/ AGRICULTURE &
LAND USE
FOR
DISCUSSION / Chairman:
Secretary:
Adviser:
Meeting Date:
Paper No: / Nick Downshire
Fraser McAuley
Jonathan Baker
27 September 2017
AG&LU/SEP17/007

UK Agricultural Bill

Summary

The Queens Speech included an Agricultural Bill which “will ensure that after we leave the EU we have an effective system in place to support UK farmers and protect our natural environment”.

The CLA expects a White Paper on the Bill by the early 2018 with a first reading in Summer 2018.

This Bill will have a major impact on future farming and environmental policies across the UK and although it is at an early stage of development, members views are sought on the CLA’s initial analysis.

Questions for members:
  1. What are members views on the title and scope of the Bill?
  2. Does the Committee agree that UK specific objectives should be developed?
  3. What do the Committee think about including Forestry in the scope of the Bill?
  4. Do members agree that ensuring this and future Governments create and implement UK ‘agricultural’ policies should be the priority?
  5. What are members’ views on the CLA’s emerging priorities?

UK Agricultural Bill

Information to date

Background

1.The legislation around CAP will be brought into UK law through the EU (Withdrawal) Bill. Any change to the repatriated CAP will be enacted through a new Agriculture Bill. It is likely, but not assured, that as well as providing powers to adapt the repatriated CAP the Agriculture Bill will create a framework for future UK agricultural polices (and the agricultural policies of England and the devolved administrations).

2.The following text is taken from the background notes to the Queens Speech given in June of 2017 regarding the Agriculture Bill[1]:

Agriculture Bill

In line with the manifesto, the Bill will ensure that after we leave the EU we have an effective system in place to support UK farmers and protect our natural environment.

The Bill will:

  • provide stability to farmers as we leave the EU;
  • protect our precious natural environment for future generations;
  • deliver on the manifesto commitment to “provide stability for farmers as we exit the EU.

The purpose of the Bill is to:

  • Provide stability to farmers as we leave the EU.
  • Support our farmers to compete domestically and on the global market, allowing us to grow more, sell more and export more Great British food.

The main benefits of the Bill would be:

  • To support a thriving and self-reliant farming sector that is more competitive,

productive and profitable.

  • To protect our precious natural environment for future generations.
  • To deliver on the manifesto commitment to “provide stability for farmers as we exit the EU” (p. 25-26).

The main elements of the Bill are:

Measures to ensure that after we leave the EU, and therefore the Common Agricultural Policy, we have an effective system in place to support UK farmers and protect our natural environment.

Territorial extent and application

We will consult widely with the devolved administrations on the appropriate extent of any legislation.

Timing

3.At a recent select committee the Defra Secretary of State (SoS) Michael Gove said Defra are intending to publish a consultation on the Agriculture Bill in early new year with first reading in the spring/summer of 2018.

4.Government would prefer the Bill to be in force before EU-Exit which is currently understood to be March 2019. If by exit day the Bill is not in force then the repatriated CAP will provide the legal basis for agricultural support and policy in general; this would probably cause some implementation and legal issues.

Content of the Bill

5.Note that meetings with officials have demonstrated that their thinking is at an early stage and that different teams / officials have different views and understanding. The following should not be read to understand detail, but rather tone and intent.

Devolution

  • Defra officials are aware of need to resolve the devolved nation issues (see below).

Short term evolution - Enabling powers to change the repatriated CAP outside the current CAP framework.

  • This could enable measures such as removing the 3-crop rule, or to facilitate capping beyond what is possible within the repatriated CAP. Capping has been widely trailed by the SoS. Capping of payments may be limited to enabling the transition away from direct support or it may be a principle for future policies. The CLA President has written to the SoS to discuss recent comments he has made on this subject.
  • Similarly, Defra are looking at time limited productivity actions to achieve their aim of getting the sector ‘match fit’ for the challenges of new trading and policy environment.

Transition arrangements – Enabling powers to change the repatriated CAP as part of a transition to a new agriculture policy.

  • One option that has been mentioned is the ring fencing of current individual payments which would then be reduced over a number of years – possibly 5 years.
  • There is no concrete indication of when this transition would start.
  • Officials have talked about powers to allow the testing and piloting of various ideas such as reverse auctions for agri-environment schemes.

Future agriculture policy – Enabling powers to develop a new agriculture policy.

  • Payments for public goods has been mentioned in speeches / talks given by the SoS, Minister for State and in Defra official briefings.
  • NE are currently developing a number of options for future agri-environment schemes.
  • There are discussions about the potential for ‘social payments’ for those in disadvantaged areas although other officials have pushed back at such suggestions.
  • It is not yet clear whether forestry will be included in the Agricultural Bill.

