Brexit: UK agriculture policy
Brexit requires the UK to have a new agriculture policy. The UK Government and devolved legislatures have set out proposals for supporting farmers whilst enhancing the environment. This Commons Library briefing has been updated ahead of publication of an Agriculture Bill in order to set out the policy context. The Library will provide distinct briefing on the Bill ahead of its Second Reading.
Update: the Agriculture Bill was introduced and had its First Reading on 12 September 2018.
After Brexit (and any transition phase) UK agriculture will be operating outside of the EU’s Common Agricultural Policy (CAP).
This means that a new domestic agriculture policy is needed. It gives the UK Government and devolved legislatures the opportunity to rethink farm subsidies and incentives and the general operating environment for farm businesses. The CAP currently provides nearly £4 billion of support annually to farmers across the UK as well as providing market safety nets.
These developments will come within the context of wider regulatory and trading changes that farmers will face, the impact of which will depend on the arrangements for the UK’s future relationship with the EU.
The key questions around a new UK agriculture policy are therefore:
• How might UK agricultural policy diverge from the CAP?
• How much financial support will the UK Government continue to offer and how will it be allocated across the UK?
• How will UK agricultural support be managed across the devolved nations?
• How will new trade and labour policies impact UK agriculture in concert with any changes in farm support?
• How far will regulation of issues such as food safety, pesticide approval and animal and plant health diverge from the current EU approaches?
Currently, direct CAP subsidies can make up to 80% of a UK farmer’s income and agricultural practices will be sensitive to any change of direction, priorities or funding levels of this support.
The UK Government has pledged to maintain the same cash funds as currently for CAP (for the whole of the UK) until the end of this Parliament which can run until 2022. The allocation and conditions of this support may alter during this time but the UK Government has indicated that it is unlikely to move to any brand new system of farm support until after 2024.
The UK Government’s 25 Year Environment Plan (January 2018) set out plans for a new environmental land management system based on paying farmers public money for public goods (e.g. environmental enhancement), replacing current direct payments to farmers in England from 2024.
An Agriculture Bill is forthcoming which will set out a framework for post-Brexit arrangements for farmers. As a pre-cursor to this, the UK Government consulted on the shape of this support and the transition to this new approach via its February 2018 Command Paper, Health and Harmony: the future for food, farming and the environment in a Green Brexit.
The key elements of the emerging new policy for England are:
• The Basic Payment Scheme (BPS) (direct subsidies by area farmed) for 2019 will be paid as normal with some simplification.
• A transition phase of "several years" from farming subsidy to a system of public money for public goods over time whilst limiting some of the largest subsidy payments.
• No lower animal welfare or environmental standards in trade deals
Farming unions and environmental groups have broadly welcomed the initial proposals. Farming unions want any new farm support system to be part of a coherent approach to food production with domestic agriculture policy post-Brexit helping farmers to mitigate volatility and enhance productivity as well as delivering environmental benefits. Environmental groups want to see current funding for farmers maintained to support sustainable land management.
Devolved legislatures have consulted or are consulting on similar approaches and timescales but with priorities tailored to their farming systems:
• Scottish Government, Stability and Simplicity: Proposals for a rural funding transition period, June 2018 (consultation closed 15 August 2018).
• Welsh Government, Brexit and Our Land: Securing the future of Welsh Farming, July 2018 (consultation closes on 30 October 2018)
• The Northern Irish Department for Agriculture, Environment and Rural Affairs (DAERA), Northern Ireland Future Agriculture Policy Framework: Stakeholder Engagement , August 2018 (consultation closes on 10 October 2018)
The UK Government has also said that it is seeking a flexible migration policy overall and post-Brexit wants to ensure "access to seasonal agricultural labour". A new pilot scheme will allow recruitment of some 2,500 non-EU migrants to work in agriculture each year from spring 2019 to December 2020.
The UK produces some 60% of the food it consumers so is reliant on trade to maintain food supplies. The UK imported some £46 billion of food, feed and drink in 2017 and exported some £22 billion worth. The impact of Brexit on agriculture trade will depend on the future trade framework with the EU but Environment Secretary Michael Gove said in January 2018 that he was confident of "building a new economic partnership with the EU" that guarantees tariff-free access for agri-food goods between the UK and EU. The Chequers Deal sets out plans for a common rulebook with the EU for those regulations that are needed for frictionless trade at the border. The Government also aims to increase trade with non-EU countries through new Free Trade Agreements.