Article: Scotland passes law to keep CAP policies after Brexit

The Scottish Parliament adopted the Agriculture Bill for 'Retained EU Law and Data' following a debate on 26 August.

The legislation will ensure that the EU's Common Agricultural Policy (CAP) measures are maintained in the country from 2021 onwards, although Scotland's ministers will be able to modify the schemes.

As a result of Brexit, the CAP framework will formally cease to apply in Scotland from 2021, but the existing rules will be transferred into domestic law. This means that direct payments - the main policy instrument - will stay in place until the Scottish government develops a new policy.

Scottish rural economy secretary, Fergus Ewing, said the legislation will offer financial stability to farmers amid the uncertainties caused by Brexit and the COVID-19 pandemic.

"This Bill is the first step to ensure that we secure the ability to continue to operate CAP schemes from 2021 - this includes the Less Favoured Area Support Scheme, Knowledge Transfer and Innovation and Small Farmers Grant Scheme," Ewing said.

He added that the law will enable Scotland to make improvements to the CAP that are tailored to the country's "unique agricultural and rural needs".

The Scottish Parliament now needs to adopt the necessary secondary legislation to make the new farming policy schemes available from 2021.

Budget unclear

Ewing also said he would "continue to press the UK government to adhere to their commitment to the Scottish rural economy that EU funding would be replaced".

Westminster has promised to maintain the overall level of funding for British agriculture at current (CAP) levels until 2022, when the current UK Parliament ends, but has not made any commitment on the budget beyond that date, nor how it will be divided across its territory.

"It is crucial that they make a clear statement on future funding for all aspects covered by the CAP to provide certainty and reassurance to the whole rural economy," Ewing stated.

Purpose clause

Meanwhile, four Scottish associations - the Scottish Food Coalition (SFC), Stop Climate Chaos Scotland (SCCS), Scottish Environment LINK and the Nature Friendly Farming Network (NFFN) - are urging policymakers to strengthen the Bill's sustainability credentials by including a "purpose clause".

Their amendment would require all agricultural policy measures and payments to be linked to specified public benefits, most notably for the environment and climate. These would include helping farmers to meet net-zero emission targets; maintain, restore and enhance biodiversity and landscapes; improve animal welfare; and support more local food supply chains.

The coalition further argues that direct payments "make little economic sense" since almost £650 million (€727 million) is being handed out to farmers based on how much land they cultivate, with few environmental or other conditions attached to the support.

Others move away from CAP

After the Brexit transition period ends on 31 December, the UK's devolved administrations will be able to introduce their own farm support systems.

For England, the UK government plans to gradually phase out CAP-style direct payments over a seven-year transition period from 2021 to 2028. From 2024 onwards, these will be replaced by new Environmental Land Management Schemes (ELMS), which sets out to reward farmers for the delivery of public goods such as environmental improvements or enhanced animal welfare.

The authorities of Wales and Northern Ireland are also planning to move away from area-based income support towards more targeted payments linked to specific outcomes.

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This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.