The Agriculture Bill – Impact on the Industry

The Agriculture Bill – Impact on the Industry
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DEFRA has released detail of the new Agriculture Bill which will prompt the biggest transition in farm subsidy payments since the introduction of the Single Payment Scheme in 2005.

Whilst the devil is in the detail, an overview of the proposals makes for thought-provoking reading no matter what your involvement in the industry.” Ben Johnson, consultant at North East land agents; Richard Brown & Partners goes on to discuss the matters that are likely to matter most to their clients.

Direct payments will reduce, and farming businesses will be expected to adapt to deliver ‘public goods’ to replace lost subsidy. Typically, a farm business currently receiving £50,000 per year will see a 10% reduction during the transition period 2021 to 2024. This period will take producers into the Government’s new ‘Environment Land Management Scheme’ which will ultimately replace the Basic Payment Scheme (BPS) with a system of public money for public goods.

What are ‘Public Goods’?

 Farmers will have to assess their holdings and look for the assets that deliver environmental improvement to qualify for payment. This could be creation of new habitats, reducing flood risk or improving soil health amongst other qualifying criteria like encouraging better public access.

Whilst we await full guidance it is hoped existing ‘Greening’ elements on BPS forms are a good foundation for delivering ‘Public Goods’ in the future.

Boosting Productivity, New Entrants and Succession

 Initial guidance supports funding for producers to collaborate and invest in projects and technology to increase productivity and strengthen their position in the supply chain. Welcome news.

What is also encouraging are proposals to support for New Entrants. The importance of new blood in the industry is often championed but the reality is that current direct subsidy payments and high capital startup costs have made new ventures almost impossible.

There are proposals to make payments during the transition period irrespective of the area farmed and (potentially) based on historic claims to; ‘give farmers time to prepare for new trading relationships and an Environmental Land Management System.’

These proposals will provide certain opportunities for those looking at succession, provide exit strategies for a sale or retiring for those looking to leave the industry with the possibility of “lump sum” payments.

Impact on Farmland Market

 After a slow start to 2018, the second half of the year has seen a reasonable level of activity in the North East market for farms and land.

Richard Brown & Partners have assisted a range of clients both purchasing and selling on market and privately. However, it is still evident that many farming businesses are still ‘marking time’ when it comes to the making some of the bigger investment decisions, but this applies equally to those considering a sale.

As we head through the transitional period it is hoped that historic uncertainty will diminish and free up the land market to provide much greater opportunity for both vendors and purchasers alike. 

The release of the detail on the new Agriculture Bill will undoubtedly change the face of the UK agricultural industry but we would urge producers to embrace the change, adapt their business and seize the opportunities that will present themselves.

For advice, assistance and a no obligation discussion on how the Bill may impact on your farming business please do not hesitate to contact:

Ben Johnson MRICS

Consultant

Richard Brown and Partners

The Office, South Bellshill, Belford, Northumberland, NE70 7HP

Tel: 01668 213 546    Mobile: 07968 607 249

www.richardbrownandpartners.co.uk