Category: Policy & Business

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.

 

The Tenancy Reform Industry Group (TRIG) has published a new Code of Good Practice to help Landlords and Tenants agree variations to their Tenancy Agreement.  The code, snappily titled, Code of Good Practice for Projects, Schemes or Works Requiring Landlord’s Consent in Agricultural Tenancies, updates the previous 2004 Code of Good Practice.  The update coincides with the introduction of the Agricultural Holdings (Requests for Landlord’s Consent or Variation of Terms and and the Sustainability Test (England)) Regulations 2021 SI619.

The code will help those looking to make use of the new Regulations and also in a wider context of the relationship between Landlords and Tenants.  It has been designed to provide Landlord’s and Tenant’s guidance when the parties are agreeing terms to vary an existing Agricultural Holdings Act 1986 (AHA 1986) Tenancy or a Farm Business Tenancy (FBT) to allow agricultural and non-agricultural diversification, access to financial assistance schemes (such as ELM) and compliance with statutory duties where the Agreement includes clauses to prevent these practices.  It was recognised by TRIG that with the move from BPS direct payments to the ‘public money for public goods’ approach, some tenants may not be able to access this support due to restrictive clauses in their tenancies, some often dating back many years, when the agricultural landscape was very different to now.  The full code can be found via https://www.rics.org/uk/upholding-professional-standards/sector-standards/land/tenancy-reform-industry-group-trig-code-of-good-practice-for-projects-schemes-or-works-requiring-landlords-consent-in-agricultural-tenanciespage/ 

The Irish Government has set out a vision for Ireland’s agri-food sector.  The Food Vision 2030, is a new 10 year strategy for the sector, with the objective of achieving a climate-neutral food system by 2050 with verifiable progress achieved by 2030.  It also encompasses other emissions, biodiversity and water quality together with a range of targets for organic farming, fisheries, forestry and food waste.  Its vision is that Ireland will become a world leader in Sustainable Food Systems (SFS) over the next decade.  The document continues a subtle change of emphasis.  In the first national strategy (Agri-Food 2010, published in 2000) the focus was all about growing Ireland’s agricultural sector and boosting exports.  In successive 5-year strategy updates, through to Food Wise 2025, the environment has gradually come to the fore.

To realise the vision, the strategy has 22 key goals and actions grouped into 4 high-level Missions;

• A climate smart, environmentally sustainable agri-food sector
• Viable and resilient primary producers with enhanced well-being
• Food which is safe, nutritious and appealing, trusted at home and abroad
• An innovative, competitive and resilient agri-food sector, driven by technology and talent.

The full strategy extends to 192 pages and can be found via https://www.gov.ie/en/publication/c73a3-food-vision-2030-a-world-leader-in-sustainable-food-systems/

The Environment Agency (EA) has released a Regulatory Position Statement (RPS) on the application of organic manure this autumn.  Under the Farming Rules for Water (Rule 1), when organic manure is applied to agricultural land, the application must not exceed the needs of the soil or crop on the land and must not give rise to a significant risk of agricultural diffuse pollution.  This effectively makes autumn and winter spreading on a lot of farms impossible.  For example, if spreading can only take place if there is a crop need, this would mean grass, which is dormant at this time of year, would have no crop need and therefore spreading cannot take place.  The rules are not new, but it appears the EA note has highlighted the issue to the industry and perhaps indicates a more robust approach to enforcement from the EA than in the past.

However, for this autumn and winter, the EA has confirmed if the conditions of the RPS are followed it will be possible to have a plan to apply organic manure to agricultural land that may exceed the needs of the soil or crop on that land.  But importantly, the plan must not cause a risk of pollution.  Those using the RPS will still need to show that applications do not exceed the requirements of the crop for the whole duration of its growing cycle.  Farmers must also be able to show that using the RPS is the only option and it has not been feasible to store the organic manure at the place of production or use.  And also that it has not been possible to store the manure off-site or send it to an AD plant or other effluent treatment plant.

