Agriculture Bill: “The chickens will win every time”

23 March 2020 by Rafe Jennings

Good news from the crisis front, although I’m afraid not the one we’re all thinking of: the government’s Agriculture Bill, which sets out its major post-Brexit agricultural policy, has recently passed committee stage and will soon (coronavirus permitting) be presented to the House of Lords. It shows ambition from the government to develop a post-Brexit agriculture policy with laudable commitments to harnessing the power of farmers to help address the climate crisis, and helps to address issues such as food security. Along with the Environment Bill, discussed here, it constitutes some of the core legislation aimed at achieving the government’s Net Zero by 2050 goal.

The government’s haunting refrain, since their 2018 ‘Health and Harmony’ consultation on post-Brexit agricultural policy, has been “public money for public goods”. The bill puts this into practice by giving the secretary of state power to dismantle the subsidy schemes of the Common Agricultural Policy (CAP) and replace it with the Environmental Land Management Scheme (ELMS). Under this scheme, farmers will be awarded for specific activities with ‘public goods’: good practices that further environmental goals in areas such as biodiversity and soil health that the market does not sufficiently incentivise.

One of the main targets of the new bill is the Basic Payments Scheme (BPS) from the CAP. BPS is seen on the one hand as too generous, awarding farmers money solely based on the size of the land they manage. It accounts for, on average, around 60% of farm income. On the other hand, cross compliance rules, environmental regulations with which farms must comply to be entitled to money from the BPS, are seen as too harsh, and failure to completely comply can see all payments suspended. The ELMS’s aim is to therefore be both more targeted and more fair. 

One of the most significant additions to this bill since its inception is, at the request of farming advocacy groups, a requirement by the secretary of state to report on food security every five years. A quick look at the corona-stripped supermarket shelves should hammer the importance of this home; this report from 2018 claims that almost half of British food has its origins abroad. 

Food imports raised other issues in parliament, such as what measures the government would take to protect food standards in the UK and to ensure that UK food producers were not at a disadvantage due to higher environmental and welfare standards. Further thorny issues arose about devolution; agriculture is a devolved area, but compliance with trade issues is reserved. The bill gives the secretary of state powers to make UK-wide regulations to ensure compliance with the Agreement on Agriculture, which would restrict devolved government policy makers in otherwise devolved areas. All this will be discussed in depth. 

The bill is divided into 8 parts. The first deals with giving the secretary of state the power to give financial assistance to farm and land managers, laying the regulatory framework for the ELMS, discussed below. Part 2 deals with reporting and intervening on agricultural matters, specifying that the Secretary of State must report on food security every 5 years. Parts 3 – 5 deal with general agribusiness regulations, such as use of fertilisers and organic classification. Part 6, which was hotly discussed in parliament, gives the Secretary of State powers to make regulations securing compliance with the WTO Agreement on Agriculture. Parts 7 and 8 deal with issues relating to Wales, as well as general provisions. I’ll mainly discuss Part 1 and Part 6, which respectively comprise the most significant and the most controversial areas of the legislation. 

Environmental Land Management and Agriculture

The most significant consequence of the bill is the move towards the ELMS. The bill confers broad powers to amend retained direct EU legislation surrounding farm subsidies and agricultural support, mainly focusing on the BPS. I’ll talk quite extensively on the ELMS here even though the scheme itself is not mentioned in the bill, which merely provides the legislative architecture to create it in Part 1 (Clauses 1 – 16). DEFRA’s policy paper on the ELMS can be accessed here.

The government sees the ELMS as the successor to the largely criticised CAP, and as the basis for the ambition of “public money for public goods”. The change is from a system of awarding money based on amounts of land which is removed if the farmer fails to comply with regulation, to a system of merely awarding (public) money for certain environmental actions which the market does not adequately reward (public goods). 

The scheme will be divided into three tiers. The first tier will be used to broadly incentivise good environmental practice in farming and forestry. These practices would include things like planting wildflower borders around fields to increase pollinator density, as well as good farming and livestock management practices like precision pesticide applications, improved feeding efficiency, and soil management. The second tier focuses on more locally targeted environmental goods, such as local biodiversity, habitat creations, and river and land management to help combat flooding. The third tier will focus on larger land use change projects, such as forest restoration, peatlands management, and salt marsh management and restoration. The government plans to run a pilot scheme from 2021 to 2024, phasing out all direct payments by 2027. 

