Farmers normally have to comply with rules about crop diversification to qualify for direct payments under the common agricultural policy. The Government is proposing to set aside this requirement for 2020 in England so farmers would not have to plant more than one type of crop to be able to claim the full payment. This is in response to concerns that adverse weather last year might make it hard for farmers to meet the usual crop diversification requirements this year.
The Government has already made the statutory instrument needed to bring about this legal change, but it cannot continue in force unless both Houses of Parliament approve it by 28 June 2020. The House of Lords is due to consider the instrument, the Direct Payments to Farmers (Crop Diversification Derogation) (England) Regulations 2020, on 2 June 2020.
What are direct payments?
Direct payments are paid to farm businesses based on the amount of agricultural land that they maintain. Direct payments are subject to several requirements, including crop diversification requirements. Direct payments are made up of a ‘basic payment’ that is complemented by other support schemes. The European Commission states that the average payment is €266 per hectare eligible for payment.
The green direct payment, also known as ‘greening’, is one type of support scheme given to farmers who “help to meet environmental and climate goals”. Farmers will receive the green direct payment if they comply with three mandatory practices that the EU says benefits the environment. These practices are crop diversification, maintaining permanent grassland, and dedicating 5% of arable land to areas beneficial for biodiversity.
The Direct Payment to Farmers (Legislative Continuity) Act 2020 received royal assent on 30 January 2020. This provided a legal basis in domestic law that allowed UK farms and land managers to receive direct payments after 31 January 2020. These payments are now funded domestically.
What the instrument does
The instrument disapplies the crop diversification requirements to farmers in England for claim year 2020. The explanatory memorandum to the instrument states that crop diversification rules require that:
- there must be at least two different crops grown on holdings that have between 10 and 30 hectares of arable land. The largest crop cannot cover more than 75% of that arable land; and
- there must be at least three different crops grown on holdings that have more than 30 hectares of arable land. The largest crop cannot cover 75% or more of that arable land and the two largest crops together are not permitted to cover more than 95% of the arable land.
The purpose of the instrument is to exempt farmers in England from the crop diversification requirements during 2020 only, Defra states. This is to enable farmers to receive direct payments for 2020. Farmers in England will not be required to plant more than one crop in this year.
Why is the Government making this change?
The policy background, as stipulated in the explanatory memorandum, is based on the higher than average rainfall experienced in England since 2019. Examples include the period of flooding caused by Storm Ciara and Storm Dennis. Defra states that these adverse weather conditions have impacted some farmers’ ability to cultivate crops and may impact farmers’ ability to meet the crop diversification requirements for 2020 direct payments. The explanatory memorandum states that, in normal circumstances, failing to meet the crop diversification requirements “makes a claim ineligible for the greening element of direct payments”. This accounts for approximately 30% of the total value of payments.
The instrument has been made under article 69(1) of the Regulation (EU) 1307/2013 of the European Parliament and of the Council. This EU regulation provides the rules for direct payments within the framework of the common agricultural policy.
The instrument was made as a ‘made affirmative’ on 30 April 2020 and came into force on 1 May 2020. The approval period for the instrument is scheduled to end on 28 June 2020. It extends to England and Wales and is applicable in England only.
The instrument is linked to a second instrument that also deals with the direct payment of farmers. The Direct Payments to Farmers (Legislative Continuity) Act 2020 (Consequential Amendments) Regulations 2020[BL1] (‘SI 2020/463’) came into force on 30 April 2020. The need for SI 2020/463, as provided in the explanatory memorandum to that instrument, arose from the fact that EU law governing the 2020 direct payment schemes was incorporated into UK law on exit day, rather than at the end of the implementation period. The explanatory memorandum for SI 2020/463 said:
It ensures that the retained direct payments legislation is treated in the same way as legislation retained under the European Union (Withdrawal) Act 2018. This is necessary to ensure the UK statue book works coherently and effectively. For example, it provides clarity on how cross-references to EU regulations governing the 2020 direct payment schemes should be read.
Scrutiny of the instrument
The House of Lords Secondary Legislation Scrutiny Committee noted both of the direct payment to farmers instruments to be of interest in its fourteenth report of session. The committee said:
These two sets of regulations deal with direct payments for farmers. SI 2020/475 exempts farmers in England from the need to follow crop diversification requirements in order to receive direct payments for 2020. The Department for Environment, Food and Rural Affairs (Defra) explains that the crop diversification requirement is removed for 2020 only, in response to the recent prolonged period of wet weather and the flooding from Storm Ciara and Storm Dennis which have made it difficult for farmers to access their land and to plant. Failure to meet crop diversification requirements usually make a claim ineligible for the greening element of direct payments […] but SI 2020/475 ensures that farmers in England will not be required to plant more than one crop for the 2020 direct payments scheme year.
As the instrument has been laid under the urgent ‘made affirmative’ procedure, it needs to be approved by Parliament within 28 days of having been made to remain in force. It is linked to SI 2020/463 which needed to come into force before Defra exercised powers under retained direct payments legislation to make the exemption under SI 2020/475. Defra explains that this is because EU law governing the 2020 direct payment schemes was originally incorporated into UK law on exit day, rather than at the end of the implementation period. SI 2020/463 ensures that regulations made under powers in retained direct payments legislation during the implementation period are treated in the same way as regulations under powers in retained EU law under the European Union (Withdrawal) Act 2018.
The Joint Committee on Statutory Instruments also considered the instrument and raised no concerns.
- House of Lords Library, Agriculture Bill, 22 May 2020
- Defra, ‘Explanatory Memorandum’, 30 April 2020