TFA Media Release MR20/06 – The Tenant Farmers Association Briefs MPs for Agriculture Bill Debate

The Tenant Farmers Association (TFA) has produced a briefing for the Second Reading of the Agriculture Bill 2019 which takes place today (03 February) in the House of Commons.  The briefing can be read, in full, below.

TFA Chief Executive, George Dunn said “Now that we have left the European Union, the Agriculture Bill is an immensely important piece of legislation.  It will set the future direction of agricultural policy in the four countries of the United Kingdom for a generation to come.  This will be the first time in over 70 years that we have had the opportunity to completely rethink our agricultural policy.  With the big issues of food security, climate change and environmental concerns, we must take the time to ensure that we do things well rather than just quickly.”

Ref:  MR 20/06                                                       Date: 03 February 2020

Notes for Editors:

For media enquiries contact Julia Meadows, TFA Communications and Events Co-ordinator on 0118 930 6130 or 07887 777157.

 

Tenant Farmers Association

Agriculture Bill 2019 – Briefing for Second Reading in the House of Commons

  1. Introduction

1.1     The Tenant Farmers Association (TFA) is the only organisation dedicated to representing the interests of those who do not own the land they use for agriculture in England and Wales.  Its membership comprises farms of all types and sizes but active, family farms predominate.

1.2     The tenanted sector of agriculture is responsible for farming at least one third of the agricultural area of England and Wales and approaching half of that is now under Farm Business Tenancies (FBTs).  It is estimated that a further 10% to 20% of land is farmed by individuals who do not own that land and who operate under other types of occupation and use agreements.  The TFA therefore represents a very significant constituency of interest within the agricultural industry.  Sector by sector, the proportion of farmed tenanted land is slightly higher in the upland, livestock and dairy sectors and slightly lower in the arable sector.

1.3     The TFA recognises the opportunity afforded by the UK withdrawal from the European Union to put in place bespoke policies for food, farming and the countryside in the four countries of the United Kingdom and we recognise that this is a time of change, not just for agriculture but for the whole nation. The TFA welcomes the introduction of this important piece of legislation at this time.

  1. Context

2.1     Notwithstanding the opportunities that arise in relation to our exit from the European Union, there are also challenges.  In particular, Parliament is having to consider the Agriculture Bill without fully understanding the future trading relationships between the UK and the European Union and our position within the WTO in the event of the UK failing to reach a Free Trade Agreement with the EU by the end of the Implementation Period Completion Date.

2.2     This uncertainty will have a significant impact on the profitability, resilience and sustainability of domestic agriculture.  It must be recognised that whatever policy framework is put in place by any new legislation, there must be sufficient flexibility to respond appropriately when there is greater certainty in our international trade position.

  1. General Comments on the Bill

3.1     The TFA acknowledges that the Bill as presented has seen some significant change in comparison to the previous Bill which was before the House in its previous session.  We are grateful to the Government for the improvements that it has made.  These improvements include the following:

  • The recognition of the importance of soil quality and the conservation of native livestock as public goods.
  • A requirement for the Government to have regard to the need to encourage the production of food in an environmentally sustainable way.
  • The requirement for the Government to produce multi-annual financial assistance plans.
  • The requirement upon the Government to report on food security.
  • Reform of agricultural tenancies.

3.2     However, this does not mean that the TFA does not believe that the Bill could not be improved further and in this briefing, we set out the areas where such further improvements are needed

3.3     It is appreciated that, in the main, this Bill provides a framework for implementation of existing and future Government policy. Much of the detailed work of implementation is to be set out in Regulations, many of which are to be drawn up under the Affirmative Resolution procedure. We would like to hear from Government both that it intends to make full use of the powers that it will be reserving to itself in bringing this legislation into force and that it will be making available sufficient Parliamentary time to allow for the large number of regulations to be confirmed.  We believe that the is an opportunity to use the forum of the Environment Food and Rural Affairs Committee to consider any draft regulations the Government may wish to introduce.

  1. Chapter 1 – New Financial Assistance Powers

4.1     The TFA welcomes the scope of the new financial assistance powers. It is particularly pleasing to see the powers to provide financial assistance for productivity – Section 1(2).

4.2     The TFA believes that the list of purposes set out in Section 1(1) – broadly speaking those which are considered public goods – is incomplete.  Although the Bill later provides duties upon the Government both to bring a report to Parliament on food security and to have regard to the need to encourage food production, these elements must be included within the scope of public goods.  Also, whilst welcoming the inclusion of the conservation of native livestock in the list of public goods the TFA believes that this should be extended to include all pasture fed grazing livestock systems, particularly those within an upland context.  We note that the definition of “cultural or natural heritage” includes support for uplands and other landscapes, we would again consider it appropriate to have this fully recognised within Section 1(1).  Therefore, the TFA believes that Section (1) (1) (g) should be redrafted to read:

  • protecting or improving the management of landscapes and biodiversity through pasture fed grazing livestock systems including the conservation of native livestock, native equines or genetic resources relating to any such animal.

