• Controls and assurance
• Metrics, monitoring and evaluation
• Environmental assessments

There will also be a horticultural workstream.  Work is currently progressing on all 14 separate but related workstreams developing future policy proposals.  The Framework aims to form the basis for ongoing discussions with the industry and stakeholders as policy proposals are developed.  There will be a full consultation on these this autumn.  The development of farm policy in Northern Ireland has been delayed due to the suspension of the NI Government and the Framework gives little indication of when a new policy will be introduced – only to say the move from CAP based schemes will need to happen over ‘a number of years’ in order to deliver a ‘managed’ transition.  The full Framework Portfolio can be found at https://www.daera-ni.gov.uk/sites/default/files/publications/daera/21.22.086%20Future%20Agriculture%20Framework%20final%20V2.PDF 

The Government has made new amendments to its landmark Environment Bill.  Following work with Parliamentarians and wider stakeholders a number of amendments have been tabled including the duty to set a legally-binding target to halt species decline by 2030.  Other measures will tackle storm overflows through a new requirement for water companies to monitor the water quality impacts of their sewage discharges and publish this information.  The full amendments can be found at https://bills.parliament.uk/bills/2593/stages/15657/amendments?searchTerm=&Decision=All&MemberId=4062

The Scottish Government has launched an initial consultation on future agricultural policy.  Called Agricultural Transition in Scotland – First Steps Towards our National Policy it follows on from the work carried out by the Farmer Led Groups (FLG).  These were set up in 2020, covering all the agricultural sectors in Scotland to recommend ways in which farmers and crofters could consider the effects of landuse change and cut their emissions to help tackle climate change (see our article https://abcbooks.co.uk/sustainable-future-for-farming-scotland/).  Reducing greenhouse gas emissions was core to the work of the FLGs but improving biodiversity and agricultural productivity were also seen as important.

Although billed as as a consultation on future agricultural policy, its not perhaps quite what the industry was looking for.  It does not give clear proposals for new schemes or timings – it is more about generic policy direction.   The consultation provides an overview of the key themes and recommendations emerging from the FLG reports.  It also asks a number of questions arising from the recommendations from the FLGs to inform wider work on the development of Scotland’s national agricultural policy, including:

• Baselining – should support be received for businesses to undertake a level of baseline data collection; should this be a national collection; what information should be collected?
• Capital Funding – should this only be limited to providing support for capital items that have a clear link to reducing greenhouse emissions?
• Biodiversity – should all farming and crofting businesses be incentivised to undertake actions which enhance biodiversity?
• Just Transition – what are the main opportunities and barriers for farmers in a ‘Just Transition’ to a net zero economy?
• Sequestration – how best can land use change be encouraged on the scale required for the Scottish Government to meet its climate change targets?
• Productivity – would incentives for farm plans targeting flock/herd, soil and crop health demonstrate productivity over time and should future support be dependent on demonstration of improvements in productivity?
• R & D – are additional measures required above the 2022-2027 research strategy
• Knowledge & Skills – should Continuing Professional Development (CPD) be mandatory for businesses receiving public support?
• Supply Chains – should farm assurance be linked to requirements for future support and how can the green credentials of Scottish produce be further developed?

The consultation closes on 17th November 2021 and there is expected to be a series of workshops to help further identify the key issues and stimulate ideas during the consultation period.

In addition to the consultation, almost inevitably, the Scottish Government has also set up a new committee.  The ‘Agriculture Reform Implementation Oversight Board’ (ARIOB), co-chaired by the Cabinet Secretary and NFUS President Martin Kennedy is tasked with driving forward the recommendations from the FLGs and developing new proposals for sustainable farming support.  This will also include consulting on proposals for a sustainable suckler beef scheme.

This initial consultation is expected to be followed by a full consultation in 2022 on proposals for future farm policy, with an Agriculture Bill setting legislation in 2023.  This is likely to have more of a ‘framework’ covering the transition from CAP based schemes to domestic policy.  The full consultation can be found at https://www.gov.scot/publications/agricultural-transition-scotland-first-steps-towards-national-policy-consultation-paper/documents/ More information on the ARIOB, including members can be found at https://www.gov.scot/news/delivering-a-new-future-for-rural-scotland/.

