Policy paper

Health and Harmony: the future for food, farming and the environment in a Green Brexit - policy statement

Updated 14 September 2018

This policy paper was withdrawn on 25 February 2020

An update providing further detail of England’s agricultural policy and how the Agriculture Bill will help us achieve this has been published:

• The future for food, farming and the environment: policy statement (2020)

Our ambition for the future of food, farming and the environment

British farmers, growers and foresters play a vital role in protecting the countryside, while producing world-class food, plants and trees. Now we will use the opportunity of leaving the EU to transform how these sectors can enhance the environment and get a fair return for their yields.

Under our Agriculture Bill we will spend public money on:

• enriching wildlife habitats
• preventing flooding
• improving the quality of air
• soil and peat
• and planting trees

All providing public goods which will help manage and mitigate the effects of climate change.

This will leave the environment in a better state than we found it, fulfilling our ambition for a green Brexit and helping to deliver promises set out in the government’s 25 Year Environment Plan.

Our new environmental land management system will bring in a new era for farming, providing an income stream for farmers and land managers who protect and preserve our natural environment. For the first time, farmers and land managers will be able to decide for themselves how they can deliver environmental benefits from their businesses and their land, and how they integrate this into their food, timber and other commercial activities.

The Agriculture Bill will also help farm businesses become more resilient, productive and internationally competitive. By reallocating money we can boost investment in research and development and give funding to farmers for new research projects.

Importantly, the Bill will support farmers in getting the right price for the food they produce, clamping down on unfair trading practices along the supply chain. It will make sure that food production today does not come at the expense of productivity tomorrow. For the first time, we will safeguard the assets that support domestic production by taking the health of our soils as seriously as the size of our yields.

Throughout all our reforms, we will uphold high standards of plant health and animal health. We will build upon our world-leading animal welfare standards and develop publicly-funded schemes for farmers to deliver animal welfare enhancements beyond the regulatory baseline, which are valued by the public but not sufficiently provided by the market.

The Agriculture Bill sets the foundations for all these policies, leading to a better and greener future for farming and our countryside outside the EU.

How the Agriculture Bill will help us achieve our ambition

Our new agricultural policy will be underpinned by payment of public money for the provision of public goods. The Bill will help us set the foundations for the future. It will deliver a smooth transition as we move away from the Common Agriculture Policy. It will enable policies which seize the opportunities of Brexit and work for industry in their crucial role as food producers. It will ensure that approaches can be managed across the UK as each devolved administration designs a new agriculture policy.

The Bill will allow us to:

• spend public money on public goods. These powers will enable the delivery of environmental outcomes such as clean air, thriving plants and wildlife, and helping to mitigate climate change; and will support the delivery of enhanced animal health and welfare beyond the regulatory baseline, where enhancements are valued by the public but not sufficiently provided by the market

• improve farming productivity. This will allow ministers to make payments during the agricultural transition period to improve farming productivity, which are compliant with our international agreements. For example, this could include supporting investment in technologies and methods that can help farmers to reduce the use of inputs such as fertilisers and pesticides, while maintaining or increasing production. This would help farmers to reduce costs and adjust to the new system during the agricultural transition, and simultaneously deliver environmental benefits

• enforce compliance with conditions attached to payments to farmers and land managers. These powers will create a modern and proportionate enforcement regime for future schemes, ensuring appropriate spending and high standards are maintained

• strengthen transparency in the supply chain through improved data collection and data sharing. With more transparent data, food producers will be able to respond more effectively to market signals, strengthen their negotiating position at the farm gate and seek a fairer return. Better data will also enable farmers to benchmark their performance and to track and manage risks to their business. It will also improve disease control, and consequently productivity, through greater sharing of traceability and animal health data

• strengthen fairness in the supply chain. The government will publish, maintain and enforce statutory codes of practice. These will improve fairness in the agricultural goods supply chain and protect producers from unfair trading practices

• intervene in times of extreme market disturbance. These powers will provide reassurance to the sector that the government is able to extend help should very extreme circumstances merit it, whilst maintaining a dynamic and self-reliant agriculture industry that is resilient enough to survive in a free market

