Part 2: Food and Agricultural Markets
Chapter 1: Food Security
Section 19: Duty to report to Parliament on UK food security
- Section 19 places a duty on the Secretary of State to produce a report to lay before Parliament on UK Food Security. This report will provide a broad understanding of what food security is, the challenges and risks to UK food security in a global context, and a current assessment of the state of food security to inform policy thinking on the resilience and security of food supply.
- Subsection (1) requires the Secretary of State to prepare and lay before Parliament, at least every three years, a report containing an analysis of statistical data relating to UK food security.
- Subsection (2) sets out the data that may be included in the report, which , may include data about global food availability, supply sources for food, resilience of the supply chain for food, household food security and expenditure on food, food safety and consumer confidence in food.
- Subsection (3) defines the term "relevant day" in subsection (1), meaning the first report must be produced on or before the last sitting day for both Houses of Parliament before Christmas Recess in 2021.
Chapter 2: Intervention in Agricultural Markets
Section 20: Declaration relating to exceptional market conditions
- Section 20 provides for the Secretary of State under subsection (1) to make a declaration stating that exceptional market conditions exist which warrant the use of the financial assistance or intervention powers under section 21.
- The declaration of exceptional market conditions triggers the Secretary of State’s power under section 21 to make or agree to make payments, loans, guarantees and other forms of financial assistance available to affected farmers; or to operate the public intervention and private storage aid schemes.
- Exceptional market conditions may exist where there is a severe disturbance, or the threat of such a disturbance, in the agricultural markets that has or could have a significant adverse effect on farmers in England, judged by the prices they can receive for the sale of agricultural products. This does not extend to impacts on farmers caused by other exceptional events, such as extreme weather events or animal disease unless they result in an actual or threatened market disturbance which results in reduced prices.
- The critical factor determining whether a situation is considered to create exceptional market conditions under this section is the actual or threatened severe market disturbance that results in a fall in price of one or more agricultural products, regardless of the nature of the circumstances that gave rise to that disturbance.
- Subsection (2) sets out a two-part test to identify where exceptional market conditions may exist. There must be a severe disturbance to agricultural markets, or the serious threat of one, and it must have, or threaten to have a significant adverse effect on producers to constitute exceptional market conditions.
- Subsection (3) sets out what must be included in the declaration.
- Subsection (3)(d) provides that the powers provided for in section 21 are available for use until the declaration is no longer in effect.
- Subsection (4) states that the declaration has effect until the specified end-date, which must be no more than three months from the date when it is published.
- Subsection (5) allows the Secretary of State to revoke the declaration made under subsection (1) by making and publishing a further declaration to that effect.
- Subsection (6) provides a power to extend the declaration made under subsection (1) by a further three months, by making, and publishing a declaration to that effect at any time in the 7 days ending with the day of the original declaration’s end date.
- Subsection (7) allows the Secretary of State to make a new declaration of exceptional market conditions relating to the same events if the exceptional market conditions continue.
- Subsection (8) states that declarations made under subsections (1), (5), and (6) must be published and then laid before Parliament as soon as practicable.
- Subsection (9) explains that "agriculture" in sections 20 and 21 includes "horticulture".
Section 21: Exceptional market conditions: powers available to Secretary of State
- Section 21 makes new powers available to the Secretary of State to intervene in agricultural markets in the event of a severe market disturbance, or the threat of such a disturbance, by providing financial assistance to farmers in England whose incomes are being affected by those exceptional market conditions or by operating public intervention and private storage aid schemes.
- Under this provision, during a period of exceptional market conditions, the Secretary of State may: give or agree to give financial assistance by way of grants, loans, guarantees or in any other form, under any conditions he considers appropriate, including targeting payments to particular sectors and geographical areas; and exercise the public intervention and private storage aid powers which are available to him as he considers appropriate. The intention is that the Secretary of State will be able to apply the appropriate measures at short notice to resolve the exceptional situation at hand.
- New powers are created so that any financial assistance or intervention scheme can be tailored to the domestic market, rather than relying on those which would exist in retained EU legislation that is designed to apply to the wider European agricultural market.
- Subsection (1) states that this provision applies during the period for which the declaration of exceptional market conditions made under section 20 is in effect.
- Subsection (2) provides that the Secretary of State may give or agree to give financial assistance to farmers whose incomes are or could be negatively affected by the exceptional market conditions detailed in the declaration made under section 20.
- Subsection (3) allows the Secretary of State to use the public intervention and private storage aid schemes in response to the exceptional market conditions if he considers it appropriate.
- Subsection (4) states that financial assistance given to farmers under subsection (2) may take the form of payments, loans, guarantees, or any other form the Secretary of State considers appropriate.
- Subsections (5) and (6) explain that financial assistance may be given subject to any conditions which the Secretary of State considers appropriate, including how such assistance is to be repaid or otherwise made good.
- Subsection (7) states that the Secretary of State may give or agree to give financial assistance after the declaration under section 20 has ceased to have effect, as long as the application for this assistance was submitted while the declaration was in force.
Section 22: Modification of certain retained direct EU legislation in connection with exceptional market conditions and for general purposes
- Section 22 gives the Secretary of State the power to amend the retained direct EU legislation for England relating to public intervention and private storage aid. The aim of EU public intervention and private storage aid is to provide a safety net to farmers by removing surplus products from the market and thereby stabilising market prices. The market price of certain goods is monitored, so that when the market situation so requires, eligible goods may be bought in, stored and resold once prices have risen (public intervention buying) or producers may be paid to store products for an agreed period to remove them from the market (private storage aid).
- Subsection (1) enables the Secretary of State to modify the legislation so that the operation of such schemes may be tailored to prevailing domestic circumstances when they are used in a period of exceptional market conditions established in section 20.
- Subsection (2) enables the Secretary of State to modify the legislation for either or both of the following purposes:
- Subsection (2)(a) amends either scheme in such a way as it ceases to have affect in England (with savings made for the operation of the schemes in exceptional market conditions under section 20).
- Subsection (2)(b) amends the general operation of either scheme.
- Subsection (3) states that the power in subsection (1) includes the power to make specific amendments to the public intervention and private storage aid schemes that apply only in relation to a particular exceptional market condition declared under section 20.
- Subsection (4) states that the powers conferred under subsections (1) and (2) include the ability to change what agricultural products are eligible for public intervention and private storage aid.
- Subsection (5) sets out regulations made under this section are subject to the negative resolution procedure, unless section 50(5) applies, in which case the procedure is affirmative.
- Subsection (6) sets out the retained direct EU legislation that concerns public intervention and private storage aid, and which is referred to in sections 20 and 21.
- Subsection (7) explains that until paragraph 1 of Schedule 7 of the Act, which revokes the existing crisis measures powers in the CMO (articles 219, 220, 221 and 222 of EU Regulation 1308/2013), is in force; references in this section to exceptional market conditions subject to a declaration under section 20 also includes reference to actions being undertaken under the existing crisis powers.
- If the Secretary of State deems public intervention or private storage aid as the most appropriate means of addressing the exceptional market conditions, any amendments necessary to the retained EU legislation would need to be made urgently, as an intervention scheme could not be implemented until those changes had been made.
