Agriculture Bill

Written evidence submitted by the Tenant Farmers Association (AB10)

House of Commons, Agriculture Public Bill Committee

1. Introduction

1.1 The Tenant Farmers Association (TFA) is the representative organisation for farmers who do not own the land they use for farming and is the only organisation dedicated to the tenanted sector of agriculture in England and Wales. The TFA welcomes the opportunity of providing evidence to the Agriculture Public Bill Committee as it begins its process of detailed examination of the Agriculture Bill following Second Reading of the Bill in the House of Commons.

1.2 The Agriculture Bill will be a key plank of the legislative framework required as a result the UK’s exit from the European union next March. It’s introduction to the Parliamentary process has caused an understandable level of interest since it is the first piece of primary legislation dedicated to the agricultural industry for a quarter of a century. However, it is to the Agriculture Act 1947 that many are making comparisons since this was the last time the UK Government set out a comprehensive agricultural policy for the country prior to joining what became the EU in 1973.

1.3 It is interesting to note that the aim of the 1947 Act was to promote and maintain a stable and efficient agricultural industry, capable of delivering food security through national production. This was to be achieved whilst at the same time providing a proper level of remuneration to the farming community to ensure reasonable living standards for farmers and workers in agriculture and an adequate return on capital invested in the industry, all in the context of good estate management.

1.4 The TFA would argue that over 70 years later, the issues that need to be addressed now are not dissimilar to 1947. The question that the new legislation needs to answer is how to maintain a steady supply of food products and ingredients to domestic and international markets produced to good standards of environmental management and animal welfare at prices affordable for consumers but delivering a fair return to primary producers. The TFA believes that it is against these criteria that the Agriculture Bill should be judged.

1.5 However, the job at hand for MPs is made more difficult given the uncertainty surrounding the wider context within which the new legislation will operate once Royal Assent has been obtained. Parliament is having to consider the Agriculture Bill without knowing, even in outline, the nature of any Withdrawal Agreement with the EU. There is also no clarity around our future trading relationships either with the EU or the rest of the world and what World Trade Organisation status we will have in the event of being unable to reach any sort of a deal with the European Union. Another uncertainty is the impact of the Government’s migration policy, particularly in respect of the amount of semi-permanent labour employed in agriculture and food processing which has, hitherto, come from the EU and which will no longer be available from any non-domestic source given the Government’s intended criteria for allowing migrant labour into the country following Brexit.

1.6 These unknowns will have a significant impact on the profitability, resilience and sustainability of domestic agriculture. It would be sensible, therefore, for the new policy framework being developed in the context of the Agriculture Bill to be sufficient flexibility to take on board how those important areas emerge in the months and years which lie ahead.

2. A Scaffold Not a Building

2.1 Unlike the Agriculture Act 1947, which placed a number of duties on the Government including in respect of setting guaranteed prices and holding regular reviews, today’s Bill is a powers Bill leaving much of the detail to forthcoming Regulations, many of which are to follow the Affirmative Resolution Procedure. To understand how the Government might intend to use the powers it will reserve to itself, it is important to consider the policy statement issued by DEFRA to accompany the Bill. There is much within that statement which the TFA would be able to support however it provides no guarantees of directions of travel.

2.2 The TFA has therefore described the legislation as "a scaffold not a building" which requires a great deal of trust in current and future Governments to deliver an appropriate policy through the powers being reserved through the legislation. The TFA believes that legislation should contain clearer duties on the Government to deliver on the promises it is made through the policy statement.

2.3 Connected with this, given the extent to which the implementation of the Bill relies upon Regulations, the Government needs to provide an assurance that sufficient Parliamentary time will be made available to allow these to be debated and introduced.

3. New Financial Assistance Powers

3.1 The TFA has welcomed the new financial assistance powers contained within Part 1 of the Bill and is particularly pleased to see the provisions relating to productivity. However, the list of purposes set out in Section 1(1) - broadly speaking those which are considered public goods – is incomplete. The TFA would like to see the following added to this section:

protecting or improving the health and well-being of citizens.

protecting or improving the management of upland landscapes and biodiversity through grazing livestock systems.

3.2 In relation to the powers to provide financial assistance for productivity, it is noted that the provisions for England in the main part of the Bill differ to those for Wales as set out in Schedule 3 of the Bill. In this respect, the TFA would wish to see the provisions set out in Schedule 3 Part 1 Section 1 (2) replicated in Part 1 Section 1 (2) of the main Bill.

3.3 Whilst the Government has provided an assurance of maintaining the current level of funding until 2022, it is a major weakness that the Bill does not provide a mechanism for setting a budget for the financial assistance powers. The TFA argues that the Bill should contain provisions to establish multiannual budgets (at least five-year budgets) to be agreed after the end of the current guaranteed period. Also, given the size of the task ahead, we would seek a Government assurance that it will not look to diminish the current budget into the long term.

3.4 Within the context of Devolution, the TFA would wish to see a commitment to the principle that the four countries of the United Kingdom should be provided with at least the same level of funding as they have received previously to deliver agricultural and rural development policies and that this funding must be reserved for the delivery of the objectives set out within the Bill.

