Defra has announced a new Agricultural Bill. The legislation was introduced to parliament on the 12th September and outlined the new Environmental Land Management system to replace the current EU Common Agricultural Policy (CAP) subsidy system for farmers and land managers as we approach Brexit. The aim is to produce a ‘green’ Brexit. The Environment Secretary Michael Gove explained, “This bill will allow us to reward farmers who protect our environment, leaving the countryside in a cleaner, greener healthier state for future generations.”
The current subsidy system pays farmers on the total amount of land farmed which means the largest landowners receive the greatest rewards (the top 10% of landowners currently receive 50% of funding and the bottom 20% receive only 2%) rather than rewarding efforts to increase public benefit which may take place on smaller holdings in areas requiring the most environmental action or improvement.
What are the benefits of the new policy? Farmers and land managers will be paid for ‘public goods’ such as improved air and water quality, better soil health, higher animal welfare standards, public access to the countryside and measures to reduce flood risk. Direct payments will be phased out gradually in the transition period from 2020-2027. Farmers will have additional support during this period to prepare and plan. To ease this transition and encourage diversification, payments during this period will be delinked from the requirement to farm the land for acceptance into the scheme. This revised approach is hoped to encourage farmers to diversify - or retire from farming and enable new people to enter this sector.
Instead payments will reward the greatest environmental benefit. This move will be under-pinned by measures to increase productivity and future research and development to increase profits and lower the environmental footprint of farming. All farmers will see a reduction in payments with those who historically received the highest payments seeing the biggest reduction. This reduction in payments will hopefully provide funds to pay for public goods and a ‘greener’ countryside.
The departure from Europe by the United Kingdom was never predicated on a desire to weaken environmental legislation. Indeed, the UK led in many environmental regulatory considerations in the formulation of EU Directives on the environment. So, while revisions to environmental policy could arise post-Brexit, the concern on the part of both Europe and the UK is that there continues to be a level playing field and neither side obtains a competitive advantage.
The two key concerns, still a long way from being resolved are:
A number of pressures could lead to a divergence in environmental standards post-Brexit. The urgent risk that needs to be guarded against is that of a reduction in the current level of environmental protection. This is clearly a relevant concern for the EU27 in relation to the UK, especially if the UK pursues far-reaching trade deals with third countries which have a more deregulatory approach to the economy. However, it also can be anticipated that the UK could be more aware of, and sensitive to, any future regulatory weakening on the EU side than most of the EU’s other trading partners. This is because of the high level of familiarity with the EU environmental regulatory regime in the UK, and the potential impacts on the UK as a neighbouring economy with generally the same environmental standards at present. Were the UK to embark on an ambitious environmental agenda itself, as its current Government suggests, its sensitivity to possible regression on the part of the EU may increase, particularly in areas of legislation which are of importance to the UK.
The downside risks of competitive deregulation must be avoided; but if negotiators on both sides can get the right agreement on environmental standards, we will also avoid competitiveness concerns acting as a constraint on future environmental policies. This would be a significant gain. The aim should be to create the conditions for a virtuous circle of competition between different approaches to the ambitious environmental policies which are needed both to tackle growing environmental pressures, and to deliver the high levels of environmental protection that the UK and EU public demand.
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