Category: Policy & Business

Basic Payment Scheme

The 2020 BPS application window in England is expected to open online on 12th March, with those who still wish to make a paper claim receiving their application forms shortly after this date.  The Land Use screen is already available for those who wish to check the information is correct ahead of their application, although it is perhaps worth noting the PLCD mapping update work is expected to continue until around 10th March.  The 2020 Land Use codes are available on the Gov.UK website at: https://www.gov.uk/guidance/rural-payments-land-use-codes-2020?utm_source=09585430-cf3e-4460-9848-792520123f64&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

In Wales, the Single Application Form (SAF) 2020 will be available from 2nd March, guidance and information will be available online.  A reminder that RPWales must be notified of the transfer and lease of entitlements by 30th April, for them to be used for a 2020 claim.

HLS One Year Extensions

Those in England who have accepted a one year extension to their HLS agreements need to be aware of the implications of ‘double funding’ and EFAs.  Double funding is not allowed, which means it is not possible to be paid for the same activity twice, i.e under the BPS and under an agri-environment scheme.   This affects 19 agri-environment options, where the management is the same as that required for Ecological Focus Areas (EFAs).  However, all original HLS (and the underpinning ELS) agreements have been exempt from these rules, meaning that for the best part of 10 years agreement holders have not had to worry about this.  But from 1st January 2019 new rules were introduced, this means where an HLS agreement is due to end in 2020 (and this can be any date in 2020) and a one year extension is accepted, the ban on double funding will apply to the extended agreement.  In addition this applies to those whose agreements expired in 2019 and they have agreed a second year extension.  This means, claimants will need to look at the location of their EFAs to ensure they do not overlap with the 19 affected agri-environment options.  It is possible to have EFAs in the same parcel as the agri-environment options, but they must not overlap.  Hedges are not one of the affected options.  Information on the 19 options can be found at https://www.gov.uk/guidance/higher-level-stewardship-hls-2020-agreement-extension

Defra has published a policy statement outlining its plans for farm support in England.  This is to accompany the Agriculture Bill as it enters the Committee stage in Parliament and comes ahead of George Eustice’s appearance at the NFU Conference on 26th February.  In general, there is nothing particularly revelatory in it – most of the policy initiatives in it have already been announced or been widely-trailed.  However, it provides an overview of the direction of farm policy for the next decade and there are some additional points of interest.  A summary is given below.  The full document can be found at – https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/868041/future-farming-policy-update1.pdf

Direct Payments

Probably the topic of most interest to the sector, although it is buried away at the back of the Policy Statement.  In summary, the plans for the ‘Agricultural Transition’ as set out in the original Statement of September 2018 remain unchanged.  Direct payments will be phased-out starting in the 2021 year, with 2027 being the last year any will be made.  The phasing process is still unknown with only the first year’s deductions being set out.  Again, these are unchanged from what has been announced previously;

% Reduction in Direct Payments in 2021
Payment Bands	% Reduction
Up to £30,000	5%
£30,000 to £50,000	10%
£50,000 to £150,000	20%
£150,000 or above	25%

A few new points emerge from the document;

• deductions in future years will depend on the funding required for other elements of the Government’s plans.  Although not specifically stated, it appears that the first ‘multi-annual financial assistance plan’ as required by the Agriculture Bill (see last Bulletin), due by the end of 2020, might well include the future deductions.  Defra states it will work with the industry in setting the pace of the phase-out.
• delinking of payments from land will occur during the Transition.  However, this will not happen until 2022 at the earliest.  Once this is done, there will be no link between land occupation and payments, and entitlements will disappear – there will just be a right to support for the business or individual claiming in a reference period.  There will be no requirement for that business to carry on farming.  A consultation is promised on the mechanics of delinking including, crucially, what reference period is to be used.
• when delinking occurs, there will be no link between land and subsidy, so the cross-compliance regime will end at this point.  Defra plans to bring in an alternative regulatory regime.
• the option to allow the delinked payments to be capitalised into a one-off lump sum is still being looked at.  This will be included in the future consultation.
• for the 2020 year, the BPS penalty regime will be reformed so that small errors do not lead to large fines.  The Financial Discipline mechanism will also be removed.

Other Support

As Direct Payments are phased-out, various new schemes will be introduced.  The Statement acknowledges that having multiple schemes can be confusing, but set against this is the fact that individual programmes can be used to target specific issues.  The main replacement for the BPS in England will be Environmental Land Management (ELM).  A separate consultation and Policy Document on ELM (see https://consult.defra.gov.uk/elm/elmpolicyconsultation/) has also been published.  More details on the current plans for ELM is contained in the following article.

