Category: Policy & Business

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.

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.