Brexit has changed things, including farming. If you’re a farmer, land manager, or work in the agriculture business, you may have heard of the Agriculture Act 2020, which is said to transform the future of British farming. It was brought in at the end of 2020 to move away from EU policy to reward farmers and land managers for the good work they do. A seven-year transitional period began from the end of 2021 to phase out the financial reward scheme currently in place, known as the Basic Payment Scheme (BPS), and usher in the new system. But what is this Act exactly, and what does it mean for your farm or venture?
The Agriculture Bill passed into UK law as the Agriculture Act 2020 on 11 November 2020. This Act will pave the way for change in the agricultural industry in the UK following Brexit. It will also reward farms for agriculture businesses for sustainability measures and public goods.
The main change you can expect from this Act is that a system of public money for “public goods” will replace the BPS direct support scheme, which the government hopes will boost the industry. These changes will not be implemented overnight. From 2021, there will be a seven-year transition period to adapt to the new system, which will reward farmers and land managers for mitigating the effects of climate change by contributing to better air and water quality, thriving wildlife, soil health, and measures to reduce flooding.
The primary change this Act will bring is the structure of the payment scheme, as it’ll phase out BPS in England between 2021 and 2028 to set up a new Environmental Land Management System (ELMS), which rewards farmers and land managers for producing public goods.
There will also be financial incentives to improve productivity and increase technology use on farms to help production and support climate change initiatives to have the UK meet its 25-year Environment Plan by reducing emissions.
That’s essentially the summary of the Act, but this Bill will also:
Before the Act was introduced, farmers and land managers benefited from the direct payment scheme in the UK. The scheme focused on land ownership and crop production, where farmers got an average of 8% of the total food spend.
Since Brexit, the new Act from 2021 proposes to move away from the EU’s direct BPS structure towards a system that will pay farmers public money for public goods. The new ELMS will fill the gap left behind by the former BPS subsidy and will pay out to encourage biodiversity, environmental initiatives and sustainable farming.
Other changes include things like the age of retirement, where there is no longer a minimum age to serve, whereas previously, a retirement notice could only be given to a person aged 65 years or older.
In the transition period beginning from 2021, the expected changes are the following:
The cross-compliance rules you need to follow for your farm have not changed, but changes have been made to how cross-compliance checks are run. RPA field officers will send a letter shortly after the inspection to confirm whether the visit found the farm or land to be compliant or non-compliant and what actions should be taken, and visits can take place more than once a year without prior warning.
To see how the rules are changing over the year, what you need to do, and when, see the government’s Guide to Cross Compliance in 2022, which gives you a specific date-by-date breakdown of what you should or shouldn’t do.
There has been significant pushback and criticism against the Bill. Some say it’s too “green-focused” and offers a lack of support for food production. Also, the specifics of the money allocation are still unclear. There are unanswered questions such as how much money will be distributed, to whom and for what. Will imports be subject to the same production standards as applied in the UK where food is concerned? There is no specific budget beyond saying there is an overall annual funding allocated for farmers that will remain at the current levels.
The question also hangs on what ventures will merit the budget allocation. For example, will tree plantations get more money than agroforestry or will water protection get more than nature protection?
There seems to be a big gap of power to introduce and enforce the regulatory framework upon farming and land management practices, which is an important part of the puzzle.
As a business, whether you are a farmer or a land manager, we can help you navigate the coming changes with our experienced consultants. At Granter, we are experts in helping farmers and agriculture ventures find solutions to help farms maintain profitability through Research & Development to improve farm performance and comply with sustainability initiatives to help your business get the funding it needs. The funding itself can also help enable faster adoption of technology to help your business reach its sustainability goals faster and without compromising profitability. Also, through R&D claims, which is an area many farmers assume they are unqualified for, when in fact they are–they just need to present their data in a way that HMRC understands–is also another option. We can help agriculture businesses in both areas so your transition to compliance with the Agriculture Act 2020 is as smooth as possible.