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EVERYTHING YOU EVER WANTED TO KNOW ABOUT DAIRY PRODUCER ORGANISATIONS… BUT WERE AFRAID TO ASK

Having historically had very little influence or power with regards to the terms on which they sell their milk, dairy farmers may choose to come together as a Dairy Producer Organisation (DPO) to increase their bargaining position collectively. In this article Prospect Law’s Nina Winter provides a comprehensive introduction to the purpose a DPO typically serves, the activities it can cover, how a DPO is formed and how it typically interacts with its farmer members and milk processors, as well as how Brexit will affect DPOs.

What is a DPO?

It’s a group of dairy farmers who come together to jointly market their milk. They may have other objectives, too. They form a legal entity together (such as a limited company), and the group is then formally recognised by the government as a DPO.

What’s the point of a DPO?

First and foremost, the DPO is there to help improve the farmers’ bargaining position. There is now so much concentration at the milk processor level that, depending upon where farmers are based in the UK, they have often have very little – if any at all – bargaining power vis-à-vis the milk processor. By representing a bigger milk field, the DPO should have an improved bargaining position compared to the individual farmer members of the DPO.

But can’t dairy farmers do that anyway, without being part of a DPO?

Yes to an extent, but they have to be really careful about competition law. If a group of dairy farmers come together to jointly sell milk at the same price, they risk being seen by the competition law regulator as a price-fixing cartel. That’s serious – the farmers can be heavily fined or even risk criminal prosecutions, so they need to make sure they stay the right side of the legal line.

By contrast, DPOs can jointly market the milk – even at the same price across all farmers – and not fall foul of competition law, because DPOs are specifically authorised in law to do certain things.

What are the advantages of DPOs?

As well as hopefully improving the farmers’ bargaining position and giving the farmers some legal protection, the DPO also creates a formal structure allowing the farmers to co-operate with each other in as many ways as they want to. DPOs can be very flexible – farmers can choose the right legal vehicle to suit their objectives and then the DPO can work in the way that the farmers want it to. There are some legal parameters in terms of what the DPO can do, but inside those wide parameters, there’s a lot of flexibility and choice.

How are DPOs different from a co-operative?

In the UK, a co-operative is registered with the Financial Conduct Authority and it is regulated by the Co-operative and Community Benefit Societies Act 2014. The Act is prescriptive about the formation, registration and on-going governance of a co-operative. By contrast, the legal regime for DPOs is much less prescriptive and much more flexible. Put simply, farmers forming a DPO have a lot more flexibility than farmers forming a co-operative.

In addition, co-operatives in the dairy sector in the UK have traditionally undertaken milk processing on behalf of their farmer members. DPOs, being formed by milk producers, are far less likely to undertake processing.  If a DPO wanted to join with a milk processor, together they could form an Inter Branch Organisation (IBO). IBOs are for economic operators at different levels of the supply chain; producer organisations are for producers operating at the same level in the supply chain. 

How is a DPO formed?

Legally, a DPO must be formed on the initiative of the producers. It can’t, for example, be formed because a processor pushed for it. The producers agree one or more objectives for the DPO, and one of those objectives must come from the regulation; for example, the objectives of the DPO might be: placing the farmers’ milk on the market and concentration of supply (that’s one of the regulatory objectives); joint purchasing of inputs; and joint management of waste.

Once the farmers have agreed objectives, they need to form a legal entity and then apply for formal recognition of the DPO from the government. If the DPO meets the legal requirements for being a DPO, the government must by law recognise it, and this should be within 4 months of the application.

Once the DPO has been recognised, it is officially registered as a DPO and it can start doing its work.

What does a DPO do?

Whatever its farmer members want it to do, so long as it pursues one of the statutory objectives, stays within regulatory parameters and carries out its activities properly and effectively.

What could a DPO do?

There’s a huge amount of flexibility in terms of what the DPO could do for its farmer members. At the least integrated end of the spectrum, the DPO could simply negotiate the milk price and milk contract terms on behalf of its farmer members with a processor, and then the farmers would sign up to individual contracts on the terms that the DPO had negotiated.

At the most integrated end of the spectrum, the DPO could buy raw milk from its farmer members, have that milk contract-processed by a processor(s), then sell the processed milk on to customers, with the DPO (not the processor) having the supply relationship with the customer. The DPO could undertake marketing and R&D for its farmer members, buy inputs for them at large economies of scale, optimise production and transport costs, provide technical assistance to its farmer members, and help its members to achieve high environmental standards. The DPO could use futures markets to protect its members from volatility. 

