Direct Payments to Farmers (Legislative Continuity) Bill — House of Commons, 2020-01-28
Topic: Agriculture
Charles George Eustice (Conservative, Centre-right): There is no currency risk for British farmers in this year, because the total size of the budget has already been set by the Treasury, and it has been set at the same level as last year. Under the regulations, we have to go through the formal process of setting the exact payment rate, but, because the budget has been guaranteed and it has been guaranteed that the payment system will be the same, farmers have a high degree of confidence that—barring any minuscule changes—their payment will be the same as it was last year My hon. Friend has put his finger on an important problem with the common agricultural policy. It introduced an entirely unnecessary exchange rate risk for our farmers, in that money was sent to the European Union in pounds and was then denominated in sterling at a fixed point in time, typically in September each year. That meant that if the pound had had a good year and had rallied against the euro, farmers found that their payment would be lower, whereas sometimes when the pound fell, as it did after the 2016 referendum, they had an early Brexit dividend and received a higher payment than they might otherwise have expected. That unnecessary exchange rate risk has now gone, and the budget is set for this year I do not want to bore people too much with these regulations. I have listed them all in detail, and there is a reason for that. In the European Union, particularly in the context of the CAP, there are three types of regulations. There are the basic regulations, which the Council of Ministers has quite a bit of involvement in shaping, and on which, through working groups, the member states have a vote. There are delegated Acts or regulations, in which there is far less involvement for the member states. They collectively have a kind of veto power, but have less of an amending role. Then there are the implementing Acts or regulations, which the Commission pretty much just makes up without any particular involvement of the member states That said, I am conscious that Members will never have debated any of these regulations. Ministers will have been aware of debates and discussions taking place in working groups as the basic regulation was formed, and they will have received submissions letting them know that something alarming had been handed down in an implementing Act and we could not do anything about it. Obviously, as we make regulations in future, the scrutiny of the House will be brought to bear, and Members will be able to engage in and scrutinise every bit of the detail of future agricultural policy The regulations that I read out earlier may have seemed like a list of rather meaningless numbers, but I can tell Members who are interested in what they mean collectively, in terms of what the farmer is required to do, that basic payment scheme rules are published annually by the Rural Payments Agency. Let me give Members a flavour of those The publication "Basic Payment Scheme: rules for 2019" sets out the key dates during that scheme year to which farmers must have regard. It includes, for instance—and all this is born out of the regulations that are being brought across today—the setting of 1 January as the official start of the year. The period between 1 January to 30 June is regarded as the "EFA period for EFA fallow land" That is the period during which land must be fallow if farmers want to claim it. On 13 March, the "window opens", and farmers can start sending in their applications. Between 1 May and 30 June, the so-called three crop rule kicks in, along with the "EFA period for nitrogen-fixing crops" During that period, farmers must demonstrate that in that window and that window only, they have three crops on their farms. Another rule states that one of those crops can be fallow land, but the qualifying period for that type of fallow land is different from the one for the type that is covered by the EFA period. There is a deadline of 15 May for farmers to submit their BPS application forms. They are then given a couple of weeks’ grace during which they can make changes, and they have until 31 May to do that. There is then a "late application" deadline, which means that farmers are effectively given 21 days to submit late applications, but will lose, typically, 1% of their payment for each late application day.