After nearly half a century of our farming landscaped being governed under EU rules, the new Agriculture Bill, introduced into Parliament earlier in September, sets out how farmers and land managers will be paid in the future.
There will be a fundamental switch to “public money for public goods”, but there is no detail on what the support budget will be for farming in the future, which is a significant omission.
The emphasis for future funding will be for provision of public goods such as:
- Managing land in a way that protects the environment – eg air and water quality, soil health, flood mitigation
- Improving animal welfare standards and the health of plants
- Supporting public access to the countryside.
The “new” payments will replace the current direct payment scheme, which pays farmers on the total amount of land farmed. Such payments have been under scrutiny from the public and the government, as they have favoured the largest land owners and are not linked to specific public benefits. The new payments will be introduced under an environmental land management (ELM) scheme, which will build on existing environmental stewardship schemes familiar to many farmers. The government promises it will be less onerous and involve less bureaucracy. The ELM payments will be phased in over 7 years, with the last direct payments to farmers being made in 2027.
The NFU have already expressed concern, saying that a future agricultural policy that ignores food production will be damaging to farmers and consumers, as growers and livestock farmers need the right financial and policy framework to compete in a volatile global market.
One the of biggest questions is over the budget for the new policy, as there is no guarantee that it will match current public expenditure on agriculture. This is a crucial point as the current direct payments underpin the current financial viability of many farms. For many, if not most farmers, the next 10 years will be a crucial time in determining whether their businesses can maintain survive in the post Brexit world. There are challenging but exciting times ahead of us!
As ever, the devil will very much be in the detail that eventually emerges, however those farms that do not start reviewing their business structures now, run the risk of becoming unviable further down the line. Whilst this emphasises the need to seek farming efficiencies, it also highlights the benefits in securing alternative sources of income for businesses, spreading risk and making best uses of resources whether they be land, labour, capital or skills.
Butler Sherborn are committed to helping our clients and contacts through these challenging, but hopefully exciting times.
