Published: 18/12/2020 By Harriet Parris (Graduate Surveyor)
An Overview of The Agriculture Act 2020
After more than two years since the Agriculture Bill was presented to parliament, the Agriculture Act 2020 is now due to become law from the 1st January 2021.
As a result of leaving the European Union we will also be moving away from the EU’s Common Agricultural Policy (CAP) and begin to enter a scheme called the Environment Land Management Scheme (ELMS), which will completely change the dynamics of farm management.
The Transitional Period and Removal of BPS Payments
The fundamental change of the Agriculture Bill is the removal of the Basic Payment Scheme (BPS) which will be phased out during the agricultural transition period from 2021 to 2027. However, the Countryside Stewardship Scheme will only continue until the ELMS commences in 2024.
The new financial assistance will be directed towards the concept of “public money for public goods”. The scheme is to work on three levels: Sustainable Farming Incentive, Nature Recovery and Landscape Recovery. This is essentially a requirement to encourage food production to be environmentally sustainable, improve the animal welfare standards and increase soil protection. Farmers will also be able to gain funding for equipment, technology and infrastructure under the Farming Investment Fund which encourages productivity and innovation.
During the transitional period, DEFRA’s aim is to de-link Direct Payments meaning that a claimant will no longer need to be in occupation of the land to receive payment. Defra will then calculate their payment based on a reference period which will continue to reduce annually.
The direct payment reduction year on year is as follows:
|Direct Payment Band||2021||2022||2023||2024|
|Up to £30,000||5%||20%||35%||50%|
|£30,000 to £50,000||10%||25%||40%||55%|
|£150,000 or more||25%||40%||55%||70%|
Changes within the Agricultural Holdings Act (AHA) 1986
- Rent reviews can now be referred to an independent expert surveyor.
- Parties will now be able to apply to the RICS, CAAV or the ALA to appoint an arbitrator or expert.
- Tenants may be able to refer a variation of restrictive terms of any AHA tenancy in order for tenants to benefit from government grants, support schemes and environmental schemes or to carry out works which are required by statute, arbitration or expert determination.
- A particularly important factor to highlight is the change to succession under an AHA tenancy. The minimum retirement age of 65 is to be removed and tenants will be able to give notice at any time. The commercial unit test is also to be removed, with the suitability test amended to raise the standard of the successor tenants who must prove their ability to farm commercially and profitably in an efficient and productive way.
- As like with AHA tenancies, rent reviews can now also be referred to an independent expert surveyor and parties will now also be able to apply to the RICS and CAAV or the ALA to appoint an arbitrator or expert.
- Short term notice to quit provisions for FBTs has been introduced for tenancies of ten or more years as an alternative to forfeiture.
- Non-payment of rent now requires a 3 month notice, planning consent requires a 6 month notice and death of a tenant requires a 12 month notice.