Agriculture Bill

CIWEM Policy Adviser Sarah Anderton gives a rundown of the recently published Agriculture Bill

September saw the Agriculture Bill laid before Parliament, followed shortly by the release of an accompanying policy statement. Combined these set out the Government’s current proposals for the future of food, farming and the environment, which DEFRA ran a consultation on earlier in the year.

Initial reactions to the Bill were mixed, with environmental NGOs reacting positively to the landmark shift from area based payments to payments for environmental delivery, whilst the NFU voiced their disappointment that food production was not adequately covered.

Overall the bill should be welcomed. However, there are uncertainties surrounding funding, productivity support and supply chain transparency to be resolved. Current wording also allows flexibility in the delivery of environmental benefits, this gives the Bill longevity but it also means that delivery will be dependent on interpretation.

Anticipating the potential for Brexit to cause disruption in Parliament, it seems that relying on ministerial interpretation for environmental delivery is not satisfactory. Putting Brexit aside, this Bill looks to set out a strategy for many years in which time there will certainly be ministerial changes.

Section 1- environmental delivery

The Bill’s main achievement from an environmental point of view is, as mentioned, the shift from area-based payments to payments for environmental delivery. Benefits that the Secretary of State can choose to pay for, under the new Environmental Land Management (ELM) scheme, are stated in sections 1 and 2 of the Bill.

“(1) The Secretary of State may give financial assistance for or in connection with any of the following purposes—

(a) managing land or water in a way that protects or improves the environment;

(b) supporting public access to and enjoyment of the countryside, farmland or woodland and better understanding of the environment;

(c) managing land or water in a way that maintains, restores or enhances cultural heritage or natural heritage;

(d) mitigating or adapting to climate change;

(e) preventing, reducing or protecting from environmental hazards;

(f) protecting or improving the health or welfare of livestock;

(g) protecting or improving the health of plants.

(2) The Secretary of State may also give financial assistance for or in connection with the purpose of starting, or improving the productivity of, an agricultural, horticultural or forestry activity.“

This provides a lot of flexibility to cover important water issues under subsections a, d, and e. For example, measures to protect against drought can fit into protecting the environment, adapting to climate change and protecting from environmental hazards. However, this is my interpretation which is not supported by the policy statement and highlights why we need more detail around types of measures that might be supported.

Funding issues

We also need to understand how delivery will be financially supported, including; the basis of valuation, how much public money is likely to be set aside to support the Bill’s ambitions and how public and private funding sources will be combined.

In the past agri-environment schemes have operated on an income forgone model, paying the cost of carrying out the prescribed measures and a small profit element. As we shift to a public money for public goods delivery model we would like to see the payment model move to one which recognises natural capital values.

Although not everybody approves of allocating financial values to assets that are in some cases priceless, we accept the use of comparable values as a pragmatic approach to getting environmental impacts and delivery considered.

Whilst the Bill provides no detail on how values will be determined, the policy statement talks of “valuing environmental benefits appropriately” but doesn’t expand further so this is a clear area where more information is needed.

Another small missing detail is a summary of the funding DEFRA will have to support environmental delivery under the new scheme. The Government has promised the same level of funding will be continued until the end of the Parliament, which at the time of making the announcement was expected to be March 2022. This might seem slightly less likely now than it did then. Even so, funding to 2022 would not see farmers to the start of the new scheme, intended to be “fully up and running” by 2025.

Without any indication of long term funding levels that will be made available to support agriculture it’s hard to assess the Government’s level of ambition for environmental delivery and productivity improvements.

The policy statement did give some certainty on payments during the transition, providing a table of reduction percentages to be made depending on claim size. We are pleased to see that reductions are being made across the board to encourage all farmers to prepare for Brexit, something many other consultation respondents also requested.

The policy statement also provides against another of our consultation response requests, a commitment to look into developing private sector funding through exploring the scope for public-private finance partnerships. The development of private funding is key for the longevity of financial support for the sector given that the Treasury already appears reluctant to commit to funding beyond the end of this parliament.

We have certainty. Or do we?

Having covered flexibility in the potential for environmental delivery, two further areas of flexibility stand out.

1. The agricultural transition period.

This is seven years starting with 2021. Great, certainty.

But wait, it can be extended. For an unknown period. More than once! As long as the transition period has not already ended.

Neither the Bill or the policy statement give detail on the circumstances in which an extension would be appropriate, so we can’t judge whether this will be used to provide useful flexibility or act as an open invitation for extension requests. However, extension is subject to the affirmative resolution procedure, so would be executed through a statutory instrument approved by both Houses of Parliament which provides accountability.

1. Support during exceptional market conditions.

In addition to the environmental measures and productivity improvements, clauses 17 and 18 add the ability for the Secretary of State to make a declaration that there are exceptional market conditions and give financial assistance.

S.17(2) describes exceptional market conditions, stating that they will exist where,

“(a) there is a severe disturbance in agricultural markets or a serious threat of a severe disturbance in agricultural markets, and

(b) the disturbance or threatened disturbance has, or is likely to have, a significant adverse effect on agricultural producers in England in terms of the prices achievable for one or more agricultural products.”

Anybody else think that just sounds a bit like Brexit…? Another area where a bit more detail would be helpful.

There are a range of further areas that we need extra detail on too. We welcome productivity support as we need farmers to be profitable to enable them to use sustainable practices that can be more expensive in the short term. It would be good to understand better what productivity support DEFRA has in mind.

We also welcome the ability for the Secretary of State to require supply chains to provide information for the purposes of “promoting transparency or fairness in agri-food supply chains”, “minimising adverse environmental effects of activities connected with agri-food supply chains”, and “minimising waste arising from activities connected with agri-food supply chains”. We’d like more detail on how farmers will be supported in using the information to improve practices and profits whilst minimising impacts on consumers to prevent demand building for cheaper environmentally damaging imports.

The House of Commons EFRA Committee is currently running an inquiry on the Bill and given the uncertainty I’ve outlined briefly here, I have a feeling there will be some interesting evidence sessions.

CIWEM is planning to respond to the inquiry. If you are a member and you would like to discuss to the Bill please contact me at sarah.anderton@ciwem.org.

Please note CIWEM has now responded to the EFRA inquiry, a copy of the response can be viewed on our consultations page.