Brexit and Agriculture in Northern Ireland Contents

1Developing an agriculture policy for Northern Ireland

11.In this chapter we consider:

Proposals for future agricultural policy

The UK Government’s Health and Harmony Consultation and the Agriculture Bill

12.On 27 February 2018 the Department for Environment, Food and Rural Affairs launched a consultation on future agricultural policy: “Health and Harmony: the future for food, farming and the environment in a Green Brexit.” The consultation paper outlined policy proposals that might replace the Common Agricultural Policy once the UK leaves the European Union. The paper stated the Government’s intention to move away from a system of farming subsidies towards a scheme of “public money for public goods.”17 Under this proposal farmers would be supported to deliver specified outcomes, which could include managing the natural environment, protecting animal welfare, improving agricultural productivity and preserving public access to the countryside. The Government proposed that the new policy be phased in during a ‘agricultural transition’ period from the end of 2019 and lasting “a number of years”.18 Specific proposals from Health and Harmony are discussed later in this Report.

13.On 12 September 2018—after the evidence sessions for this inquiry had concluded—the Government published an Agriculture Bill, which incorporated a number of the proposals set out in Health and Harmony.19 The Bill gives the Secretary of State for Environment, Food and Rural Affairs (the Secretary of State) powers to:

In the Written Statement accompanying the Bill, the Secretary of State said that the Bill “sets out our new policy of paying public money for public goods,” in line with the approach set out in Health and Harmony.21

14.The proposals in Health and Harmony are specific to England, with a few limited exceptions.22 The document does not make specific agricultural policy proposals for Northern Ireland. Defra states that it believes its proposals are “a vision that could work for the whole of the UK,” but that “devolution provides each administration with the powers to decide its own priorities.”23 The UK Government’s intention is that the new agriculture policy should “lead to an increase in decision-making powers for each of the devolved administrations.”24 The consultation document cites Direct Payments to farmers as an example of a policy area where the devolved administrations will “have the same flexibility [as England] to target support in a way that best suits their circumstances.”25

15.In the short term, the UK Government intends to replicate current arrangements established by the Common Agricultural Policy, with a view to these being amended over time. In, June—prior to the passage of the EU (Withdrawal) Act and the introduction of the Agriculture Bill—George Eustice MP, Minister of State for Agriculture, Fisheries and Food (the Minister), told us that the Withdrawal Act would replicate the design of the existing Common Agricultural Policy scheme in UK law. He added that the Agriculture Bill would give the UK and the devolved administrations the power to change aspects of that scheme during the transitional period.26 The Minister said that each of the devolved administrations would be able to determine its own approach, allowing Northern Ireland to set a different policy to the rest of the UK if it chooses.27

16.The powers conferred by the Agriculture Bill on the Secretary of State with respect to Direct Payments are limited to England only.28 Schedule 4 of the Bill makes provision for Northern Ireland, and transfers to DAERA the powers needed to operate a payments scheme.29 Clause 2(1) states that DAERA may modify the Direct Payments scheme if it considers that the changes “will simplify or improve the scheme (so far as it operates in relation to Northern Ireland).”30 Sub-clause 2(1)(b) specifically empowers DAERA to make provision for “a payment for areas with natural constraints.”31

17.Dr Viviane Gravey of Queen’s University Belfast told us that some aspects of the proposals in Health and Harmony would not be appropriate if applied to Northern Ireland, and that it was important to avoid a situation where the proposals in the White Paper were “copy-past[ed]” to Northern Ireland by default. As an example, she told us that:

The plan is to cap payments to free some money in order to fund [the] agricultural transition, but payments are already capped in Northern Ireland. They are capped at €150,000. If you free up a lot of extra money in England to fund that transition, you will not be able to free up that extra money in Northern Ireland. You need to get that money for transition elsewhere.32