Following further lobbying from the NFU, the EA updated its guidance further on 25th August to include a ‘hierarchy of actions:

1. If you can follow Rule 1 of Farming Rules for Water, then you do not need to use the RPS – carry on with your planned activities.
2. If you can follow the conditions in the RPS – tell the Environment Agency you are using the RPS as described in the ‘contact’ section (see below), and carry on with your activities.
3. If you cannot comply with the conditions in the RPS, email [email protected] or call 03708 506 506 (general enquiries). The Environment Agency will assess the risk of your activities. For this autumn, it will allow activities that will not cause significant risks (significant risk may result from repeated applications to the same field or spreading close to protected sites, such as Natura 2000 sites). You must not start your activities until the Environment Agency confirms you can do so

There are strict conditions on how and where the organic matter can be spread.  If land managers need to use the RPS they must contact the EA.  Contact details and full guidance can be found at https://www.gov.uk/government/publications/spreading-organic-manure-on-agricultural-land-rps-252/spreading-organic-manure-on-agricultural-land-rps-252.  The RPS will be withdrawn on 1st March 2022, unless there is a further extension.  This is only a short term ‘fix’ to the problem, which will arise again next autumn.  Many in the industry have rised concerns as to how practical the rules are.  A move to more storage and spring and summer spreading looks like the only solution, but this will take time and money.

The Catchment Sensitive Farming (CSF) initiative is being expanded to cover the whole of England.  Currently the programme, which gives farmers support to reduce water and air pollution, is only available on 40% of English farmland.  But by March 2023 Defra has said every farmer in England will be able to access advice and support to reduce pollution.  It has announced an extra £17m of funding will be introduced over the next three years.

CSF, which is a partnership between Defra, Natural England (NE) and the Environment Agency (EA), provides free one-to-one advice to farmers.  Natural England advisors also support farmers to make applications to the Countryside Stewardship (CS) for grants towards management practices and capital investments to reduce on farm pollution, such as planting new grassland buffer strips or riverside trees, or using better slurry storage facilities.  Some funding via CS is only available with support from a Catchment Sensitive Farming Officer (CSFO) and if the land is in a priority catchment area.  It is unclear whether this announcement will mean the whole of England now falls within this category and these grants are available to all.

The extra funding will mean more NE advisors will be available to help farmers implement practical solutions to reduce pollution.  But it will also fund 50 new EA inspectors to carry out an increased number of farm inspections.

 

 

NFU Scotland has called for area-payments and coupled payments to continue.  However, current direct payments should be amended to introduce more ‘conditionality’ in the areas of biodiversity, climate change and efficiency.  This would see tiers of payment levels with different rates depending on the measures a farmer choses to enact.

It is envisaged that the new support arrangements would commence from 2026 (the date set out in legislation for a new Scottish support regime to be in place).  In the meantime the farming sector should be prepared for the new scheme through a ‘just transition’.  The NFUS states that this should start as soon as possible – i.e. this year.  This would see a period of (subsidised) information gathering to set baselines in terms of environmental and business performance.  There would then be a period of support, advice, farm planning and capital grants to equip businesses for the future.

More details of the proposals can be found at -https://www.nfus.org.uk/userfiles/images/Policy/0521%20NFUS%20Proposals%20For%20Future%20(Conditional)%20Support.pdf.  The ‘Delivering Change’ document has distilled the concepts and principles from the Scottish Government’s Farmer-led Climate Change Groups (FLGs) and the Union’s own ‘Steps to Change’ proposals.

Reading between the lines of the document, there is a sense that the Union has got tired of waiting for the Scottish Government to come up with any proposals.  This publication seems, at least partly, an attempt to prod the administration into showing its hand in terms of farm policy.

The second part of the National Food Strategy report, undertaken by Henry Dimbleby, has recently been released.  A tax on sugar and salt made headline news but some of the other recommendations have a more direct impact on UK farming.  In total, there are 14 recommendations; 8 and 9 (looked at in more detail below) are likely to impact the most on farmers, but other recommendations including Innovations to Create Better Food Systems (recommendation 11) and Maintaining Standards for Trade (recommendation 10) will also be of interest.

The report is independent and the Government does not have to implement its recommendations.  Indeed, the Prime Minister has already rejected the idea of taxing sugar and salt.  The Government has said it will respond to the report with a Food White Paper within six months.  The recommendations in full can be found at https://www.nationalfoodstrategy.org/the-report/

Recommendation 8 – Guarantee the Budget for Agricultural Payments until at Least 2029

It is recommended that the current budget of £2.4bn is maintained, in real terms, to 2029.  Currently the Government has guaranteed that spending will remain the same for agriculture until the end of this Parliament (scheduled to be 2024).  The report recommends, at the least, this overall spending commitment is maintained to the end of the decade, progressively shifting about £2.2bn from BPS direct payments to ELM.  The remaining £200m should be used to improve farm productivity and innovation.