• set common marketing standards. These powers will make sure that marketing standards (for example, the grading of eggs) will protect farmers and consumers, are proportionate and will support the agriculture sector and take account of other objectives such as animal welfare

• comply with the World Trade Organisation Agreement on Agriculture. These powers will set financial limits on the level of farming subsidies paid by the devolved administrations (Scotland, Wales and Northern Ireland) and England. The powers will make provision for a process for the classification of schemes and require the devolved administrations to provide information on their support regimes, enabling us to comply with World Trade Organisation rules

The Agriculture Bill will allow us to move to our new policy in a measured way. It will enable us to:

• phase out and simplify Direct Payments. The government will make simplifications and phase out Direct Payments, within the rules of the implementation period, over the course of an agricultural transition period

• continue to run rural development (Pillar 2) legacy schemes. The government will continue to make payments and honour those agreements farmers have entered into under Pillar 2, which will run past Brexit day

• simplify current financial, management and reporting rules. The government will strip out unnecessary requirements, which will make the current system more appropriate to the country’s needs

• amend market intervention schemes. We will amend these to make them better tailored to the agriculture market and phase out these requirements gradually as the sector becomes self-reliant

• continue collaboration between agricultural producers. We will continue to recognise Producer Organisations and retain existing competition law exemptions

The importance of food production

Our priority is a productive, competitive farming sector. British farmers play a crucial role in our food chain, and provide the majority of the diet for the country’s population. They drive the success of the food and drink industries, contributing towards UK food and drink exports.

Our future policy will support farmers to provide more home-grown, healthy produce made to high environmental and animal welfare standards. Not only can the health of the nation be improved by eating nutritious food – but the way in which our food is produced can improve our air, water, soil, biodiversity and help with climate change mitigation.

Our food security is built on a strong domestic production base and access to safe, high-quality imports from a diverse range of countries. This will not change after we leave the EU. We will use the powers in our Bill to:

• support innovation to improve productivity

• improve investment in farming equipment, technology and infrastructure

• facilitate enhanced collaboration and pioneer the use of more innovative and efficient farming techniques, such as those which will allow us to use resources more sustainably- supporting reduced emissions, pollution, waste and soil erosion

There are a range of innovations across farming which can increase productivity, help us to safeguard the public goods of animal and human health and ensure we better protect the environment. A changed regulatory culture, a skilled workforce and investment in R&D can all help the sector to thrive and maximise its trading opportunities.

Public money for public goods

In February 2018, the government launched a consultation on how we can achieve a brighter future for food, farming and the environment in England. At the heart of this consultation was a proposal to spend public money on the things that have public value – principally, enhancing our environment and protecting our countryside.

The consultation generated a huge amount of interest. Respondents endorsed the principle of public money for public goods, with key goods that we should support including:

• environmental enhancement, protection and enjoyment
• better animal health and welfare
• healthy crops, trees, plants and bees
• preserving rural resilience and traditional farming and landscapes in the uplands

Environmental land management

The government will work with farmers and land managers who wish to improve the environment by entering into environmental land management contracts, which could span several years.

These contracts will make sure that the environmental benefits farmers help deliver, but which cannot be sold or bought, are paid for by the public purse.

These will include:

• helping deliver high air and water quality

• protecting and enhancing biodiversity on their land, by providing habitats for wildlife, for example

• preventing, reducing and adapting to climate change and other environmental hazards like flooding and drought. Planting trees, for example, can help reduce flood risk and sequester carbon to help mitigate climate change

• providing public access to their land and contributing to the public’s understanding and enjoyment of nature. We will also look at specific incentives to increase access for disabled or disadvantaged groups

• protecting our rural historic environment and our distinctive landscape features

In sharp contrast to the inflexible nature of the current system, these contracts will be based on a land management plan developed by the farmer or land manager. Their plan will set out how they intend to deliver the environmental benefits identified, based on guidance and specialist advice.

Farmers and land managers will have the flexibility to decide how best they can deliver environmental benefits from their business and their land and how they integrate this into their food, timber or other commercial activities. The new system will respect the knowledge of the person who knows the land best, put them in control and inspire them to explore how best to improve the environment.