The sky is the limit, and it really is up to the farmer members of the DPO to decide what they want the DPO to do. The key starting point is the rationale for the group of farmers coming together in the first place. Have they come together as producers all supplying the same processor? Or do they have a common production system?  Or are they in the same geographic location?  Or do they have the same vision for dairy farming of the future? Or do they have environmental objectives they want to achieve? Or do they have a brand idea that they want to develop together? Or do they simply want a better bargaining position and more stable prices for their milk?

Does the DPO have the right to terminate a farmer’s milk contract, or enter a new one on the farmer’s behalf?

Not unless the farmer members of the DPO want it to. The farmers might want the DPO to have the right, on their behalf, to terminate their milk contracts and move the milk across to another processor; this would certainly give the DPO a significant bargaining position with processors.  But equally the farmers might prefer that the DPO negotiates the terms and price, but they have individual milk contracts with the processor. If the DPO supplies more than one processor, then a farmer might be able to move his milk around between processors that the DPO supplies, benefitting from whatever price and terms the DPO negotiated with those processors. If the DPO supplies only one processor then the rules of the DPO will need to specify what happens when a farmer terminates his milk supply contract with that processor.

Does the DPO own the milk that its farmer members produce?

Again, only if the farmer members of the DPO want it to.

Does a farmer have to supply all of his milk to the DPO?

Not from a legal perspective; farmers can market some of their milk through the DPO and some elsewhere. Obviously if the farmers forming the DPO want to supply the DPO exclusively, they can make that a rule of the DPO. But farmers cannot be members of more than one DPO – that’s set out in the regulation. In addition, the milk going into the DPO must not be contracted to a co-operative.  Since co-operatives almost always require their farmer members to supply milk exclusively to the co-operative, that effectively means a farmer cannot be a member of a co-operative and a DPO.

Do all farmer members of the DPO get the same milk price?

That’s entirely up to the farmer members. They can all have the same price, or they can have different prices, as they choose.

Can a DPO sell to more than one buyer?

Yes.

How big can a DPO get?

Up until 31st December 2020, a DPO could cover up to 3.5% of EU milk production and up to 33% of milk production in a Member State. With Brexit now completed, a DPO is able to cover up to 33% of UK milk production.

Do DPOs have to be processor-orientated?

Not at all, and certainly a DPO cannot be formed on the initiative of a processor – it must by law be formed on the initiative of the milk producers.

What does “recognition” of a DPO mean?

It’s the process by which the government formally accepts the DPO as a DPO; once “recognised” by the government, the DPO can start work for its members. It’s really important to stress that recognition of DPOs is not done by processors – a common misconception. If the DPO is recognised by the government, it’s a DPO and that is that.

What if the processor won’t negotiate with the DPO?

There is nothing in law to compel a processor to negotiate with a DPO, and it wouldn’t be feasible to make it a legal requirement for processors to have to negotiate with DPOs. 

Certainly, if a DPO is formed with the sole objective of giving the processor a hard time, and it takes that approach from the outset, it’s highly unlikely that the processor will want to engage; after all, who wants to buy from a supplier whose key objective is to cause you difficulties?

Processors in the UK are likely to be somewhat sceptical about DPOs and the key for the DPO will be to offer the processor a compelling proposition.  What can the DPO offer to the processor, to encourage the processor to come to the table? Clearly a big milk field will help, especially at times when processors are recruiting. But what if the DPO offers a supply profile that meets the processor’s needs? What if the DPO manages the relationships with the farmer suppliers, so the processor only needs to have one negotiation – with the DPO. What if the DPO can offer the processor cost savings (e.g. by arranging transport of the milk to the processor’s facility)?

In addition, the likely forthcoming regulation of milk contracts by the government will mean that processors have to operate differently in any event; what a great opportunity for DPOs to enter the market and offer processors some compelling solutions at a time of challenge and transition.

What will happen to DPOs after Brexit?

Up to 31st December 2020, DPOs were regulated at EU level, whereas now domestic legislation has come into force and DPOs are recognised and regulated under that UK legislation. The provisions that have come into force are much the same as the EU provisions, but they have been tweaked to reflect the fact that they apply across the UK, rather than across the EU.

About the Author

Nina Winter is a Senior Solicitor with 16 years post-qualification experience in litigation and dispute resolution, with particular expertise in judicial review challenges to government and public body decisions and an established reputation as a legal expert in the agricultural industry. Nina read law at Oxford University before training and qualifying at Eversheds. In 2006 Nina joined the legal team of the National Farmers’ Union (NFU), the leading trade association representing farmers and growers in England and Wales. In 2009 Nina was appointed as the NFU’s Chief Legal Adviser, a position she held for 12 years before joining Prospect Law. Having worked as in-house counsel for 14 years, Nina is able to quickly identify the legal issues at stake and to work pragmatically and seamlessly as part of a team to achieve the client’s objective. Nina’s expertise in agriculture means she brings a comprehensive understanding of the issues facing agri-businesses to her legal work.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy, infrastructure and natural resources  sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and other technical experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

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DAIRY PRODUCER ORGANISATIONS – TO BE, OR NOT TO BE?