4.3     In addition, we believe that a new clause should be added after (j) as follows:

  • protecting or improving the health, well-being and food security of citizens.

4.4     In the context of this legislation being an Agriculture Bill, the TFA believes it is necessary to restrict the financial assistance powers such that they are available only in respect of individuals who are operating units which are predominantly agricultural in nature.  Therefore, in Section 2 of Part 1 it should be made clear that financial assistance may only be made to individuals or groups of individuals natural or otherwise operating land where the predominant use is agricultural as defined by the Agricultural Holdings Act 1986 Section 96 (1).

4.5     There also needs to be a clear limitation of who can be considered a beneficiary by ensuring that it is targeted at “active farmers” or “active land managers” defined as individuals being in occupation of, or with rights of common over, the land they are farming, taking the entrepreneurial risk for the decisions made in relation to the management of that land and in day to day management control.

4.6     Within the context of Devolution, the TFA would wish to see a commitment to the principle that the four countries of the United Kingdom are provided with at least the same level of funding as they received previously to deliver agricultural and rural development policies and that this funding must be earmarked for the delivery of the objectives set out within the Bill.

  1. Multi-Annual Financial Assistance Plans

5.1     The TFA welcomes the requirement upon the Secretary of State to prepare Multiannual Financial Assistance Plans, something which was entirely missing from the previous Bill considered by the House.  In addition to the elements specified, there must be a requirement upon the Government to identify the level of expected expenditure over the lifetime of the plan and a clear statement as to the outcomes that it expects to achieve.

  1. Part 1: Chapter 2 – Direct Payments After EU Exit

6.1     We note the intention, set out in Section 8 (1) for a seven-year transition to phase out current direct payments and that this period can be modified by the Government by Regulation.  Whilst not objecting to the seven-year transition, we do believe that the transition should start in 2022 rather than in 2021.  In that we are creating a new policy framework for a generation, the TFA believes that it is better for it to be introduced well rather than quickly.  We fear that a rushed implementation could lead to significant problems both in terms of the administration of new arrangements and for the industry.  Therefore, we believe that the seven-year transition should start a year later than stated.

6.2     The Government should also be clear about its plan for phasing out direct payments.  Previously, an indication was provided for how the transition would begin in the first year but we would like to see clarity about the way in which the remaining years of the transition period will be handled and, in particular, an assurance that smaller recipients will be protected for a longer period of time in comparison to larger recipients to help with farm business adjustment.

6.3     The TFA supports the concept of delinking payments and the provisions for providing a lump sum payment in lieu of future direct payments (Sections 12 and 13).  The TFA believes that this will be of significant assistance to progress restructuring within the industry allowing individuals to use both de-linked payments and consolidated payments to retire from the industry or invest in their businesses or to invest in other economic activities either on their holdings or off their holdings. However, it will be essential that recipients of these payments must meet the active farmer test at the time they make the application for these payments to be made.

6.4     The TFA welcomes the flexibility available to the Government to extend the transition period if required. The TFA believes that the Bill should also reserve the necessary powers to ensure that DEFRA does not lose any money recouped from direct payments if, for whatever reason, the new financial assistance schemes proposed are not available to the extent necessary to make full use of the available funding. The TFA believes that any surplus funding identified on an annual basis should be reallocated through direct payments until sufficient schemes are available.

  1. Part 2: Chapter 1 – Food Security

7.1     The TFA congratulates the Government for recognising the need to consider matters of food security and has included a requirement in the Bill for the Government to prepare and lay before Parliament a report on food security.  However, we are disappointed that for such an important issue this is only to occur once every five years.  As this is such an important issue, not only should it be identified in the list of public goods, but the Government’s report should be an annual requirement.  We would ask MPs to insist that five years is replaced with an annual requirement.

7.2     The TFA also believes that the Government must be required to specify food security targets and to identify any actions it needs to prioritise if those targets are not being met. 

  1. Part 2: Chapter 2 – Exceptional Market Conditions

8.1     The TFA welcomes the provisions within the Bill to allow for financial and other assistance to be made available to the farming industry at times of exceptional market conditions. The TFA would wish to be assured that this will cover natural phenomena such as drought, flood and disease as well as economic phenomena that may impact upon markets.

8.2     The TFA would also wish to have an assurance from the Government that this part of the legislation will cover not only situations of “acute” hardship or difficulty but that it will also be able to be invoked if “chronic” or long-lasting difficulties are apparent. This might involve things like endemic disease or structural changes in agricultural markets which may require farmers to undergo significant adjustment.

  1. Part 3: Chapter 1 – Collection and Sharing of Data

9.1     The TFA welcomes this part of the Bill as it will provide the potential for a greater degree of information to be available about the operation of supply chains that will lead to more informed negotiation between farmers, processors, retailers and food service outlets. This has important links to the provisions set out in Part 3 Chapter 2 of the Bill dealing with provisions to ensure fairness within the supply chain.

