{"id":358,"date":"2020-02-17T10:30:45","date_gmt":"2020-02-17T10:30:45","guid":{"rendered":"https:\/\/blogs.ncl.ac.uk\/cre\/?p=358"},"modified":"2020-02-17T11:38:01","modified_gmt":"2020-02-17T11:38:01","slug":"the-agriculture-bill-2020-whats-in-it-for-british-farmers","status":"publish","type":"post","link":"https:\/\/blogs.ncl.ac.uk\/cre\/2020\/02\/17\/the-agriculture-bill-2020-whats-in-it-for-british-farmers\/","title":{"rendered":"The Agriculture Bill 2020: What\u2019s in it for British farmers?"},"content":{"rendered":"\n

In the latest CRE blog senior lecturer Carmen Hubbard<\/a> discusses what the UK’s new Agriculture Bill might mean for farmers.<\/em><\/p>\n\n\n\n

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Sheep in Weardale<\/figcaption><\/figure>\n\n\n\n

The reintroduction of the Agriculture Bill 2020 for its first reading on 16 January attracted attention from all quarters. Agriculture is generally regarded as a dull topic, but Teresa Villiers, the former Secretary of State for the Environment, heralded<\/a> the new Bill as a \u201clandmark\u201d and \u201cone of the most important environmental reforms for many years\u201d which will take the UK \u201caway from the EU\u2019s bureaucratic Common Agricultural Policy\u201d.  <\/p>\n\n\n\n

The initial version\nof the Bill, tabled in 2018, stipulated a gradual phasing-out of the Common\nAgricultural Policy (CAP) direct payments (known as \u2018farm income support\u2019) and their\nreplacement with a system that rewards farmers for the provision of \u2018public\ngoods\u2019. These include better quality air and water, improved soil health, public access to\nthe countryside, animal welfare, and flood-risk reduction.<\/p>\n\n\n\n

At the core of its delivery was the Environmental Land\nManagement Scheme (ELMS), described by Defra as \u2018one flexible contract\u2019 that\nwill allow farmers \u2018to deliver public goods alongside market products\u2019.  The Bill also set out measures to increase farm\nproductivity and fairness along the food supply chain, and included provisions\nregarding market intervention and compliance with the World Trade\nOrganisation (WTO). To allow farmers to adjust, the Bill established a\nseven-year transition period starting from 2021. <\/p>\n\n\n\n

Environmentalist groups reacted\nfavourably, but the Bill was severely criticised by the industry for being too\n\u2018green-focused\u2019, and particularly for its lack of support for food production. The\nindustry also complained about the lack of detail: how much money will be\nallocated, to whom and for what? Will food imports be subject to the same production\nstandards as applied in the UK?<\/p>\n\n\n\n

Moreover, a report<\/a> by the Environment, Food and Rural Affairs (EFRA)\nCommittee of the House of Commons that scrutinised the Bill in November 2018 reinforced\nthe criticisms. It stressed the excessive empowerment of ministers, the\nimbalance between food production and the environment, the lack of a multi-annual\nfinancial framework to cover the transition period, and the absence of any procedures\nregarding standards for imported food products. Hence, the Committee called on the\ngovernment to \u2018put its money where\nits mouth is\u2019.<\/p>\n\n\n\n

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Following the political turmoil that\nfollowed the departure of Theresa May, the Bill was put on hold, only to be revived\nwith additional face-lifting in January this year.  <\/p>\n\n\n\n

In response to this criticism, and to EFRA\u2019s\nrecommendations, the revised Bill contains some extras. It includes a new\nchapter regarding the government\u2019s duty to report to Parliament on UK food security, at\nleast once every five years. It also refers to the preparation of a multi-annual\nfinancial assistance plan, with the first plan covering the period of\ntransition starting on 1 January 2021. Another part relates to fertilisers,\nidentification and animal traceability; transfer of payments between red meat levy\nbodies across countries in Great Britain; organic production and agricultural\ntenancies. The Bill also reinforces the provisions for increases in productivity,\ntransparency and fairness in the supply chain, and assistance during\nexceptional market conditions.<\/p>\n\n\n\n

Notably,\nthough, the Bill focuses mainly on England, with just one part (Part 7)\ndedicated to Wales and Northern Ireland. Public\nconsultations took place across all four nations, and these led to different\npreferences being expressed: for example, the complete and rapid abandonment of\ndirect payments has been treated with more caution in both Scotland and\nNorthern Ireland, at least up to 2024. This is not surprising given that agriculture is a devolved issue, and\nScotland, which refused to consent the initial Bill, published its own Agriculture Bill<\/a> in November 2019. This allows the Scottish government to\ncontinue current CAP schemes, including direct payments, beyond 2020.<\/p>\n\n\n\n

