Agricultural Policy News

Agricultural Policy

News in brief December 2020

Agricultural Policy

i) 95% of Welsh BPS claimants receive payment during first week

Minister Lesley Griffiths recently announced that more than 94.6% of Welsh Basic Payment Scheme (BPS) applicants received either their full 2020 BPS payment or a BPS support payment in the first week of the payment window (1-7 December) the equivalent of more than £219.3 million to 14,900 claimants.

Payments Agencies in England, Scotland and Northern Ireland announced similar success, with Northern Ireland’s payment window beginning as early as 16 October.
The FUW has welcomed the announcement and thanked all those Welsh Government staff involved in the processing of payments in a difficult year - payments which provide an essential injection of funds into rural businesses and communities.

ii) UK signs trade deals with Singapore and Vietnam

The Singapore continuity trade agreement will allow UK businesses to continue to benefit from the existing (EU-Singapore) trading relationship, worth £17.6 billion in 2019, and the UK Government hopes the deal will bring the UK closer to joining the Trans-Pacific Partnership (CPTPP), a trading agreement across 11 Pacific Countries.

There are also plans to launch negotiations for a Digital Economy Agreement, the first between Singapore and a European Country if signed.

An agreement with Vietnam will see 99% of tariffs removed after seven years including machinery, one of the key exports to Vietnam.

iii) GB glyphosate extension to end of 2025 is likely

The widely used herbicide glyphosate was set to expire across the EU on 15 December 2022. However, it is believed that all active substances that are due to expire between 2021 and 2023 will be granted a three-year extension under the new GB pesticides regulations.

The Health and Safety Executive (HSE) will still retain the power to review active substances at any time should concerns to human or environment health be raised. The extension will not apply in Northern Ireland due to the Northern Ireland Protocol.

Changes to the Agricultural Flat Rate Scheme from 1st January

Agricultural Policy

Below is an overview of the changes to the Agricultural Flat Rate Scheme coming into effect on 1st January 2021 from HM Revenue and Customs:

What is the Agricultural Flat Rate Scheme (AFRS)?
The AFRS is an alternative to VAT registration for businesses involved in designated agricultural activities. It is designed to offer an alternative to the administrative burden of VAT for small farming businesses.

If you register as a flat rate farmer, you do not account for VAT or submit returns and so cannot reclaim input tax. But you can charge and keep a flat rate addition (FRA) of 4% when you sell goods or goods and services to VAT registered customers.

Changes to the Agricultural Flat Rate Scheme
Entry and exit eligibility criteria based on turnover are being introduced to the AFRS from 1st January 2021.

Once the changes are implemented, businesses can join the AFRS when their annual turnover for farming activity is below £150,000 and remain on the scheme until their annual turnover for farming activity exceeds £230,000.

The purpose of the changes is:

To provide clear and precise rules to offer our members clarity on the scheme
To offer specific and focussed support for small farming businesses
Offer consistency with other HMRC simplification schemes

New livestock export rules from GB to EU & NI from 1 January 2021

Agricultural Policy

From 1 January 2021 the UK will have left the EU, and depending on the outcome of current negotiations, the UK will likely be trading on third country terms. This means new rules for live animals entering the EU will apply.

From 1 January 2021 the two-letter ISO country code of ‘GB’ will have to be used to identify livestock exported to EU Member States. This will mean an additional tag which includes the country code GB and the animal’s individual ID number will need to be applied prior to export.

As an alternative for newborn animals that are not yet identified or lambs with slaughter tags, UK tags with a GB suffix could be applied. These are tags which bear UK plus the individual number as well as GB printed on them.

Further details of the tags can be found here.

Update on Bovine Electronic Identification (EID)

Agricultural Policy

Despite a number of discussions on the introduction of bovine electronic identification (EID) earlier this year, Welsh Government has recently confirmed that it is going to be introduced later than anticipated with bovine EID tags not being available on the market until at least 2022.

The FUW continues to participate in discussions on the proposals on identification, registration and movement reporting prior to the Welsh Government consultation, expected in Summer 2021.

Welsh Government recommends that cattle keepers only order enough conventional tags to cover calves expected to be born in 2021.

Further updates will be announced towards the end of 2021 in regard to the timing and definite timescales which are subject to the consultation responses.

BCMS update on cattle passport amendments

Agricultural Policy

The British Cattle Movement Service (BCMS) has announced that cattle passport amendments can now be posted once again.

Due to the Covid-19 pandemic, BCSM requested for cattle keepers to send passport amendments via email to reduce the need to travel.

If possible and restrictions allow, BCMS are now asking for keepers to return to the original posting process:
Write on the passport what information needs to be amended

If the amendment is to the date of birth, or requires 3 or more amendments, please also send a copy of your calving records
Post the original passport to:
British Cattle Movement Service, Curwen Road, Workington, CA14 2DD
It is also advised to ask for proof of postage