Agricultural adjustment act – which makes it easier for farmers to adjust their farming expenses to higher prices – has been hailed by some as a key step in easing the financial squeeze on the agricultural sector.
The act also requires governments to keep up to date with farmers’ payments, so if they lose money, they are allowed to repurchase them from the government.
But critics argue that it is not enough to ensure that farmers are getting the best value for their money, especially as the market is not yet fully aware of the potential impact of the new rules.
“It’s a bit of a mess,” said Chris Grafton from the Rural Economics Institute (REI).
“There’s no clarity in what’s happening with farmers.”
The impact of this legislation is a question of “what is the future worth” for farmers, he said.
“What is the market going to do?”
Grafton believes the impact of changing the market for agricultural products could be significant.
“If farmers have a lot of cash and they don’t need it, then there will be a lot less demand for those products,” he said, noting that there are some products which have already lost value, such as cereals.
Graftor said the act should be applied more broadly to the rest of the food sector, which includes meat, eggs, dairy, beef, poultry and pork.
“It will have to apply across the food system,” he added.
Farmers’ representatives say the change has been introduced to ensure they are able to adjust and adjust well to the new market, and is needed to support the agriculture sector in the wake of the Brexit vote.
But the impact on the wider economy, such the effect on exports and domestic food imports, is yet to be fully analysed.
“The impact on agricultural supply chains will be significant,” said Andrew Clements, senior food and farming economist at the think tank Chatham House.
“A lot of those products are imported into Europe and it will impact on how much that [agricultural] industry can recover.”
Clements said the impact would be greater in the UK, where the UK government has promised to boost production of the EU’s most popular agricultural products, such beef and pork, as a result of the legislation.
“There will be an impact on UK food imports from the UK,” he told Al Jazeera.
“We know that the food market in the US and Europe is already heavily affected by this change, and it’s very difficult for us to predict how this will affect that.”
The European Commission has warned that farmers could be unable to sell to EU consumers for many years, as the change takes effect from the first of 2019.
“We are now in the middle of a transition period for the agricultural supply chain,” said Margrethe Vestager, the EU commissioner responsible for the food and agricultural sector, in a recent statement.
“This is not just a transition for the farmers.
It is also a transition that affects food production in general.”
Farmers in the EU are not the only ones to be affected.
The United Kingdom’s National Farmers Union has warned the change will have an “unintended impact on British agricultural businesses”.
“We’re all impacted by this,” said the NFU’s David Hillier.
“I don’t think the government is being very helpful.”
Hillier added that the UK is also in the process of adjusting to the Brexit process, as it is expected that the bill will require farmers to repay all of their payments from 2018.
“If you’re looking at a farmer who has been losing money for 10 years, that’s a pretty big burden for a family,” he explained.
Hillier said that he believes the agricultural reform will also impact the food chain.
“Farmers are already going to be more reliant on food banks,” he argued.
“With the introduction of the act, there will definitely be a financial impact on those food banks.”
He also believes the changes will negatively impact local businesses in the country.
“The UK will be very dependent on the export of food to Europe,” he continued.
“That’s a huge financial burden for businesses, and they’re going to have to get a lot more efficient.”
Hilliers views are echoed by many other economists, who have said the legislation could have a significant impact on Britain’s food market.
“With this [agreed-upon changes] [the UK] will lose access to the European market,” said Graftor.
The Farm Bill will now move to the House of Lords for debate.”
As the UK enters the new relationship with the EU, they will be in a situation where they will have absolutely no say on the food they sell in the market.”
The Farm Bill will now move to the House of Lords for debate.