That is indeed the question. Shakespeare asks whether it is nobler to suffer the slings and arrows of outrageous fortune, or to take arms against a sea of troubles to end them. 

You might well ask the same questions about Dairy Producer Organisations (DPOs). The opportunity to form DPOs has been available to farmers since 2012 when the EU brought in the “dairy package” – a set of measures designed to help the industry during that crisis. But very few DPOs have been formed in the UK, although farmers in some other EU countries have taken the plunge. 

Frequently misunderstood and often maligned, I think the DPO in fact presents farmers with a great opportunity to work together to improve their bargaining position. I’ve heard some industry commentators say that farmers can’t – or won’t – collaborate, and that’s why DPOs haven’t taken off in the UK; but I just don’t believe that’s right. Look at what’s been achieved in wildlife control to prevent the spread of bovine TB; farmers have come together in areas all across England to deliver successful disease control in the most challenging of situations.

So if collaboration isn’t the issue, what is? Personally, I think it’s really a question of timing. Up until now, there’s been a limit to what a DPO can achieve because processors can ultimately impose unfair contract terms on farmers, however well the DPO negotiates on their behalf. But with the forthcoming potential regulation of dairy contracts, I think DPOs will come into their own. Contract regulation alone won’t solve all of the issues that dairy farmers face, just like DPOs on their own could not either. But together, contract regulation and the formation of DPOs give a real possibility of reform. Contract regulation will prevent processors from imposing unfair terms, and DPOs will give farmers an improved bargaining position.

In 2018 when I was at the NFU I went out to Madrid to find out more about dairy contract regulation in Spain. It was clear from everyone – farmers, processors and the government – that contract regulation was in their view only one part of the puzzle. DPOs – and, interestingly, IBOs (processors and farmers together) – were the other critical element that was needed to put the industry on a better footing.

So, as contract regulation looms large on the horizon, the time has come for farmers to stop suffering the slings and arrows of outrageous fortune and to start using the tools they have available – including DPOs – to end the sea of troubles.

Find out more about DPOs in my follow-up article: Everything you ever wanted to know about Dairy Producer Organisations…. but were afraid to ask.

About the Author

Nina Winter is a Senior Solicitor with 16 years post-qualification experience in litigation and dispute resolution, with particular expertise in judicial review challenges to government and public body decisions and an established reputation as a legal expert in the agricultural industry. Nina read law at Oxford University before training and qualifying at Eversheds. In 2006 Nina joined the legal team of the National Farmers’ Union (NFU), the leading trade association representing farmers and growers in England and Wales. In 2009 Nina was appointed as the NFU’s Chief Legal Adviser, a position she held for 12 years before joining Prospect Law. Having worked as in-house counsel for 14 years, Nina is able to quickly identify the legal issues at stake and to work pragmatically and seamlessly as part of a team to achieve the client’s objective. Nina’s expertise in agriculture means she brings a comprehensive understanding of the issues facing agri-businesses to her legal work.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy, infrastructure and natural resources  sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and other technical experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

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ENVIRONMENTAL LAW AND POLITICS POST-BREXIT

How will your business be affected by the major changes in environmental law and regulation that are taking place, many flowing from Brexit?

Prospect Law’s William Wilson, Senior Environmental and Regulatory Lawyer, has developed short, focussed briefings on some of the key areas, designed to help your business map a way through a rapidly changing legislative landscape.

We can tailor these briefings to your specific business, or deliver them in short interactive lunchtime sessions aimed at senior management or groups of staff with particular interests.

Defra’s Resources and Waste Strategy

This Strategy takes forward, in England, the Circular Economy elements of Defra’s 25 year plan. This briefing considers coverage of product lifecycle (on the circular economy model); topical areas (such as waste crime and food waste) and the bigger picture (for example marine plastics, research and innovation, and data monitoring), and key commitments including those on producer responsibility for packaging.

REACH Chemicals Regulation, and UK REACH

Disengagement from the EU REACH chemicals regulation, and from related regulations such as Biocidal Products, has been one of the most vexed aspects of Brexit for businesses affected by environmental laws. This Briefing considers relations with ECHA post-Brexit, the position of Downstream Users and Only Representatives, issues with UK REACH, the waste/chemicals interface and implications for firms undertaking cross-border trade.

