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It has been almost a year in the making but on 11 November, the Agriculture Bill was finally enacted. It is now entitled the Agriculture Act 2020.
The Act marks a significant milestone in agricultural policy. Looking back to the previous Agriculture Acts (as long ago as 1993 and 1986) illustrates just how far policy has shifted. The Agriculture Act 1986 marked the growing impact of EU legislation on domestic agricultural policy and by contrast, the 2020 Act has been heralded by DEFRA as the move away from the inefficient and overly bureaucratic policy of the EU.
The underlying objectives of the legislation are to drive competitiveness, increase productivity and the use of technology, and generate fairer returns. It will be some time before we can measure the success of those objectives. The devil is in the detail with much of that still to be formalised in statutory instruments. At present, we only have the framework, moulded by the parliamentary process. It covers the following broad areas.
We leave behind the Basic Payment Scheme, replaced instead by a seven year transition period across to a scheme paying public monies for public goods. Support payments from public funds will recognise the importance of protecting and improving soil quality, alongside other environmental objectives needed in order to deliver the 25 year Environment Plan and net zero emissions by 2050. Also now included is a provision (not in the original bill) that the Government has power to continue to fund existing Rural Development Scheme agreements. These would include Countryside Stewardship or even Environmental Stewardship scheme agreements.
At the start of the legislative process, the objective was to improve productivity and allow farmers to retire and leave the industry. There is no detail yet on how lump sum payments might work. How that will shape up in a post Covid landscape and a vastly increased deficit will be interesting.
The Act grants powers to improve transparency and fairness in the supply chain. These powers will be fleshed out in statutory instruments. There are powers to require a person in, or connected with, an agri supply chain to provide information connected with their activities in that chain. There are also fair dealing obligations for business purchasers in order to promote fair contractual dealing. The objectives are sound, but it is hard to avoid the conclusion that there is a lot of work still to be done in order to achieve them.
This was not in the draft bill at the start of its legislative journey but successful lobbying now means the Government have a duty to report to Parliament on UK food security. The first report will be due at the end of 2021 and then every three years.
The Government’s announcement that it would bring forward an amendment to the Trade Bill to place the newly established Trade and Agriculture Commission (“TAC”) on a statutory footing, and widen its remit, satisfied the Lords and finally pushed the Bill over the line to receive Royal Assent. The Government did not go as far as committing to ensure that future trade agreements include an obligation for imports to meet health, welfare and environmental standards. It did however set out reporting requirements of the Secretary of State to Parliament on all new negotiated trade agreements, including agricultural products. This will allow Parliament to consider the trade agreement before it is signed off, with knowledge of the extent to which the measures affecting agricultural products are consistent with UK statutory protection of health welfare and environmental standards. Whilst a welcome check, it remains to be seen whether this will answer the concerns on how agriculture might fare in future trade deals.
From a very broad set of proposals that were included in the original consultation, only a handful found their way through to the Act. The commercial unit test on succession disappears, as does the threshold for serving a retirement notice no earlier than 65. This may open the door to larger commercial businesses and a younger generation coming through. The biggest impact from the legislation might be the ability of landlords to finance investments, without that fact impacting on a rent review. Some hope that will fuel longer term lettings. Aspects of the landlord and tenant reforms will come into effect on 11 January 2021 and we will provide a more detailed briefing before then. Where statutory instruments are required to flesh out the detail, DEFRA freely admits that it will be summer 2021 before those appear.
Finally, less well known are the powers set out in the Act for the Government to intervene in agricultural markets, and to bring in measures for marketing standards, carcass classification and traceability.
The Act is a turning point, but it is fair to say that the results are not fully visible. DEFRA has a lot more to do in the coming months to fill in the gaps and we will be closely monitoring the detail. We will be producing a series of further articles.
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...
