Brexit and the Common Agricultural Policy

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By Amy MacIntosh

Solicitor & Associate

The Common Agricultural Policy in its most recent form has been in existence since 2005. Since 2005 CAP payments have been divided into two strands, one for Direct Income Support (Pillar 1) and one for Rural Development (Pillar 2). The bulk of support is given to Farmers under Pillar 1 and is delivered in the UK via the Basic Payment Scheme. The Basic Payment Scheme sought to prevent the historic problem of subsidies being a cause of overproduction (you got more subsidies the more you produced) and instead attached itself to the land a farmer owned and not the amount that they produced.

If you had the land, so long as you complied with certain rules (known as cross compliance) you could receive the subsidy.

The Common Agricultural Policy is a European Directive and as such much confusion has arisen as to what happens when the UK leave the European Union which could be as early as October 2019.

In September 2018 the Government published the Agricultural Bill with the aim of providing a framework as to what would happen to the subsidies post Brexit considering that most recent figures suggest that 55% of farming income in the UK is as a result of EU subsidies.

The current position being proposed is that claims under the Basic Payment Scheme will remain as they are for the claim years 2019 and 2020 under the terms of the UK funding guarantee. After 2020 the Government have committed to providing the same cash total until the end of the current parliament (expected to be in 2022) however the process for doing this is not as yet clear.

It is currently being proposed that following the UK leaving the EU there will be a transition period of 7 years from 2021-2028 where the BPS will be phased out. Farmers who receive a large payment will have their payments reduced at a quicker rate. In addition payments may be paid in a single lump sum to allow for farmers to invest in the farms.

At the same time that BPS is being phased out the Environmental Land Management Scheme (ELMS) will be trialled from 2019 on a three year pilot scheme with it being rolled out in 2024/2025. ELMS is being promoted as providing support to farmers from a different approach and will be focused on environmental protection and enhancement.

There has to date been no guidance as to how you will be able to apply for the ELMS scheme nor where it will be piloted. However, with the end of October fast approaching more information is expected.

The future of farming, like with many aspects is presently uncertain post Brexit and we will have to wait to see what the Government’s long term plans for farming subsidies look like.