Differences between countries regarding\nfarm support could create tensions, with farmers complaining about the lack of\na \u2018level playing field\u2019. But the amount of money to be allocated to UK farming\nstill lies with Westminster, and therefore the devolved governments may find\nthemselves constrained on how they can use their own budget.  <\/p>\n\n\n\n

As an economist, I never find\nagriculture or how we produce and trade food products at all dull.  But it does seem that the questions an\neconomist would really like to see answered are still hanging in the air. Like\nits predecessor, the new Bill does not provide any specific budget, beyond\nsaying that overall annual funding for farm support will remain at current\nlevels for the duration of this Parliament. At the same time, the term \u2018public\ngoods\u2019 has disappeared, to be replaced with \u2018purpose\u2019, and there is no\nreference to ELMS. Does this signal a shift in emphasis, perhaps even that the\nBill\u2019s intentions are not as \u2018green\u2019 as environmentalists suppose?  <\/p>\n\n\n\n

Improving productivity is always the government\u2019s \u2018holy grail\u2019, but our research <\/a>shows that this is by no means the answer to every problem, either for the country or for the producer. The UK does not have a \u2018comparative advantage\u2019 (the ability to produce food at a lower opportunity cost than that of trade partners) in agriculture. However, as yet, the UK has not been threatened by food insecurity, as our imports have generally come mainly from suppliers (mostly EU member states) who are very stable economically and politically.  Could this explain the lack of any reference regarding the quality and safety standards of future imported food?  <\/p>\n\n\n\n

Traditionally,\neconomists have categorised farmers as \u2018price-takers\u2019 in the market. This is\nbecause farmers are numerous and typically small in terms of production.\nConsequently, they have little market power and therefore are unable, unlike\nfor example supermarkets, to decide their selling prices. Farming Minister\nGeorge Eustice wants them to become \u2018price makers\u2019, and to increase their power\nin the market. This is easier said than done. Grouping together to form\nco-operatives is one possibility, but these have never been popular in the UK.\nAnother possibility is for farmers to \u2018add value\u2019 to a product, for example by\ntransforming milk into speciality cheese or switching to organic production.\nBut farmers who produce an undifferentiated, homogeneous product \u2013 potatoes, carrots,\nwheat, milk \u2013 are always likely to be \u2018price-takers\u2019.<\/p>\n\n\n\n

Finally, any form of\nsupport is likely to be capitalised into land values (as well as captured by\nothers across the supply chain).  Hence,\nthe tenant farmer simply pays more in rent. \nIt remains to be seen how this might manifest itself under the new\nregime. <\/p>\n\n\n\n

For the economist these are all fascinating questions that remain to be answered.  For farmers and producers they represent a worrying, and continuing, uncertainty.<\/p>\n\n\n\n

<\/p>\n\n\n\n

This blog post\u00a0originally appeared on\u00a0<\/em>The UK in a Changing Europe<\/em><\/a> blog<\/em>.<\/p>\n","protected":false},"excerpt":{"rendered":"

In the latest CRE blog senior lecturer Carmen Hubbard discusses what the UK’s new Agriculture Bill might mean for farmers. The reintroduction of the Agriculture Bill 2020 for its first reading on 16 January attracted attention from all quarters. Agriculture … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":7447,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-358","post","type-post","status-publish","format-standard","hentry","category-uncategorised"],"_links":{"self":[{"href":"https:\/\/blogs.ncl.ac.uk\/cre\/wp-json\/wp\/v2\/posts\/358","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.ncl.ac.uk\/cre\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.ncl.ac.uk\/cre\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.ncl.ac.uk\/cre\/wp-json\/wp\/v2\/users\/7447"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.ncl.ac.uk\/cre\/wp-json\/wp\/v2\/comments?post=358"}],"version-history":[{"count":7,"href":"https:\/\/blogs.ncl.ac.uk\/cre\/wp-json\/wp\/v2\/posts\/358\/revisions"}],"predecessor-version":[{"id":368,"href":"https:\/\/blogs.ncl.ac.uk\/cre\/wp-json\/wp\/v2\/posts\/358\/revisions\/368"}],"wp:attachment":[{"href":"https:\/\/blogs.ncl.ac.uk\/cre\/wp-json\/wp\/v2\/media?parent=358"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.ncl.ac.uk\/cre\/wp-json\/wp\/v2\/categories?post=358"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.ncl.ac.uk\/cre\/wp-json\/wp\/v2\/tags?post=358"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}