Tuesday, December 18, 2018

Clarity needed to get the best from Agriculture Bill

December 3, 2018 by  
Filed under News & Business

Expert view: Government plans for agriculture should recognise the benefits already provided by farmers, writes David Bolton.

Published this autumn, the government’s Agriculture Bill seeks to provide “stability” for farmers as the UK leaves the EU and seeks to comply with World Trade Organisation  agreements. But it contains more questions than answers.

The Bill had its second reading in the House of Commons on 10 October – to be followed by its committee stage, the report stage and a third reading before it follows the same process in the House of Lords.

The Bill is highly populist in its approach, light on attraction for food-producing farmers and there is much potential devilment in its details. And there will be no Royal Assent until appropriate consideration of any amendments has taken place.

Direct payments to farmers cannot be relied on beyond 2021 and will end by 2027. Any alternative scheme – or its physical and financial impact – remains unclear, despite the government’s mantra of “public money for public goods”.

Future concerns

Speaking in Norfolk recently, former prime minister Sir John Major shared his concern about the future for food production, food imports, the countryside and – particularly – the availability of affordable labour for harvesting fruit and vegetables.

The government says it hopes to further persuade farmers to care for their soils and water – don’t they already? It is clear that more public access to the countryside and the establishment of a  “managing agency” are also to be expected – along with additional  regulations.

Other questions remain unanswered too. Will Agricultural Tenancies Act (FBT) tenants seek to cash up any annual payment entitlements in lump sums? And what about the worth of Agricultural Holdings Act (AHA) tenancies and remaining succession rights? And how will company tenancies be affected?

Answers to all these questions will be crucial for negotiations and sound decision-making.

Unknown impact

That Basic Payments have contributed to the size of rents paid to landowners and profits to farmers cannot be disputed. Yet what remains unknown is the impact that their reduction or removal will have on the sector.

Basing future support on rewarding farmers who look after “natural capital” will have its own challenges. Natural capital that is soundly measurable, efficient in its assessment and fair in its application will have to be invented in practice.

The East Anglian landscape is multi-faceted. It has fens, forests, water courses and livestock as well as crops and people. Its views, skylines and colours are unique. Future judges of these “public goods” and how they should be rewared are going to be well tested.

Finally, the loss of the Common Agricultural Policy (CAP) to UK farmers is triggering tougher rules for the food supply chain when it comes to supplying “market data”.

Farm profits

The Bill hints at “obligations” on first purchasers of agricultural products for written terms relating to volumes, prices, timing and  methods of payment. Surely this is hardly novel and has been common practice since cash replaced barter centuries ago?

What we do clearly know is that future agricultural policy will not support farm profits in the way it has done in the past. The outcomes of both Brexit negotiations and UK agricultural policy have yet to be defined, but the results are likely to be unpopular.

The availability and supply of migrant labour remains in jeopardy and there will be adverse changes in the regulatory burden on UK farmers. But whatever materialises, it is clear that high output value to low input cost will be the key ratio.

After 40 years of stable policy, there are massive changes to be faced.

David Bolton is the founding partner of David Bolton Partners. For details, call 01953 714030 or visit www.boltonpartners.co.uk.

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