Environment (Principles and Governance) Bill

On leaving the EU, the UK will cease to apply EU Treaty provisions supporting environmental protection and will no longer have environmental laws applied by the European Commission and the Court of Justice of the European Union. This Briefing considers the arrangements that the government is proposing for England to replace these structures with a new Office for Environmental Protection, and what has been learned from pre-legislative scrutiny by the EFRA Committee, including Michael Gove’s evidence of 6 March 2019.

Environment Bill

The wider Environment Bill, promised for the next session of Parliament, is supposed to include the draft Environment (Principles and Governance) Bill; air quality protection; enhancement of landscapes; wildlife and habitat; more effective handling of resources and waste; better management of surface, ground and waste water. This will be the most important Environment Bill for over 20 years, and this Briefing considers the ways in which it will affect the environment and businesses.

Illegal waste sites issues

Illegal waste sites are a massive issue for many parts of the UK, happening on a much greater scale than is generally realised and resulting in millions of pounds of avoided Landfill Tax for government and regulators, as well as unfair competition for legitimate businesses. This Briefing considers some of the latest technological options for locating and identifying illegal waste sites, and bringing them to the attention of regulatory authorities.

Air Quality Strategy, Clean Air Zones, Air Quality Legislation

Air quality legislation is undergoing a major overhaul, with big implications for the economy, the environment and human health. This Briefing considers Clean Air Zones, the ClientEarth litigation, the Government’s new Air Quality Strategy, air quality in the Environment Bill, and some of the effects that this legislation is already having, for example on the car market.

Pesticide policy, law and Brexit

In the short term, pesticide policy review seems to have fallen victim to the “Brexit first” approach within government. In the medium term it is likely to be subject to major review. This Briefing considers the trends from recent European judgments, and the way in which their influence may continue to be felt, despite Brexit and divergence from EU law.

Devolution, Environmental Law and Brexit

The development of distinctly different environmental laws and regulations, in England, Scotland, Wales and Northern Ireland, is going to result in an increasingly challenging environment for compliance for businesses working across these jurisdictions. This Briefing gives a very brief overview of the main differences, and considers both the possible problems and potential solutions for an integrated approach to environmental regulation.

Labour Party policy, the environment and energy

Is your business up-to-date on Labour Party policies on the environment and energy, and how it may be affected by them in the event that the Labour Party wins a future election? This Briefing reviews the party’s policies in these key areas, and considers how they may affect businesses.

Environmental Law and trade

Alignment of environmental regulations with either the EU, the USA or any other jurisdiction is clearly going to be a major factor in any future trade talks undertaken by the UK. This Briefing considers what to expect, and what is at stake.

About the Author

William Wilson is a specialist environmental, regulatory and nuclear lawyer with over 25 years experience in government, private practice and consultancy. He worked as a senior lawyer at the UK Department of the Environment/DETR/DEFRA, and helped to build up the environmental and nuclear practices at another major law firm, as well as running his own environmental policy consultancies. William has experience of all aspects of environmental law, including water, waste, air quality and industrial emissions, REACH and chemicals regulation, environmental protection, environmental permitting, litigation, legislative drafting, managing primary legislation, negotiating EU Directives and drafting secondary legislation.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental  sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

To discuss which of these Briefings may be relevant to your business, and how to arrange a session to deliver them in-house, or to follow up advice required on any of the issues covered, please contact William Wilson at wew@prospectlaw.co.uk or on +44 (0)7885 551 405.

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THE ENVIRONMENT (PRINCIPLES AND GOVERNANCE) BILL: ENVIRONMENTAL STANDARDS AFTER BREXIT

On 19 December 2018 the government published draft Clauses on Environmental Principles and Governance. These are supposed to address the arrangements for the effective enforcement of environmental laws in England after Brexit, when enforcement by the European Commission and the Court of Justice of the European Union will no longer be available.

Publication of the Clauses followed a consultation which produced over 175,000 responses. The Clauses, published as a draft Environment (Principles and Governance) Bill are intended to be part of a wider Environment Bill to be introduced in 2019, covering air quality, protection and enhancement of landscapes, wildlife and habitats, more efficient handling of resources and waste and better management of surface, ground and waste water.

The government now summarises its legislative proposals, made in pursuance of section 16 of the European Union (Withdrawal) Act 2018, as follows –

“The draft Environment (Principles and Governance) Bill sets out how the government will maintain environmental standards as we leave the EU. It also details how we will build on the vision of the 25 Year Environment Plan.

