Defra has announced BPS balance payments will be made from 1st September this year instead of December. It has said the decision has been made to ‘help all farmers with cash flow following the impact of the wet weather’. The announcement was made alongside details of an expansion of the Farming Recovery Fund (see additional article). This will mean farmers receiving 50% of their delinked payment from 1st August and the remainder from 1st September.
The Prime Minister, Rishi Sunak, has called a UK General Election for the 4th July. We wait to see what the various parties promise in terms of agriculture in their manifestos – especially whether there are any pledges on the budget for farm support from 2025 onwards. The ‘purdah’ period leading up to the vote means that there will be no major policy announcements until after the election.
Defra has recently released statistics on Business Management practices on farms. The information is taken from the Farm Business Survey (FBS) in England and covers the period from March 2022 to February 2023. The areas covered include;
Some of the key results include;
The full statistical notice can be found at https://www.gov.uk/government/statistics/farm-business-management-practices/farm-business-management-practices-in-england-202223-statistics-notice#accessing-advice.
Defra has released information on how and when existing Countryside Stewardship (CS) and Higher Level Stewardship (HLS) agreement holders can exit their current agreements if they wish to. From September, CS Mid Tier and HLS agreement holders will be able to apply to end their existing agreements early to go into the SFI or a CS Higher Tier scheme (opening this winter) either:
Note, that it will not be possible to end existing agreements before September.
Contrary to previous advice, there will not be any requirement for the new agreement to be the same or ‘better’ than the existing agreement. Previously the message had been that early termination would only be allowed if the new agreement would deliver the same or greater environmental benefits as the existing agreement. However, we always thought this would be difficult to show when the system doesn’t allow a new scheme to be applied for when the old one is still running.
If the existing agreement includes an SSSI or Scheduled Monument, agreement holders will need to keep managing the land in line with the requirements of those designations.
The case is not so straight forward for those with a CS Higher Tier agreement. It will only be possible to end the existing agreement early ‘by exception’. Defra has not expanded on the criteria for this as yet, and has said more information will be available in the summer together with details on how CS MT and HLS agreement holders can apply to end their agreements.
In terms of agreements which end on 31st December 2024, Defra has said it should be possible to apply for an SFI or CS Higher Tier agreement ahead of this date, so that the new agreement is ready to commence on 1st January 2025. Furthermore, agreement holders are reminded that they can apply for an SFI agreement to run alongside an existing agreement as long as the actions under both schemes are compatible and there is no double funding.
Ending an existing agreement early to enter the SFI is one of the most common questions we receive. This does give a time frame, even if we still don’t have all the detail. We also know of cases where there has been a problem applying for SFI when an HLS or CS agreement is coming to an end or has recently finished, hopefully this means Defra has addressed or will be addressing this problem shortly.
The area of UK land managed according to organic principles fell in 2023 compared with 2022. Latest figures released on 9th May 2024 from Defra put the organic land area (both fully organic and in-conversion) at 498,000 hectares. This is a 2.1% reduction compared with 2022. Both the area of fully organic and that in conversion decreased compared with 2022; by 1.3% and 11% respectively (462,000 Ha and 36,000 Ha).
Organic land represents 2.9% (3% in 2022) of the total farmed area on agricultural holdings in the UK. Grassland makes up, by far, the largest organic area, with permanent pasture comprising 62% of the total, covering 307,000 hectares (314,000 hectares in 2022). This is followed by temporary grassland at 18% and cereals at 10%. Interestingly, the organic area of cereals and other arable crops are the only two categories of land use (apart from woodland) to experience a rise in area compared to 2022. Cereals recorded a 1.6% increase and other arable crops have risen by 3.1%. The temporary and permanent grassland organic area fell by -4.8% and -22% respectively.
In the meat sector, after both increasing last year, the number of cattle and sheep farmed organically both decreased in 2023 compared to 2022. Organically reared sheep experienced a 5.8% decline, to 692,000 head; organic sheep account for 2.2% of the UK flock. Cattle numbers fell by 2.8% to 290K; making up 3% of the total UK herd. Organically reared pigs after increasing by 9.2% last year, fell by 34% in 2023, whereas poultry, which made the largest decline in numbers last year, is the only category to record an increase, numbers were up by 19% year-on-year. At 23,000, organic pig numbers make-up 0.5% of the total UK pig herd. Organic poultry numbers now stand at 4.365 million and make up 2.5%(1.9% in 2022) of the UK’s flock.
