Update: Agriculture and Brexit
The Government's plans to provide support to the farming industry have become clearer following a statement by Michael Gove, the Environment Secretary and a leave supporter.
Whilst the current Basic Payment Scheme (which replaced the Single Farm Payment Scheme in 2015) will continue for another 5 years, it will be replaced thereafter by subsidies for farmers and landowners who enhance the natural environment.
There have been many critics of the current scheme which came about as part of the EU Common Agricultural Policy. It was said that the scheme placed a drain on the UK in terms of the payments the UK made relative to monies received, and that it rewarded those with large land holdings thereby giving to those with the greatest personal wealth.
The new method of support will concentrate upon rewarding those farmers and landowners who do things to enhance the natural environment, for example, promoting bio diversity, improving water quality, and returning cultivated land to wild flower meadows. In some respects these schemes will be similar in nature to the current woodland grant and stewardship schemes, under which farmers have been encouraged to grow crops with no artificial fertilizer.
Potential Future Issues
However, some commentators have already expressed concerns.
If UK farmers are to face increased competition via trade deals with the US, will this be on a level playing field? Animal welfare standards vary outside the EU – for example, the US allows both chlorine washed chicken and hormone fed beef and individual cows in the large US herds are often culled after one lactation and remain indoors all their life.
Taking land out of active production for grass land meadows may give rise to issues regarding UK food security - how long would it take to return land to active arable production should the need arise?
These issues have yet to be addressed and although the five year period gives ‘breathing spac’, there remains a great degree of uncertainty for farmers ,landowners and all those in the rural community. For some farmers the removal of the support will be such as to render current farming methods financially unviable.
At Butcher & Barlow our Agricultural team are able to discuss with our clients, and their farming advisors and accountants, how their business structures can be reviewed and enhanced in light of the new policies. For example, would it be wise to split the farm business from the land holding so that in the event that the trading partnership fails the basic assets i.e. land and property assets are preserve?
We urge all our Agricultural clients and those whose businesses are rural related to take action now and take steps which will ensure their businesses can survive - both without the subsidies -and ensure that they are in the best position to face the potential competition from non EU markets with confidence.
Contact the Agricultural team on 01606 334309. /our-services/agricultural-law.aspx