All the while, the new system will retain a strong focus on results. Farmers and land managers will be able to tailor their plans to what works in their area. Plans will be adaptable and encourage local solutions, but they must be rooted in strong evidence and best practice, encouraging farmers and land managers to review and revise approaches throughout the year to deliver the best results.

This means that farmers and land managers will be able to benefit from all the evidence and experience built up over the years, but without rigid bureaucratic constraints that have proven so costly and inflexible. At the same time, thanks to the close involvement of advisers, the public will have the assurance that plans are properly made and delivered, so we can be confident that public money is spent well and environmental benefits will really be delivered.

Farmers and land managers will be able to earn money delivering two types of goods and services: through selling products (like food or timber) on the market; and providing environmental services and benefits that society relies upon, which will be supported by government funds. It will be up to farmers and land managers to decide what types of goods they want to produce. This does not have to be a trade-off, as many land management activities will have multiple benefits. Farming efficiently and improving the environment can go hand in hand.

Farmers and land managers will be able to join the scheme using a simple application process throughout the year. We will explore how to encourage greater participation to help deliver our environmental aims, valuing environmental benefits appropriately, while respecting our international obligations and ensuring we maximise value for money. This could vary from region to region depending on the priorities for that area. Funding from the government could comprise multi-annual payments, capital grants, and/or payments for collaboration and for local engagement.

So we can be confident that the new approach works in practice, we will work with potential participants to design, test and trial elements before piloting it widely and then rolling it out nationally. This will include new and innovative delivery mechanisms, like payment by results and reverse auctions. Trials will also be used to find out what advice participants in schemes need to succeed; these trials will also establish how best to communicate with farmers, land managers and different sectors.

We will work with the private sector to explore the scope for public-private finance partnerships to deliver a wider range of environmental outcomes and ensure our approach to land management provides space for such partnerships to develop.

We will implement the new system in phases. This will allow for flexibility as we develop the system, and enable us to deliver a system that is valued and participated in by farmers and land managers.

Taken together, the new system will encourage more environmental measures across the landscape and reward farmers and land managers properly for their environmental products. This will contribute to meeting the goals set out in the 25 Year Environment Plan announced by the Prime Minister. These goals span clean air, clean and plentiful water, thriving plants and wildlife, reduced risk of harm from environmental hazards, enhanced beauty, heritage and engagement with the natural environment, and contribute to the network of enhanced habitats – the Nature Recovery Network.

High standards of animal health and welfare

We will continue to be a world leader in animal welfare after we leave the EU by maintaining and strengthening the UK’s already world-class welfare standards, using modernised enforcement tools to make sure that our standards are applied effectively on the ground.

The consultation responses showed that high standards of welfare are a priority for the public and the sector. We will continue to keep our regulatory baseline under review, raising standards sustainably over time as new research and evidence emerges.

Beyond regulation, improving consumer information can help ensure farmers get a return on their investments to raise welfare. The government will work with key industry and welfare groups, including the Farm Animal Welfare Committee, on how best the market can meet enhanced animal welfare standards beyond the minimum by tapping into consumers’ willingness to pay. This will include providing greater transparency and certainty for consumers and for farmers. We will also engage with farm assurance schemes to consider what their role is in delivering enhanced welfare standards beyond the minimum.

As part of our move to higher regulatory standards, we will develop publicly-funded schemes for farmers to deliver animal welfare enhancements beyond the regulatory baseline that are valued by the public but not sufficiently provided by the market. We will focus on enhancements that deliver the greatest impact and benefit.

Excellent standards of animal health can deliver better welfare, improve productivity on farm, and help protect the nation from the environmental and economic impacts of disease. Over the coming year, we will work with representatives of industry and the veterinary profession to determine how we can work more closely together to significantly reduce the impact of endemic disease and health conditions, as well as establish the range of tools required. We will pool our expertise to ensure that interventions are effective and industry-led.

Better use of data can improve farmers’ performance on animal health, welfare and productivity. We want to expand the range and detail of animal health and traceability data, and, working with industry, maximise opportunities for using data responsibly. With greater access to data, we can support farmer learning, identify disease threats more quickly and improve the transparency of health standards from farm to fork. All of these have a direct impact on productivity, trade, and reduced reliance upon anti-microbial veterinary medicines.