This includes creating an independent body – the Office for Environmental Protection (OEP) – which will-

  • scrutinise environmental law and the government’s environmental improvement plan (EIP)
  • investigate complaints on environmental law
  • take enforcement action on environmental law.

The draft Bill commits the government to publishing a policy statement which will set out how ministers should interpret and apply environmental principles. It also commits government to have a plan for environmental improvement.

The broader Environment Bill will also include measures on air quality, nature recovery, waste and resource efficiency and water management.”

By Brexit, the UK will lose  –

  • Treaty obligations reinforcing environmental laws;
  • Enforcement by the European Commission;
  • Enforcement by the Court of Justice of the European Union;
  • The ultimate sanction of EU Member States risking fines for continuing breaches of EU law;
  • Legal requirements on government to secure that penalties for breaches are “effective, proportionate and dissuasive” (see e.g. Water, Waste, Air Quality Framework Directives, REACH Regulation etc); and
  • Rights of individuals to activate enforcement of environmental laws, at no cost, through complaints to the Commission

In May 2018, Secretary of State EFRA, Michael Gove MP, declared that –

“Our new Environmental Principles and Governance Bill is designed to create a new, world-leading, independent watchdog to hold government to account on our environmental ambitions once we have left the EU. The role which has been played in the past by the EU Commission and courts should be filled now by a UK body embedded in the UK’s parliamentary democracy.”

The May 2018 consultation considered (para 137-8) that –

“Subject to the outcome of this consultation, we believe the most appropriate approach may be to create an independent body that will be accountable to Parliament…”

However in place of the robustly independent body, accountable to Parliament, that was proposed, the Office of Environmental Protection would under these clauses be appointed, and funded, by the same Secretary of State.

The Office of Environmental Protection would be able to issue an Information Notice, a Decision Notice, and eventually to make a “review application” to the High Court or Court of Session, and maybe to make a public statement about breaches of environmental law, but all mention of the powers of the European Commission to seek and the Court of Justice of the European Union to impose, a fine for non-compliance with environmental laws has been omitted.

The draft Clauses apply the environmental principles to the actions of Ministers and public authorities through the Secretary of State’s Policy Statement. It is the Policy Statement to which Ministers must have regard.  This allows much scope for Ministerial lobbying against enforcement action, and for re-interpretation of which principles should apply and how, instead of applying the principles directly to the discharge of functions by public bodies.

Three wide exemptions are driven through the scope and application of the Policy Statement on the application of Environmental Principles –

“The statement may not deal with policies relating to—

(a) the armed forces, defence or national security,

(b)  taxation, spending or the allocation of resources within government, or

(c)  any other matter specified in regulations made by the Secretary of State.

These exemptions appear unjustified, inconsistent with EU environmental law which the government has promised to transpose into national law, and inconsistent with the express ambition of the Secretary of State to have a “world-leading, independent watchdog to hold government to account on our environmental ambitions once we have left the EU”. There is a long way to go in amending these Draft Clauses before they can be said to deliver anything equivalent to the force and enforcement of EU environmental laws.

                                                         William Wilson, Prospect Law Ltd

About the Author

William Wilson is a specialist environmental, regulatory and nuclear lawyer with over 25 years experience in government, private practice and consultancy. He worked as a senior lawyer at the UK Department of the Environment/DETR/Defra, and helped to build up the environmental and nuclear practices at another major law firm, as well as running his own environmental policy consultancies. William has experience of all aspects of environmental law, including water, waste, air quality and industrial emissions, REACH and chemicals regulation, environmental protection, environmental permitting, litigation, legislative drafting, managing primary legislation, negotiating EU Directives and drafting secondary legislation.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

For a PDF of this blog click here

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EU COURT NEONICOTINOID INSECTICIDE JUDGMENTS: SIGNIFICANCE FOR UK AGRICULTURE, CHEMICALS AND ENVIRONMENTAL POLICY, PART III

In the first article of this series we reported  on the three joined neonicotinoid pesticide judgements issued by the EU General Court on 17 May 2018 (First Article)

In the second article we considered in more detail why these judgements come at a particularly significant point for agriculture in the UK and EU, the immediate implications for Brexit, how they represent a divergence between the UK government and some farming organisations, and why that matters for the current consultations on an Environmental Principles and Governance Bill.  We will consider environmental principles and governance further in future articles.

In the third and final article in this series we will consider some of the impacts of farm chemicals on farmland birds and on water and question the implications of the judgements and current policies and practices for human health.