In terms of organic operators, there were 5,230 producers and processors registered with the organic certification bodies in the UK, a decrease of 4.8% from 2022. The figures are a little depressing for the organic industry but probably reflect the lack of profitability in the sector where demand has been weak as a result of the cost of living crisis. The full details can be found a https://www.gov.uk/government/statistics/organic-farming-statistics-2023
On 1st May 2024, the EU-NZ Free Trade Agreement (FTA) entered into force. This follows the initial announcement of the FTA back in July 2023 (see https://abcbooks.co.uk/eu-nz-trade-deal/) and the ratification of the deal by the EU in November.
The EU will benefit from the elimination of tariffs on key exports to NZ such as pig meat, wine (& sparkling wine), chocolate, sugar confectionary and biscuits. In return, NZ achieves limited access to the EU market for imports of sensitive agricultural products such as beef, sheep meat and dairy products, through tariff rate quotas (TRQs). This includes 10,000 tonnes of beef (phased in over 7 years) at a reduced tariff of 7.5%. A duty-free TRQ for 38,000 tonnes of sheepmeat will also be phased in over the same period. There are also new TRQs for milk powder and butter (both 15,000 tonnes, with varying duty rates), cheese (25,000 tonnes; 0% duty) and high-protein whey (3,500 tonnes; 0% duty). All of these TRQs will also be phased in over 7 years.
As reported previously, NZ’s access to the EU market is much more curtailed for beef, sheepmeat and dairy products in comparison to the relatively more generous access that the UK has granted. This is a function of the greater bargaining power of the EU and the eagerness of the UK to sign a new FTA with NZ as part of its independent trade policy.
Defra has released details of the expanded SFI 2024 offer. In total there will be 102 actions available. This will include the 23 existing actions (available now under SFI 2023), over 20 brand new actions and more than 50 actions which were previously available under Countryside Stewardship Mid Tier (CS MT). With reference to the latter, a number of these actions have been simplified and reduced from 5 to 3 years, so that over 90 of the actions are for 3 years. This has the aim of making the scheme more accessible to tenant farmers. Our article of 8th January gave details of some of the new actions, which include support for precision farming, agroforestry, boundaries and an improved offer for upland farmers (see https://abcbooks.co.uk/elm-2024/).
All the actions will be merged into one scheme – called the Sustainable Farming Incentive (SFI) and they will be available via one application. Defra has said ‘bringing the schemes into one place, with one name, means farmers can access the best of both offers, the flexibility of the SFI with the breadth, scale and ambition of CS MT, just with less paperwork’. It is our understanding that going forward there will no longer be a CS Mid Tier; this has now been subsumed into the SFI. We were expecting this to happen over time, but it has occured quicker than we thought. CS Higher Tier will remain available – see below.
The expanded SFI will be offered via a ‘controlled rollout’. Initially, the RPA will invite a mix of farm businesses who have submitted an Expression of Interest (EoI) in the expanded offer. EoIs have now opened and can be made via https://defragroup.eu.qualtrics.com/jfe/form/SV_cSGsCBrA5Kim3H0 Invites from the RPA will start from the end of May. This is to test the system before full rollout. Applications will then open to the wider sector ‘based on eligibility’ (it’s not clear what that actually means) from 22nd July 2024. We do however know, the expanded offer will be available to those who have not previously claimed the BPS for the first time.
The SFI cap, which was put in place in March 2024, will remain with a further four actions from the new expanded offering being added. This means new SFI applications will only be able to put 25% of the total agricultural area of their farm into a combination of one or more of these 10 actions which include:
The original actions:
New actions similar in nature to the 6 above:
Full details on the expanded offer can be found via https://www.gov.uk/government/publications/sustainable-farming-incentive-scheme-expanded-offer-for-2024
Guidance on all the individual actions can be found on the new digital tool known as ‘find funding for land or farms’ https://www.gov.uk/find-funding-for-land-or-farms. This is similar to the Countryside Stewardship Grants finder. Whilst it was very nice to have a SFI ‘Handbook’ with all the actions in when there was only 23, this may not be practical now we have 102 actions. One has not been published as yet.