The livestock information service, which is already being developed with industry, will allow us to take greater advantage of electronic identification for livestock and move towards near real-time reporting of movements.

Improving the health of animals can also reduce reliance on veterinary medicines, and so contribute to our wider efforts to reduce anti-microbial resistance in the interests of public and animal health. Industry has made considerable progress in responsibly reducing its use of antibiotics and together, we will build on the leadership shown and deliver further improvements in animal health.

Healthy crops, trees, plants and bees

Crops, trees, plants and bees provide huge value to the economy and society, but pests and disease threaten that value. We will promote pest and disease control across the forestry, horticulture and beekeeping sectors, to protect their health and maintain the value they provide. We will maintain our leading and coordinating role in response to threats and outbreaks.

Farmers must be able to protect their crops; and people must be protected from the risks that pesticides can pose to them and the environment. It is right to minimise the use of pesticides and to make the greatest possible use of other techniques, including non-chemical alternatives, to protect crops. We are committed to putting Integrated Pest Management at the heart of sustainable crop protection with the minimum use of pesticides.

Preserving rural resilience

Agricultural land has value that stretches beyond the economic and environmental – it contributes to our society and culture too. The conservation and enhancement of our cultural heritage contributes directly to a healthier environment, benefitting people, offering support to thriving rural economies and national prosperity. To preserve this value, there is a range of landscapes and communities we could support.

Upland farmers play a vital role as stewards of the countryside and upland farms are an iconic part of our heritage. They produce food, environmental benefits such as clean air and water, resilience to climate change, abundant and diverse wildlife and attractive landscapes. We recognise that upland farmers are often more dependent than most on Direct Payments. Upland farmers will be well placed to benefit from our new environmental land management system which will reward farmers for the public goods they provide.

A sector fit for the future

Innovation and Research and Development

We want an effective innovation system that drives up productivity and sustainability in agriculture. This will increase our ability to compete, provide the products British consumers want to buy and grow exports. In the long run, it will help the resilience of our economy and rural communities.

Working with industry and other partners, we will develop new approaches to research and development (R&D) that build on investments such as the AgriTech Strategy and the £90 million Industrial Strategy Challenge Fund Transforming Food Production initiative to enable greater take up of innovation on farms.

We will focus on developing R&D funding to support high quality research, through:

• targeted support for collaborative R&D in priority areas, including environmental outcomes and soil health

• industry-led research syndicates, with groups of farmers coming together to deliver practical solutions and commission research projects with academia that improve the translation of R&D onto farms

• encouraging short experimental projects, such as funding for trialling new ideas for different varieties and methods

A skilled workforce

Attracting skills and talent is crucial. It is vital that the agriculture and horticulture sector is able to plan ahead and secure the appropriately-skilled people that it needs, across both the permanent and seasonal workforce. A new nationwide pilot to bring migrant workers to UK farms was announced by the Home Secretary and Environment Secretary on 6 September. The pilot will mean fruit and vegetable farmers are able to employ migrant workers for seasonal work for up to six months. 2,500 workers from outside the EU will be able to come to the UK each year, alleviating labour shortages during peak production periods.

Effective risk management and resilience

Farmers are exposed to risk from many sources, meaning farm income can fluctuate greatly from year to year. This volatility makes it harder for farmers to plan and can discourage long-term investment. Our immediate focus will be on improving productivity and profitability so that farm businesses are more resilient. We also want to help farmers target and manage risks, and plan more effectively. The government will develop existing legal powers for collecting and sharing data to support risk management while safeguarding sensitive information. Improved data collection and sharing will also support the private sector in developing risk management tools for farmers to help mitigate volatility.

Helping new entrants

We have a thriving community of young and new farmers who have a strong drive for producing the very best quality food in a way that will be sustainable for future generations. We will consider how to help Local Authorities who want to invest in their Council Farms, so that they offer real opportunities for new farmers to start a foundation business and gain the experience they need to progress onto a larger unit.

Maximising trading opportunities

Increasing exports is a priority for the government. This will create jobs, drive productivity and competitiveness, and support economic resilience. There are great opportunities for our world-renowned produce such as our beef, lamb, cheese and whisky; taking advantage of the growing interest in British food and drink around the world.

