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Director of Policy's Blog - 26 November 2018

The Route to a More Certain Future for Agricultural Support

Throughout the Brexit process, it has often been said that the only certainty is uncertainty.

As things stand, the UK will ‘leave’ the EU on 29 March. But in effect, that date simply starts what is known as the time-limited ‘implementation period’ to 31 December 2020.

During that time, everything agricultural policy in the UK and Scotland will look, taste and smell like the CAP – because it will be the CAP.
 
Whilst this is important for continuity and stability through transition, NFU Scotland has always been clear that the real prize from exiting the EU is to develop and implement new agricultural policies that are bespoke to the unique needs of Scotland.

But much of what should be a pragmatic process has become very politicised – putting at risk the process to establish a new agricultural policy. That is exactly why NFU Scotland has taken such an active role.

Three big steps towards certainty

1)    The ability of the Scottish Government to make payments to farmers and crofters for scheme year 2019
Legislation has been passed that will ‘cut and paste’ all EU rules and regulations on day one of EU exit.
 
Therefore, this carries over the legal ability to make payments through the Basic Payment Scheme (BPS), Greening and Voluntary Coupled Support schemes (VCS – suckler calf and ewe hogg payments) that operate under Pillar 1 of the CAP, and payments made under the Scottish Rural Development Programme (Pillar 2), such as the Less Favoured Areas Support Scheme (LFASS).

In that sense, the first big step is in place – payments can and will be made to farmers and crofters for claims made under CAP Pillar 1 and Pillar 2 schemes in 2019.
 
What is causing uncertainty is that the UK and Scottish governments currently disagree on which parliament has authority to pass this ‘cut and paste’ legislation. The Supreme Court will imminently pass a judgement on whether the UK Government’s ‘Withdrawal Act’ or the Scottish Government’s ‘Continuity Bill’ has the authority.
 
If the Supreme Court rules in favour of the Scottish Government, then its legislation will allow for the continuation of payments for the 2019 claim year. If the Supreme court rules against the Scottish Government, then the UK Government’s Act will provide the necessary legal cover for these payments to be made in payment year 2019. The Withdrawal Act provides a safety net if the Continuity Bill falls.

2)    The ability of the Scottish Government to make payments to farmers for scheme year 2020
The EU text of the Direct Payments Regulations relating to BPS, Greening and VCS applies to the years up to 2020 – the end of the current round of the CAP.
 
However, the Draft Agreement on the withdrawal of the UK from the EU says that direct payments to farmers under CAP support schemes shall not apply in the UK for claim year 2020. This is because of the way the EU finances the CAP.

Due to an oversight in the drafting of the UK Agriculture Bill, which is currently going through the parliamentary processes at Westminster, a clause to allow for continuation of BPS and other direct payments in 2020 was left out. MPs are currently considering an amendment to correct this for England. Similar legislation is required for Scotland.

In its consultation document ‘Stability and Simplicity’, the Scottish Government has stated its preference to continue with current schemes and payments, with some minimal changes, through an agricultural transition from 2019 to 2024.

At present, the Scottish Government has not confirmed that it intends to pursue primary legislation that would allow for the continuation of BPS and all other direct (Pillar 1) support in and beyond 2020. So, it is a concern that there is currently no clarity on the legal vehicle for the Scottish Government’s ‘Stability and Simplicity’ transitional model to be delivered – and nor for payments to be made to farmers and crofters for claims made under CAP Pillar 1 schemes in 2020 or beyond.

However, it is within the competence of the Scottish Parliament to introduce like-for-like primary legislation to allow for this continuation in and beyond 2020. This can and must be done.

3)    The ability for Scottish Government to develop, implement and make payments for a new (i.e. ‘non-CAP’) agricultural policy in 2021 and beyond.
 
The two big steps above mean that agricultural support in Scotland will continue to be entirely tied to existing CAP rules.
In order to develop and implement a new, ‘non-CAP’ policy from 2021, primary legislation is required.

NFU Scotland continues to develop its proposals as set out in the policy document Steps to Change – A New Agricultural Policy for Scotland Post-Brexit through consultation with members and engagement with Scottish Government and other stakeholders.

The Scottish Government has identified various issues with the UK Agriculture Bill and has declared that it will not take a Schedule in the Agriculture Bill unless these issues are resolved. NFU Scotland shares some of these concerns.

The Union also understands that the Scottish Government is keeping open the option of introducing its own Scottish Agriculture Bill to the Scottish Parliament. The Scottish Government has indicated that, if it were to pursue this, a Scottish Agriculture Bill could be introduced to the Scottish Parliament in Autumn 2019, in order to go through the parliamentary processes and receive Royal Assent in time for the 2020 payment year.

If this option is taken forward, it would provide the same legislative vehicle that is on offer via the UK Government’s Agriculture Bill for Scottish Government to make payments in the 2020 payment year and for Scotland to subsequently develop and implement a new ‘non-CAP’ agricultural policy from 2021 or beyond.

At the time of writing, NFU Scotland is seeking assurance from the Scottish Government of its intended legislative route to allow Scottish Ministers to develop and deliver a new Scottish agricultural policy beyond the CAP.

Given the wider uncertainties around Brexit, very clear and solid commitments on actions required by governments in Holyrood and Westminster are required.

One absolute certainty amid the apparent chaos is that NFU Scotland will not relent in its pursuit of securing the best possible outcome for all of Scottish agriculture from the Brexit process and beyond.

Author: Jonnie Hall

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About The Author

Jonnie Hall

NFU Scotland’s Director of Policy Jonnie Hall has been involved with agricultural and rural policy for more than 30 years. He is a graduate of the University of Newcastle-upon-Tyne (BSc. Honours in Agricultural Economics and an M.Phil. in agricultural policy research) and Oxford University (MSc. in Agricultural Economics). Following an academic and consultancy career, Jonnie joined what was the Scottish Landowners’ Federation in January 1998, leading their policy work on agriculture and land use issues. Jonnie then joined NFU Scotland in May 2007, and has overall responsibility for the policy work of NFU Scotland as Director of Policy and Member Services. He has served on all key rural and agricultural policy stakeholder groups.

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