3.5 In the context of this legislation being an Agriculture Bill, the TFA believes it is necessary to restrict the financial assistance powers such that they are available only in respect of individuals who are operating units which are predominantly agricultural in nature. We propose that the Bill adopts the definition of agriculture as set out within section 96 (1) of the Agricultural Holdings Act 1986 as follows:

"agriculture" includes horticulture, fruit growing, seed growing, dairy farming and livestock breeding and keeping, the use of land as grazing land, meadow land, osier land, market gardens and nursery grounds, and the use of land for woodlands where that use is ancillary to the farming of land for other agricultural purposes, and "agricultural" shall be construed accordingly

3.6 Finally, there should be clear restrictions around who can be considered a beneficiary of the financial assistance available. This should be achieved by including within the Bill a requirement that beneficiaries can only be "active farmers" or "active land managers" defined as individuals who are in occupation of the land they are farming, taking the entrepreneurial risk for the decisions made in relation to the management of that land and in day to day management control.

4. Financial Support After Exiting The EU

4.1 The seven-year transition from 2022 is welcomed by the TFA. However, the Government must be required to provide greater certainty about the way it will reduce direct payments beyond the first year. The policy statement issued alongside the Bill gives a detailed position for year one but nothing thereafter. The TFA would like to see an assurance, to help with farm business adjustment, that smaller recipients will be protected for a longer period in comparison to larger recipients of direct payments.

4.2 The TFA supports the concept of delinking payments and the provisions for providing a lump sum payment in lieu of future direct payments (Section 7 of the Bill). The TFA believes that this will be of significant assistance to progress in restructuring within the industry allowing individuals to use both de-linked payments and consolidated payments to retire from the industry or invest in their businesses or to invest in other economic activities either on their holdings or off their holdings. It will be essential that recipients of these payments must meet the active farmer test at the time they make the application for these payments to be made.

4.3 The TFA notes that there has been some debate over whether there should be restrictions on how these delinked or consolidated payments should be used by recipients. The TFA would not be opposed to such criteria however it is concerned that if it is considered too difficult to provide a viable framework to restrict use that the principal idea should not be lost as a result. There is more to be gained in terms of restructuring than might be lost in a handful of cases where the funds may not be used for what they were initially intended. In any case, individuals would not be receiving money that they would not otherwise be entitled to over the period of the transition.

4.4 The TFA notes that the Bill contains necessary flexibility to enable the Government to extend the transition period if needed in respect of the economic circumstances prevailing at the time. The TFA would like to see additional provisions to ensure that any funds saved through the transition away from direct payments are not lost to the farming industry if, for whatever reason, the new financial assistance schemes proposed are not available to the extent necessary to make full use of the available funding. The TFA believes that any surplus funding identified on an annual basis should be reallocated through direct payments until sufficient schemes are available.

5. Collection and Sharing of Data

5.1 The TFA welcomes the provisions enabling the Government to insist on the provision of information from supply chains which will provide an important lever to Government to allow for more transparency within supply chains. Concerns have been raised about contract confidentiality, but the TFA believes that sufficient protection could be built in to any requirements for publication of data without needing a complicated framework to be imposed on the face of the Bill.

6. Exceptional Market Conditions

6.1 The TFA welcomes the provisions within the Bill to allow for financial and other assistance to be made available to the farming industry at times of exceptional market conditions. The TFA would wish to be assured that this will cover natural phenomena such as drought, flood and disease as well as economic phenomena that may impact upon markets.

6.2 The TFA would also wish to have an assurance from the Government that this part of the legislation will cover not only situations of "acute" hardship or difficulty but that it will also be able to be invoked if "chronic" or long-lasting difficulties are apparent. This might involve things like endemic disease or structural changes in agricultural markets which may require farmers to undergo significant adjustment.

7. Marketing Standards and Carcass Classification

7.1 The TFA welcomes the inclusion within the Bill of powers for the Government to set marketing standards for agricultural products. The TFA believes that there should be a duty placed upon Government to ensure that high standards operating in respect of domestic production are also applied equally to products entering the UK from abroad either within negotiated free trade agreements or otherwise. The TFA believes that this must be done by having a direct read across between the provisions contained within the Agriculture Bill and the Trade Bill.

8. Producer Organisations and Fairness in the Supply Chain

8.1 The TFA is delighted that the Government is proposing to reserve significant powers to regulate the operation of supply chains and, in particular, relationships between farmers and first purchasers. The TFA believes that this is a vitally important role for Government in the face of significant market failure within agriculture and food supply chains.

8.2 It is concerning that the Government does not see these new powers forming part of an expanded role for the Groceries Code Adjudicator. It has been proposed by the Government that the appropriate regulator here would be the Rural Payments Agency (RPA). The TFA does not believe that the RPA has sufficient expertise in this area. If the new powers are not to be given to the Groceries Code Adjudicator, then the TFA would wish to be assured that a more appropriate body than the RPA is created.

9. Agricultural Tenancies

9.1 The biggest disappointment for the TFA is that the Government failed to address much needed changes to the legislative framework for agricultural tenancies within the Bill. The Agriculture Bill is the obvious place to include the recommendations for legislative change presented to Government last autumn by the Tenancy Reform Industry Group (TRIG). The TFA’s disappointment is compounded by the fact that DEFRA specifically asked for the advice and recommendations of TRIG on what changes would be needed to assist the tenanted sector of agriculture in the post-Brexit, economic environment. To ask for recommendations and then to do nothing with them is bizarre.

9.2 So far, the Government has suggested a further consultation on possible changes. However, the TFA does not see what is to be gained by a further consultation given the extent to which matters have been fully considered by all the relevant stakeholders through TRIG. We need a firm commitment from the Government that it will bring forward its own amendments to the Bill to cover the recommendations made by the tenancy reform industry group for legislative change to the Agriculture Act 1970, the Agricultural Holdings Act 1986 and Agricultural Tenancies Act 1995 to enact the recommendations produced by TRIG.

18 October 2018

 

Prepared 24th October 2018