The Agriculture Act 2020 (‘the Act’), enacted last November, provided little detail on how the issues covered would develop in Wales. Instead, powers were granted to the Welsh Government to implement its own post-Brexit agricultural support scheme(s) and to manage the transition away from the Basic Payment Scheme.
This article provides an update on the position in Wales, and also summarises the changes to the landlord and tenant regime in Wales introduced under the Act.
The Welsh Government is currently consulting on the Agriculture (Wales) Bill White Paper, which sets out its ambition under the proposed Agriculture (Wales) Bill. The consultation ends on 26 March 2021.
The Welsh Government’s proposal is for the legislation to come into effect in 2023, although with Senedd elections due in May, this timetable is by no means guaranteed. Until the legislation comes into effect, the Welsh Government has committed to continuing to make payments under the Basic Payment Scheme in full in 2021 and 2022.
Some of the powers being taken for Welsh Ministers under the Agriculture Act 2020 are intended to be temporary until the Agriculture (Wales) Bill is enacted, with a ‘sunset’ provision included at the request of the Welsh Government, providing for a 31 December 2024 expiry date.
Significantly, this sunset provision, together with England specific clauses on the transition period, means that those provisions in the Act which allow for a transition into the new system of support, will not apply in Wales.
The Welsh Government is proposing support to farmers based on a principle of Sustainable Land Management (SLM) and payments for the production of public goods.
SLM will provide an overarching framework for future policy and support, with a Sustainable Farming Scheme (SFS) providing a single support scheme to replace the Basic Payment Scheme and existing EU environment schemes such as Glastir.
In brief, the SFS aims to:
Unlike proposals in England, the Welsh Government has yet to give any indication as to how the Basic Payment Scheme will be phased out and how the transition to the SFS will work; concepts like “delinked payments” and “lump sums”, which appear in the Agriculture Act 2020, do not appear to apply to Wales. No doubt these are issues which will be addressed in the Agriculture (Wales) Bill next year so it remains to be seen how closely Wales follows the English method of transition.
Obviously in the meantime the divergence of approach between the two nations means that the drafting of legal agreements, such as farm business tenancies, will be different, depending on the location of the holding.
The White Paper also includes proposals for regulatory reform, aimed at reducing the complexity and patchwork nature of existing agricultural regulation via consolidation into a set of National Minimum Standards – the aim being to make it easier for farmers to understand the legal requirements, with which they must comply. Associated reforms are proposed to enforcement and sanctions.
The National Minimum Standards are intended to come into force at the same time as the proposed SFS.
Vivienne Williams’ article ‘Agricultural Act 2020: Landlord and Tenant reforms – Now and Later‘ considers the changes introduced under the Act to the landlord and tenant relationship in England.
All but one of those provisions apply to Wales and came into force on 11 January 2021 in line with the English reforms, the Welsh Government having taken forward the Agriculture Act reforms directly.
The only aspect which the Welsh Government did not take forward is the proposal to enable Agricultural Holdings Act 1986 tenants to refer to arbitration or third party determination requests either for landlord’s consent to activities that are restricted under the terms of their tenancy agreement or for a variation of tenancy terms, for the purpose of enabling the tenant to access government financial assistance schemes.
This remains a proposal in England, with draft Regulations expected later this year. The Welsh Government will deal with the issue itself, via the Agriculture (Wales) Bill. The current consultation seeks views on whether this proposal regarding AHA tenancies should also be extended to FBTs in relation to longer term commitments lasting beyond the term of the tenancy.
The consultation also includes a range of proposals designed to provide wider agri-food industry support, to encourage greater market alignment (so farmers produce goods that consumers want to buy), to increase the amount and value of Welsh products used in the supply chain in Wales and beyond and to provide market intervention measures to help farming businesses cope with exceptional market volatility.
It is clear that the Welsh Government’s legislative agenda is currently some way behind England, with even fewer details available to Welsh farmers about the shape of support after 2022 than their English counterparts.
Nonetheless, the Welsh Government has set itself a deadline for implementing its new SFS by no later than 31 December 2024, with currently no provision for a transition period or transitional arrangements. Whether this is achievable, with upcoming Senedd elections and no real information about the detail of the proposed SFS, remains to be seen.
Michelmores are looking forward to putting on another Agriculture Roadshow, between 3-7 February 2025. Following the success of our tour last year, we are going...
