What Government Plans for a Green Brexit will mean for UK Farmers

Introducing the Agricultural Bill 2018 back in September, Environment Secretary Michael Gove heralded it as ‘an historic moment as we leave the EU and move towards a brighter future for farming.’ He added that the measures have been designed to pave the way for the smooth and gradual transition from the EU that farmers and land managers need in order to plan ahead.

The Bill represents the biggest overhaul of UK farm policy since the end of the Second World War. It brings about the end of public support for food production, a system that has been in place for almost a century.

Environmental Land Management

Although there will still be grants to support agricultural productivity, under a new Environmental Land Management system, the government will work with farmers to design, develop and trial a new approach under which those who provide the greatest environmental benefits will secure the largest rewards, laying the foundations of a Green Brexit.

The 62-page document sets out plans to abolish the current system of direct payments to farmers in England. This will be replaced with a new system of public money for “public goods”, rewarding farmers who undertake environmental measures, such as protecting and enhancing wildlife and the environment, providing public access to the countryside, flood-risk mitigation and carbon reduction, rather than those who produce food. Other UK nations are expected to implement similar policies.

The country’s biggest landowners will see the payments they receive from the public purse fall sharply. From 2021, the new system will be phased in until 2027, when the last payments based on the amount of land farmed will be made. Direct payments for 2019 and 2020 will be made in much the same way as now.

A new environmentally-driven system

In place of the £3bn a year that farmers currently receive under the EU’s Common Agricultural Policy (CAP), farmers will be expected to sign Environmental Land Management contracts detailing their commitments to initiatives like protecting habitats, improving flood management and enhancing air and water quality. The contracts that farmers sign will vary in duration, and could be up to 10 years long to ensure they provide the benefits they commit to.

Under the CAP, big landowners receive the lion’s share of taxpayer subsidies, based on the amount of land they farm. The top ten recipients currently account for half of the total payments, while the bottom-fifth get only about 2%.

However, government ministers have yet to confirm how much public money farmers will receive under the reforms. They have so far committed to preserve payments at the level of the CAP until 2022. After that, ministers will set farming budgets on a multi-year basis, but exact details have yet to be announced.

How smaller farms will be affected

Fears have been expressed that these measures will see food production move to bigger farms. In response, ministers have pledged to support small family farms by giving them income for the “public goods” that they provide, as well as the income they will receive from the food they produce.

Grants are promised for farmers to enable them to invest in equipment, technology and infrastructure, helping them deliver under the new contracts.

There will be financial support for research projects, such as studies into soil health or sustainable livestock farming. Farmers will also be able to use direct payments as a “golden handshake” to retire from the industry if they wish.

The Brexit conundrum

Although any legislation that delivers a cleaner and healthier environment for future generations will be welcomed by environmental groups and the public alike, farmers’ concerns over Brexit are unlikely to be entirely put to rest by these measures.

Until the future terms of trade with Europe and the rest of the world are known, much is uncertain. Important questions remain, including whether UK food production standards will be maintained, and what provisions will be in place for hiring migrant and seasonal workers. One of the biggest unknowns is what will happen to agricultural exports and what tariff system might apply post-Brexit.

For more information, get in touch by email, sfolbigg@woodfines.co.uk, or by telephone on 01767 680251.