18.We heard concerns about the level of engagement by the Department with the sector during the consultation on the Health and Harmony paper. Dr Gravey told us that the 44,000 responses Defra had received was a low figure for a consultation of its kind and that it was “disappointing” there had not been more participation.33 The Horticulture Forum for Northern Ireland told us that farmers themselves saw the policy proposals as “distant and complex” and recommended that the Government make further efforts to engage with farmers directly.34 Dr Mary Dobbs agreed that Health and Harmony was “a very complex document” and there was insufficient focus on what the proposals might mean for farmers in practice.35 Stakeholder groups like the Northern Ireland Meat Exporters Association also told us that they had had little engagement with the Northern Ireland Office, and no formal discussions with the Secretary of State about agriculture policy and Brexit.36

19.The Minister and Defra officials told us that DAERA had shared its paper on future agricultural policy—which we examine in the next section—with them.37 However, we did not hear any evidence that Defra had proactively engaged with stakeholders in Northern Ireland during the Health and Harmony consultation period. Charles Hotham, the Department’s Deputy Lead on Future Farming Policy and Legislation and its Head of Devolution, told us that there was no dedicated group for examining agriculture in Northern Ireland.38 The Minister told us that he had not recently met with the agriculture representatives of the major parties in Northern Ireland. However, we did hear that he had recently met with the Ulster Farmers Union.39

20.We are concerned that Defra’s consultation on Post-Brexit agriculture policy does not look in detail at the sector in Northern Ireland. We have also heard that there has been little direct engagement with farmers in Northern Ireland on this consultation, and consequently there has been insufficient recognition of key differences between Northern Ireland’s agriculture sector and that of other parts of the United Kingdom. This is a particular concern given the absence of a Northern Ireland Executive, which means that an agricultural policy for Northern Ireland cannot be developed independently at this time.

21.In recognition of the critical role that agriculture plays in the Northern Ireland economy and the absence of an Executive, the Government should proactively seek the views of farmers in Northern Ireland to better inform the remaining stages of the Bill.

The Northern Ireland Department of Agriculture, Environment and Rural Affairs consultation

22.While agriculture is a devolved policy area, the Brexit process is a reserved matter and so aspects of Northern Ireland agriculture will be affected by decisions taken by the UK Government as part of the withdrawal process. The devolved administrations have therefore been conducting their own work, as well as engaging with the UK Government, on areas of devolved policy. On 2 March 2017 the then Minister for Agriculture, Environment and Rural Affairs, Michelle McIlveen MLA, wrote to the then Secretary of State for Environment, Food and Rural Affairs, Andrea Leadsom MP, setting out four key outcomes desired for the Northern Ireland agriculture sector. These were:

23.Northern Ireland has been without a functioning executive since January 2017. In the absence of ministerial direction, DAERA has continued to prepare for Brexit. In July 2017 the Department established stakeholder groups on Trade and Agriculture, Fisheries, the Environment and Rural Society to engage with representative organisations on Brexit issues. Between June 2017 and January 2018 the Department developed—first internally and later through engagement with the Trade and Agriculture and Environment stakeholder groups—a Northern Ireland Agricultural Policy Framework containing proposals for a Northern Ireland agriculture policy.41 This built on the four key desired outcomes previously outlined by Minister McIlveen. The Department shared this framework with Defra. Dr Mary Dobbs told us that ministerial approval would be required for this document to be put out for public consultation, and the Minister George Eustice MP told us he did not think DAERA would publish the document until an Executive was in place.42

24.Despite this. DAERA published its consultation document, Northern Ireland Future Agricultural Policy Framework, on 1 August 2018, and invited public submissions on the proposals.43 The closing date for the consultation was 10 October 2018. The Department has stated that

Final decisions on a future agricultural policy will be for Ministers to take. Following this exercise it is likely, therefore, that there will be further consultations on any specific proposals which arise as a result of this exercise.”

