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The post-Brexit agriculture bill - paving the way

Common Agricultural Policy (CAP)

On Thursday the 16th of January 2020, the post-Brexit agricultural bill was re-introduced to the House of Commons. This bill will lead the way for the biggest shake-up that the agriculture industry in the UK has seen for decades, with big changes set for agricultural food and supply chains. The new system outlined in the bill will be phased in from 2021 to 2027 when the last payments made under the old common agricultural policy (CAP) will be made. The CAP costs the EU nearly 40% of its budget or approximately €58bn a year. It was originally set up in 1957 to sustain the EU’s food supplies by increasing agricultural productivity. However, after many reforms due to the butter mountains and wine lakes of the 80s, the structure is quite different to the original.

Nowadays, the 12 million farmers across Europe that the CAP supports are rewarded for particular land use. A large part of the CAP payments is known as direct payments, known as the Basic Payment Scheme (BPS).

These direct payments pay farmers based on the total amount of land farmed. Farmers in the UK currently receive about £3.5 billion annual support under the CAP, of which over 80% are classified as ‘direct payments’.

These payments tend to be skewed and the largest landowners benefit the most as opposed to being linked to any specific public benefits. The top 10% of recipients receive almost 50% of total payments, while the bottom 20% receive 2%.

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Author

Paul Fagan

Partner (Advisory Services)

Paul Fagan is a partner at Farrelly & Mitchell and leads the consultancy team, providing strategic, advisory, technical and M&A services to food and agribusiness.

The post-Brexit agriculture bill - paving the way

Download Insight

The post-Brexit agriculture bill - paving the way

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Common Agricultural Policy (CAP)

On Thursday the 16th of January 2020, the post-Brexit agricultural bill was re-introduced to the House of Commons. This bill will lead the way for the biggest shake-up that the agriculture industry in the UK has seen for decades, with big changes set for agricultural food and supply chains. The new system outlined in the bill will be phased in from 2021 to 2027 when the last payments made under the old common agricultural policy (CAP) will be made. The CAP costs the EU nearly 40% of its budget or approximately €58bn a year. It was originally set up in 1957 to sustain the EU’s food supplies by increasing agricultural productivity. However, after many reforms due to the butter mountains and wine lakes of the 80s, the structure is quite different to the original.

Nowadays, the 12 million farmers across Europe that the CAP supports are rewarded for particular land use. A large part of the CAP payments is known as direct payments, known as the Basic Payment Scheme (BPS).

These direct payments pay farmers based on the total amount of land farmed. Farmers in the UK currently receive about £3.5 billion annual support under the CAP, of which over 80% are classified as ‘direct payments’.

These payments tend to be skewed and the largest landowners benefit the most as opposed to being linked to any specific public benefits. The top 10% of recipients receive almost 50% of total payments, while the bottom 20% receive 2%.

Download Full Insight

Author

Paul Fagan

Partner (Advisory Services)

Paul Fagan is a partner at Farrelly & Mitchell and leads the consultancy team, providing strategic, advisory, technical and M&A services to food and agribusiness.

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