The government is seeking a relationship with the EU which is broader in scope than any other that exists between the EU and a third country: one that reflects the UK and EU’s shared history and values, close ties, and unique starting point. We do not seek membership of the Single Market after we leave the EU, but a bold and ambitious economic partnership. We propose a UK-EU free trade area for goods, to ensure continued frictionless access at the border to each other’s markets. This would be underpinned by a common rule book for goods, which, for agri-food, would cover only those rules necessary to provide for frictionless trade at the border. A Facilitated Customs Arrangement will remove the need for customs checks and controls at our borders, but still enable the UK to control its own tariffs for trade with the rest of the world.

We are proud of the high food safety and animal welfare standards that underpin our high-quality British produce. The government will continue to take action to improve animal welfare. Any future trade agreements must work for consumers, farmers, and businesses in the UK. We will maintain our standards on food safety, animal welfare and environmental protection as part of any future trade deals.

A changed regulatory culture

We will maintain strong regulatory standards and introduce a new approach to monitoring compliance and enforcement. We will adopt a more streamlined and focused regime, with more data sharing, reduced duplication and greater use of “earned recognition”, which received strong support in the consultation. “Earned recognition” may take account of historic compliance and membership of industry assurance schemes, where there is confidence that the scheme enforces regulatory standards.

Enforcement will be firm but fair. Those who do not comply with regulations can expect to be sanctioned. Where appropriate we will look to provide greater scope to remedy underperformance before sanctions are applied. This will give land managers and farmers a fair chance to improve within the rules. We will look to legislate for new enforcement powers, introducing modern tools such as civil sanctions, to further help authorities provide robust and proportionate enforcement.

We have already launched an independent review, led by Dame Glenys Stacey, assessing the current farm regulation and inspection regime in England. The interim report was released July 2018, suggesting that there is a compelling case for independent regulation and for the creation of a single field force to undertake streamlined, “whole farm” inspections. We welcome these initial findings and the value of this independent advice, which we will consider further.

Moving from the old system to the new

The system of agriculture support in England will start to change as we move to the new system of land management contracts. We will help the farming sector adapt to a post-Common Agricultural Policy world by phasing out Direct Payments, which will free up funding to reinvest into the delivery of public goods. We will introduce the new land management system gradually, as part of a planned and controlled transition. This will help farm businesses become increasingly resilient, internationally competitive and better equipped to protect our environment.

During the transition, we will provide support for farmers to invest in equipment, technology, and infrastructure. This will help them to deliver public goods, improve their productivity and resilience, and put them in a strong position to take up offers through environmental land management. Support could be in the form of grants, loans, loan-guarantees, or capital allowances and would be compliant with our international agreements.

Simplifying the CAP (2019 to 2020)

We can simplify the current schemes to improve applicants’ experiences. We will be able to do this even while our agriculture policy is still governed by the CAP, within the rules of the implementation period.

We will pay Direct Payments for the 2019 scheme year on the same basis as now. The EU rules for the Basic Payment Scheme, greening and young farmer payment will apply throughout the whole of 2019.

We also plan to allocate the money paid in Direct Payments for 2020 in much the same way that we do now. We will, however, look to make simplifications to make it easier to apply for and administer Direct Payments to increase value for money. We will do this as soon as we can, and in line with the terms of the implementation period.

We will simplify the 2019 Countryside Stewardship application process in England, within the rules of the implementation period. This will include:

• reducing the size of the mid-tier application form with associated application packs available online for printing

• improving agreement documents

• extending the online offer to include the upland, lowland grazing and mixed farming wildlife packages that were introduced in 2018

The Agricultural Transition (2021 to 2027)

We will phase out Direct Payments in England, giving time for farmers to adjust. We said we planned to begin the agricultural transition as soon as we are able to do so and we plan to start reducing payments in 2021. We aim to phase out Direct Payments completely by the end of the transition, with the last payments being made for the 2027 scheme year.

This seven year agricultural transition will make sure there is a gradual transition from the current world to the new, avoiding a cliff-edge for businesses. It will give farmers sufficient time to adapt and prepare for the new environmental land management system which will be piloted and rolled out during the transition. A longer transition would have delayed the benefits of moving away from Direct Payments, which are poor value for money, untargeted and can inhibit productivity improvements. It could also have delayed farmers beginning to adapt for the future.

