Stability and simplicity: proposals for a rural funding transition period

6. Policy Context

Although Scotland did not vote in favour of leaving the EU, it is expected that we will leave along with the rest of the UK in March 2019, with or without an agreed transition or implementation period thereafter during which EU law would continue to apply in the UK.

At the time of publishing the EU/ UK negotiating agreement confirms that EU law would continue to apply until the end of 2020, with the exception of the CAP Direct Payments Regulation (governs the Basic Payment Scheme, Voluntary Coupled Support ( VCS) and Greening) which would not apply in the UK for the 2020 scheme year.

Under the EU/ UK Withdrawal Agreement the regulations governing the SRDP will remain in place until 31 December 2020, with funding for agreements linked to agriculture and forestry likely to continue beyond that date.

As set out in more detail in the section on financial context below, should this agreement not be reached, the UK Government has provided a range of funding guarantees of variable detail to cover lost EU funding, which the Scottish Government has committed to passing on in full to its stakeholders.

Scotland should, on current assumptions, be able to adopt its own chosen farm support policy, either from late March 2019 or, if an EU-UK transition period is agreed, from 1 January 2021 (or 2020 for CAP Direct Payments).

A number of stakeholders and the Agriculture Champions have highlighted that whilst change is inevitable as a result of the decision for the UK to leave the EU, it would be desirable for it to take place at a manageable pace for the industry and others with a stake in the rural economy, environment and communities.

In practice, however, it would be difficult for any administration to have a full new domestic policy ready for implementation in those timescales given the complexity, cost and risks involved. In addition, many of the factors which could constrain or affect future Scottish policy would not become clear for some time to come. There are clear timescales involved in building the apparatus to deliver new schemes not least the lead times to develop and procure digital systems as well as to consult upon, lay and bring into force appropriate and potentially wide-ranging legislation.

For these reasons the Scottish Government, like other administrations in the UK, envisages a "transition period" for farm support policy , from the time when EU law ceases to apply directly.

The new domestic policy envisaged to be from 31 March 2024 will be shaped by the CAP Greening Report, the Agriculture Champion's Report, the results of this consultation, and the final report due from the National Council of Rural Advisors. The results of the consultation later this year on Environmental Principles and Governance, the planned Climate Change legislation that will be in place from 2020, other domestic legislative requirements (such as those in the Forestry (Scotland) Act 2018) and new analysis on the impact of existing CAP policies will also be used to inform new policy. As set out in more detail below, it will also be dependent on the overall financial settlement to be made to Scotland to reflect the UK's exit from the EU and associated decisions on future budgets and funding.