Buried within the UK Agriculture Bill, a clause allowing UK ministers to determine which of three WTO 'boxes' state aid for farmers should goes into could prove difficult for the devolved administrations.
On 10 October the long-awaited Agriculture Bill will be debated in Parliament. It confirms that direct support (subsidies) for farmers in England will be phased out after Brexit, with agriculture being based more on market principles. Support will be largely confined to the provision of ‘public goods’. Beyond that, it is light on policy and is mostly about conferring powers on ministers. The concept of public goods, in particular, is not clearly defined.
The bill deals with England but was opened to the devolved governments as the UK Government ‘offered to extend’ powers to them. The Scottish Government believes that it has these powers already. It is locked into conflict with the UK in the Supreme Court over its own Continuity Bill, which affirms this and in the meantime has declined to use the Agriculture Bill for its own proposals.
The Welsh Government, having settled its dispute over the division of powers, has chosen to write its own provisions into a schedule of this bill rather than going its own way. The Welsh schedule follows England in phasing out direct support. While this was announced some time earlier, it has surprised many observers, given the dependence of Welsh farmers on direct support. This accounts for some 80 per cent of their incomes. Previously Wales, like Scotland, had emphasized support for farmers.
Northern Ireland also has its own schedule in the bill but, as the power-sharing Executive is not currently functioning, the work has been done by civil servants. So there are no policies in the schedule, only provisions for giving powers to Northern Ireland departments, similar to those for English and Welsh ministers,
As the bill does not apply to Scotland, and Wales and Northern Ireland have opted in, the UK Government can claim that there has been no power grab and that devolution remains intact. One apparently technical provision, however, does have UK-wide application. It concerns the World Trade Organization (WTO), which regulates permissible forms of agricultural support in three boxes: green for allowable payments; amber for restricted payments; and blue for exceptions to the amber box for payments that limit production. The bill gives the Secretary of State power to determine in which box any payments made across the UK go into. This could be used to determine which forms of support are permissible in the devolved territories and thus centralize key policy decisions.
Meanwhile, discussions are still taking place on frameworks to govern what were formerly EU competences, including those in agriculture. This is to secure the UK’s own internal market after Brexit and allow the UK Government to negotiate international trade deals, including a deal with the EU and membership of the WTO. It is not clear how the outcome of these discussions will link into decisions made in the Agriculture Bill.
The other big issue is the funding for agriculture after the Brexit ‘agricultural transition’ period’ ends in 2022. This will be led by decisions for England, determined by the Treasury. Devolved administrations will presumably get a corresponding allocation, whether through the Barnett Formula (which would largely preserve their advantaged position), though an equal percentage cut (as in the last allocations under the Common Agricultural Policy) or some other mechanism. If there are drastic reductions, the debate about policy options may become moot.
Stakeholders in the agricultural policy community are becoming quite confused – and with good reason.