A further proposal is to ring-fence £500-£700m of the budget for schemes which encourage natural carbon removal and habitat restoration.  The idea being these schemes would incentivise farmers to convert their less productive land into nature-rich, carbon-sequestering landscapes.  This would see farmers receive payments on a basis of ‘carbon sequestered and nature restored’.  Initial payment rates should be 100% of costs with an additional per hectare payment uplift to ensure farmers receive a fair return on land taken out of production.

The report maintains changing the way agricultural land is used is key to achieving national targets; protecting 30% of land in England for nature by 2030 (30×30), the 25 year plan for nature and the net zero target and carbon budgets.  The report estimated in line with the Climate Change Committee’s (CCC) 6th Carbon budget report, that ‘roughly one tenth of agricultural land in England will need to transition to woodland, restored peat, other semi-natural habitats and energy crops by 2035 as part of the broader road to net zero’.

The strategy states ‘we think that Defra is broadly speaking, taking the right approach’ by transitioning from BPS to ELM, but notes that farmers have received subsidies based primarily on the amount of land they farm or the amount of food they produce for over seventy years and they ‘need time – and money – to adjust their business models’.  It acknowledges the reliance many farms have on Basic Payments, but it also draws attention to the fact that the difference in profit between farms is not just as a result of effort and skill by individual farmers, but much of it is to do with the quality of the land.  The report recommends that this unproductive land can now be turned into an advantage for both the ‘farmer and the common good’.  It states that around 20% of English farmland would be suited to creating environmentally friendly landscapes, such as species-rich wood pasture grazed by rare breed cows, new diverse forests and re-wetted peat bogs.  Although most would be upland farms, some lowland grazing land would also fall into this category.  Mr Dimbleby cites losing 20% of the least productive farmland would present very little risk to food security (just 3% of calories).  But until there is a market for carbon sequestration or natural capital restoration, the report recommends £500-£700m per annum, about one third of the ELM budget should be used to pay farms for establishing; 4000,000 hectares of species-rich broadleaf forests, 325,000 hectares of restored upland peat and about 200,000 hectares of farmland dedicated to nature.

Recommendation 9 – Create a Rural Land Use Framework based on the Three Compartment Model

The recommendation is that a Rural Land Use Framework should be devised by Defra ready for 2022.  This will provide a detailed assessment on which land should be used for what, so that food security is not compromised and the environment not made worse.  The report notes that, in the main, the land that could deliver the greatest environmental benefits is often the least productive.  The only real ‘clash’ in England is the Fens, where the land is exceptionally productive, mainly due to its peaty soils, which would otherwise be a major carbon sink.  The report recommends the framework should set out the best way to achieve a ‘Three Compartment Model’ for the country, including which land is more appropriate for;

• Semi-natural land
• Low-yield farmland
• High-yield farmland

It should also flag up land that is appropriate for economic development and housing and should be updated annually.  The aim is for it to provide detailed assessments of the best way to use any given area of land and inform the many existing incentive schemes and future policy within Defra.

Other Recommendations

The remaining recommendations are important in the overall drive in making everyday foods more healthier and tackling the nation’s obesity problems but have less of a direct impact on farming.  The one making the headline news is the introduction of a sugar and salt reformulation tax – £3 per kg on sugar and £6 per kg on salt sold for use in processed foods or in restaurants and catering businesses.  Some of the revenue to used to get fresh fruit and veg to low income household (Recommendation 1).  Others include;

• making it a legal duty for all food businesses with over 250 employees to publish annual data on their sales of various product types as well as food waste
• the Department for Education should launch a new ‘Eat and Learn’ initiative for all 3-18 year olds
• there are initiatives for households on low incomes including increasing the eligibility threshold for free school meals (FSM) from £7,400 to £20,000, extending the Holiday Activities Food programme open to those receiving FSM for the next three years, expanding the Healthy Start scheme and trialing a ‘Community Eatwell’ programme to improve the diets of those on low incomes
• creating a National Food System Data programme to collect and share data
• the Government should reform its Buying Standards for food so that taxpayers’ money goes on healthy sustainable food and it should also set a long-term statutory target to improve diet-related health and create a new governance structure for food policy, through a Good Food Bill.

Defra’s ‘flagship’ statistical publication ‘Agriculture in the UK’ has been published.  The latest edition includes a wide range of farming and food statistics up to the 2020 year.  It can be found at – https://www.gov.uk/government/statistics/agriculture-in-the-united-kingdom-2020 .