Analysis: NFU Scotland’s post-Brexit farm support proposals

That the four main farming unions in the UK work closely together is as obvious as it is sensible.

Indeed, less than a fortnight ago, the NFU, NFU Cymru, NFU Scotland and the Ulster Farmers Union issued a joint statement, setting out their priorities for a post-Brexit farm policy.

See also: Direct payments a crucial part of future farm support, says NFU

Given their co-ordinated approach, it is not surprising to see a number of similarities between NFU Scotland’s latest “Steps to change” document and the “Framework for success” document issued by the NFU last October.

Like this earlier report, the new Scottish paper singles out three, interlocking components of future farm support – financial stability, productivity measures and environmental measures.

And like the NFU’s previous document, NFU Scotland makes clear that the allocation of government funds between the three should be dependent on the type of trade deal the UK gets post-Brexit, and the prevailing economic situation, including the balance of power within the food supply chain.

The objective is certainly to see a shift in funds away from “financial stability measures” – direct payments in plain English – towards new productivity and environmental measures.

But this should only happen over a lengthy transition period (seven years is suggested), and may have to be paused altogether if market returns to farmers are not good enough, or if market volatility prevails.

“Financial stability will remain a vital component, particularly in the short to medium term,” says the paper, now being consulted on north of the border. “But rather than incentivising inertia, a new approach to financial stability would be built on agricultural activity, rather than simple occupation of land.”

Three-pronged approach

So what is NFU Scotland actually proposing?

According to the paper, it is seeking “a bold Scottish agricultural policy, which will make Scottish agriculture productive, innovative and, above all, profitable, whilst delivering a wide range of public benefits that are increasingly expected as the co-products of active farming and crofting”.

This is to be delivered using a three-pronged approach.

Financial stability

Perhaps more than any other farming union, NFU Scotland is seeking to retain a central role for direct payments in the post-Brexit era.

It describes them as a “vital safety net”, which provide farmers and crofters with a “stable source of income that is independent of market fluctuations”.

“An element of financial stability will remain vital – at least through a lengthy transition phase beyond the current operation of the CAP,” it says, adding that such payments must be “properly targeted at active farmers and crofters”.

The paper does suggest some changes in the way direct support is delivered, though somewhat confusingly it recommends “moving away from existing area-based payments to a new system based on eligible payment hectares”. Eligibility would be defined by “levels of agricultural activity”.

Direct payments should continue to be subject to “pragmatic” cross-compliance requirements, it says.

It also suggests the continuation of “coupled supports” for vulnerable sectors, with payments based on levels of production, and it wants top-up payments in more disadvantaged areas.


Productivity measures

If Scottish agriculture is to become less reliant on direct support, then increased productivity is a priority, says the NFU Scotland report.

Better productivity should also give higher incomes, more clout in the food chain and more investment in the sector, it argues.

This might be achieved through better use of innovation and new technology, increased knowledge exchange and improved managerial skills.

Delivering all this will require more supportive regulation, financial incentives and improvements to the planning system, as well as investment in R&D and better training. It says: “Advisory services that provide in-depth and tailored advice when and where required is essential.”

Specifically, the paper sets out a menu of options covering the livestock sector, the cropping sector and “people issues”.

Data management, livestock housing, disease eradication, slurry storage, precision farming, soil management, min-till equipment, renewable energy, succession planning, business skills training and apprenticeship schemes are among the many things flagged up to help boost productivity.

Environmental measures

Recognising the need to provide more public goods if farming is to secure future taxpayer support, the paper also focuses on the environmental measures farmers should deliver post-Brexit.

“New environmental measures should seek to deliver primarily for climate change, water quality and biodiversity, but also embrace habitats, air quality and landscape character in the process, as well as natural flood management, cultural heritage, public access and education,” it says.

However, it insists that any new agri-environment policies are “voluntary and accessible to all”, and they must be adequately funded.

“Current agri-environment payments are based on income forgone (under WTO rules) and do not always provide sufficient incentive compared to the risk of participation,” it says. “Interpretation and implementation of ‘income forgone’ must be addressed for future environmental measures.”

It also demands straightforward guidance notes and proportionate compliance checks, as well as a recognition that some environmental objectives take many years to achieve.

As with productivity, the paper then lists a number of possible environmental options for farmers to choose from, including annual measures, such as fallow land management and pollinator-friendly cropping, and multi-annual measures, including farm woodland schemes and bracken control. 

A tiered approach to future support

As well as identifying the three main areas of future support, NFU Scotland is recommending a new “tiered” approach.

Tier 1 would be made up of the financial stability measures described above, sometimes linked to production and subject to cross-compliance requirements.

Tier 2 would be made up of “non-competitive” productivity and environmental measures, tailored to work with specific types of farming system and available to all, based on unit size

Tier 3 would be made up of “competitive” productivity and environmental measures, available for those farmers who wanted to invest further in their businesses or deliver extra environmental improvements.

The UK’s transition period after Brexit is due to finish at the end of 2020, at which time the CAP will terminate.

NFU Scotland then wants another seven years, during which new international trade deals will be negotiated, with financial stability payments reduced and productivity/environmental payments increased.

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