The Rural Bulletin: 7th February, 2019

Andrew Shirley, Head of Rural Research comments:

"The pressure is really on now. With under two months until our proposed exit from the EU, the spectre of a no-deal Brexit is sending shivers through many parts of the agricultural industry.

"The response from a government minister that a drop in the value of sterling would make up for any associated costs and tariffs will have done little to calm nerves. Nor will the government’s ongoing failure to make BPS payments on time to all claimants inspire confidence in its ability to deliver a viable domestic replacement for the Common Agricultural Policy".

Scottish hill farmers to benefit from £57m loan

Scottish hill farmers are being offered the chance to opt into a loan which will provide an advance payment of their Less Favoured Area Support Scheme (LFASS) entitlement. The loans, worth £57m, will guarantee 90% of each claimant’s anticipated LFASS entitlement in April, according to a report by Farmers Weekly.

Rural economy secretary Fergus Ewing said: “The risk of leaving [the EU] with no deal in place is growing. All the analysis suggests this would be catastrophic for Scotland’s rural economy, and particularly challenging for livestock farmers. I am therefore determined to provide as much financial support and stability as I can.”

It is anticipated that the Scottish government will send out loan offer letters from 1 March.

Delays to farm payments hurting businesses

Urgent action is needed to aid farmers still awaiting payments from the Basic Payment Scheme (BPS), Countryside Stewardship (CS) and Environmental Stewardship (ES). The Tenant Farmers Association (TFA) has highlighted that though 90% of farmers were paid by the end of 2018, those still awaiting payment were experiencing major cash flow issues. It has therefore urged HMRC to allow affected farmers to delay due tax payments.

“Poor communication with those who are owed money adds additional frustration,” said Lynette Steel, TFA Farm Policy Adviser. “Farm businesses trying to plan their cash flows have no idea when they might be able to expect payment. With tax bills and rent demands due soon, without bridging payments, many farm businesses will be forced into financial difficulty.”

Minister claims the pound’s value would offset no-deal tariffs

Claims that the fall in value of the pound would offset no-deal tariff costs by farming minister George Eustice, have angered agriculture groups. 

Mr Eustice’s comments, which were made on BBC World at One on Friday (1 February), have raised concerns from industry bodies, reported Farmers Guardian.  He also said that a no-deal could see farmers move away from sheep production, as EU tariffs would make UK exports uncompetitive.

Phil Stocked, chief executive of the National Sheep Association, said: “To suggest a fall in currency value would go anywhere near offsetting the extra cost of a 45% value tariff is misleading.”

He went on to state that suspending tariffs on imported goods without a guarantee that this would be reciprocated was shocking. “It shows where our Government’s priorities lie – keeping the public superficially happy. Evidence that our Government will be prepared to sell our farming industry off for perceived greater benefits elsewhere.” 

Environmental body must be independent

The proposed new body for overseeing environmental legislation – the Office for Environmental Protection (OEP) – must be truly independent if farmers and land managers are to have confidence in it, the Agricultural Law Association (ALA) has warned.

The ALA has stated that the new body should report directly to Parliament, not just to government departments. As an independent body, the OEP will be giving advice on proposed changes to environmental law, but under the current wording of the draft Bill the Minister won’t be required to present this advice to Parliament, which has the real possibility of limiting the scrutiny of any future changes,” said Mike Holland, consultant and adviser at the ALA. 

“Environmental law has a direct effect on land use and management. For the agricultural industry to have confidence in the OEP it absolutely must be transparent, open and independent, and for that to be the case it must report directly to Parliament.”

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