The Agriculture Bill 2020. What does it mean for the industry?

Feb 11th, 2020

Françoise Vandale, Partner

The Agriculture Bill 2020 was introduced to Parliament on 16th January.  The Bill provides the UK with powers to shape a new system on farming once we have exited the EU. The Bill affects England, Wales and Scotland slightly differently. I will concentrate on how it will affect English law for the purposes of this article.

Initially there will be a transition period of phasing out the EU system of direct payments to farmers, which will start in 2021 and run for 7 years. Direct payments will then be replaced with other financial assistance and the Bill introduces a new system based on “public money for public good”; a phrase that we are now all too familiar with.  I use the word “replacement” lightly as it is expected that the level of subsidy will be nowhere near that of the direct payment scheme. There has been much speculation in respect of Environmental Land Management Schemes (ELMs) but interestingly the Bill does not use this terminology.  Still, it is anticipated that the phrase will remain when the details of the scheme are regulated.

The Bill allows the Secretary of State to provide financial assistance where it would encourage improvements to the environment, public access to land, animal welfare and productivity of an agricultural or forestry activity. The previous Agriculture Bill 2017-2019 was criticised for not encouraging the fundamental part of farming – producing food. It seemed to ignore food production in favour of environmental concerns. The shift in the new Bill means that when framing any financial schemes the Secretary of State must have regard to encouraging the production of food by producers in England, albeit in an environmentally sustainable way.

The Bill provides powers to introduce lump sum payments in lieu of direct payments to eligible persons i.e. a person entitled to basic payments (other than if applied for in the last year of the transition period). It would appear that the government wishes to support retiring farmers and provide the ability for farmers to investment in their farms. Mr Eustice recently stated “We want to make it easier for farmers to retire with dignity and simultaneously help new entrants get access to land”.

Another area that should see change is in relation to food security. The Secretary of State will have a duty to analyse data and report back to Parliament, at least once every five years.  This will include analysing the resilience of the food supply chain and looking into global food availability.

The Bill deals with transparency and fairness across the food supply chain.  This will include powers for the Secretary of State to regulate fairer contracts throughout the supply chain, which I am sure will be welcomed by farmers.

In one of my recent articles I discussed the Agricultural Tenancies Reform Consultation. The consultation has been accounted for within the Bill whereby detailed amendments to the Agricultural Holdings Act 1986 and the Agricultural Tenancies Act 1995 have been laid down. One major change will see the abolition of the “commercial unit test” for succession applications in respect of Holdings Act tenancies on death or retirement. The current test limits applicants to succeed a tenancy in the event that they are already occupying a holding that essentially provides an income for two full time workers.

With the Government’s current majority in Parliament it is expected that the Bill will pass through quickly.

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