The Direct Payments to Farmers (Legislative Continuity) Bill was introduced to the House of Commons on the 9th of January to ensure farmers participating in the Basic Payment Scheme in 2020 can be paid as normal from the beginning of December 2020.
The Withdrawal Agreement effectively means the UK remains subject to the bulk of EU schemes and rules during the 11 month transition period, because BPS payments made from the beginning of December onwards would normally come from the following year's EU budget (these budgetary years are calendar years). However, this facility was excluded from the Withdrawal Agreement since the UK Government did not want to draw money from the 2021 EU budget in order to make BPS payments in December 2020 as this would mean becoming a contributor to the next (2021-2027) EU budget without being a Member State.
As such, the Bill allows BPS payments to come from domestic UK funds and is in a sense a housekeeping exercise. However, the FUW has queried whether it requires funding to be paid to farmers or whether devolved nations, for example, could divert the funds to other areas of spending (which the EU Regulations does not allow).
The Bill also takes into account the Bew Review recommendations, which the FUW has been heavily critical of. Indeed, the FUW’s response to the Sustainable Farming and Our Land consultation states that the "Bew Review recommendation to award Scottish agriculture a sum equivalent to an additional £1,300 per Scottish farmer, thereby potentially increases the difference between average annual Welsh and Scottish farm payments from £11,000 to £12,100 once the small uplift recommended by Lord Bew of around £150 per Welsh farm per annum is taken into account.”
"Such decisions and recommendations highlight the need for a proper financial and political framework which secures long-term funding for agriculture in all of the devolved regions based on a fair and objective formula which minimises market distortion, ensures Welsh farmers are not disadvantaged, and provides ring-fenced funding to ensure spending cannot be diverted in ways which disadvantages individual businesses."
Therefore the Bill effectively opens the door to a far larger differential between what Scottish farmers receive on average and what those elsewhere receive on average.
Notwithstanding this concern, the FUW supports the Bill, but remains concerned about long term funding arrangements, how payments in future years will be administered and how funding will be allocated to devolved nations. The FUW believes ring-fenced funding should be allocated to devolved nations through a multi-annual fair funding formula, as described in our Filling the Void document.
Follow the progress of the Bill through Parliament here.