Impacts of Farm Chemicals on Birds and Water

The Royal Society for the Protection of Birds ‘RSPB’ reports that increased use of farm chemicals – fertilisers and pesticides – is one factor, amongst several others, in the decrease in bird populations in the British countryside, stating that the following list shows percentage declines of some bird species recorded in the Common Bird Census between 1970 and 1999:

Tree sparrow  – 95%
Corn bunting  – 88%
Willow tit  – 78%
Spotted flycatcher – 77%
Woodcock  – 74%
Starling  – 71%
Turtle dove  – 71%
Song thrush  – 56%
Bullfinch  – 53%
Skylark  – 52%
Cuckoo  – 33%

Meanwhile the EU Drinking Water Directive 98/83/EC, and the newly adopted proposal for its replacement, set very low levels, of 0.1 microgrammes per litre, as allowable levels for most individual pesticides, 0.030 microgrammes per litre for aldrin, dieldrin and heptachlor epoxide, and 0.5 microgrammes per litre for ‘total pesticides’.

However, there are some signs that water companies, and their customers, face enormous costs in meeting these very strict requirements. For example, Anglian Water has estimated that it could cost an initial £600 million, with a further £17 million per year, to set up and run treatment simply to deal with metaldehyde from slug pellets, and that this could imply a 21% increase in the cost of water bills to its customers.

Impacts on Human Health

Michael Deland, who was Chair of the U.S. Council on Environmental Quality from 1989 to 1993, has stated:

“We are now confronting, because of our industrialised society, an entirely different variety and much more insidious and complex form of pollution, namely toxics. We measure pollutants now, not in tons, but in parts per million, trillion or quadrillion. The challenge that we’ve not yet been able to meet adequately is the causal relationship between a part per million, trillion or quadrillion, of a given pollutant, and its effect on our health and that of our kids. That is where a good deal of our research needs to be.”

Regulation has nevertheless tended to rely upon ‘tolerances’ or ‘safe’ levels, as reflected in the EU Drinking Water Directive example given above. However, as Rachel Carson noted in Silent Spring, back in 1963, in effect all that establishing tolerances is doing is authorising contamination of public food supplies with poisonous chemicals so that farmers and processors can enjoy the benefits of cheaper production – then penalising the consumer by raising taxes to maintain a policing agency to make sure that he does not receive a lethal dose. However, as she added drily, doing the policing job properly would require unsustainable levels of taxes, given the present volume and toxicity of agricultural chemicals, so “in the end the luckless consumer pays his taxes but gets his poisons regardless.”

The benchmark for assessing what is safe

Human health, and the effects of farm chemicals upon it, should be the standard ultimately relied on. However, we do not seem to be much further forward in determining quite what level of organophosphates, glyphosate, synthetic pyrethroids, nitrates, total pesticides or other farm chemicals it is acceptable to spray on fields, use as treatment on seeds, use at sea on caged fish, find in our rivers, find in our bloodstreams, or pass on to our children.

Those who participated in the negotiations that led to the current EU REACH chemicals Regulation of 2006 may remember that one of the simplest and most effective interventions in those negotiations, in 2003, was when the World Wildlife Fund offered 40 Members of the European Parliament, and some key European Commission officials, including the then Environment Commissioner Margot Wallstrom, blood tests with chemical analysis. It turned out that her blood showed evidence of 28 chemicals, including Poly Brominated Diphenyl Ethers, PBDE flame retardants, Poly Chlorinated Biphenyls, PCBs, and Organochlorine Pesticides, in particular DDT, which was what Rachel Carson was writing about in the 1960s, and which was banned for most agricultural purposes in 1978, and subject of a total ban on uses in agriculture in 1983. Margot Wallstrom was also a parent, and some reports at the time suggested that breast feeding for six months could give an infant 17% of its lifetime dose of some persistent chemicals.

We are supposed to be guided by the best science in these matters – that is the commitment often given by government. It therefore seems to be relevant and significant that Defra’s own Chief Scientist Ian Boyd stated in 2017 that the assumption by regulators around the world that it is safe to use pesticides at industrial scale across landscapes is false; that the lack of any limit on the total amount of pesticides used and the virtual absence of monitoring of their effects on the environment means it can take years for the impacts to become apparent.

The EU Court’s neonicotinoid judgements are a significant contribution to the law, and to the debates that ought to be taking place on the wider questions of the use of pesticides and farm chemicals, delivered at a critical time for UK agriculture.

