UK Treasury announces £3 billion of farm support in time for 2020

The Chancellor of the Exchequer has today (Monday, December 30) confirmed nearly £3 billion of funding for 2020 to support UK farmers once the the country leaves the EU.

Sajid Javid confirmed the cash will be used to maintain the level of funding for Direct Payments at the same rate as last year, providing at least some certainty for farmers for next year.

The UK will leave the Common Agricultural Policy (CAP) Direct Payments scheme, which supports farmers across Europe with subsidies in 2020. This will be replaced by a new system based on public money for public goods.

The cash injection will allow the funding for Direct Payments for 2020 to continue at the same level as 2019 and supplement the remaining EU funding that farmers will receive for development projects until 2023 at the latest.

In a statement, the Government said it would guarantee the current annual budget to farmers in every year of the Parliament.

It is in addition to the £206.6 million of funding awarded since the last spending round to support the farming sector in Scotland and Wales.

Chancellor of the Exchequer Sajid Javid said: When we leave the EU and are freed from the Common Agricultural Policy, we will be able to support our vital rural communities – who are a cornerstone of life in the UK – with a fairer and less bureaucratic system.

Farmers can enter the New Year with confidence that they have our backing and will be able to thrive after Brexit.

Environment Secretary Theresa Villiers added: “Outside the EU we will have a simpler, fairer funding system – one that rewards farmers for enhancing our environment and safeguarding our high animal welfare standards.

“We are committed to making sure our rural communities feel the benefits of Brexit and will ensure our farmers get a better deal.”

How the money will be split

The funding announced today will be available from late 2020, as in previous years.

The UK Government will, therefore, provide £2.852 billion of support, topping up the remaining EU funding, and matching the total funding for Direct Payment available for 2019.

The funding is spread across two financial years. The allocations for each nation of the UK for 2020-2021 are:

  • £1,751 million for the Department for the Environment, Food and Rural Affairs (Defra);
  • £449 million for the Scottish Government;
  • £231 million for the Welsh Government;
  • £279 million for the Northern Ireland administration.

And for 2021-2022:

  • £92 million for the Department for the Environment, Food and Rural Affairs;
  • £24 million for the Scottish Government;
  • £12 million for the Welsh Government;
  • £15 million for the Northern Ireland administration.

NFU Scotland president Andrew McCornick said: “With the UK set to leave the European Union and the Common Agricultural Policy on January 31, 2020, it is essential that the farming industry knows where it stands with regards direct payments.

Farm businesses still rely upon these payments and, until we see a fairer redistribution of the share of the profit in the supply chain, direct support will remain important for almost all farmers and crofters.

“Government commitment to continue to fund direct payments when we leave the EU is welcome.

“When we meet Ministers and MPs at Westminster early in the New Year, we will seek further clarity on this announcement and press for a long term funding commitment to farming. We will also look for further measures that will help farmers secure a fairer share of returns from the supply chain.”

UFU president Ivor Ferguson echoed McCornick’s comments: “It gives farmers some much-needed certainty in relation to direct payments, which are crucial for many farm businesses and help ensure the production of the affordable, high-quality food consumers demand.”

“Further to this commitment, it is essential Northern Ireland’s share of UK funding is maintained, and that we have the ability to regionalise agricultural policy,” he added.

Farming in Northern Ireland is very different to farming in the south of England and regionalisation will ensure that the delivery of this funding best suits the differing needs and structure of our industry here.

“As the Brexit process progresses, it is vital that NI’s competitiveness in the all-island economy is maintained. The level of support payments given to agriculture in the Republic of Ireland must be tracked and matched.

“The Government must also deliver on its guarantees that NI will still have unfettered access to the GB market post-Brexit.

“Quick progress must also be made on one of the Conservative party’s other key manifesto commitments – encouraging the public sector to buy local to support our farmers and reduce environmental costs.”