  1. Part 3: Chapter 2 – Fair Dealing with Agricultural Producers and Others in the Supply Chain

10.1   The TFA is delighted that the Government is proposing to reserve significant powers to regulate the operation of supply chains and, in particular, relationships between farmers and first purchasers. The TFA believes that this is a vitally important role for Government in the face of significant market failure within agriculture and food supply chains. However, it is concerning that the Government does not see this forming part of an expanded role for the Groceries Code Adjudicator. It has been proposed that the appropriate regulator here would be the Rural Payments Agency (RPA). The TFA does not believe that the RPA has sufficient expertise in this area.  The TFA sees no reason why this responsibility should be placed anywhere else other than with the the Groceries Code Adjudicator.

  1. Part 5: Marketing Standards, Organic Products and Carcass Classification

11.1   The TFA welcomes the inclusion within the Bill of powers for the Government to set marketing standards for agricultural products. It will be important to ensure that these are used to protect the high standards of production evident on UK farms in respect food safety, animal welfare and environmental management. It will be important to see this joined up with the Government’s policy on international trade such that these same standards apply to agricultural products imported into the UK from abroad.  The Government has given an oral commitment to protect our high standards in trade and in signing new free trade agreements, but this also must be supported by clear legislation in order to sustain these arguments within the context of the World Trade Organisation.

 

A 12. Agricultural Tenancies

12.1   The TFA is very pleased that the Bill includes Schedule 3 with amendments to certain aspects of agricultural tenancy legislation which formed part of the consultations on tenancy reform conducted by DEFRA and the Welsh Government in 2019.  From discussions with the government, it has decided to proceed with what it considers to be the most urgent matters and those which were least contentious considering the consultation responses.

12.2   The TFA is pleased to support all the changes that are being made but there is a need for certain aspects to be improved.

12.3   Whilst we welcome the new provisions which will allow a tenant the ability to object to a refusal from the landlord for consent to enter into a scheme introduced under the financial assistance provisions of the Bill or to carry out works in accordance with a statutory obligation, currently this only applies to tenancies regulated by the Agricultural Holdings Act 1986.  These provisions must be extended to tenancies regulated by the Agricultural Tenancies Act 1995.

12.4   Also, the Bill envisages that tenants are able to use these new provisions only if the landlord’s consent is required by the terms of the tenancy agreement or by a variation of the terms of the tenancy.  However, this should be widened to include any situation where landlord consent is required.  For example, whilst a tenancy agreement itself may not require landlord’s consent, a scheme under which financial assistance has been provided may by its own terms require the tenant to have obtained landlord consent before participating.

12.5   There are two other legislative changes which were not deemed to be contentious following the consultations which, inexplicably, the Government has decided not to take forward.  These are as follows:

Firstly, to encourage landlords to consider letting for longer periods of time on Farm Business Tenancies (FBTs), new provisions for new FBTs with an initial minimum term of 10 years and without Landlords’ scheduled break clauses, to allow the FBT to be terminated by notice served on the tenant by the landlord for:

  • non-payment of rent (as an alternative to but not a replacement for forfeiture);
  • breaches by the tenant of the contractual terms or conditions of the agreement;
  • the death of the tenant;
  • the landlord to remove land from the holding where planning consent has been granted for non-agricultural use.

Secondly, a set of technical and procedural changes to improve the operation of the succession provisions under the 1986 Act.

12.6   Whilst understanding that some of the other changes upon which the government consulted are not being taken forward at this stage due to the assessment that they are more contentious, the TFA would like to know what the Government’s plans are in looking at future legislation in these areas.  These include the following:

  • To encourage restructuring, allowing the option for Agricultural Holdings Act tenants, with at least lifetime security, to assign their tenancy (for payment) to a new tenant for a term of 25 years, subject to a pre-emptive right for the landlord to buy out the tenant’s interest.
  • To encourage earlier successions, to restrict successions on retirement when sitting tenants reach an age 5 years beyond state retirement age in return for widening the franchise for succession to include nephews, nieces and grandchildren.

12.7   In addition to these, the TFA would wish to promote a further technical change within the Agricultural Holdings Act 1986.  To bring arrangements in line with notices to do work, allowing tenants to serve counter notices in respect of notices to remedy from their landlords which are not notices requiring work to be done.

  • Conclusion

13.1   The TFA would welcome support from all Members of Parliament in respect of the matters set out above.

 

Tenant Farmers Association

5 Brewery Court

Theale

RG7 5AJ

t: 0118 930 6130

f: 0118 930 3424

w: www.tfa.org.uk

e: george@tfa.org.uk

 

29 January 2020

GWD/0513


5 Brewery Court, Theale, Reading, Berkshire, RG7 5AJ Tel: 0118 930 6130, Fax: 0118 930 3424, Email: tfa@tfa.org.uk Web site: www.tfa.org.uk
Copyright © 2013 Tenant Farmers Association (TFA). All rights reserved.