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Hot Topic Highlight – Agriculture Act 2020



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What is this week's blog about?


In this week’s blog, we take a look at some of the key points of the Agriculture Act 2020.


Essential reading for RICS APC candidates on the Rural pathway, as well as candidates on other pathways involved with rural or agricultural property or land.



When does the Act take effect?


The Agriculture Act 2020 came into law on 11 November 2020. This followed the Agriculture Bill 2019-2021, which was published in January 2020.


You can read the full text of the Act here.


What is the Agriculture Act 2020?


The Agriculture Act 2020 makes key changes to the Agriculture Acts of 1986 and 1993, primarily in relation to the challenges posed by Brexit. The proposals will be formalised within future Statutory Instruments.


The key measures include replacement agricultural support schemes and new approaches to farm payments and land management, together with wider measures to provide benefits to the agricultural markets and supply chain.


What are the aims of the Agriculture Act 2020?


  • To increase competitiveness

  • To increase productivity

  • To increase the use of technology

  • To produce fairer returns


What are three of the key measures?


  1. Replacement financial support system for the Basic Payment Scheme and Countryside Stewardship with the Environmental Land Management Scheme

  2. Food security reporting

  3. Changes to Agricultural Holdings Act (AHA) 1986 tenancies


What financial support system will replace the Basic Payment Scheme and Countryside Stewardship Scheme?


At present, the Basic Payment Scheme (BPS) provides financial support to the farming industry based on the quantum of land farmed. These are also known as direct support payments.


The BPS is being phased out between 2021 and 2027, with payments being delinked to the amount of land occupied or farmed between 2024 and 2027. Farmers may be offered a lump sum payment scheme in 2022, in lieu of annual BPS or delinked payments from 2024.


The Countryside Stewardship Scheme will be available until 2024, with new applications being accepted until the end of 2023.


New schemes are being introduced by the Agriculture Act 2020. This includes the Environmental Land Management Scheme, new grants and a new approach to farming regulation and enforcement.


In 2021, the first changes will include:

  • Removal of greening rules, e.g. crop diversification, Ecological Focus Areas (EFA) and permanent grassland retention

  • First reductions to the BPS, based on set percentages and payment bands

  • Improvements to cross compliance rules, e.g. targeting high risk areas

  • Additional schemes and grants introduced, which will be funded through reduced BPS payments, e.g. Farming Investment Fund and Slurry Investment Scheme

  • Existing schemes improved


Further consultation will be undertaken to consolidate the changes within future Statutory Instruments.


What is the Environmental Land Management Scheme (ELMS)?


Under the ELMS, farmers and land managers will enter into paid agreements to deliver the following 'public goods':

  • Clean and plentiful water

  • Clean air

  • Thriving plants and wildlife

  • Environmental hazard protection

  • Reduction of climate change

  • Environmental beauty, heritage and engagement


The ELMS will, therefore, provide a renewed focus on the UK’s net carbon 2050 goal, as well as supporting the rural economy and working towards DEFRA’s 25 Year Environmental Plan.


The ELMS will include three individual schemes:

  • Sustainable Farming Initiative – farmers will be paid to manage their land in an environmentally sustainable way, based on a set of standards. It will pilot in 2021 and launch in 2022

  • Local Nature Recovery – this will support local nature recovery and environmental priorities. It will pilot in 2022 and launch in 2024

  • Landscape Recovery - this will support long-term projects to support landscape and ecosystem recovery, e.g. tree planting or salt marsh restoration. It will pilot in 2022 and launch in 2024


What will happen to food security reporting?


The Government will have a duty to report to parliament in relation to food security. This will commence in 2021 and be required on a 3 yearly rolling basis.


What changes will affect Agricultural Holdings Act (AHA) 1986 tenancies?


The Agricultural Holdings Act 1986 was a consolidating act that regulated existing and new agricultural tenancies, until the introduction of the Agricultural Tenancies Act 1995. The aim of the AHA was to provide long-term security and protection to tenants who invest or grow crops on agricultural land.


Tenancies created before 31 August 1995 are classed as AHA 1986 tenancies. As the Act provided for both security of tenure and succession, there are still a significant number of AHA tenancies in existence. It is not possible to create new AHA tenancies, except in very limited scenarios.


The Agriculture Act 2020 makes a number of key changes affecting AHA 1986 tenancies:

  • Rent review – an explicit disregard has been introduced, relating to any written agreement requiring a tenant to pay for a landlord’s (productivity) improvements to the holding. The choice of third party appointment bodies has also been broadened to include the RICS, Central Association of Agricultural Valuers (CAAV) and the Agricultural Law Association

  • Succession - the minimum age for an application for succession to be made upon retirement has been removed. Previously it was set at the age of 65

  • Tests – the Commercial Unit Test has been removed and the Suitability Test has been replaced with the Business Competency Test

  • County Council Holdings – AHA tenancies can only be terminated when the tenant reaches pensionable age, rather than the prescribed age of 65 previously

  • Change of use and alterations – a tenant can request that a landlord varies the tenancy to allow for a change of use or alterations, promoting farm diversification and access to Government funding schemes


How can we help?

Stay tuned for our next blog post to help build a better you.

N.b. Nothing in this article constitutes legal, professional or financial advice.