
James Farrell
Head of Rural
Head of Rural
It aims to establish a new system based on public money for public goods, to deliver what DEFRA secretary Michael Gove describes as a ”cleaner, greener and healthier” environment.
Much of the detail has been covered in previous government announcements but there are some new elements.
There are, as expected, also some omissions, the most significant of which is what the overall support budget for farming will be in the future.
The Bill provides the mechanisms by which the government can change the existing rules, rather than setting out how new rules will work in practice.
Direct payments will be phased out, to zero, by 2028, with payments being reduced over a seven year ‘agricultural transition period’ from 2021 to 2027 to give ‘time for farmers to adjust’. NEW
Payments will be cut more initially for larger recipients, starting as follows. Over the transition period these reductions will be increased. NEW
Annual Direct Payment | % payments cut by in 2021 |
Up to £30,000 | 5% |
£30,000 - 50,000 | 10% |
£50,000 - 150,000 | 20% |
£150,000 or more | 25% |
Direct Payments will be made on the same basis as now in 2019 and in broadly the same way in 2020, subject to simplifications where possible NEW
It is not clear what the basis for the 2021 – 2027 payments will be, although the Bill says that they ‘may’ be based on money received in previous years. NEW
Payments will be ‘delinked’ from the requirement to farm the land, to enable recipients to invest, diversify or retire. There should be an option to take them as lump sum. NEW
The most significant omission is that there is no indication of how the overall support budget for farming, which is currently around £3.2bn per annum for Direct Payments and rural development spending, will change during the transition period.
It is also unclear on what basis DEFRA would like to set the support budget. The most rational basis would be to agree targets for the environmental outcomes desired from the new policy, so mainly related to public goods and climate change, then work out how much it will cost to deliver the outcomes. The worst scenario would be an arbitrary figure set, probably by the Treasury trying to cut annual spending, which may be insufficient to deliver the desired objectives.
It is also unclear whether the support budget for farming will be set over a specified period or annually. The current CAP budget is set every seven years which gives land managers a level of certainty and confidence to invest.
The Bill is also silent on future policy associated with agricultural workers, trade policy and whether UK standards for food production will be maintained, although a pilot overseas workers scheme has been launched and the government has repeatedly said that food standards will not be reduced for both UK production or imported food.