DAERA has proposed that the system of agricultural support should remain largely unchanged for the 2020–2021 CAP scheme years, and that Direct Payments continue to be paid during that period on the same terms as under the CAP. Beyond 2021, the Department suggests a number of policy options aimed at achieving four key objectives: increased productivity; improved resilience; environmental sustainability; and efficiency and competitiveness in supply chains. On Direct Payments, it proposes that income support payments be continued as a “basic farm resilience support measure”. This would be paid at a level below that currently offered, and over time support would be delivered not through an area payment but through policies aimed at driving productivity growth and environmental sustainability.44 Other proposals include:

Specific proposals from the consultation document are referenced throughout this report.

25.Many witnesses to our inquiry praised the preparatory work done by DAERA but expressed frustration that the absence of ministers had limited what the Department was able to do. Wesley Aston of the Ulster Farmers Union told us that Northern Ireland had been “ahead of the game” in its preparations for Brexit but that progress had subsequently stalled.46 He added that a number of agricultural pilot projects were “sitting on the shelf” because they could not go ahead without ministerial approval.47 Dr Mary Dobbs of Queen’s University Belfast told us that the work DAERA had done had been “excellent” but agreed that “we are being stalled by not having a Northern Ireland Executive.”48 We examine issues arising from the absence of an Executive later in this chapter.

26.Some of the witnesses we spoke to felt that they had not been given adequate opportunities to make their views known to DAERA. Dr Barbara Erwin, Chair of the Horticulture Forum for Northern Ireland, told us that horticulture had no representation on the Department’s stakeholder groups and that there had been no opportunity to make the voice of the industry heard by the Department.49 DAERA has provided us with the membership of the stakeholder groups it convened to inform the development of its proposals, which we publish with this report.50 Neither the Trade and Agriculture Committee nor the Environment Stakeholder Group included representation from bodies specifically representing horticulture.51

Funding for Northern Ireland agriculture

27.The agricultural policy DAERA is able to deliver in Northern Ireland will depend on the level of funding available to the province. The Government has committed—including in the Conservative Party’s confidence and supply agreement with the Democratic Unionist Party—to provide “the same cash total in farm support until the end of the Parliament.”52 Health and Harmony sets out the Government’s commitment as follows:

We will maintain the same cash total funding for the sector until the end of this Parliament: this includes all EU and Exchequer funding provided for farm support under both Pillar 1 and Pillar 2 of the current CAP. This commitment applies to each part of the UK.53

During the debate on the Second Reading of the Agriculture Bill, the Secretary of State said the Government would shortly launch a review of agriculture funding across the United Kingdom. He added that “agricultural funding will not be Barnettised, and the generous—rightly generous—settlement that gives Northern Ireland, Scotland and Wales more than England will be defended.”54 A written statement was laid on 16 October to announce the review.55

28.The Minister told us that—assuming a transitional period with the EU is agreed—funding for agricultural support would still be drawn from the EU in 2019, but that from January 2020 direct support would be funded by the Exchequer.56 He said that the EU (Withdrawal) Act would bring across the design of the current CAP scheme, allowing payments to continue to be made under the same terms as the current scheme. He added that the Agriculture Bill would allow the UK Government and the devolved administrations to modify aspects of the scheme if they so wished, and these provisions did indeed appear in the published Bill.57 The Government has not yet indicated if the funding provided for direct agricultural support will be allocated as part of a separate, ring-fenced fund or as part of the block grant allocated to Northern Ireland. The Agriculture Minister said that famers and the devolved administrations had indicated their preference for a ring-fenced fund rather than a “Barnettised approach.”58 This reflects the fact that the devolved administrations receive a larger share of agricultural support funding than they would if this was distributed on the basis of the Barnett formula, in recognition of the greater importance of the agricultural sector in Scotland, Wales and Northern Ireland.59

29.Witnesses welcomed the commitments which had been made about funding allocations through to the end of the Parliament (which, assuming a five year Parliament, would be 2022) but told us they needed clarity on future funding beyond that date. Conall Donnelly of the Northern Ireland Meat Exporters Association said the industry needed clarity over how future budgets would be calculated, and whether funding would be ring-fenced. He told us that if the Barnett formula were used to determine future allocations then that would be “extremely disadvantageous to the industry in Northern Ireland.”60 The Ulster Farmers Union emphasised the importance of financial support to farmers in Northern Ireland, and told us they hoped that Northern Ireland would receive a ring-fenced share of funding at the same level as it currently receives.61

