Farmers to continue receiving same level of EU-funding until 2020, government promises

Philip Hammond expected to commit to billions of pounds of investment, including science grants and agricultural subsidies
Philip Hammond expected to commit to billions of pounds of investment, including science grants and agricultural subsidies

Philip Hammond is to guarantee billions of pounds of UK government investment after Brexit for projects currently funded by the EU, including agricultural subsidies.

In a statement issued on Saturday (13 August), the Chancellor said the current level of funding under the Common Agricultural Policy (CAP) Pillar 1 would be upheld until 2020 as part of the transition to new domestic arrangements.

Universities and researchers will also have funds guaranteed for research bids made directly to the European commission.

The chancellor’s funding commitment is designed to give a boost to the economy in what he expects to be a difficult period after the surprise result of the EU referendum in June.

NFU President Meurig Raymond said he is "extremely pleased" to hear the news officially
NFU President Meurig Raymond said he is "extremely pleased" to hear the news officially

"We recognise that many organisations across the UK which are in receipt of EU funding, or expect to start receiving funding, want reassurance about the flow of funding they will receive," he said.

"The government will also match the current level of agricultural funding until 2020, providing certainty to our agricultural community, who play a vital role in our country."

Voters backed leaving the EU in the 23 June referendum but Prime Minister Theresa May has indicated the UK government will not trigger Article 50, which would begin a two-year process to leave, during 2016.

'Much-needed certainty'

The National Farmers Union has reacted positively to the news, saying farmers have been given "much-needed certainty" in the short term.

CLA’s Ross Murray said the decision is a "vitally important first step"
CLA’s Ross Murray said the decision is a "vitally important first step"

The union said it should mean that farmers can count on receiving the Basic Payment Scheme through to 2020 and that agri-environment schemes already in place are guaranteed through to their conclusion.

The NFU said it’s good to hear that other rural development grants such as Leader offered before the Autumn Statement will also be honoured.

NFU President Meurig Raymond said he is "extremely pleased" to hear the news officially after the NFU’s discussions with Secretary of State Andrea Leadsom, her department and the Treasury in the past three weeks.

Mr Raymond said this certainty in the short term now allows time for the industry and Defra to formulate a domestic agricultural policy that is fit for purpose.

Mr Raymond said: "The Treasury’s announcement today is positive for farmers.

"I hope that this short-term certainty will help to deliver longer-term confidence and this is exactly what farm businesses need now.

"We’ve been emphasising to the Government at all levels that the success of the UK’s largest manufacturing sector - food and drink–worth £108 billion to the UK economy, is underpinned by the farming sector.

"With the agricultural budget now retained and agri-environment agreements and BPS payments now honoured, I am delighted that the Prime Minister and Defra have understood the importance of farming and food production."

'Vital positive step'

The CLA, which represents over 32,000 farmers, landowners and other rural businesses, has described the announcement as a "vital positive step."

The organisation has argued that this step is vital to help businesses manage themselves through a period of "significant uncertainty" caused by the Brexit vote and "extremely poor trading conditions" for agricultural commodities.

As well as to provide the additional time necessary to develop a new improved UK-specific policy to replace the CAP.

CLA President, Ross Murray said: "This decision is a vitally important first step in preparing for the UK’s exit from the European Union.

"It will provide a significant degree of reassurance to farmers and other landowners across the country.

"We have been clear, since the start of the EU Referendum campaign, that this is the first decision Ministers had to make to reassure rural businesses in the advent of a Brexit vote.

"It is therefore a strong signal that will give confidence to businesses considering their future in a difficult agricultural market.

"There are of course many more decisions that now need to be made, not least a commitment that there will be a fully funded, world-leading domestic Food, Farming and Environment Policy in place ready to succeed the current system in place ready for 2021."