What the new Agriculture Bill contains for farmers

The eagerly anticipated Agriculture Bill has been published – for a second time – but this time with a cast-iron guarantee of becoming an act of parliament, without the need for troublesome amendments.

Such is the power of the new Boris Johnson government, with its 80-seat majority, that it really is a case of “what you see is what you get”.

But what exactly does it contain and what might it mean for farmers in England, to whom it mostly applies?

See also: George Eustice on government’s farming policy ambitions

The actual document comes to 94 pages – somewhat longer than the 62-page original, which fell when parliament was prorogued last September amid all the Brexit shenanigans.

It is largely “enabling” legislation, saying that the government “may” do certain things, rather than it “will” do certain things – though the accompanying briefing notes confirm the government’s intentions.

These set out three broad aims:

  1. To become more collaborative in developing a new support system
  2. To become less bureaucratic
  3. To promote the important contribution of farmers to the environment and food

What’s changing?

Phasing out direct payments
The centrepiece of the new policy will be the phasing out of direct payments to English farmers from 2021 to 2027, to be replaced with a new “public money for public goods” system.

Defra has already stated that the Basic Payment Scheme (BPS) for 2020 will stay the same, and the overall budget for agriculture will not change until the end of the current parliament in 2024.

In the first year of BPS cuts (2021), the biggest reductions will be applied to the higher payment bands, as follows:

Payment band Maximum reduction
Up to £30,000 5%
£30,000-£50,000 10%
£50,000-£150,000 20%
£150,000 or more 25%

So, for a BPS claim worth £40,000, the bill will provide for a 5% reduction on the first £30,000 and a 10% reduction on the next £10,000, taking it to £37,500.

“We’ll set the reduction percentages for later years by taking into account our detailed plans for future schemes and wider decisions about government spending,” says Defra.

Key points of the Agriculture Bill

  • Seven-year transition
  • Progressive cuts to direct payments
  • Direct payments delinked from any requirement to farm
  • Farmers to be paid for environmental management
  • Funds available to help increase productivity
  • Farmers to get more clout in the supply chain
  • Direct government intervention allowed under “exceptional” market conditions
  • Rewards for improved animal welfare
  • Wales and Northern Ireland may continue with BPS beyond 2020

The new Agriculture Bill also confirms plans to “delink” direct payments from the requirement to farm the land, regardless of whether the recipient chooses to continue farming or not.

This could start as soon as 2021, though further consultations will be held with industry.

Delinked payments could be used in a number of ways – for example, to invest in improving productivity, to diversify the business or to retire from farming.

“This should help to provide more opportunities for new entrants, and existing farmers wishing to expand, or to buy or rent land,” says Defra.

It is also looking at the option of offering farmers a one-off lump sum in place of any further direct payments – again subject to consultation.

Rural development
The government has committed to fund all Rural Development Programme projects commencing before the end of 2020, and these will run for the lifetime of their agreement.

Countryside Stewardship agreements will continue to be available in the first few years of the agricultural transition period and, for a time, will overlap with the planned new Environmental Land Management (ELM) scheme

“No one in a Countryside Stewardship agreement will be unfairly disadvantaged when we transition to new arrangements under ELM,” says Defra.

It is also looking for ways in which the proposed UK Shared Prosperity Fund (set to replace EU structural funding, currently worth about £2.1bn), can support the rural economy.

What’s new in this bill?

Defra insists that the new bill is an improvement on the original, published in September 2018, and takes into account some of the feedback from those working in the agricultural sector. In particular:

  • Food security The government will report every five years on food security, with a focus on global availability and resilience of the supply chain, with policies adapted if necessary. Budgets must also “have regard to the need to encourage the production of food”.
  • Multi-annual budget The government to produce a multi-annual budget, rather than just an annual one, initially for seven years covering the transition period, then for “no shorter than five years”. This will provide greater certainty.
  • Soil quality Soil is specifically named in the bill, so the government can provide financial assistance to farmers for protecting or improving its quality.
  • Animal traceability The bill gives powers to improve the collection and management of information relating to the identification, movement and health of animals.
  • Organics Organic regulations may be tailored so the UK can continue to trade organic produce across the world.

Supply chain
Defra says it wants to give farmers better access to data, enabling them to make more informed, market-driven decisions, and equipping them in their negotiations with processors and retailers.

“We also plan to publish, maintain, and enforce statutory codes of practice, which will help farmers to be confident that they are receiving fair treatment in their business dealings,” it adds.

The bill also provides for a new UK producer organisation system that will facilitate greater collaboration between primary producers.

Future support arrangements

Environmental Land Management scheme
The centrepiece of the government’s new “public money for public goods” approach, as set out in the Agriculture Bill, will be its ELM scheme

Pilots are already under way, with the aim to launch the scheme proper in 2024.

It insists the new approach isn’t a subsidy. “Those who are awarded ELM agreements will be paid public money in return for providing environmental benefits.”

The main areas farmers will be expected to deliver on include clean air, reductions in environmental hazards and pollution, thriving plants and wildlife, clean water, enhanced landscapes and measures to minimise the effects of climate change.

Exceptional market circumstances
The bill also enables the government to intervene where there is “severe disturbance in agricultural markets” (for example, arising from disease outbreaks or extreme weather events) with a significant effect on producer prices.

Such financial assistance may take the form of a grant, loan or guarantee, or “any other form”, including the use of intervention buying or private storage aid for a defined period.

Animal welfare
Publicly funded schemes for English farmers will also be developed to reward animal welfare enhancements, above a legal baseline.

This might include new animal welfare grants, to help pay for investment in equipment, infrastructure, technology or training and innovation.

“We are also exploring a ‘payment by results’ scheme, under which we will reward farmers with ongoing payments if they sign up to and achieve animal welfare enhancements above the baseline,” says Defra.

There may also be improvements in labelling, to help consumers identify higher animal welfare standards.

Investment and R&D
The bill enables the government to help farmers invest in equipment, technology and infrastructure – for example, to improve productivity, manage the environment sustainably and provide other public goods.

Public money may also be used to support research and development projects that facilitate more efficient, sustainable food production.

“This will build on the £90m Transforming Food Production initiative, which will support a technology- and data-driven transformation in UK agriculture as we leave the EU,” it says.

What people have said about it

“Farmers across the country will still want to see legislation underpinning the government’s assurances that they will not allow the imports of food produced to standards that would be illegal here through future trade deals.” Minette Batters, NFU

“I am glad to see that the bill will provide a mechanism to reform the sharing out of the red meat levy across Great Britain.” John Davies, NFU Cymru

“It is of concern that the new bill includes clauses that could see the UK government impose unwanted policies on Scottish farmers in areas that are clearly devolved, such as livestock traceability and organics.” Fergus Ewing, Scottish government

“It’s great to see ministers putting soil protection at the fore of the new Agriculture Bill – something soil scientists have spent years pushing for.” Prof Duncan Cameron, University of Sheffield

“It is reassuring to see that the new bill encourages innovation and diversification, and aims to create opportunities for new entrants to break into the industry.” David Goodwin, National Federation of Young Farmers Clubs

“We are very pleased to see the government maintain the commitments on regulating the supply chain in order to drive out unfair practices which harm farmers.” Vicki Hird, Sustain