CAP Update: Gove Sets Out Proposals And LFASS Boost For Scottish Farmers

CAP: Some clarification

Following our April 2017 update on the Common Agricultural Policy, Michael Gove, the Secretary of State for Environment, Food and Rural Affairs, has recently shed some light on what may happen to the current subsidy regime in the United Kingdom, post-Brexit.

Following our April 2017 update on the Common Agricultural Policy, Michael Gove, the Secretary of State for Environment, Food and Rural Affairs, has recently shed some light on what may happen to the current subsidy regime in the United Kingdom, post-Brexit.

At the Oxford Farming Conference on 4 January 2018, Gove stated that the government will guarantee subsidies at the current EU level until 2022. After that, it is anticipated that there will be a transition period during which farmers would be expected to change their business model or make other adjustments as necessary. It was suggested that during this transition period, subsidy payments may continue to be available until 2024. A consultation will be held to determine whether payments equivalent to Basic Payment Scheme support (BPS) should continue during this period, and if so, at what rate. During this time, subsidies would be reduced, perhaps by way of a sliding scale of reduction, or by introducing a maximum cap for larger claimants. A DEFRA report is due to be released later in January outlining the manner in which such a cap could be imposed.

Gove also reiterated his criticisms of the current CAP system which he says advantages wealthy landowners by offering more subsidy to those with more acres. Additionally, he commented that the current system encourages wastage and inefficiency and fails to encourage good environmental practice. This point of view is supported by the recent Agricultural and Horticultural Development Board's (AHDB) Horizon report showing that British farmers are lagging behind their international counterparts in terms of productivity. The AHDB has valued the loss to the UK's GDP between 2000 and 2013 caused by the productivity gap at £4.3bn. However, many farmers utterly refute this and point to numerous innovative practices found on their individual farms, designed to increase efficiency and productivity.

The subsidy regime post Brexit will have a new focus on incentivising environmental aims and the provision of 'public goods'. 'Public goods' include access to the countryside; planting woodland and wildflowers; boosting wildlife; and improving water...

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