From 2021, the UK government will start a seven-year process of replacing the EU’s Common Agricultural Policy Direct Payments with a new set of payments. The new Agricultural Bill will change some of the conditions which defined subsidies under the EU scheme and will no longer reward farms for their size and type but on whether they deliver ‘public benefits’.
These benefits include activities such as addressing soil improvement, tackling climate change and working to protect nature.
The new Agriculture Bill is seen as the foremost piece of legislation affecting farming for 70 years, with its radical aim of inspiring innovation and promoting environmental protection measures. It will address climate change – something widely accepted as creating the conditions that left farms across large areas of the UK severely flooded in 2019.
Although farms are usually insured against flood damage, 2019’s sufferers need additional support. The Farming Recovery Fund, established by the government in 2019 to provide £2m of support to flood-hit farms in North Yorkshire and Lincolnshire, was boosted in January 2020 by a further £2m. Eligible areas now include Worcestershire, Derbyshire, Nottinghamshire and Gloucestershire.
The Farming Recovery Fund provides assistance to farmers whose agricultural land has been damaged by flooding and declared a natural disaster by the Government. The Fund provides financial assistance up to 100% of costs, with a minimum grant level of £500 and a maximum grant level of £25,000. To demonstrate the impact of flooding, farmers need photographs and maps to support their claim, as well as meeting eligibility criteria.
The Rural Payments Agency’s Chief Executive, Paul Caldwell, is on record as saying “while insurance will pay out for the majority of the damage”, the fund will enable affected farmers to pay for unexpected projects and farm restoration work, including fence rebuilding and the creation or repair of stone walls, re-cultivation, re-seeding and removing flood debris from farmland.
Applications must be submitted by March 31, 2020 by North Yorkshire and Lincolnshire farmers and by July 31 for those in the counties covered by the extension.
By concentrating on better land management and environmental protection, the Agriculture Bill seeks to remodel the farming landscape, reversing impacts like soil erosion. Damaged land is ineffective at retaining water and is increasing flow rates into ditches, streams and rivers, thus contributing to flooding. Nutrients and recently applied organic materials are being picked up by this run-off water and having negative impacts on lakes and rivers.
The new Bill is not just about erosion, flooding and water quality, it also addresses better air quality, improved animal welfare standards, enhanced wildlife protection, and food supply security. New methods and innovations will contribute to a drive to decarbonise agriculture, helping to meet the Government’s net-zero emissions target by 2050, whilst reversing a number of the impacts of climate change on the land.
Neither the new Agriculture Bill, nor the compensation scheme provide an instant fix for farmers’ problems, so farms should consider All Risks insurance, including cover for fire risks emanating from more extreme summers. Factors like these can disrupt a farm’s business plan and operation, making business continuity insurance another area to consider, but there are many other risks too.
If your farm needs the correct insurances, to cover existing core perils as well as emerging climate risks, innovations and evolving methods of farming, you should speak to a broker who understands agricultural insurance. Please contact us for further information.