About the Author:

William Wilson is a specialist environmental, regulatory and nuclear lawyer with over 25 years experience in government, private practice and consultancy. He worked as a senior lawyer at the UK Department of the Environment/DETR/Defra, and helped to build up the environmental and nuclear practices at another major law firm, as well as running his own environmental policy consultancies. William has experience of all aspects of environmental law, including water, waste, air quality and industrial emissions, REACH and chemicals regulation, environmental protection, environmental permitting, litigation, legislative drafting, managing primary legislation, negotiating EU Directives and drafting secondary legislation.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

For a PDF of this blog click here

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EU COURT NEONICOTINOID INSECTICIDE JUDGMENTS: SIGNIFICANCE FOR UK AGRICULTURE, CHEMICALS AND ENVIRONMENTAL POLICY, PART II

In the first article of this series we reported on the three joined neonicotinoid pesticide judgements issued by the EU General Court on 17 May 2018. In this article we consider in more detail why these judgements come at a particularly significant point for agriculture in the UK and EU, the immediate implications for Brexit, how they represent a divergence between the UK government and some farming organisations, and why that matters for the current consultations on an Environmental Principles and Governance Bill.

The final article in this series will consider some of the impacts of farm chemicals on birds, water and human health, and how these judgements may be important for a wider re-appraisal of pesticide use in the UK.

Agriculture at the crossroads

Agriculture is at a critical point, both at EU and UK levels. On 2 May 2018 the European Commission embarked on two years of what will be difficult negotiations of a new Multiannual Financial Framework, or budget, for the EU, which will need to take account of the withdrawal of the UK’s net contribution and pressures for increased spending on other issues such as border management, migration, asylum and security. Some commentators expect the long term decline of spending on the Common Agricultural Policy as a proportion of the EU budget to continue, and it seems equally likely that where support is given to agriculture, conditions attaching a requirement for the protection of the environment will be strengthened.

At UK level, the government has promised to maintain agricultural subsidies for the next few years as the UK leaves the EU, but there are no promises to do so over the long term, and again it seems likely that environmental protection requirements as part of the ‘conditionality’ for farm subsidies will only increase.

Farmers are awaiting publication of a promised UK Agriculture Bill as part of the legislation required to deliver Brexit. Agriculture is also a devolved matter, and further legislation is likely in the short term. For example, the Climate Change, Environment and Rural Affairs Committee of the National Assembly for Wales has been carrying out its own inquiry into agriculture and the environment, and the ‘common frameworks’ needed to ensure some form of coordination between UK and devolved agricultural policy.

Immediate significance of the judgments with Brexit

The immediate significance of the Court’s neonicotinoid judgements is that they become part of the acquis communautaire, or body of EU law. They are now part of EU law, they apply to the UK as it is currently a member of the EU, and the UK government has undertaken to ensure the conversion of the whole acquis communautaire into UK law by means of the European Union (Withdrawal) Bill.

Again, where agriculture is a devolved matter, for example in Wales and Scotland, the Parliaments of Wales and Scotland can be expected to deliver legislation with similar effects: in the case of Scotland, it may require the Supreme Court to rule on whether this should be done by means of the European Union (Withdrawal) Bill or its own ‘continuity’ legislation (see our earlier briefing on Wales, Devolution, Brexit and the Environment).

Divergence between UK government and farmers’ organisations

In November 2017, Michael Gove, UK Secretary of State for the Environment, Food and Rural Affairs, announced the reversal of the UK government’s policy on neonicotinoids, and its support for the EU’s total ban on outside uses, writing that –

“The weight of evidence now shows the risks that neonicotinoids pose to our environment, particularly to the bees and other pollinators which play such a key part in our £100bn food industry, is greater than previously understood.”

However, as noted, the UK’s National Farmers Union was in court supporting the manufacturers’ legal challenge to the EU ban.

This is not an isolated example of a significant divergence between the UK government and the NFU in their approach to farm chemicals, which can also be noted in their respective statements on organophosphates in sheep dip, glyphosate, and the use of chemicals on the ‘landscape scale’ (see the third article in this series on the views of Defra’s Chief Scientist). At a time when public and political opinion really matters, this sort of divergence is potentially very significant.

Environmental Principles and Governance

The Court’s neonicotinoids judgements also come at a time when both the UK government, and those of each of the home nations, are examining very fundamental questions about the environmental governance that should apply after Brexit, how to replace the enforcement of environmental laws when the European Commission and the Court of Justice of the European Union are no longer enforcing EU law in the UK, and which environmental principles should inform UK laws and in what way. House of Lords amendments to the European Union (Withdrawal) Bill will ensure that this is further debated in the UK Parliament before that Bill can be enacted.

The UK government and Defra issued a consultation on a proposed Environmental Principles and Governance Bill on 10 May 2018, and Parliaments in Wales and Scotland will also be considering these issues. The Court’s strong re-statement of the precautionary principle is therefore timely and significant.

This is one of the core environmental principles of EU environmental law. How it fares after Brexit, and how it comes to be reflected in UK law and the law of the devolved Parliaments will be closely watched.

