Those who made a BPS claim in 2018 in excess of €2,000 should be receiving a reimbursement shortly via the Financial Discipline Mechanism (FDM). The rate being used for 2018 is 1.346% (1.310% in 2017). The RPA calculates the reimbursement by taking the 2018 payment, deducting the first €2,000 and any other reductions (i.e. for a late claim), but not cross compliance penalties. This figure is then multiplied by 1.346% and any cross compliance penalties are deducted to give the final amount. Payments will start hitting bank accounts from mid-September. Remittance advice slips will be sent with ‘FDM Reimbursement’ on them once payment has been made.
Financial Discipline is the mechanism which allows for a crisis reserve to be available to the farming industry if required for such things as a disease outbreak, but without exceeding the European budget. Each year a percentage is removed from the BPS across all Member States, called Financial Discipline. If the FDM fund is not all used to relieve a crisis it is paid back to those with an eligible claim in the following year. This refund is being paid to eligible 2018 claimants from the 2017 FDM fund.
With its aspiration for British farming to reach net zero greenhouse gas emissions by 2040, the NFU has launched its Achieving Net Zero report. The report sets out three main headings or ‘pillars’ to help achieve its goal:
Improving farming’s productive efficiency – reducing emissions by using a wide range of techniques to deliver the same or increased output with fewer inputs
Improving land management and changing land use to capture more carbon – by planting more hedgerows, woodlands, improving soil organic matter and looking after grassland and pastures which store carbon
Boosting renewable energy and the wider bio-economy – replacing fossil fuel emissions by increasing the use of bioenergy and bio-based materials e.g hemp fibre and sheep’s wool.
The 12 page report also acknowledges the policy measures to achieve net zero emissions by 2040 will require a partnership approach. Support for producers will be required not just from Defra but also from the Department for Business, Energy and Industrial Strategy (BEIS), the Treasury and other Government departments. The full report can be found at https://www.nfuonline.com/news/bulletin/nfu-unveils-its-plan-for-british-farming-to-deliver-net-zero/?leader
The Agriculture Bill will need to be reintroduced in the next Parliamentary session. Following Boris Johnson’s prorogation of Parliament, the Bill, which gives the Government powers to introduce a new farm policy after Brexit, has ‘fallen’ and will not be carried over to the next session. The Bill was put before Parliament last September (see article), but has been held up, due to other (more urgent) matters. It will now have to be re-introduced into Parliament in the next session, details of which are to be set out in the Queen’s Speech, expected to be on 14th October. With the Agricultural Transition period due to commence in 2021, the NFU is calling for a delay to its start by at least one year, as there is no guarantee legislation will be in place. For the Agricultural Transition period to start in 2021, the Agricultural Bill would need to receive Royal Assent by summer 2020.
Payments will continue to be made in Euros as well as Sterling for the 2019 Basic Payment Scheme. This has now been confirmed by Defra even if the UK leaves the EU without a deal on 31st October. This year the payment window opens on 2nd December as the 1st falls on a Sunday. However there is no clarification for 2020 payments. There could be a one-off ‘renationalisation’ permanently converting entitlements from Euros to a Sterling basis, but again, we do not know at what rate; it may not be the average September rate as is the current mechanism.
Details of the ‘Operation Yellowhammer’ worst-case scenario planning in the event of a No-Deal Brexit have been published. This comes after MPs forced the Government to put the document in the public domain which had previously been classed as ‘Official Sensitive’. In terms of the food chain the report states that, although there will be no food shortages, the range of products will fall and prices will rise (affecting low-income groups the most). Certain types of fresh food supply will decrease. There is a risk that panic buying will cause or exacerbate food supply disruption. In a wider context, the document states that protests and counter protests will take place across the UK and that there may be a rise in civil disorder. The document can be seen at – https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/831199/20190802_Latest_Yellowhammer_Planning_assumptions_CDL.pdf
The Government has launched a consultation – A new Deal for Renting, seeking views on its decision to remove Section 21 of the Housing Act and to improve the grounds and process for evictions under Section 8. Readers may recall we wrote about these proposals back in April (https://abcbooks.co.uk/residential-lettings/). A Section 21 notice is the current method by which Landlords can end an Assured Shorthold Tenancy (AST) by giving the Tenant at least two month’s notice after the initial Term (usually six months) has expired. Under the new proposals a Tenant cannot be evicted from their home without ‘good reason’. The aim is to provide more stability for Tenants. Alongside the removal of S21, the Government also proposes to strengthen the Section 8 eviction process to enable Landlords to regain their property in the event they need to sell or move into it themselves.
