The Agriculture Bill

 Commons Library Briefing Brexit: UK Agriculture provides background on the policy proposals, impact of Brexit as well as the current working of the Common Agricultural Policy.

The Agriculture Bill provides for a range of enabling powers to ensure “stability” for farmers as the UK exits from the EU’s Common Agricultural Policy and compliance with the World Trade Organisation Agreement on Agriculture. It also introduces new measures to change the way in which farmers and land managers are supported in the longer term.

It is the first substantial Brexit Bill in a domestic policy area which covers both devolved and reserved matters.

Leaving the CAP

The UK will have to leave the EU Common Agricultural Policy under any Brexit scenario. The body of EU regulation which forms the CAP will become ‘retained EU law’ on Exit Day.

Currently CAP allows for direct payments to farmers (subsidies), rural development payments (including agri-environment schemes) and certain market interventions.

As the UK has been a part of the CAP since 1973 the UK Government and stakeholders have described the Bill as a historic opportunity to radically reshape domestic agricultural policy. The scale of potential change has been compared to the Agriculture Act 1947 which sought to increase food production after the Second World War and introduced higher farming standards.

This 2018 Bill sets out to provide the architecture for most parts of the UK to start to develop their approaches to supporting farm businesses whilst meeting international trading obligations.

Funding

The UK Government has pledged to continue to commit the same cash total in funds (some €4bn per year) for farm support across the UK until the end of this parliament, expected in 2022. It has pledged that “any changes made to agricultural funding would reflect the Government’s aim of securing a better future for UK agriculture and for the environment”.[1]

An enabling Bill

The Bill is an ‘enabling’ Bill containing 25 delegated powers with five of these allowing Ministers to modify primary legislation (Henry VIIIth powers). A Delegated Powers Memorandum and a Defra Policy Statement provide more detail on the powers being sought.

The UK Government has said that the Bill is “a deliberate departure” from the CAP approach. These delegated powers are designed to allow government policy to “evolve” in response to “changing environmental priorities and changing social and economic circumstances”, reduce the bureaucracy of farm support and regulation and to enable the government to respond to the outcomes of EU withdrawal negotiations. This includes a ‘no deal’ scenario.

A UK-wide Bill?

The main body of the Bill applies to England. However, Schedule 3 (Wales) and Schedule 4 (Northern Ireland) extend similar powers to Welsh Ministers and the Department for Agriculture, Environment and Rural Affairs (DAERA) so that they can start preparing replacement schemes.

These powers were extended at the request of the Welsh Government and DAERA. However, the Scottish Government has not currently taken up the offer of powers in the Bill as it is in disagreement with the UK Government about its overall approach to repatriating EU powers in devolved areas of competence.

There are no specific Scottish provisions in the Bill. Scotland is however covered by the UK-wide provisions in the Bill. For example, relating to the World Trade Organisation.

What does the Bill do?

‘Public payments for public goods’

• Part 1 (Clauses 1-3) gives the Secretary of State new powers to provide financial assistance to those managing the land and delivering public benefits such as air and water quality, public access and productivity. (Schedule 3 provides similiar powers for Wales but with more emphasis on rural communities)

Phasing out of Direct Payments

• To make way for this system, Part 2, Chapter 1 (Clauses 4-8) allows for the phasing out of direct payments (as currently provided for under the Common Agricultural Policy). Schedule 3 provides similiar powers for Wales but there are not phase-out powers for Northern Ireland. 

• Clause 5 determines that, for farmers in England and Wales (Schedule 3) this phase-out is over a 7-year agricultural transition period from 2021 and that no direct payments will be made after 2027.

Potential to ‘delink’ payments from farming requirements

• Clause 7 sets out powers to phase out Basic Payment Scheme (BPS) payments and/or terminate them and instead ‘de-link’ them the requirement to farm during the transition. Clause 7(7) allows for these ‘de-linked’ payments to be made in a lump sum allowing farmers to invest in their business, diversify or retire from farming.

Data Collection

• Part 3 (Clauses 12-16) includes wide powers, extending to Wales and Northern Ireland, to collect and share data from those involved with/having an impact on, matters linked to certain activities in, the agri-food supply chain. Household consumers are excluded from the requirement.

Market intervention

• Part 4 of the Bill provides powers to reshape the future interventions that can be made in the market ‘in exceptional circumstances’.

Marketing Standards

• Part 5 provides powers to tailor and modernise existing marketing standards regarding the quality of agricultural products and product information to customers in England. (This power is extended to Wales and Northern Ireland in Schedules 3 and 4 respectively).

Producer Organisations and Fairness in the Supply Chain

• Part 6 (Clauses 22-25) aim to strengthen the position of food producers in the supply chain. Measures are included to allow UK Producer Organisation (PO) rules to be introduced in place of EU rules. Clause 25 provides for powers to introduce sector-specific codes. E.g. in areas where voluntary codes have not worked.

World Trade Organisation obligations

• Part 7 includes provisions to secure compliance with the WTO Agreement on Agriculture. Clause 26 supports UK membership of the WTO and the Agreement on Agriculture by allowing the UK Government to set financial ceilings on the devolved administrations in relation to agricultural support that is considered as trade distorting.

Stakeholder reaction

The reaction to the Bill has been mixed. Whilst both farming organisations and environmental groups broadly support the new ‘public money for public goods’ approach to future farm support schemes (in England and Wales), there is concern from both groups that there will not be sufficient future funding beyond this Parliament.

A lot of stakeholder comment has focussed on whether the Bill has the right balance of measures between incentivising environmental protection and supporting productivity.

There has been a notable absence of consumer comment.

[1] HL 10006 [Agriculture: Subsidies] 18 September 2018