Criticisms of the EUs agricultural policy have been pretty widespread. The CAP has been criticised for its poor value for money: farming only makes up a small proportion of the EU economy, and takes a disproportionately large share of the budget. Within the UK, the vast majority of direct payments go to the richest large landowners. Moreover, the BPS, which make up the vast majority of the direct payment, are distributed merely through according with cross compliance, therefore not rewarding those farms who go over and above in environmental actions. The Countryside Stewardship scheme (CS), aimed on rectifying that, has had, for various reasons, poor uptake. 

The ELMS has therefore been (tentatively) welcomed by farmers and environmental groups. Some have criticised tier 1 for not being ambitious enough, essentially paying farmers for what should be considered standard good environmental practice. However, it has also been recognised that tier 2 and tier 3 could drive serious systemic change, through incentivising large scale land use changes. Farming groups have welcomed the payment system which initially rewards actions rather than outcomes, as a move away from the essentially punitive structure of cross compliance. 

Agriculture and Trade

Much of the parliamentary debate focused on what was not in the bill rather than what was. Opposition MPs criticised the government for not including provisions in the bill to protect UK food producers from being undercut by imported food. Daniel Zeichner MP tabled an amendment writing into law the prohibition of the import of food that was not subject to the same or better regulation, mentioning particularly hot issues like chlorinated chicken and hormone raised beef. Their main concern is domestic farmers being undercut by imported products from countries with significantly reduced agricultural regulations. The government has given numerous verbal reassurances that trade deals will be predicated upon UK standards being met or exceeded, but has refused to include it as a legal requirement within the bill. 

The government’s position, as set out by Victoria Prentis MP, was that the European Union (Withdrawal) Act 2018 carries over restrictions from EU regulations on the importation of chlorine washed chicken and hormone raised beef, therefore meaning there is no requirement to restate them in the Agriculture Bill. Indeed, various regulations work to the same effect, specifically: Animals and Animal Products (England and Scotland) Regulations 2015, Animals and Animal Products (Wales) Regulations 2019, and Animals and Animal Products (Northern Ireland) Regulations 2016. The reason why the amendment couldn’t be included, according to the government, was that the introduction of broad legislation regulating these kinds of issues may be at odds with the WTO Agreement on Agriculture. This would undermine the power of the Secretary of State to ensure UK-wide compliance with Agreement on Agriculture rules, one of the most important features of the bill. Being able to secure international trade outside of the EU is, after all, one of the key positive Brexit narratives.

Law aside for one moment, talking exclusively politics, it’s interesting to note the words of one Guardian commentator on the point: “if the choice is between the commercial interests of banks or the welfare of chickens, the chickens will win every time”. The words of a member of the professional left-wing commentariat? No – then backbench MP, but now Secretary of State for Environment, Food, and Rural Affairs, George Eustice.

Agriculture and trade also raised thorny devolution issues. Agricultural policy is a devolved issue, but international trade issues are reserved, so it’s not hard to see therefore that agriculture trade was always going to be an area of friction. The debate focused on clause 40:

“40: Power to make regulations for securing compliance with WTO Agreement on Agriculture: general. 
(1) The Secretary of State may make regulations for the purpose of securing compliance with obligations of the United Kingdom under the Agreement on Agriculture.”

Those regulations largely concern the aggregate UK-wide subsidy levels for farmers and land-managers. SNP representatives wanted, predictably, additions requiring those regulations to be made with the consent of Scottish parliament. The opposition suggested as a compromise that regulations changes should require that the secretary of state consult their devolved administration counterparts. 

However, both additions were voted down. The government argued, along the same lines as the earlier point about food standards, that they could not include those powers in the bill as it would hinder their ability to secure compliance with the Agreement on Agriculture. Fully federated countries like the US and Canada are required to keep agriculture as a power reserved for the federal government; this is seen as structurally analogous to the devolved political system of the UK. However, the ability to set subsidies within the limits prescribed by the secretary of state’s regulations would remain powers for the devolved administration. 

As a concluding thought, it’s worth remembering that Mike Pompeo, head of the United States Department of State, has insisted that any trade deal will require the UK accepting chlorinated chicken and other such US agricultural products. The many positives of the ELMS stand to be undermined. This is true on both the animal welfare and climate crisis front: a very significant proportion of the UK’s per capita carbon emissions come from imported goods. There is one large trading partner whose standards and climate goals we seem to share – the EU. We’ll have to see to what extent the government pursues this option. All this being said, the Agriculture Bill represents progress. But as always, we’ll have to see how it shakes down in practice: whether it’s really true that “the chickens will win every time”…

Rafe Jennings is a journalist and aspiring barrister with an interest in environmental law and policy