EU nationals will still be able to continue to come to the UK to live and work after 31st October even in the event of a No-Deal Brexit. This was confirmed by the Home Office on 4th September and will come as a relief to many in the industry concerned over recruiting workers from the EU. The Government had originally stated that Free Movement of people from the EU (plus countries in the European Economic Area (EEA) such as Switzerland) would cease on 31st October in the event of No-Deal. After receiving legal advice, this position has changed. The following rules will apply;
Free Movement will be retained for EU (and EEA) citizens until 31st December 2020 (to both live and work)
those arriving after 31st October 2019 who wish to remain after 2020 will be able to apply under a Temporary Leave to Remain Scheme. This will allow them to live and work in the UK for up to 36 months
if they then wish to stay longer (i.e. beyond Dec 2023) then it is expected they will have to apply under the new immigration (points-based) policy, when it is introduced
Those EU nationals already in the UK prior to 31st October will be able to apply for settled or pre-settled status.
Although this provides some temporary relief for the farming industry, allowing an extra 14 months of being able to recruit from the EU in the event of No-Deal, it does not solve the longer-term issue of labour availability. The Government might be persuaded to expand the current pilot Seasonal Agricultural Workers Scheme (SAWS) to cover the shortfall after 2020. However, such a scheme does nothing to address the need for full-time workers in the agri-food sector. The Government’s current plans for the points-based immigration policy favours highly paid shortage occupations such as doctors and IT specialists rather than those in the food industry.
The 2019 Spending Review, held on 4th September, sees Defra receive extra funding along with additional support for Scottish and Welsh farmers. In Chancellor Sajid Javid’s first Spending Review, he announced no government department would experience cuts in the next financial year, with Defra receiving a 3.3% budget increase. There will also be an additional £20m to support the development of the Domestic Agricultural Policy in England to replace the CAP when the UK leaves the EU.
In Scotland, farmers and crofters will benefit from an additional £160m of support. Readers may remember the Scottish government has been campaigning for many years that money allocated to the UK back in 2013, under the ‘convergence’ rules should have all gone to Scottish farmers, as it was received because area payments in Scotland were below the EU average. The total money given to the UK from the EU was £190m, but Westminster only gave Scotland £30m. The Chancellor announced, the £160m will be given to Scottish farmers, fulfilling Boris Johnson’s leadership campaign pledge, back in July, to return the money. Scotland’s farmers will also benefit from the announcement that they will receive an additional £51.4m per year for the next two years to their agricultural budget. Welsh farmers will see an increase of £5.2m per year also for the next couple of years. However, budgets in England and Northern Ireland will remain unchanged.
Many in the farming industry have quietly forgotten about Local Enterprise Partnerships (LEPs). These were the bodies that set the priorities for Growth Programme grants under the RDPE in their local areas (although actual grant applications were soon transferred across to the RPA). These grants provided 40% funding for rural diversification projects in England – for example in tourism and food processing. The programme has closed to applications as a result of Brexit and, with no money on offer, LEPs have become far less interesting to rural businesses. However, the bodies still exist and many are currently in the process of drawing up ‘Local Industrial Strategies’ (see https://www.lepnetwork.net/lep-activities/local-industrial-strategies/ for details). Although perhaps not relevant to individual businesses, the farming sector more widely should be involved with this. As we have written previously, LEPs have a tendency to be dominated by interests from the urban parts of their areas and the rural hinterland gets forgotten.
The documents being drawn up will inform the LEPs activities for a number of years, including the distribution of any funding that becomes available in future. The Government has highlighted that a ‘Shared Prosperity Fund’ will replace EU structural funding after Brexit. Like many things Brexit-related, details on the fund are lacking (the best summary is at – https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8527). It is not even clear LEPs will be the vehicle to distribute any of these funds. However, rural areas need to ensure their voice is heard at this early stage, or it may be too late to influence policy once the money arrives. LEADER grants were the other main source of diversification funding in recent years (for smaller projects). Again, it is not currently clear whether some LEADER-like community-based programme will continue after Brexit or not, and what, if any, funds it may have to distribute.
After a year on the market, the Strutt and Parker Farms business has been sold. As we reported last September, the business comprises around 13,000 hectares (33,000 acres) of arable land in Essex, Suffolk and Cambridgeshire, of which around 5,000 Ha (13,000 acres) is owned with the rest farmed under a mix of AHA tenancies, FBTs and contract farming agreements. Also included in the sale were over 120 residential properties and rural business units. However, the two anaerobic plants operated by S&P Farms were sold separately. There is no indication whether the sale realised the £200m price that was being sought. The buyer is a new company called Robigus, but this is linked closely to Belport Limited, an investment business that specialises in farms and estates. It is stated that European investors provided finance. The sale is the biggest transaction of farmland since the Co-op Farms business was sold in 2014. It shows that there is still demand for UK farmland, despite all the present uncertainties. However, with the sale price being unpublished, and the land being on the market for a relatively long time, this might suggest some underlying caution in the market.