30.Under normal circumstances, Northern Ireland would be able to set its own budget and allocate resources to departments accordingly. If the Executive wished to prioritise agricultural support by reallocating resources from another department, it would be able to do so. The Minister told us that “it would be for the devolved administrations to work out how to prioritise certain policies within their funding envelope.”62 Without an Executive, Northern Ireland’s budget may continue to be set in Westminster and there is little scope for officials in Northern Ireland to make political judgments about how funds will be allocated. As a result, at present DAERA’s budget and policy options are constrained by the resources made available to the Department by the UK Government.

Policy-making in the absence of an executive

31.There has been no Executive in Northern Ireland since the Government collapsed in January 2017. In the absence of an Executive, the Northern Ireland Civil Service has been responsible for day-to-day administration in Northern Ireland. The Civil Service has a limited remit, however, and is able to take few strategic policy decisions in the absence of democratically accountable ministers, as underlined by a High Court judgment earlier this year.63 Civil servants in DAERA have developed policy options on the basis of the outcomes outlined by the previous DAERA minister in her letter to the Prime Minister in March 2017, but there has been no ministerial direction since then.

32.In addition to the obstacles presented by the lack of ministerial direction, we also heard that resource limitations were inhibiting DAERA’s preparations for Brexit. Dr Viviane Gravey told us that DAERA had 30 members of staff preparing for Brexit, compared to 1,200 in Defra.64 She noted that while at Defra staff numbers had returned to 2010 levels, at DAERA the number of staff had continued to fall.65 Wesley Aston of the UFU said that “because of limited resources we cannot necessarily do all the work that we would like to do.”66

33.The absence of a Northern Ireland Executive has also disrupted the routes through which the views of the people of Northern Ireland would ordinarily be represented in policy discussions at the UK level. Dr Viviane Gravey highlighted that Northern Ireland is currently represented on the UK-wide Joint Ministerial Committee—which brings together ministers of the UK Government and devolved administrations—by a senior civil servant, as opposed to a government minister.67 She pointed out that a civil servant would not be able to participate in these discussions on equal terms. Civil servants are also unable to act as public advocates for Northern Ireland in the way that elected politicians can, and Dr Gravey argued that this may limit Northern Ireland’s ability to influence Brexit discussions in Brussels and in London.68

34.We asked Defra what it was doing to engage with stakeholders in Northern Ireland in preparation for Brexit. We heard that the Department “work[s] closely with officials in DAERA to make sure that we understand the issues that they are facing.”69 However, with no DAERA ministers to represent Northern Ireland politically it appeared that the nature of these discussions had been purely technical—for example, relating to the technical drafting of the Statutory Instruments that will transpose existing EU law into UK and Northern Ireland law.70

35.Furthermore, we learned that no individual person or team at Defra was responsible for Northern Ireland Brexit preparations, despite the unique concerns of the province and the constraints facing DAERA in the absence of an Executive.71 It was unclear how Defra was engaging on a political level with the issues facing agriculture in Northern Ireland. The Minister told us he had not recently met with the agriculture spokespeople for the political parties in Northern Ireland.72

36.The UK Government has, on occasion, taken actions that would, in normal circumstances, have been the responsibility of elected representatives in Northern Ireland: for example, passing the Northern Ireland Budget Act 2018 in July to set a Budget for Northern Ireland. However, such interventions have been the exception and have been limited in their scope, and the UK Government has not gone as far as, for instance, proposing how a post-Brexit agriculture policy for Northern Ireland would be delivered in the ongoing absence of a Northern Ireland Executive.