About the Author:

William Wilson is a specialist environmental, regulatory and nuclear lawyer with over 25 years experience in government, private practice and consultancy. He worked as a senior lawyer at the UK Department of the Environment/DETR/Defra, and helped to build up the environmental and nuclear practices at another major law firm, as well as running his own environmental policy consultancies. William has experience of all aspects of environmental law, including water, waste, air quality and industrial emissions, REACH and chemicals regulation, environmental protection, environmental permitting, litigation, legislative drafting, managing primary legislation, negotiating EU Directives and drafting secondary legislation.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

For a PDF of this blog click here

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EU COURT NEONICOTINOID INSECTICIDE JUDGMENTS: SIGNIFICANCE FOR UK AGRICULTURE, CHEMICALS AND ENVIRONMENTAL POLICY, PART I

In the first of this series of articles, we consider three important linked judgements about neonicotinoid pesticides, which damage bees, from the EU General Court, issued on 17 May 2018, which have widespread implications for agriculture, chemicals and environmental policy, especially for the UK, for example in the way the judgement endorses the precautionary principle.

In the next article we will consider in more detail why these judgements come at a particularly significant point for agriculture in the UK and EU, the immediate implications for Brexit, how they represent a divergence between the UK government and some farming organisations, and why that matters for the current consultations on an Environmental Principles and Governance Bill. We will be considering the consultations on environmental principles and governance further in future articles.

In the third article we will consider some of the impacts of farm chemicals on farmland birds and on water, and question the implications of the judgements and current policies and practices for human health.

In judgements on three joined cases [T-429-13, T-451-13, T-584-13] issued on 17 May 2018, the General Court of the European Union confirmed the validity of restrictions introduced at EU level in 2013 against three neonicotinoid insecticides, because of the risks those substances pose to bees.

The active ingredients restricted were clothianidin, produced by Takeda Chemical Industries and Bayer Crop Science, thiamethoxam, made by Syngenta, and imidacloprid, made by Bayer Crop Science.

The Court dismissed the challenges brought to the EU legislative restrictions by Bayer Crop Science AG and Others, and Syngenta Crop Protection AG and Others, the “Others” in both cases including the UK National Farmers Union ‘NFU’.

However, in the third case the Court largely upheld the action brought by BASF, and annulled the restrictions on the use of the pesticide fipronil, since they were imposed without a prior impact assessment by the European Food Safety Authority ‘EFSA’.

In all three cases, the Court made a strong and clear re-statement of the importance of the ‘precautionary principle’.

As the Court’s Press Release on the judgements explained –

As regards the uses restricted and prohibited in 2013, the Court rules that the Commission has succeeded in demonstrating that, in view of the considerable strengthening of the requirements that there should be no unacceptable effects of the active substances on bees, the risk identified by EFSA warranted the conclusion that the three substances in question no longer satisfied the approval criteria….

…Consideration of the arguments put forward by Bayer and Syngenta in that respect did not reveal any errors (such as manifest errors of assessment) or any misapplication of the precautionary principle or the principle of proportionality. So far as the precautionary principle is concerned, the Court recalls that, where there is scientific uncertainty as to the existence or extent of risks to human health or to the environment, this principle allows the institutions to take protective measures without having to wait until the reality and seriousness of those risks becomes fully apparent or until adverse health effects materialise. The precautionary principle, moreover, gives precedence to the requirement relating to the protection of public health, safety and the environment over economic interests.”

In the third BASF case, the Court made it clear that the reason for allowing the challenge by BASF to the restrictions on fipronil was the failure by the Commission to secure an adequate prior impact assessment by EFSA, which itself constituted a failure to apply the precautionary principle correctly.

In sum, therefore, the manufacturers of these pesticides and their supporters have won themselves one of the strongest endorsements to date of the precautionary principle.  It remains to be seen whether they will seek to appeal against the judgement to the next level within the Court of Justice of the European Union. The next article in this series will consider some of the reasons why the judgements have particular significance to agricultural, chemicals and environmental policy at this point.

About the Author:

William Wilson is a specialist environmental, regulatory and nuclear lawyer with over 25 years experience in government, private practice and consultancy. He worked as a senior lawyer at the UK Department of the Environment/DETR/Defra, and helped to build up the environmental and nuclear practices at another major law firm, as well as running his own environmental policy consultancies. William has experience of all aspects of environmental law, including water, waste, air quality and industrial emissions, REACH and chemicals regulation, environmental protection, environmental permitting, litigation, legislative drafting, managing primary legislation, negotiating EU Directives and drafting secondary legislation.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

For a PDF of this blog click here