Relationship to other policies

6.The relationship between the Bill and the 25 Year Environment Plan (25YEP) is not yet known although senior officials have stated that the 25YEP will be the ‘foundation’ for future agricultural policies (and potentially the Act). The 25YEP has been in gestation for many months with recent revisions, and is expected to be published before the consultation on the Agriculture Bill. Relevant elements are likely to be included in the Agriculture Bill, particularly around agri-environment schemes.

7.The Natural Capital Committee, who were asked by the SoS to provide guidance on the 25YEP, wish for the 25YEP to be included in legislation. It is possible, but unlikely that Defra might use the Agricultural Bill to provide a legal basis for the 25YEP.

8.The Agriculture Bill is being framed within the evolution, transition and replacement of the current CAP which would indicate that direct payments, AES, and socio-economic payments would be included, However, there is an option that farming and forestry productivity and rural growth could be part of the Government Industrial Strategy rather than through an agriculture policy.

Analysis

9.The following is an initial consideration of the CLA’s positions with regard to the Agricultural Bill. It is primarily intended to start discussions, not as a final proposal.

Nature of the Bill

10.There are two broad options for the Bill – the first is as an enabling Bill that gives broad and discretionary powers to UK Ministers to adapt or create policies and secondary legislation as they see fit. The alternative, is a detailed, comprehensive Bill that includes specific policy elements, processes and institutions. It is assumed that Ministers would prefer the former, but that the necessity of getting Parliamentary approval and issues around devolution will push the Bill somewhere towards the latter.

Devolution

11.The geographic scope of the Bill will be the United Kingdom. CLA policy is that a UK framework is a necessity but that devolved administrations must have at least as much power as pre-EU exit.

12.This Bill will cause major political and constitutional challenges. The devolution settlements turn policy areas into legal categories, and “agriculture” and “environment” are devolved. This is problematic as the Sewel convention[2], stated that the UK Parliament will “normally” not legislate in devolved areas without the consent of the relevant devolved legislature. A related part of the convention is that the UK Parliament will not legislate to change the powers of the devolved institutions without similar consent. The Government will have to choose to navigate this problem or push through against what is a non-binding convention.

13.The politics of this is hugely complex. There are drivers from both sides to come to a resolution. Scottish, Welsh and Northern Irish farmers are generally more reliant on agricultural subsidies than English and the loss of access to UK support would be a significant blow to these sectors. Equally, the DAs could create their own agricultural policies supported by devolved funding sources whereas England is reliant on the UK parliament. It is not in the interest of any of the parties to fail to arrive at an outcome.

14.The best outcome is for the UK Government to seriously and significantly engage with the DAs to take forward this Bill.

15.There might be a need for a formal role in the Bill for UK-wide institutions such as the Joint Ministerial Council or Council of the UK – this is the current position of the Welsh Government. This would complicate the CLA’s lobbying but is arguably preferable to a bruising constitutional crisis or no UK agricultural policy.

What could be in the Bill

16.The structure and contents of Primary Legislation differ depending on its remit and content, there are however certain elements that the Bill could include (assuming it is more than an enabling Bill).

  1. Title and Scope
  2. Purpose of the Bill – what is the geographic, legal and thematic scope of the Bill
  3. Processes and governance – what if any systems and processes will be created and who will be responsible
  4. Powers – what powers will Ministers or other institutions be granted.

17.The rest of this note considers what each of these elements could be and some initial thoughts on what the CLA would wish them to be.

i.Title and scope

18.The short title is how the Bill will be known. The Government has more or less committed to calling it the Agricultural Bill as that is the title in the Queen Speech. However, considering the scope of the Bill and the likely medium-term direction of travel there is a case to be made for broadening out the title of the Bill to better reflect its scope. There is also a case for the CLA arguing to broaden its scope and therefore title, to better reflect its’ members interests. The risk of broadening its scope is that the Act is amended in ways that are harmful to the membership; for instance, to provide a vehicle for tenancy reform.

19.The long title provides a description of the provisions of the Bill and will relate to its eventual scope and powers which are discussed later.

Question: What are members views on the title and scope of the Bill?

20.Forestry is currently not considered within the CAP. The (initial) CLA view is that the inclusion of forestry into the Agriculture Bill would be preferable.

The pros and cons are set out below:

Arguments why the CLA should propose including forestry in the proposed Agriculture Bill /
  • Forestry and woodland provides many ‘public goods’, explicitly including forestry in the Bill increases the scope of what landowners can be rewarded for providing.
  • The Bill will set the framework for a future ‘agri-environment’ scheme which will likely include forestry. Explicit consideration of “forestry” would ensure that commercial forestry, not just woodland for environmental purposes is included in future policy.
  • Create a UK framework for woodland and forestry policy.
  • Recognises that forestry is likely to become a bigger part of land based businesses post EU-exit.
  • Create coherent policy for farming businesses by removing divisions between forestry – agriculture grants, advice, finance, skills and other policy instrument.
  • Promoting commercial (as well as environmental) forestry as a profitable use of land would differentiate the CLA from the NFU.