Defra has also produced guidance leaflets under the following themes:
More information will be available later in the summer for those interested in the CS Higher Tier, this will include:
Higher Tier is being kept separate as these agreements are usually more complicated and require specialist advice from Natural England (NE) or the Forestry Commission (FC). Later this summer applicants will be able to start working with NE or the FC to draw up their applications, with eligible farmers being able to submit applications online via Rural Payments during the ‘winter’ with the first agreements commencing in early 2023. After this, applications will be possible all year round with agreements normally starting the month after applications are approved.
The existing SFI 2023 scheme remains open, but it seems there will be a ‘downtime’. Defra has said ‘you can apply for the SFI 2023 offer until access to the application service is restricted, before the expanded SFI offer is launched in summer 2024’. As all the actions that are in the 2023 offer will be carried forward into the 2024 offer, this will only really affect those that are in the middle of drawing up an agreement, we do however expect to be given warning before this happens, so this is just a ‘head’s-up’.
Northern Ireland food businesses will have easier access to imported products as a result of a new agreement. The UK Government and the EU Commission have ratified an agreement to permit Northern Irish businesses to access tariff rate quotas (TRQs) that the UK agrees with non-EU countries. The agreement means that over 13,000 tons of lamb, beef, and poultry including from key importers such as Australia and New Zealand will now be available. The UK Government claims that this will significantly benefit Northern Ireland businesses, and further cements Northern Ireland’s integral place in the UK.
The new arrangements will operate alongside the UK Internal Market system from 30th September 2024. It addresses a problem with the old NI Protocol, where NI businesses exporting their goods could benefit from UK Free Trade Agreements but those importing high-tariff products like meat into Northern Ireland could not benefit from UK deals. This agreement will signify more competition for NI farmers, although the UK Government claims that this will be limited. It is also claimed that the deal will help NI food processors to adopt a more flexible approach, particularly when local production (e.g. sheepmeat) is out of season.
The AHDB is to undertake research into the true carbon footprint of farming. This will calculate net emissions from farming (including sequestration) rather than just gross emissions. It also aims to more accurately measure and record emissions. The AHDB (alongside its partner, QMS) is looking to recriut 170 farms for the 5-year study. More details can be found at – https://ahdb.org.uk/baselining
Defra has published new data on the UK’s food security. This shows that the UK has a high degree of food security which, in the short-term, has remained broadly stable as the UK has come out of a challenging period of global supply chain shocks. However, there is a longer-term risk from climate change.
Under the Agriculture Act 2020, the UK Government has to present a report on food security to Parliament at least once every three years. This is known as the United Kingdom Food Security Report (UKFSR) and the first one was produced in 2021 (see https://www.gov.uk/government/collections/united-kingdom-food-security-report ). A revised UKFSR is promised ‘towards the end of the year’.
The Prime Minister announced in January that a Food Security Index for the UK would be produced annually to fill the gaps between the three-yearly reports. The first of these has now been published. It is not as detailed as the UKFSR, but provides a ‘snapshot’ of key trends.
It is based on nine Indicators which are measured using existing statistics published annually. The Indicator is then ranked on a 5-point scale, depending whether risks have increased, decreased or stayed broadly the same. The Indicators and results for 2024 are;
1: Global food supply for human consumption: Broadly stable
2: Share of global cereals and soyabeans internationally traded: Broadly stable
3: Production-supply ratio (this is UK self-sufficiency in food): Broadly stable
4: Agricultural total factor productivity: Some reduction in risks
5: Agricultural land use: Broadly stable
6: Energy and fertiliser prices: Some reduction in risks
7: Business investment: Broadly stable
8: Biosecurity risk: Broadly stable
9: Consumer confidence in food supply chain actors: Broadly stable
Full details can be seen at https://www.gov.uk/government/publications/uk-food-security-index-2024