37.In July, the Secretary of State for Northern Ireland told the House that the UK Government is committed to taking “a number of limited but necessary steps to ensure good governance and to protect the delivery of public services in Northern Ireland.”73 In her statement to the House of 6 September, the Secretary of State announced her intention to bring forward legislation in October which would “give greater clarity and certainty to enable Northern Ireland Departments to continue to take decisions in Northern Ireland in the public interest and to ensure the continued delivery of public services.”74 It is not yet clear what this will entail, and whether it will better enable preparations to be made for Brexit in the context of agriculture in Northern Ireland.

38.In the absence of a Northern Ireland Executive DAERA is not able to respond to the urgent challenges posed by Brexit. In particular, in the absence of a Northern Ireland Executive and Northern Ireland Assembly there is no mechanism by which a new agricultural policy for Northern Ireland can be implemented, except through the UK Government. We did not see evidence that the UK Government has sufficiently recognised the strategic importance of the agriculture sector to Northern Ireland, or the unique difficulties facing the province in the absence of an Executive. We were surprised that, given the lack of formal channels through which Northern Ireland’s priorities could be fed into UK policy-making processes, there appeared to have been limited engagement by the UK Government with DAERA and with the parties in Northern Ireland on this issue. The importance of agriculture to the Northern Ireland economy means there is an urgent need for clarity about the direction of future policy, and so contingency plans are required for making essential decisions should the current political deadlock continue.

39.The Government should identify areas in which it can lend capacity and share knowledge to support DAERA’s preparations for Brexit, including in the development of policy options and rollout of pilot programmes. The Government should also proactively engage with agriculture stakeholders in Northern Ireland to ensure that the province’s views are not overlooked due to a lack of formal ministerial representation. The Government must also set out how, if the Executive is not reconstituted by the end of the year, it will develop and legislate for post-Brexit agriculture policy for Northern Ireland. If primary legislation is required, and the required measures fall within the scope of the Agriculture Bill, the Government should introduce amendments to that Bill as needed.

Common frameworks

40.The Common Agricultural Policy establishes common baseline rules and standards in areas relating to agriculture, such as animal welfare and environmental management. When the UK leaves the EU it will gain greater control over these policy areas. Agriculture policy is devolved, and so in principle the various administrations could take different approaches to these issues. However, we heard from Dr Viviane Gravey and Dr Mary Dobbs that there is a case for retaining a common approach across the UK in order to deal with issues that are by their nature not isolated to any one region, such as air pollution and management of waterways.75

41.Health and Harmony recognises that some aspects of agriculture policy will require the various UK administrations to co-ordinate their approach so that consistent standards are met across the UK.76 The Joint Ministerial Committee on EU Negotiations has agreed to establish ‘common frameworks’ through which these standards can be agreed.77 Health and Harmony reproduces the principles agreed by the Joint Ministerial Council, which state that frameworks will be established where they are necessary to:

Health and Harmony states that common frameworks will lead to an increase in decision-making powers for the devolved administrations, and will “ensure recognition of the economic and social linkages between Northern Ireland and Ireland and that Northern Ireland will be the only part of the UK that shares a land border with the EU.” The consultation also states that common frameworks will “adhere to the Belfast Agreement.”79

42.At this stage, however, it is not clear how these common frameworks will be agreed, or what they will look like. The Agriculture Bill does not provide any further clarity on how common frameworks for agricultural and environmental policy areas will work.80 The Public Administration and Constitutional Affairs Committee (PACAC), in its report on Devolution and Exiting the EU: reconciling differences and building strong relationships, concluded that “the UK Government does not have a common strategy or policy for how Common Frameworks should operate, and is instead leaving it to different Whitehall departments to develop their own strategies and models.”81 The Agriculture Minister has not confirmed how the Department intends to establish common frameworks for agriculture; it is therefore not clear whether representatives of Northern Ireland will be able to take decisions on, or even influence, how the common frameworks that will affect Northern Ireland’s farmers are designed.