Arguments why the CLA should not propose including forestry in the proposedAgriculture Bill /
  • Would complicate the scope of the Bill as forestry is not currently a European competency and is not part of the CAP (other than via Rural Development Policy).
  • It is unnecessary as forestry could be supported under the guise of rural development or similar concepts.

21.This move could be challenged by the devolved administrations who might see the explicit mention of forestry as the loss of power over an area excluded from the CAP and European policy in general. Policy stakeholders, with the possible exception of the NFU, would likely support including forestry in the Agriculture Bill.

Question: What do the Committee think about including Forestry in the scope of the Bill?

ii.Purpose of the Bill

22.The Queens Speech states repeatedly that the purpose of the Bill is to provide stability; this will include powers for Ministers to adapt the repatriated CAP. Officials have confirmed that the intention is that it will also be the mechanism to set the framework for future agricultural policy.

23.The Bill’s thematic scope will presumably at least map the scope of the CAP unless a case can be made that aspects of the CAP are not relevant. The scope of the CAP is set by the four basic rules[3]:

  • Direct payments linked to environmental-friendly practices (BPS)
  • Market measures – rules on the common market for agriculture
  • Rural development – rules around RDP schemes
  • Horizontal issues – cross cutting issues such as cross-compliance, advisory services.

24.It is not currently clear whether the market measure rules will be included within the Agriculture Bill or will be sufficiently addressed via the Withdrawal Bill. A senior official suggested the market measures were to be included as they were challenging to implement based on the powers provided by the Withdrawal Bill alone.

The objectives of the CAP as set out Article 39 of the Consolidated Treaty are[4]:

(a)to increase agricultural productivity by promoting technical progress and by ensuring the rational development of agricultural production and the optimum utilisation of the factors of production, in particular labour;

(b)thus to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture;

(c)to stabilise markets;

(d)to assure the availability of supplies;

(e)to ensure that supplies reach consumers at reasonable prices.

25.A recent blog by the NFU Strategy Director[5] suggested that these objectives are “generally regarded as retaining their relevance”. The background notes of the Queens Speech and meetings with Minsters and officials suggest they disagree and that new UK objectives will be created. Many stakeholders and academics have been highly critical of the objectives of the CAP.

26.Developing new, UK specific objectives which set the framework for subsequent powers is the clearest opportunity Parliament and Devolved Administrations have for directly influencing the Bill (recognising the desire of Ministers to keep the Bill high level). It is therefore highly likely that the objectives of the CAP will not be retained in the Agriculture Bill.

27.We should consider whether we want to propose new objectives such as those developed around the UKFFEP, or if we wish to make the case for retaining some or all of the CAPs’.

Question: Does the Committee agree that UK specific objectives should be developed?

iii.Processes and governance

28.Ensuring that by 2019 there is a legal requirement for a series of funded, UK wide agricultural policies now and in the future, should be the CLA’s lobbying priority for the Agriculture Bill.

29.The Agriculture Bill will provide Ministers with powers to adapt the CAP and to introduce a new agriculture policy in the future. However, this may not extend to future Governments being legally required to fund or implement any agricultural / land use / environmental programmes. This would create the situation where, in England at least, there is no support or a specific set of policies to support farmers and land managers.

30.To address this, the Agricultural Act must include a requirement similar to the following:

“Government shall present to the UK Parliament a UK agricultural policy in 202X and every seven years thereafter. UK agricultural policy should provide for…”

31.Such a requirement or similar would replicate the requirements under the CAP. Setting a date for the first UK agricultural policy that was completely disconnected to the CAP would essentially provide a backstop to the discretionary powers presumably provided to Ministers via the Withdrawal Bill and Agricultural Act.

32.Other processes relating to monitoring, reporting and evaluation might also be created.

Question: Do members agree that ensuring this and future Governments create and implement UK ‘agricultural’ policies should be the priority?

iv.Powers

33.It is broadly accepted that there is a need to give Minsters substantial discretionary powers post-EU exit on the basis that there is insufficient time and capacity within Government to take forward detailed primary legislation. Recognising the need for post-EU clarity and the ability to meet the Government’s manifesto commitment such powers are in the interests of the members in the short term, but beyond that would start to present a risk. The major risk, is that without the legally backed drumbeat of needing to have a UK wide policy (as above), agricultural policies are substantially adapted without Parliamentary oversight or are not actively implemented.

34.Ministers should be given discretionary powers to adapt the repatriated CAP within a framework of agreed principles and objectives. These powers should however be time limited. The Agriculture Bill should state that the Minsters must present a UK wide agricultural policy to parliament by an agreed date, at which time their discretionary powers are removed. This would allow for short term management of post-EU uncertainty whilst also instigating a system of UK wide, agricultural policies with a clear role for parliament and devolved administrations.