Robinson & Hall, Land and Property Professionals advise on the changes to the Agriculture Bill.
On 16th January 2020 the Government reintroduced the Agriculture Bill which, if passed through Parliament, will shape future domestic policy for years to come.
The document itself is an expansion on the previously proposed Agriculture Bill and, whilst much is identical, there have been some important additions. The below applies currently only to England. Wales and Northern Ireland are working on their own devolved policies whilst Scotland has brought forward a Bill to manage the inherited Common Agricultural Policy with any significant change to come later.
What has not changed?
Future policy
The fundamental principle remains “public money for public goods” with a statement on expectations anticipated shortly which builds on the 25 year Environment Plan.
Direct payments
These will run unchanged and at their current level for this claim year, although the Bill gives the Secretary of State authority to simplify the systems where possible.
From 2021 to 2027 an “Agricultural Transition Phase” will see the Secretary of State granted:
• The power to phase out direct payments to £0 over the period with the largest claimants likely to face the largest reductions initially.
• The power to de-link payments from the need to farm the land.
• The power to make lump sum payments based on an, as yet unknown, historic claim period to enable claimants to either reinvest or retire.
Other funding
Countryside Stewardship Scheme (CSS) – this will continue but with scope to be simplified where possible with the potential for shorter term agreements. Some Higher Level Schemes may be offered extensions. Existing agreements could be converted into new Environmental Land Management Schemes (ELMS) agreements.
Environmental Land Management Scheme contracts – these remain the replacement for CSS and will be targeted towards measures which:
• Deliver high air and water quality
• Protect and enhance biodiversity
• Prevent or reduce climate change, flooding and drought
• Provide public access
• Protect the rural historic environment
Funding could be multi-annual agreements or capital grants. It remains unclear what value is to be ascribed to the benefits delivered by the new ELMS and how that will compare to current funding.
Rural Development – the priorities remain similar and there will be funding for areas such as business development, risk management and improving productivity, albeit delivered by a different mechanism but likely to remain administered by the Rural Payments Agency. However, such funding may be time limited to the Agricultural Transition Phase.
What is new?
Food security
There will now be a requirement for the Government to report to Parliament regularly on food security to include:
• Global food availability
• Supply sources
• Supply chain resilience
• Household food expenditure
• Food safety and consumer confidence
There is no mention of what further measures may be taken nor of any specific requirements to ensure that domestic food production is supported or protected. However, there is provision for the Secretary of State to intervene in agricultural markets in the event of severe market disturbance by providing financial assistance to farmers in England.
Monitoring of financial assistance
The Secretary of State will now report regularly to Parliament on the impact and effectiveness of financial assistance schemes, both provided by Government and third parties. There is no clarification on the procedure if such schemes are found not to be delivering value for money.
Soil quality
Soil is now specifically mentioned in the Bill with financial assistance targeted towards protecting and improving soil quality most likely through ELMS or research.
Tenancy legislation
The Agricultural Holdings Act 1986 is proposed to be amended as follows:
• The minimum age of 65 for applications to succeed on retirement will be removed meaning a tenant could opt to retire early.
• The earliest a local authority landlord will be able to serve notice to quit on a tenant of a smallholding will be the age they can receive the state pension.
• There will no longer be the requirement to meet the “Commercial Unit test”. Instead a new Suitability test will be implemented which must relate to the applicant’s ability to farm the holding commercially, efficiently and environmentally taking into account the applicant’s experience, skills, health and finances. Therefore, those potential successors who already farm a commercial unit may still be eligible to apply.
• There will be scope for a tenant to refer a request for landlord’s consent or variation of tenancy terms to arbitration to enable a tenant to apply for financial assistance under new policies.
• Where a written agreement exists under which a tenant is to make payment to a landlord for an improvement wholly or partly financed by the landlord, those payments are disregarded at a rent review as are the benefits that improvement brings whilst payments are still being made.
• As well as the President of the Royal Institution of Chartered Surveyors, the President of the Central Association of Agricultural Valuers and the Chair of the Agricultural Law Association shall be able to appoint an arbitrator to resolve disputes. This will also apply to the Agricultural Tenancies Act 1995.
As with the first introduction of this Bill in 2018, the one caveat to all of the above is that it has yet to be passed through Parliament. Whilst there is now a considerable Conservative majority which should facilitate the Government passing its legislation and much of the content of the Bill already enjoys cross party support, there will remain questions to be answered which may lead to amendments. However, the fact that the content of the Bill remains largely unchanged is a clear signal that this is the direction of future policy, and businesses should prepare accordingly.
If you would like further information on any of the above, please contact Frankie Burton, Rural Surveyor at Robinson & Hall on 01234 362921 or email fmb@robinsonandhall.co.uk