The following is a summary of the other policies set out in the Statement;

• following criticism of the lack of focus on anything to do with food production in earlier Policy Statements, food gets a mention on the very first page.  But there is nothing new beyond what is contained in the Agriculture Bill.
• advice to farmers is covered.  This appears firstly in the context of ELM and having the right advice to put together a scheme.  But there is also a Future Farming Resilience Funding project which will be running pilot schemes in 2020 looking at the best ways to provide support for farmers through the early years of the Agricultural Transition.
• there will be a change in farm regulation – although not immediately.  The plan is to take up the recommendations contained in Dame Glenys Stacey’s ‘Farming Inspection and Regulation Review’ (FIRR) of 2018 (see Dec 2018 Bulletin).  This would see a move away from cross-compliance to a more proportionate, transparent and flexible regulation regime.  A consultation on the next steps will be undertaken later in the year.
• with Brexit, EU Rural Development rules and funding no longer apply.  The replacement for past EU funding is to be the ‘UK Shared Prosperity Fund’.  The Statement has no details how this will operate, other than a vague promise that rural areas will not be forgotten.  Funding under this heading could replace previous programmes such as LEADER, the Growth Fund etc. in areas such as diversification and food processing.  It does not seem that grants will be available any time soon however.  
• there is a strong focus on animal welfare and health in the Statement.  Firstly there is a promise to maintain and enhance the current high regulatory baseline.  Any increase in legal standards would take into account the effect of this on international competitiveness.  There would be support to get the market (consumers) to pay more for high-welfare products – for example, by clarifying labelling terms and standards.  Lastly, there may be public money for animal welfare in certain circumstances.  There is little detail yet on what these initiatives might look like in practice
• the Government commits to investing in tree health, with a new set of grants available in 2024 with pilots being undertaken in the next two years.
• there is a wide package of productivity support promised.   There will be capital grants that look very much like the current Countryside Productivity Scheme – both the small and large grants elements look set to continue, with new rounds opening in 2021.  There will be support for initiatives in Research and Development, particularly projects that get research out onto farm.  The skills and knowledge of the farming sector will also be a focus, with plans for a professional body for agriculture and more benchmarking of performance.

Just from this brief summary, it is hopefully clear that Defra has got big plans now that it is free to set English farm policy.  Although it will not all happen overnight, there is still a large shopping list of initiatives.  There will be a question of whether Defra (and the wider Government) has the capacity to deliver them all, and deliver them well.  

Following George Eustice’s promotion to Secretary of State, Victoria Prentis has been appointed as the new Parliamentary Under Secretary of State for Defra and will take on Mr Eustice’s agricultural role within the department.  Ms Prentis is MP for North Oxfordshire and was first elected as a Conservative MP in May 2015.  She is a farmer’s daughter and describes herself as a ‘passionate environmentalist and supporter of the rural economy’.  Her father, Tim Boswell, served as junior Minister at the Ministry of Agriculture, Fisheries and Food (MAFF).  Rebecca Pow and Lord Gardiner have both retained their roles as Parliamentary Under Secretaries of State.

The Government’s plan for a post-Brexit immigration scheme looks set to cause problems for farming and the wider food chain.  The new points-based system specifically excludes any route for low-skilled workers, with the statement that ‘we need to shift the focus of our economy away from a reliance on cheap labour from Europe and instead concentrate on investment in technology and automation‘.

Free movement of labour for EU citizens will end on the 31st December 2020.  From that point, potential immigrants from the EU and the rest of the world will be treated in the same way.  There will be a points-based system with a requirement to meet 70 points.  The following requirements apply;

• offer of a job from an approved sponsor (20 points)
• job at the appropriate skills level (20 points) – it is not clear to us what this means, but it is probably to prevent the system being ‘played’ through jobs being offered to workers that don’t have the relevant skills
• speaking English at the required level (10 points).  There is also a minimum requirement that the applicant be educated to the equivalent of A-level (or Scottish Highers) standard
• meets the salary threshold of £25,600 or more (20 points)

It is on this final point that things start to get complicated.  For higher-paid professions (e.g. doctors) the salary threshold will be at the ‘going rate’ rather than the minimum threshold.  Presumably to prevent migrants undercutting existing pay rates.  In addition, the threshold of £25,600 can be lowered if the applicant has a PhD in a subject relevant to the job, or the job is in a defined ‘shortage occupation’.  The Migration Advisory Committee (MAC) will set out a list of these shortage occupation in due course.  It is highly unlikely to cover farming occupations or those in the food chain.  On the current list are professions such as engineers, nurses etc. (and bizarrely, ballet dancers).  The closet agriculture is likely to get is that vets will be included on list.  The salary requirements will also be lower for ‘new entrants’ to the job market.