Farmers in Scotland could receive 95% of their 2021 BPS payment as early as September.  Once again, Scotland has announced it will be running a National Basic Payment Support Scheme.  This will mean loan offers will be made, calculated at 95% of a claimant’s anticipated BPS payment including the Greening amount, capped at a maximum of £133,638 (€150,000).  Letters will be sent out in batches, with the first set arriving from mid-August.  Similar to the scheme in 2020, those wishing to make use of the scheme will need to opt in.  Balance payments will be made from December 2021 when the payment window opens.

In Wales, the aim is to make a BPS advance payment of 70% of the estimated claim value from 15th October 2021.  Payment will be made automatically subject to submission of an eligible BPS claim and the necessary supporting documents.  Balancing payments will be made from 15th December subject to completion of the full validation of the claim.

In England there has been no announcement regarding ‘early’ payment.  As in previous years payments are expected to commence on 1st December.

The deadline for applications to the SFI Pilot has been extended until 30th September 2021 (originally 1st September).  The Pilot is for those who expressed an interest in the scheme earlier in the year.  Furthermore, Defra continues to make amendments to the online guidance for the SFI Pilot.  There seems to be a lot of guidance, we think the best place to start and ‘navigate’ from is https://www.gov.uk/government/collections/sustainable-farming-incentive-pilot-guidance.

Scotland’s Rural Affairs Secretary, Mairi Gougeon is urging the public to take part in a consultation to help shape a Local Food Strategy.  The consultation, which runs until 26th November is the first stage in a strategy to make high quality food accessible to all and provide the benefits of local food.  The consultation can be found at https://www.gov.scot/news/local-food-strategy-consultation-launch/

Some Countryside Stewardship Higher Tier (HT) Agreement Holders could be offered the opportunity to replace their existing agreement with a new one under domestic regulations.  Called a ‘Countryside Stewardship 5 in 10 Agreement’, these are HT agreements with 5-year options ending on 31st December 2021 and 10 or 20 year options that will continue until the agreement’s expiry date.  The replacement agreements will run for 10 or 20 years and will be subject to the Countryside Stewardship Higher Tier manual for agreements starting in 2022.  It is not completely clear, but it appears the options coming to their 5 year end will be extended so this land continues to be managed environmentally.  NE will carry out initial assessments to see if an agreement is suitable for a replacement.  If this is deemed to be the case, the RPA will write to agreement holders inviting them to apply.  It will be possible to terminate a replacement agreement early, without penalty, at the end of an agreement year if a place in ELM has been secured.  More information and conditions of eligibility can be found at https://www.gov.uk/guidance/countryside-stewardship-5-in-10-agreements?utm_medium=email&utm_campaign=govuk-notifications&utm_source=7f02f389-2e47-4988-ba6a-12eb303e79fc&utm_content=daily

The Farm Business Grant (FBG) opens in Wales on 1st September 2021 for expressions of interest.  The closing date is 1st October and successful applicants will have four months in which to purchase and claim for items.  The FBG provides a 40% contribution towards capital items which have been pre-identified to improve technical, financial and environmental performance.  A budget of £2m is available under this round.

The disruption caused by the Covid pandemic, coupled with Brexit effects, has severely disrupted some parts of the economy.  The effects on farm are not yet widespread, but increases in costs and lack of product availability are being seen.

Some of the most noticeable effects are on building materials – notably steel and timber.  This is pushing up costs for those with a building project ongoing and, in some cases, it has been impossible to source the right materials.  Where grants are being received, these are far less attractive than before as the rates were set before cost increases.  Timber prices have gone up due to the ‘cutting season’ being disrupted by Covid last year.  Covid has also had an effect on global steel output although a larger factor is the reduction in Chinese production to reduce pollution.  In both cases higher shipping costs (see below) and additional Brexit-related trade costs are adding to the increases.

Transport is another area where there has been disruption.  At the global level, costs for container and bulk shipping have risen strongly.  There has been a combination of factors that has led to a capacity shortage.  One of these if the unbalanced reopening of the world economy, resulting in containers, ships and men often being in the ‘wrong place’.  Closer to home it is lorry drivers who are in shortage.  An existing shortfall has been exacerbated by EU drivers leaving due to a combination of Brexit and Covid.  Covid has also delayed HGV driving test meaning few new drivers are coming through.  High-profile shortages such as Nando’s chicken and McDonalds milkshakes have already been reported (although the formers is as much about a shortage of poultry processing staff as transport issues).  There are few reports that deliveries to and from farms have been affect as yet, but it will be an area of concern of the coming months.