Yesterday, Wednesday, 12 September 2018, the landmark Agriculture Bill 2018 was published and had its first reading in Parliament. The legislation aims to deliver a cleaner and healthier environment for future generations, concurrently helping promote a profitable and viable UK agriculture industry.
The Agriculture Bill sets out the basic mechanism as to how farmers and land managers will in future be paid for “public goods”, such as better air and water quality, improved soil health, higher animal welfare standards, public access to the countryside and measures to reduce flooding. This will replace the current subsidy system of Direct Payments, and as of 2022 a new Environmental Land Management System (ELMS) will be highly beneficial for famers and land managers, which is one of payment of public money for public goods.
The Bill provides for farmers & landowners to work with DEFRA to produce the new system, which allows for argument for a capitalised payment rather than year-to-year. Receiving capitalised payments under the current scheme will be possible, during the transition period. The detail of the new system will be put into place by secondary legislation (statutory instruments).
Jonathan Thompson, Senior Associate, noted that if new schemes run for up to 10 years, there could be implications as to land use by agricultural tenants. He also highlights that there has previously been a campaign by the Tenant Farmers Association for a minimum term of 10 years for farm business tenancies. Farm tenants will want to subscribe to the new ELMS, but they will want long tenancy terms to enable them to get the best value and support for the ELMS and drive forward their businesses. Jonathan adds that landed estate owners will also need to consider this in their own overall land management and tax planning (particularly in relation to Agricultural Property Relief): does this raise a requirement for longer agricultural tenancy terms by the back door?
Overall, the Bill sets out how the government will strengthen transparency in the supply chain to help farmers get a better deal in the marketplace, as well as ensure that all the necessary measures are in place for the start of the agricultural transition in 2021, away from direct payments.
For more information, please contact the partner having responsibility for your affairs or any partner in the Landed Estates team here.
 GOV.UK, Landmark Agriculture Bill to deliver a Green Brexit, https://www.gov.uk/government/news/landmark-agriculture-bill-to-deliver-a-green-brexit