43.The UK Government published an analysis of the powers returning from the EU to the UK following the UK’s departure from the EU, identifying where these powers intersected with devolved and reserved policy areas.82 Of the 153 policy areas identified, 31 are listed as being wholly or partly the responsibility of Defra; the Government’s analysis proposes that 18 of these could potentially be the subject of legislative common frameworks, which would set out in statute how policy in these areas would be subject to common rules across the UK. These include: agricultural support; animal welfare; rules on the use of pesticides; food labelling; and plant health.83 Dr Mary Dobbs suggested that this list should be expanded to include policies relating to environmental quality such as air and water quality.84 The Government’s analysis categorises these as being the potential subjects of non-legislative frameworks, where common rules and standards are agreed between the administrations without needing to be set out in statute.85

44.Witnesses told us it was important to strike the right balance between commonality and flexibility. Wesley Aston of the UFU said that an overarching UK framework was needed to avoid creating competitive distortions within the UK.86 However, he stressed the importance of being able to regionalise certain aspects, such as the level of direct financial support offered to farmers.87 Dr Mary Dobbs said that the frameworks did not need to be detailed or extensive, but could take the form of minimum standards that regions could exceed if they chose.88 Witnesses acknowledged the tension between common frameworks and the principle of devolution. However, Dr Gravey took the view that UK-wide frameworks should not be seen as undermining devolution, provided that the devolved administrations were sufficiently involved in designing and agreeing them and that Westminster did not take decisions for the whole of the UK.89

45.The Government should, during the passage of the Agriculture Bill, set out to the House the process by which common frameworks for UK-wide aspects of agriculture policy will be developed and agreed. These frameworks should be reached by agreement between the relevant devolved administrations and not set in Westminster. In the absence of a Northern Ireland Executive, the UK Government should engage with both the Northern Ireland Civil Service and the main political parties in Northern Ireland to discuss these arrangements.

18 Ibid., p 20

19 Agriculture Bill [Bill 266, (2017–19)]

20 Explanatory Notes to the Agriculture Bill [Bill 266] (2017–19)—EN), p 4

21 HC Dec, 12 September 2018, col21WS [Commons written ministerial statement]

22 For example: trade policy (a reserved matter which is set at a UK level by the UK Government) and areas where cooperation between devolved administrations may be required (for which the Government proposes the creation of ‘common frameworks’, discussed later in this chapter)

24 Ibid., p 7

28 Agriculture Bill, Clause 5, 7–8

29 Ibid., Schedule 4

30 Ibid., Schedule 4 (2)(1)

31 Ibid., Schedule 4 (2)(1)(b)

32 Q2

33 Qq57–58 (The 44,000 responses include responses received from all parts of the UK. The number received from Northern Ireland specifically is not available)

34 Horticulture Forum for Northern Ireland (AGR0003)

40 Permanent Secretary to DAERA, Letter to the Committee, 20 June 2018

41 Permanent Secretary to DAERA, Letter to the Committee, 20 June 2018

50 Permanent Secretary to DAERA, Letter to the Committee, 20 June 2018

54 HC Deb, 10 October 2018, Col 154 [Commons Chamber]

55 HC Deb, 16 October 2018, Col 41WS [Commons written ministerial statement]

59 The Barnett formula determines how the block grant allocated to each of the devolved administrations by the UK Government changes from one year to the next. It is calculated on the principle that changes to funding of services in England should be reflected in the budgets for comparable services in each of the devolved administrations, on a per-person basis. The House of Commons Library briefing HC Briefing Paper 7386 provides a more detailed explanation of how the formula works

61 Q6

73 HC Deb, 9 July 2018, col 755 [Commons Chamber]

74 HC Deb, 6 September 2018, col 348 [Commons Chamber]

75 Qq35–36; Dr Viviane Gravey and Dr Mary Dobbs (AGR0002)

79 Ibid., p 60

81 Public Administration and Constitutional Affairs Committee, Eighth Report of Session 2017–19, Devolution and Exiting the EU: reconciling differences and building strong relationships, p 33

83 Ibid.

86 Q4

Published: 22 October 2018