There will be additional routes for highly-skilled workers, building on the current ‘Exceptional / Global Talent’ system, and students.

The proposals mention the expansion of the Seasonal Agricultural Workers Scheme (SAWS) to 10,000 places, but most in the horticultural sector believe that this number is inadequate even for seasonal employment.  It also does nothing to address the labour shortage in full-time positions (i.e. not seasonal) in farming and the food chain.  However, the dropping of the threshold from the previously stated £30,000 to £25,600 does bring it more into the range of farming jobs – a herdsperson, for example, might well be able to come in under these rules.  The bureaucracy of the new scheme compared to the previous free-movement also needs to considered.      

 

George Eustice has been promoted to Secretary of State for Environment, Food and Rural Affairs.  With his new job as Environment Minister, Mr Eustice gets a set at the Cabinet table.  The previous Defra Secretary, Theresa Villiers, was sacked after a little more than six months in post, in the Cabinet reshuffle undertaken by Boris Johnson on the 13th February.

Mr Eustice was previously a junior Minister (Minister of State) in Defra, responsible for agricultural matters.  He comes from a farming background and knows the sector well.  It is also positive that there is continuity in policy-making and that the new Minister will not have to spend time getting up-to-speed with matters in the Department.  For example, this should mean that the publication of the expected Policy Statement on farm support should not be delayed.  However, the promotion of Mr Eustice fits in with a wider theme in the reshuffle; in that the loyalty of Ministers to No.10 seems more important than the actual skills a Minister may possess.  Those that have dealt with him in his time as Farm Minister have not been universally complimentary about Mr Eustice’s grasp of the issues. 

At the time of writing, Mr Eustice’s old Minister of State position was unfilled.  Lords Goldsmith and Gardiner remain in place as does Rebecca Pow.

The window for Countryside Stewardship applications opened on 11th February, for agreements which will commence on 1st January 2021.  This covers Higher Tier, Mid Tier, Hedgerows & Boundaries Grants and the Wildlife Offers;

Deadline for requesting application packs:

• Higher Tier – 31st March 2020
• Mid Tier and Wildlife Offers via paper applications – 31st May 2020
• Mid Tier online applications – 30th June 2020
• Wildlife Offers online – a request for an application pack is not required
• Hedgerows & Boundaries Grant – a request for an application pack is not required

Deadline for submissions:

• Higher Tier – 1st May 2020
• Hedgerows & Boundaries Grant – 1st May 2020
• Mid Tier – 31st July 2020
• Wildlife Offers – 31st July 2020

Further information and the new manuals are available on the GOV.UK website at https://www.gov.uk/government/collections/countryside-stewardship-get-paid-for-environmental-land-management

The Government is consulting on what tariffs to impose once the Brexit Transition Period ends on the 31st December.  This is key for UK farming, as it sets the level of protection the industry has from low-cost agricultural imports from the rest of the world.  For the past 40 years, UK farming has benefited from the EU Common External Tariff (CET), but after Brexit, the Government has to implement its own trade policy.

The consultation can be found at – https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/863880/Approach_to_MFN_Tariff_Policy.pdf.  It states ‘The consultation will close on 5^th March 2020 and an announcement on the UK’s new Global Tariff schedule will follow shortly afterwards’.  This seems a little odd, as it would make more sense to us to see how the trade talks with the EU were going first before committing to specific tariff levels. 

The consultation explicitly states that the ‘No Deal’ Tariffs published last year  (see https://abcbooks.co.uk/post-brexit-tariffs-plans/) are no longer relevant.  This might be a relief to the industry as this saw most import tariffs lowered or set to zero (i.e. a ‘cheap food’ policy).  However, nothing stops the Government coming back with something very similar after the current consultation.  The document doesn’t really give any clue on likely levels (other than a desire to simplify tariff rates).

The Scottish Farm Advisory Service (FAS) has announced the business resilience planning specialist advice grant will be extended indefinitely.  The pilot scheme allows farmers and crofters to apply for up to £1,000 through the FAS to appoint an expert advisor to undertake a thorough review of the business and develop a ‘resilience action plan’ to address the challenges.  The scheme was due to expire at the end of March, but following positive feedback and acknowledgment that farming businesses are under pressure from factors such as Brexit, climate change and market volatility, the Scottish Government has decided to extend this support.