Jeremy's Blog 9th October 2020: Profit, Schemes and Work

This article by Jeremy Moody first appeared in the CAAV e-Briefing of 8th October 2020.

Over 4 years after the Referendum, we seem finally to be on the brink of new policies being introduced after the EU transition period ends with New Year’s Eve, with increasing effects on clients and for professional work for them.

The Agriculture Bill, providing policy powers for DEFRA, Wales and Northern Ireland, is in its final stages before Royal Assent, perhaps completed in the next few days.

DEFRA is saying that, perhaps in November, it will set out much more of the detail of how the coming changes will be implemented. That might cover more of how Basic Payment is to be reduced, how ELMS might be introduced, the possible new Sustainable Farming Incentive for 2022 and 2023 with allied consultations on de-linking and other matters. It could include the further changes to simplify BPS; crop diversification and EFAs have already gone. Detailed legislation would come in 2021.

Wales is consulting on simplification for 2021 and promises a White Paper in the winter for legislation later next year, replacing BPS with the Sustainable Farming Scheme. Scotland is to publish proposals for policies after 2024 and may use its new simplification powers. Northern Irish legislation may come after the 2022 Assembly elections.

Three of many issues are farming profitability, the environmental demand and contact with clients.

It is a longstanding comment that farming must be profitable to be green; indeed, the management needed for good farming is consistent with good environmental practice. The withdrawal of Basic Payment will throw that into sharp relief as those dependent on farming will need to farm for profit or find alternatives, no longer cushioned by area support. Turning essentially on the individuals involved, the range of performance means that the restructuring to achieve a profitable sector may be underestimated by many.

With issues of climate change, water quality, biodiversity, we are watching a debate about how much change will be required by environmental schemes. How far might the Sustainable Farming Incentive and Tier 1 ELM be a poor man’s BPS with more cross compliance, inevitably with less money? How far will ELM be shaped to drive real change? Beneath that will be the legal requirements of regulatory baseline, probably rising.

Then, as greening is removed and then Basic Payment is de-linked but with the likely changes requiring much professional advice, what might professionals to do keep in good contact with clients, maintaining their place as trusted advisers?