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No deal Brexit: What happens to farm payments?

Published Tuesday, August 13, 2019

UK farmers receive around €4 billion per year under the EU's Common Agricultural Policy (CAP). Under any Brexit scenario, the UK will leave the CAP when it leaves the EU. A new policy framework and legislative basis will be needed. Work is in progress to develop this: the four UK nations are developing their own plans for farm support and an Agriculture Bill is currently awaiting further consideration in the Commons. But what happens to farm payments in the event of a no deal Brexit? This briefing sets out the Government's plans to continue to pay farmers after exit day and the legal measures to enable this to happen.

No deal Brexit: What happens to farm payments?

Currently farmers in the UK receive around €4bn per year under the EU’s Common Agricultural Policy (CAP).This is split between direct payments to farms (the majority) and agricultural support and rural development funding.

The UK Government has said that if the UK leaves the EU on 31 October 2019 with no agreement in place, eligible beneficiaries will continue to receive payments under the terms of the UK government’s funding guarantee until the end of this Parliament, expected in 2022. Beneficiaries will be required to conform to the same standards as they do currently to receive payments.

Farm payments after Brexit

When the UK leaves the EU, whether under a withdrawal agreement or not, it will leave the CAP as the CAP only applies to EU Member States. The Government has committed to retaining current overall level of cash support for farmers until 2022. This includes all funding provided for farm support under both Pillar 1 (mainly direct payments) and Pillar 2 (mainly rural development and agri-environment schemes) of the current CAP. This commitment applies to the whole UK. Levels of funding after 2022 and details of how funds might be apportioned have not been set out

A new framework and legislative basis will be needed for farm support after Brexit and preparation for this is in train across the UK. The four UK nations have consulted on and are developing their approaches for how to support farmers in England, Northern Ireland, Scotland and Wales after Brexit.

The Agriculture Bill 2017-19

Provisions for the framework for future farm support payments have been set out in the Agriculture Bill 2017-19 for England, with schedules providing similar powers for Wales and Northern Ireland. The Commons Library briefing on the Agriculture Bill 2017-19 contains further information.

The Scottish Government did not take up the option of having a schedule in the Bill and it considered that it would have the necessary powers (under the European Union (Withdrawal) Act 2018 ) to correct deficiencies to ensure that the law on farm payments would continue to be operable. It proposes a transition period with little change until 2020 and simplification of current schemes from 2021. It has said it could bring forward Scottish specific legislation if new powers are needed. For more information see this Scottish Parliament Information Centre briefing.

Secondary legislation

The Agriculture Bill is awaiting its Report stage. Should the Bill not have received Royal Assent at the time of Brexit, the provisions in it to enable Ministers to continue to make farm support payments would not be in place. However, the Government has introduced secondary legislation to allow continuation of payments. Defra has laid a series of SI’s under the European Union (Withdrawal) Act 2018 to make EU retained law operable in relation to agriculture, including measures on farm payments.

The explanatory memorandum to the Common Agricultural Policy (Direct Payments to Farmers) (Amendment) (EU Exit) Regulations 2019, and The Common Agricultural Policy (Rules for Direct Payments) (Amendment) (EU Exit) Regulations 2019 explains that their purpose is to allow for direct (farm) payments legislation to continue to operate effectively after Brexit. The SI’s extend and apply to the UK. The EM states that "the appropriate legislative 'fixes' introduced by these instruments will maintain a status quo position, as far as possible, and will have no noticeable impacts on the ground for farmers".

It also states that the SI’s maintain the status quo in respect of the flexibility of the relevant authorities in England, Northern Ireland, Scotland and Wales to “operate the Direct Payments framework, make payments and enforce the rules surrounding Direct Payments, within their respective territories”. The SI’s provide the legal basis for continuing payments to farmers and enable UK authorities to determine actual funding levels.

No deal technical notices

The Government has published a series of technical notices for stakeholders on no deal preparations. The Farm Payments if there’s no Brexit deal [Accessed 13 August 2019] states that:

  • If the UK leaves the EU on 31 October 2019 with no agreement in place, eligible beneficiaries will continue to receive payments under the terms of the UK government’s funding guarantee.
  • Defra and the devolved administrations are preparing domestic legislation (under the Withdrawal Act) to ensure we have the ability in law to continue operation of payments in a ‘no deal’ scenario. This legislation preserves the EU law as it currently stands, and ‘fixes’ the legislation so that it is operable once we’ve left the EU.
  • The domestic legislation will require beneficiaries to conform to the same standards as they do currently, in order to receive payments. This will include on-site inspections to UK farms receiving payments, which will continue as normal.
  • All of these rules and processes will remain the same until Defra and the devolved administrations introduce new agriculture policies, either through the Agriculture Bill, or an Agriculture Bill in one or more of the devolved parliaments.
  • The government has pledged to continue to commit the same cash total in funds for farm support until the end of this parliament, expected in 2022: this includes all funding provided for farm support under both Pillar 1 and Pillar 2 of the current CAP. This commitment applies to the whole UK.

Farmers representatives have called for clarity on long term funding levels beyond 2022. The Tenant Farmers Association and the Country Land and Business Association, have called for a delay to any changes in payment schemes until the “economic realities of operating outside the EU are clearer”.

Commons Briefing papers CBP-8644

Author: Sarah Coe

Topic: Agriculture

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