The payment reductions will be applied in a fair way, with higher reductions initially applied to amounts in higher payment bands. For the first year of the transition, 2021, we will reduce farmers’ Direct Payments by up to the following percentages, which could free up to around £150 million to reinvest into the delivery of public goods - piloting new schemes, investing in research & development and providing support for farmers during the transition:

Direct Payment band**	Reduction percentage
Up to £30,000	5%
£30,000 - £50,000	10%
£50,000 - £150,000	20%
£150,000 or more	25%

** For example, for a claim worth £40,000, a 5% reduction would be applied to the first £30,000 and a 10% reduction would be applied to the next £10,000.

This method of progressive reductions balances the views of those who feel recipients of the highest payments should initially face higher reductions, with the strong calls for the reductions to be shared amongst all farmers from the start of the transition. It reflects the views of many farmers that the whole industry needs to prepare for the changes and that applying reductions to all farmers sends an important signal that change is on its way. It also gives all farmers the same transition period.

These reduction percentages will be increased over the transition until the final payments are made for the 2027 scheme year. We will set the reduction percentages taking account of our detailed plans for future schemes and wider decisions about government spending. We will maintain the same cash total funding for the sector until the end of this parliament, expected in 2022.

To help new entrants get into the sector and give farmers flexibility to plan for the future, we will delink payment from the land. This will remove the requirement to farm the land in order to receive these final payments. This will give farmers much greater freedom over how they use the funding they receive from Direct Payments.

Some farmers could use the money to invest in their business without having to worry about the bureaucratic paperwork that accompanies the Basic Payment Scheme. Others may choose to use the money to diversify their activities or decide to stop farming altogether and use the payment to contribute to their retirement. It should increase the ease with which new entrants, and those existing farmers wishing to expand, could acquire land.

Under this approach we will make payments during the agricultural transition based on a reference period, regardless of whether the recipient continues to farm or not. There will be no need for the farmer to have land or payment entitlements. This approach will send a clear signal to farmers that we are leaving behind the Common Agricultural Policy and Direct Payments are coming to an end.

We consider this approach best meets the widespread desire for simplification, while at the same time increasing the range of options available to farm businesses to adjust for the future. It gives farmers the greatest flexibility on how they use the money received. To provide further flexibility, and in response to ideas put forward in response to our consultation, we will look to give farmers the option of taking a one-off lump sum payment in place of all their annual Direct Payments.

Some farmers could use the money to invest in their business without having to worry about the bureaucratic paperwork that accompanies the Basic Payment Scheme. Others may choose to use the money to diversify their activities or contribute to their retirement. This should facilitate restructuring and productivity improvements. It should increase the ease with which new entrants, and those existing farmers wishing to expand, could acquire land.

Delinking will also remove the requirement to follow existing EU rules, as well as the system of payment deductions that enforces them. This change will help us to improve on some of the more onerous and ineffective requirements in place today; but all farmers must continue to comply with good land management and husbandry standards. We are committed to maintaining a strong regulatory baseline, with enforcement mechanisms that are proportionate and effective. Alternative enforcement mechanisms will be introduced before Direct Payments are delinked so that we can maintain agricultural and environmental best practice.

As Direct Payments are phased out, funds will be released so that the new environmental land management contracts and other measures to incentivise public goods can be introduced gradually. During the transition we will also offer time-limited initiatives that will enable farmers to invest in equipment, technology, and infrastructure that will help them to deliver public goods, improve their productivity, and put them in a strong position to take up offers through the new environmental land management system. For example, this could include assistance for the purchase of infrastructure and equipment that would both reduce ammonia emissions (a key component of our Clean Air Strategy).

Simplified versions of the Countryside Stewardship will continue to be open to new applicants. We are also looking at whether any current Higher Level Scheme agreements may be extended. This means that an established scheme will continue to be available as we test and refine the new arrangements. We want to protect environmental benefits already accrued under existing schemes; so our aim is to make transition to the new environmental land management scheme as easy as possible for farmers and land managers.